[Federal Register Volume 69, Number 135 (Thursday, July 15, 2004)]
[Notices]
[Pages 42415-42417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-16044]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service


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

AGENCY: Food and Nutrition Service, USDA.

ACTION: Notice.

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SUMMARY: This Notice announces the annual adjustments to: (1) The 
``national average payments,'' the amount of money the Federal 
Government provides States for lunches, afterschool snacks and 
breakfasts served to children participating in the National School 
Lunch and School Breakfast Programs; (2) the ``maximum reimbursement 
rates,'' the maximum per lunch rate from Federal funds that a State can 
provide a school food authority for lunches served to children 
participating in the National School Lunch Program; and (3) the rate of 
reimbursement for a half-pint of milk served to nonneedy children in a 
school or institution which participates in the Special Milk Program 
for Children. The payments and rates are prescribed on an annual basis 
each July. The annual payments and rates adjustments for the National 
School Lunch and School Breakfast Programs reflect changes in the Food 
Away From Home series of the Consumer Price Index for All Urban 
Consumers. The annual rate adjustment for the Special Milk Program 
reflects changes in the Producer Price Index for Fluid Milk Products. 
These payments and rates are in effect from July 1, 2004 through June 
30, 2005.

EFFECTIVE DATE: July 1, 2004.

FOR FURTHER INFORMATION CONTACT: Ms. Rosemary O'Connell, Section Chief, 
School Programs Section, Policy and Program Development Branch, Child 
Nutrition Division, Food and Nutrition Service, USDA, 3101 Park Center 
Drive, Room 640, Alexandria, VA 22302 or phone (703) 305-2590.

SUPPLEMENTARY INFORMATION:

Background

    Special Milk Program for Children--Pursuant to section 3 of the 
Child Nutrition Act of 1966, as amended (42 U.S.C. 1772), the 
Department announces the rate of reimbursement for a half-pint of milk 
served to nonneedy children in a school or institution that 
participates in the Special Milk Program for Children. This rate is 
adjusted annually to reflect changes in the Producer Price Index for 
Fluid Milk Products, published by the Bureau of Labor Statistics of the 
Department of Labor.
    For the period July 1, 2004 to June 30, 2005, the rate of 
reimbursement for a half-pint of milk served to a nonneedy child in a 
school or institution which participates in the Special Milk Program is 
17 cents. This reflects an increase of 29.8 percent in the Producer 
Price Index for Fluid Milk Products from May 2003 to May 2004 (from a 
level of 143.2 in May 2003 to 185.9 in May 2004).
    As a reminder, schools or institutions with pricing programs that 
elect to serve milk free to eligible children continue to receive the 
average cost of a half-pint of milk (the total cost of all milk 
purchased during the claim period divided by the total number of 
purchased half-pints) for each half-pint served to an eligible child.
    National School Lunch and School Breakfast Programs--Pursuant to 
sections 11 and 17A of the National School Lunch Act, (42 U.S.C. 1759a 
and 1766a), and section 4 of the Child Nutrition Act of 1966, (42 
U.S.C. 1773), the Department annually announces the adjustments to the 
National Average Payment Factors and to the maximum Federal 
reimbursement rates for lunches and afterschool snacks served to 
children participating in the National School Lunch Program and 
breakfasts served to children participating in the School Breakfast 
Program. Adjustments are prescribed each July 1, based on changes in 
the Food Away From Home series of the Consumer Price Index for All 
Urban Consumers, published by the Bureau of Labor Statistics of the 
Department of Labor. The changes in the national average payment rates 
for schools and residential child care institutions for the period July 
1, 2004 through June 30, 2005 reflect a 2.86 percent increase in the 
Consumer Price Index for All Urban Consumers during the 12-month period 
May 2003 to May 2004 (from a level of 181.5 in May 2003 to 186.7 in May 
2004). Adjustments to the national average payment rates for all 
lunches served under the National School Lunch Program, breakfasts 
served under the School Breakfast Program, and afterschool snacks 
served under the National School Lunch Program are rounded down to the 
nearest whole cent.
    Lunch Payment Levels--Section 4 of the National School Lunch Act 
(42 U.S.C. 1753) provides general cash for food assistance payments to 
States to assist schools in purchasing food. The National School Lunch 
Act provides two different section 4 payment levels for lunches served 
under the National School Lunch Program. The lower payment level 
applies to lunches served by school food authorities in which less than 
60 percent of the lunches served in the school lunch program during the 
second preceding school year were served free or at a reduced price. 
The higher payment level applies to lunches served by school food 
authorities in which 60 percent or more of the lunches served during 
the second preceding school year were served free or at a reduced 
price.
    To supplement these section 4 payments, section 11 of the National 
School Lunch Act (42 U.S.C. 1759(a)) provides special cash assistance 
payments to aid schools in providing free and reduced price lunches. 
The section 11 National Average Payment Factor for each reduced price 
lunch

[[Page 42416]]

served is set at 40 cents less than the factor for each free lunch.
    As authorized under sections 8 and 11 of the National School Lunch 
Act (42 U.S.C. 1757 and 1759a), maximum reimbursement rates for each 
type of lunch are prescribed by the Department in this Notice. These 
maximum rates are to ensure equitable disbursement of Federal funds to 
school food authorities.
    Afterschool Snack Payments in Afterschool Care Programs--Section 
17A of the National School Lunch Act (42 U.S.C. 1766a) establishes 
National Average Payments for free, reduced price and paid afterschool 
snacks as part of the National School Lunch Program.
    Breakfast Payment Factors--Section 4 of the Child Nutrition Act of 
1966 (42 U.S.C. 1773) establishes National Average Payment Factors for 
free, reduced price and paid breakfasts served under the School 
Breakfast Program and additional payments for free and reduced price 
breakfasts served in schools determined to be in ``severe need'' 
because they serve a high percentage of needy children.

Revised Payments

    The following specific section 4, section 11 and section 17A 
National Average Payment Factors and maximum reimbursement rates for 
lunch, the afterschool snack rates, and the breakfast rates are in 
effect from July 1, 2004 through June 30, 2005. Due to a higher cost of 
living, the average payments and maximum reimbursements for Alaska and 
Hawaii are higher than those for all other States. The District of 
Columbia, Virgin Islands, Puerto Rico and Guam use the figures 
specified for the contiguous States.

National School Lunch Program Payments

    Section 4 National Average Payment Factors--In school food 
authorities which served less than 60 percent free and reduced price 
lunches in School Year 2002-03, the payments for meals served are: 
Contiguous States--paid rate--21 cents, free and reduced price rate--21 
cents, maximum rate--29 cents; Alaska--paid rate--35 cents, free and 
reduced price rate--35 cents, maximum rate--45 cents; Hawaii--paid 
rate--25 cents, free and reduced price rate--25 cents, maximum rate--33 
cents.
    In school food authorities which served 60 percent or more free and 
reduced price lunches in School Year 2002-03, payments are: Contiguous 
States--paid rate--23 cents, free and reduced price rate--23 cents, 
maximum rate--29 cents; Alaska--paid rate--37 cents, free and reduced 
price rate--37 cents, maximum rate--45 cents; Hawaii--paid rate--27 
cents, free and reduced price rate--27 cents, maximum rate--33 cents.
    Section 11 National Average Payment Factors--Contiguous States--
free lunch--203 cents, reduced price lunch--163 cents; Alaska--free 
lunch--330 cents, reduced price lunch--290 cents; Hawaii--free lunch--
238 cents, reduced price lunch--198 cents.
    Afterschool Snacks in Afterschool Care Programs--The payments are: 
Contiguous States--free snack--61 cents, reduced price snack--30 cents, 
paid snack--05 cents; Alaska--free snack--100 cents, reduced price 
snack--50 cents, paid snack--09 cents; Hawaii--free snack--72 cents, 
reduced price snack--36 cents, paid snack--06 cents.

School Breakfast Program Payments

    For schools ``not in severe need'' the payments are: Contiguous 
States--free breakfast--123 cents, reduced price breakfast--93 cents, 
paid breakfast--23 cents; Alaska--free breakfast--196 cents, reduced 
price breakfast--166 cents, paid breakfast--33 cents; Hawaii--free 
breakfast--143 cents, reduced price breakfast--113 cents, paid 
breakfast--25 cents.
    For schools in ``severe need'' the payments are: Contiguous 
States--free breakfast--147 cents, reduced price breakfast--117 cents, 
paid breakfast--23 cents; Alaska--free breakfast--235 cents, reduced 
price breakfast--205 cents, paid breakfast--33 cents; Hawaii--free 
breakfast--171 cents, reduced price breakfast--141 cents, paid 
breakfast--25 cents.

Payment Chart

    The following chart illustrates: The lunch National Average Payment 
Factors with the sections 4 and 11 already combined to indicate the per 
lunch amount; the maximum lunch reimbursement rates; the reimbursement 
rates for afterschool snacks served in afterschool care programs; the 
breakfast National Average Payment Factors including ``severe need'' 
schools; and the milk reimbursement rate. All amounts are expressed in 
dollars or fractions thereof. The payment factors and reimbursement 
rates used for the District of Columbia, Virgin Islands, Puerto Rico 
and Guam are those specified for the contiguous States.
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[[Page 42417]]

[GRAPHIC] [TIFF OMITTED] TN15JY04.001

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

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

    Dated: June 9, 2004.
George A. Braley,
Associate Administrator, Food and Nutrition Service.
[FR Doc. 04-16044 Filed 7-14-04; 8:45 am]
BILLING CODE 3410-30-P