[Federal Register Volume 70, Number 34 (Tuesday, February 22, 2005)]
[Rules and Regulations]
[Pages 8501-8503]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-3267]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 70, No. 34 / Tuesday, February 22, 2005 / 
Rules and Regulations  

[[Page 8501]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 226

RIN 0584-AD-67


Child and Adult Care Food Program: Increasing the Duration of 
Tiering Determinations for Day Care Homes

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule amends the Child and Adult Care Food Program 
(CACFP) regulations to implement a provision of the Child Nutrition and 
WIC Reauthorization Act of 2004 that increases the duration of the 
tiering status determinations from three years to five years for family 
or group day care homes participating in CACFP. This change, which was 
effective on June 30, 2004, applies only to tiering status 
determinations based on the eligibility of elementary school children 
for free or reduced price school meals. Day care homes that are located 
in the attendance areas of elementary schools in which at least half of 
the enrolled children are certified eligible to receive free or reduced 
price school meals receive higher reimbursement rates (tier I) for 
CACFP meals served to children in care.

DATES: This rule contains information collection requirements that may 
not become effective until approved by the Office of Management and 
Budget (OMB). The Food and Nutrition Service will publish a document in 
the Federal Register announcing the effective date once these 
requirements have been approved.

FOR FURTHER INFORMATION CONTACT: Keith Churchill, Policy and Program 
Development Branch, Child Nutrition Division, Food and Nutrition 
Service, USDA, 3101 Park Center Drive, Alexandria, VA 22302, phone 
(703) 305-2590.

SUPPLEMENTARY INFORMATION:

I. Background

What Are Tiering Determinations?

    One of the major changes made to the CACFP by the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 (Pub. L. 
104-193), section 708(e)(13) amendment to section 17 of the National 
School Lunch Act, was to require a two-tiered system of reimbursements 
for family and group day care home providers. Since July 1, 1997 when 
implementing Program regulations became effective, CACFP day care home 
providers have been categorized as either tier I or tier II for 
reimbursement purposes. Tier I day care homes receive higher 
reimbursement rates because they are located in low-income areas or 
their family income is determined to be low-income. The threshold for a 
determination of low-income is at or below 185 percent of the Federal 
income poverty guidelines. Tier II providers who do not meet these 
criteria receive lower reimbursement rates. However, tier II providers 
may receive the higher tier I reimbursement rates for any child in care 
whose family income is determined to be low-income. This determination 
is based on an income eligibility application for free or reduced price 
meals that is voluntarily completed by the child's parent or guardian.
    One of the primary ways in which day care homes qualify for tier I 
rates is based on data from nearby elementary schools in which at least 
half of all the enrolled students are certified eligible for free or 
reduced price school meals. Any day care home that is located within 
the attendance area of an elementary school that is at the 50 percent 
level for free or reduced price meals qualifies for tier I rates. Other 
data sources that may be used to determine tier I status include census 
block data and providers' income eligibility applications. Prior to the 
change made by the Child Nutrition and WIC Reauthorization Act of 2004 
(Pub. L. 108-265), the duration of tiering determinations varied by 
data source; i.e., one year if based on the income eligibility 
statement of the provider, three years if based on school data, and ten 
years or longer if based on census block data.

What Did the New Law Change About Tiering Determinations?

    Section 119 of Pub. L. 108-265 amended section 17(f)(3)(E)(iii) of 
the Richard B. Russell National School Lunch Act (NSLA), 42 U.S.C. 
1766(f)(3)(iii), to increase the duration of tiering determinations 
from three years to five years for family or group day care homes whose 
tiering status is derived from school data. The school data, which is 
provided annually by the State agency that administers the National 
School Lunch Program (NSLP) to the CACFP State agency, lists the 
elementary schools in which at least 50 percent of the enrolled 
children are certified eligible for free or reduced price school meals. 
This provision affects family or group day care homes that are 
participating in the CACFP and are located in the attendance area of an 
elementary school that is listed at the 50 percent level for free or 
reduced price school meal eligibility.

When Was This Change Effective?

    The change made by Pub. L. 108-265 was effective on June 30, 2004.

What Guidance Has the Department Provided on This Change?

    The Food and Nutrition Service (FNS) notified CACFP State agencies 
in writing on July 8, 2004 of the increased duration of tiering status 
determinations based on school data. In this written guidance, 
available at http://www.fns.usda.gov/cnd/care/Reauth-Memos/2004-07.pdf, 
FNS explained that the tiering classifications based on school data for 
new day care homes (with signed agreements as of June 30, 2004 or 
later) now last five years. Thus, the tiering status of those day care 
homes approved in 2004 will not have to be redetermined by their 
sponsoring organizations until 2009. FNS stated in the guidance that 
the tiering status for day care homes of currently participating 
providers (i.e., those whose agreements were signed prior to June 30, 
2004) may be extended by two years for a total of five years; the 
guidance also clarified that no other changes to the requirements of 
day care homes' tiering status determinations were made by Pub. L. 108-
265.

[[Page 8502]]

How Will This Change Affect Day Care Home Providers?

    Tier I day care providers whose tiering status is based on school 
data will retain tier I status for five years instead of three years. 
This change should provide them with improved ability to project future 
program reimbursements and may enhance their ability to plan for future 
day care activities and expenses.

How Will This Change Affect Sponsoring Organizations?

    The primary change for sponsoring organizations of day care homes 
participating in the CACFP will be a reduction in their workload. 
Sponsors now have five years before it is necessary to redetermine the 
tiering status of day care homes based on school data instead of every 
three years. As the current regulations stipulate, sponsoring 
organizations receive school data that is updated each year; this 
information is used to determine the tiering status of new day care 
providers. The regulations at 7 CFR 226.6(f)(1)(iii) prohibit State 
agencies from requiring that sponsoring organizations must routinely 
redetermine tiering status of tier I day care homes each year based on 
updated school data.

How Will This Change Affect State Agencies?

    The effect on State agencies should be minimal. The annual 
responsibilities of State agencies, as described in the NSLP and CACFP 
regulations are unchanged by the lengthening of tiering status 
determinations based on school data. Consistent with section 
17(f)(3)(E)(iii)(I) of the NSLA, NSLP State agencies must continue to 
provide the school data to CACFP State agencies annually as required in 
7 CFR 210.19(f) of the NSLP regulations, and CACFP State agencies must 
continue to pass the information along to sponsoring organizations of 
day care homes as specified in 7 CFR 226.6(f)(1)(iii).

What Changes Does This Rule Make to the CACFP Regulations?

    Responsibilities for administering the tiering system for day care 
homes are described in the CACFP regulations--for State agencies at 7 
CFR 226.6(f)(1)(iii) and for sponsoring organizations at 7 CFR 
226.15(f). This final rule amends these two paragraphs to increase the 
duration of tiering status based on school data from three years to 
five years. These are the only changes that are made to the CACFP 
regulations by this rulemaking.

II. Procedural Matters

Executive Order 12866

    This rule has been determined to be not significant and therefore 
was not reviewed by the Office of Management and Budget (OMB) under 
Executive Order 12866.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Roberto Salazar, 
Administrator for the Food and Nutrition Service, has certified that 
this rule will not have a significant impact on a substantial number of 
small entities. This rule will implement a statutory change that 
increases the duration of tiering status determinations from three 
years to five years for family and group day care homes. This change 
should positively impact day care home providers that are located in 
low-income areas or that are determined to be low-income because they 
will have an additional two years of reimbursement at the higher tier I 
rates before their tiering status must be redetermined. This change 
will also positively impact sponsoring organizations by reducing the 
frequency of the redeterminations of tiering status of the family or 
group day care homes under their sponsorship. The U.S. Department of 
Agriculture does not anticipate any significant negative fiscal impact 
resulting from the implementation of this final rule.

Public Law 104-4

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, the 
Food and Nutrition Service (FNS) generally prepares a written 
statement, including a cost-benefit analysis, for proposed and final 
rules with ``Federal mandates'' that may result in expenditures to 
State, local, or tribal governments, in the aggregate, or to the 
private sector, of $100 million or more in any one year. When such a 
statement is needed for a rule, section 205 of the UMRA generally 
requires FNS to identify and consider a reasonable number of regulatory 
alternatives and adopt the least costly, more cost-effective or least 
burdensome alternative that achieves the objectives of the rule.
    This final rule contains no Federal mandates (under regulatory 
provisions of Title II of the UMRA) for State, local, and tribal 
governments or the private sector of $100 million or more in any one 
year. Thus, this final rule is not subject to the requirements of 
sections 202 and 205 of the UMRA.

Executive Order 12372

    The Child and Adult Care Food Program is listed in the Catalog of 
Federal Domestic Assistance under No. 10.558. For the reasons set forth 
in the final rule in 7 CFR part 3015, subpart V and related Notice (48 
FR 29115), this program is subject to the provisions of Executive Order 
12372, which requires intergovernmental consultation with State and 
local officials.

Executive Order 13132

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have ``federalism implications,'' agencies are 
directed to provide a statement for inclusion in the preamble to the 
regulation describing the agency's considerations in terms of the three 
categories called for under section (6)(a)(B) of Executive Order 13132. 
FNS has considered the impact of this rule on State and local 
governments and has determined that this rule would not have federalism 
implications. This final rule does not impose substantial or direct 
compliance costs on State and local governments. Therefore, under 
Section 6(b) of the Executive Order, a Federalism summary impact 
statement is not required.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This final rule will have a preemptive effect 
with respect to any State or local laws, regulations or policies which 
conflict with its provisions or which otherwise impede its full 
implementation. This final rule does not have retroactive effect unless 
so specified in the DATES section of this preamble. Prior to any 
judicial challenge to the provisions of this final rule or the 
application of the provisions, all applicable administrative procedures 
must be exhausted. In the Child and Adult Food Care Program, 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 parts 
3016 and 3019, which address administrative appeal procedures for 
disputes involving procurement by State agencies and institutions.

Civil Rights Impact Analysis

    FNS has reviewed this final rule in accordance with the Department 
Regulation 4300-4, ``Civil Rights Impact

[[Page 8503]]

Analysis'' to identify and address any major civil rights impacts the 
rule might have on minorities, women, and persons with disabilities. 
After a careful review of the rule's intent and provisions, FNS has 
determined that there is no negative effect on these groups. All data 
available to FNS indicate that protected individuals have the same 
opportunity to participate in the CACFP as non-protected individuals. 
Regulations at 7 CFR 226.6(f)(4)(iv) require that CACFP institutions 
agree to operate the Program in compliance with applicable Federal 
civil rights laws, including title VI of the Civil Rights Act of 1964, 
title IX of the Education amendments of 1972, Section 504 of the 
Rehabilitation Act of 1973, the Age Discrimination Act of 1975, and the 
Department's regulations concerning nondiscrimination (7 CFR part 15, 
15a, and 15b). At 7 CFR 226.6(m)(1), State agencies are required to 
monitor CACFP institution compliance with these laws and regulations.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35, see 5 CFR 
1320) requires that OMB approve all collections of information by a 
Federal agency from the public before they can be implemented. 
Respondents are not required to respond to any collection of 
information unless it displays a current valid OMB control number. 
Information collections in this final rule have been previously 
submitted to OMB for approval under OMB 0584-0055. A 60-day 
notice was published in the Federal Register on December 6, 2004, which 
provided an opportunity for the public to submit comments on the 
reduction to the information collection burden resulting from the 
changes in the CACFP made by this final rule. This burden change has 
not yet been approved by OMB. FNS will publish a document in the 
Federal Register once these requirements have been approved.

Government Paperwork Elimination Act

    FNS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA), which requires Government agencies to provide 
the public the option of submitting information or transacting business 
electronically to the maximum extent possible. This rule does not 
require the submission of additional information.

Public Participation

    This action is being finalized without prior notice or public 
comment under authority of 5 U.S.C. 553(b)(3)(A) and (B). This rule 
implements through amendments to current program regulations a 
nondiscretionary provision mandated by the Child Nutrition and WIC 
Reauthorization Act of 2004 (Pub. L. 108-265). Thus, the Department has 
determined in accordance with 5 U.S.C. 553(b) that Notice of Proposed 
Rulemaking and Opportunity for Public Comments is unnecessary and 
contrary to the public interest and, in accordance with 5 U.S.C. 
553(d), finds that good cause exists for making this action effective 
without prior public comment.

List of Subjects in 7 CFR Part 226

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


0
Accordingly, 7 CFR part 226 is amended as follows:

PART 226--CHILD AND ADULT CARE FOOD PROGRAM

0
1. The authority citation for part 226 continues to read as follows:

    Authority: Secs. 9, 11, 14, 16, and 17, Richard B. Russell 
National School Lunch Act, as amended (42 U.S.C. 1758, 1759a, 1762a, 
1765, and 1766).


Sec.  226.6  [Amended]

0
2. In Sec. 226.6, amend the fifth sentence in paragraph (f)(1)(iii) by 
removing the words ``three years'' and adding in their place the words 
``five years''.


Sec.  226.15  [Amended]

0
3. In Sec. 226.15, amend the tenth sentence in paragraph (f) by 
removing the words ``three years'' and adding in their place the words 
``five years''.

    Dated: February 15, 2005.
George A. Braley,
Acting Administrator.
[FR Doc. 05-3267 Filed 2-18-05; 8:45 am]
BILLING CODE 3410-30-P