[Federal Register Volume 70, Number 114 (Wednesday, June 15, 2005)]
[Rules and Regulations]
[Pages 34630-34633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-11806]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 226

RIN 0584-AD69


Child and Adult Care Food Program: Permanent Agreements for Day 
Care Home Providers

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

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[[Page 34631]]

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 which stipulates that the agreement 
between a sponsoring organization and family or group day care home 
participating in the CACFP is permanent and remains in effect until 
terminated by either party. This change will reduce the administrative 
workload and paperwork burden of sponsoring organizations, by 
eliminating the periodic renewal of agreements with their family or 
group day care homes.

DATES: This rule contains information collection requirements that have 
not been 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, Section Chief, 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 Agreements Between the Sponsoring Organizations and the Family 
or Group Day Care Homes?

    The agreements record specific requirements and responsibilities of 
sponsoring organizations and the family or group day care homes that 
participate in CACFP under their supervision. The standard form 
agreements are developed by State agencies. However, a State agency may 
allow sponsoring organizations to develop agreements for use with their 
family or group day care homes provided those agreements include all 
required elements.

What Did the New Law Change About the Agreements?

    Prior to reauthorization, the Richard B. Russell National School 
Lunch Act required each State agency to develop, and provide for use, a 
standard form of agreement, and that a sponsoring organization must 
enter into an agreement with each day care home, for the purpose of 
specifying the rights and responsibilities of each party. The law did 
not set requirements on the duration of agreements. Currently, the 
CACFP regulations found at 7 CFR Part 226 make no mention of, nor set 
limits on, the duration of agreements between the sponsoring 
organizations and family or group day care homes. As a result, 
administering State agencies have applied a variety of standards for 
the duration of the agreements. For example, some State agencies have 
linked the renewal of agreements between sponsors and family or group 
day care homes with the renewal of licensing and/or application 
process. Section 119 of the Child Nutrition and WIC Reauthorization Act 
of 2004, Public Law 108-265, amended section 17(j) of the Richard B. 
Russell National School Lunch Act to mandate the use of permanent 
agreements between sponsoring organizations and family or group day 
care homes.

When Was This Change Effective?

    The change made by Public Law 108-265 was effective on June 30, 
2004. The Food and Nutrition Service (FNS) notified CACFP State 
agencies through an implementation memorandum on July 12, 2004, that 
all day care homes must have a permanent agreement in place no later 
than July 1, 2005. Although this provision went into effect on the date 
of enactment, sponsors are not immediately required to revise currently 
valid agreements, but must make all agreements permanent as they are 
updated or revised.

What Guidance Has the Department Provided on This Change?

    On July 12, 2004, FNS provided CACFP State agencies with written 
guidance regarding the permanent agreement provision. In this written 
guidance, available at http://www.fns.usda.gov/cnd/Care/Reauth_Memos/2004-07-12.pdf, FNS explained that the agreement between sponsoring 
organizations and family or group day care homes must now be made 
permanent.

What Does This Rule Do?

    The rule will stipulate that either party to the permanent 
agreement may still terminate the agreement. Although the agreement is 
permanent, it does not remove the right of the sponsoring organization 
to terminate a family or group day care home for cause (e.g., expired 
license) or convenience. Additionally, the rule clarifies that the 
right of a day care home provider to change sponsors in accordance with 
current regulations is unchanged. Should a family or group day care 
home be out of compliance with program requirements, the sponsoring 
organization will follow the serious deficiency process, which may 
culminate in the termination of the family or group day care home's 
agreement. Sponsoring organizations will continue to be permitted to 
amend the permanent agreement when there is a change in program policy 
or meal services. State agencies and sponsoring organizations are 
reminded that permanent agreements must stipulate that CACFP payments 
are contingent upon the availability of Federal funds.

How Will the Change Affect Family or Group Day Care Home Providers?

    This change should have a minimal effect on family and group day 
care home providers. They will no longer be required to sign an annual 
agreement with their sponsoring organizations.

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 administrative 
workload and paperwork requirements. Sponsoring organizations will 
benefit from not having to renew agreements and should be able to 
direct their resources to other Program-related functions. In the past, 
some State agencies have required sponsoring organizations to link the 
renewal of agreements to the renewal of their family or group day care 
homes' licenses and/or applications, which usually occurred either 
annually or once every 2 or 3 years. The regulation mandates that 
sponsoring organizations of day care homes must establish permanent 
agreements with their family or group day care homes.

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 current CACFP 
regulations, are unchanged by the permanent agreement between the 
sponsoring organization and the family or group day care home. To 
implement this new provision, State agencies may require sponsoring 
organizations to amend their current agreement or execute a new 
permanent agreement.

What Changes Does This Rule Make to the CACFP Regulations?

    Responsibilities for agreements between sponsoring organizations 
and family or group day care homes are described in the CACFP 
regulations at 7 CFR 226.6(p) for State agencies, and at 7 CFR 
226.18(b) for day care homes. This final rule amends these two 
paragraphs to mandate that the agreements between sponsoring 
organizations and family or group day care homes be permanent, and adds 
a sentence to each of these paragraphs

[[Page 34632]]

stating that the amendment does not change, nor affect, any other 
requirements of the CACFP regulations. These are the only changes that 
are made to the CACFP regulations by this rulemaking.

II. Procedural Matters

Executive Order 12866

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

Regulatory Flexibility Act

    This final 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 decreases the administrative workload and 
paperwork burden for sponsoring organizations by reducing the frequency 
with which agreements between sponsors and family or group day care 
home providers must be renewed. The U.S. Department of Agriculture does 
not anticipate any 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 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 7 CFR 226.6(k), which 
establishes appeal procedures; and 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 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 Parts 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 May 5, 2005, at 70 FR 
23835, which provides 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. The information 
collection in this rule involves the agreements that State agencies 
require sponsoring organizations to enter into with their family and 
group day care homes in order to participate in the CACFP. FNS 
encourages all State agencies and sponsoring organizations to automate 
their process whenever feasible.

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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 (Public Law 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.

List of Subjects in 7 CFR Part 226

    Accounting, Aged, Day care, Food assistance programs, Grant 
programs, Grant programs--health, 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).


0
2. In Sec.  226.6, amend paragraph (p) by adding the words ``written 
permanent'' before the word ``agreement'' in the first sentence and by 
adding a new sentence after the first sentence, to read as follows:


Sec.  226.6  State agency administrative responsibilities.

* * * * *
    (p) * * * Nothing in the preceding sentence shall be construed to 
limit the ability of the sponsoring organization to suspend or 
terminate the permanent agreement in accordance with Sec.  226.16(l). * 
* *
* * * * *

0
3. In Sec.  226.18, amend paragraph (b) introductory text by adding the 
word ``permanent'' before the word ``agreement'' in the second sentence 
and by adding a new sentence after the second sentence, to read as 
follows:


Sec.  226.18  Day care home provisions.

* * * * *
    (b) * * * Nothing in the preceding sentence shall be construed to 
limit the ability of the sponsoring organization to suspend or 
terminate the permanent agreement in accordance with Sec.  226.16(l). * 
* *
* * * * *

    Dated: May 25, 2005.
Roberto Salazar,
Administrator.
[FR Doc. 05-11806 Filed 6-14-05; 8:45 am]
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