[Federal Register Volume 70, Number 211 (Wednesday, November 2, 2005)]
[Rules and Regulations]
[Pages 66247-66250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-21785]



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  Federal Register / Vol. 70, No. 211 / Wednesday, November 2, 2005 / 
Rules and Regulations  

[[Page 66247]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 220

RIN 0584-AD50


School Breakfast Program: Severe Need Assistance

AGENCY: Food and Nutrition Service, USDA.

ACTION: Interim rule.

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SUMMARY: This interim rule addresses and implements amendments made by 
Section 201 of the Child Nutrition and WIC Reauthorization Act of 2004. 
The rule amends the School Breakfast Program (SBP) regulations to 
eliminate the requirement that a school's costs exceed the rate of 
reimbursement as a criterion for receiving the higher severe need 
funding available in the SBP. This rule also allows State agencies to 
provide severe need reimbursements to certain new schools that are 
beginning participation in the school feeding programs and therefore 
have no historical second preceding year participation information, as 
was previously required. This rule is intended to simplify eligibility 
for severe need reimbursements by removing previous restrictions on 
receipt of those payments. This rule does not impose new administrative 
requirements on State or local governmental entities.

DATES: Effective Date: December 2, 2005.
    Comments Date: Comments on this rule must be postmarked on or 
before May 1, 2006 to be assured of consideration. Comments will also 
be accepted via E-Mail submission, at the address listed below. E-mail 
submissions must be received no later than 11:59 p.m. on May 1, 2006 to 
be assured of consideration.

ADDRESSES: The Food and Nutrition Service invites interested persons to 
submit comments on this interim rule. Comments may be submitted by any 
of the following methods:
     E-Mail: Send comments to [email protected] The 
subject line must contain the phrase ``School Breakfast Program 
Regulations: Severe Need Assistance''.
     Fax: Submit comments by facsimile transmission to: (703) 
305-2879, attention Mr. Robert Eadie. The subject line must contain the 
phrase ``School Breakfast Program Regulations: Severe Need 
Assistance''.
     Mail: Comments should be addressed to Mr. Robert Eadie, 
Chief, Policy and Program Development Branch, Child Nutrition Division, 
Food and Nutrition Service, Department of Agriculture, 3101 Park Center 
Drive, Room 640, Alexandria, Virginia 22302-1594.
     Hand Delivery or Courier: Deliver comments to 3101 Park 
Center Drive, Room 640, Alexandria, Virginia 22302-1594, during normal 
business hours of 8:30 a.m.-5 p.m.
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
    All submissions will be available for public inspection at 3101 
Park Center Drive, Room 640, Alexandria, Virginia 22302-1594, Monday 
through Friday, 8:30 a.m.-5 p.m.

FOR FURTHER INFORMATION CONTACT: Mr. Christopher Davenport, Child 
Nutrition Division, Food and Nutrition Service at (703) 305-2590.

SUPPLEMENTARY INFORMATION: 

Background

    The rules concerning the amounts to be paid to schools 
participating in the SBP for providing Program benefits are set forth 
in Section 4(b) of the Child Nutrition Act of 1966 (CNA), 42 U.S.C. 
1773(b) and in 7 CFR 220.9. In addition to the standard SBP rates of 
reimbursement, schools determined to be in ``severe need'' are 
authorized to receive additional funding in order to effectively 
provide Program benefits.
    The requirements for schools to qualify to receive severe need 
rates of reimbursement under the SBP are described in 7 CFR 220.9(e). 
The regulation currently establishes the criteria a school is required 
to meet to be eligible to receive severe need reimbursements under the 
SBP. The first criterion is that the normal reimbursement rate 
established by the Secretary would not provide the school in question 
with sufficient funds to cover the costs of the breakfast program. The 
second eligibility criterion is that the school is participating in or 
desiring to initiate a breakfast program, and the third is that 40 
percent or more of the lunches served to students at the school in the 
second preceding school year were served free or at a reduced price. 
Under 7 CFR 220.9(d), schools received the lesser of their documented 
costs for free and reduced price breakfasts or the product of the 
number of free and reduced price meals times the applicable severe need 
rate of reimbursement.
    On June 30, 2004, the President signed the Child Nutrition and WIC 
Reauthorization Act of 2004 (Pub. L. 108-265). Section 201 of Public 
Law 108-265 amended section 4 of the CNA to remove the requirement that 
the per meal reimbursement rate established by the Secretary be 
inadequate to cover the costs of the school's breakfast program as a 
threshold requirement to qualify for severe need funding. The law also 
allows eligibility for severe need subsidies to be available for 
breakfasts served in schools in which no reimbursable lunches were 
served in the second preceding year if the Secretary determines that 
those schools would have met the requirement of serving 40 percent or 
more of their lunches free or at a reduced price. The Department will 
establish through guidance how the Secretary will make this 
determination. This rule makes changes to the regulations in 7 CFR 
220.9(d) and (e) to reflect the changes mandated by Public Law 108-265.

What Specific Changes Does This Rule Make?

     Removes 7 CFR 220.9(d) and redesignates current 7 CFR 
220.9(e) as 7 CFR 220.9(d).
     Removes the requirement in current 7 CFR 220.9(e) that 
schools document that the normal per meal reimbursement is insufficient 
to cover the costs of the SBP.
     Makes technical changes to 7 CFR 220.9(c)(2) and current 7 
CFR 220.9(e)(3) to remove outdated references to severe need 
reimbursement for schools in States that are required by law to serve 
breakfasts.

[[Page 66248]]

     Adds an exception to the criterion, established in 
redesignated 7 CFR 220.9(d), which allows States, in accordance with 
guidance provided by the Secretary, in schools which did not serve 
meals in the second preceding school year, to determine if 40 percent 
or more of the meals served to students would have otherwise been 
served free or at a reduced rate.

Why Is This Rule Being Issued as an Interim Rule and Not a Proposed 
Rule?

    Section 501(b) of Public Law 108-265 states that FNS may promulgate 
interim regulations to implement the requirements of Section 201 
discussed above. The Secretary has deemed the requirements of this 
provision sufficient to warrant an interim regulation, without regard 
to the Administrative Procedure Act's prior notice and comment 
provisions at 5 U.S.C. 553; the Statement of Policy of the Secretary of 
Agriculture effective July 24, 1971 (36 FR 13804) relating to notices 
of proposed rulemaking and public participation in rulemaking; and the 
Paperwork Reduction Act at 44 U.S.C. Chapter 35. However, issuance of 
these program changes also allows FNS to request and consider public 
comment that may assist in future amendments to this rule. FNS intends 
to issue a final rule after consideration of comments received on this 
rule.

When Does This Rule Take Effect?

    Section 201 of Public Law 108-265 became effective on July 1, 2004. 
Beginning with School Year 2004-2005, otherwise qualified schools no 
longer have to justify SBP costs or maintain cost records to receive 
the severe need reimbursement rate for the SBP. However, any claims 
outstanding from School Year 2003-2004 are still subject to the cost-
accounting procedures for severe need assistance. FNS informed State 
agencies of these provisions immediately after the law was signed.

Executive Order 12866

    This interim rule has been determined to be non-significant and is 
not subject to review by the Office of Management and Budget under 
Executive Order 12866.

Regulatory Flexibility Act

    This interim rule has been reviewed with regard to the requirements 
of the Regulatory Flexibility Act (5 U.S.C. 601-612). Roberto Salazar, 
Administrator of the Food and Nutrition Service, has certified that it 
will not have a significant economic impact on a substantial number of 
small entities.
    This interim rule reduces administrative burdens for school food 
authorities operating the SBP that wish to apply for severe need 
funding.

Unfunded Mandates Reform Act

    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, FNS 
generally prepares a written statement, including a cost-benefit 
analysis. This is done for rules that have ``Federal mandates'' which 
may result in expenditures of $100 million or more in any one year by 
State, local, or tribal governments, in the aggregate, or by the 
private sector. When this statement is needed for a rule, section 205 
of the UMRA generally requires FNS to identify and consider a 
reasonable number of regulatory alternatives. It must then adopt the 
least costly, most cost-effective or least burdensome alternative that 
achieves the objectives of the rule.
    This interim rule contains no Federal mandates of $100 million or 
more in any one year (under regulatory provisions of Title II of the 
UMRA) for State, local, and tribal governments or the private sector. 
Thus, this interim rule is not subject to the requirements of sections 
202 and 205 of the UMRA.

Executive Order 12372

    The School Breakfast Program is listed in the Catalog of Federal 
Domestic Assistance under No. 10.553. This program is subject to the 
provisions of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials (7 CFR part 3015, subpart 
V, and interim rule related notice at 48 FR 29115, June 24, 1983).

Federalism Summary Impact Statement

    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 regulations 
describing the agency's considerations in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132. FNS has 
considered the impact of this rule on State and local governments and 
has determined that this rule does not have Federalism implications. 
This 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 interim rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It 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 impede its full 
implementation. This rule is not intended to have retroactive effect 
unless so specified in the Effective Dates section of this preamble. 
Before any judicial challenge to the provisions of this rule or the 
application of its provisions, all applicable administrative procedures 
must be exhausted.

Civil Rights Impact Analysis

    Under USDA Regulation 4300-4, Civil Rights Impact Analysis, FNS has 
reviewed this interim rule to identify and address any major civil 
rights impacts the interim 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 this interim rule will not in 
any way limit or reduce participants' ability to participate in the 
Child Nutrition Programs on the basis of an individual's or group's 
race, color, national origin, sex, age, or disability (the Child 
Nutrition Programs' nondiscrimination policy can be found at 7 CFR 
210.23(b)). FNS found no factors that would negatively and 
disproportionately affect any group of individuals.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
1320) requires that the Office of Management and Budget (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 interim rule have been 
previously approved under OMB 0584-0012. This interim rule 
contains information collections that are subject to review and 
approval by OMB; therefore, FNS is submitting for public comment the 
changes in the information collection burden that would result from 
adoption of the provisions in the rule.
    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

[[Page 66249]]

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 are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology. All responses to 
this Notice will be summarized and included in the request for OMB 
approval, and will become a matter of public record. Comments may be 
sent to Katherine Astrich, Desk Officer, Office of Information and 
Regulatory Affairs, Office of Management and Budget (OMB), Washington, 
DC 20503. A copy may also be sent to Mr. Robert Eadie at the address 
below. For further information, or for copies of the information 
collection, please contact Mr. Robert Eadie, Chief, Policy and Program 
Development Branch, Child Nutrition Division, Food and Nutrition 
Service, U.S. Department of Agriculture, 3101 Park Center Drive, Room 
634, Alexandria, Virginia 22302-1594.
    Comments will also be accepted via E-Mail submission if sent to 
[email protected]. When submitting comments via E-Mail, you must 
include ``School Breakfast Program Regulations: Severe Need 
Assistance'' in the subject line.
    Comments and recommendations on the proposed information collection 
must be received by January 3, 2006. All responses to this information 
collection will be summarized and included in the request for OMB 
approval and will become a matter of public record.
    Title: School Breakfast Program Regulations.
    OMB Number: 0584-0012.
    Expiration Date: August 31, 2007.
    Type of Request: Revision of a currently approved collection.
    Abstract: The School Breakfast Program (SBP) regulations are being 
amended to implement section 201 of the Child Nutrition and WIC 
Reauthorization Act of 2004 (Pub. L. 108-265) regarding severe need in 
the program. Specifically, section 201 of Public Law 108-265 eliminates 
the requirement to document costs in order to receive the severe need 
reimbursement rate. Consequently, this rule will remove the requirement 
that schools maintain records to support the cost of producing 
breakfasts in order to receive federal reimbursement at the severe need 
rates.
    The severe need cost accounting requirements are being removed by 
revising 7 CFR 220.9(d) and (e). Therefore, the reporting and 
recordkeeping requirements are also being removed.
    Estimate of Burden: The current inventory for School Breakfast 
Program, OMB 0584-0012 collection is 4,564,772 burden hours. 
Consequently, when this rule is published and the burden package is 
approved, the reporting burden will decrease by 70,034 hours and the 
recordkeeping will decrease by 2,098,273 hours. The total reduction in 
burden hours for School Breakfast Program, OMB 0584-0012 will be 
2,170,307 hours; the new burden hours will be 150,988 for reporting and 
2,287,710 for recordkeeping for a total of 2,438,698 burden hours.
    Number of Respondents: 84,138 respondents.
    Average Number of Responses per Respondent: 10 responses.
    Estimated Total Annual Responses: 872,915 responses.
    Estimated Time per Response: .17 hours/response.
    Estimated Annual Reporting Burden Hours:--150,988 hours.
    Number of Recordkeepers: 84,138 respondents.
    Estimated Annual Hours per Recordkeeper: 27.19 hours.
    Estimated Annual Recordkeeping Hours: 2,287,710 hours.
    Total Request--Annual Reporting and Recording Burden Hours: 
2,438,698 hours.

Government Paperwork Elimination Act

    The Food and Nutrition Service makes every effort to comply with 
the Government Paperwork Elimination Act by providing electronic 
submission in lieu of paper submission whenever it is feasible. School 
food authorities demonstrate their eligibility for severe need 
reimbursements by applying to their State agency. State agencies have 
the option of accepting and reviewing these applications 
electronically. The Food and Consumer Service encourages State agencies 
to provide electronic submission in lieu of paper submission where 
feasible.

Public Participation

    FNS has determined, in accordance with 5 U.S.C. 553(b), that a 
Notice of Proposed Rulemaking and the 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. In Section 501(b) of 
Public Law 108-265, Congress specifically afforded the Secretary the 
option of implementing this rulemaking without prior notice and 
comment. In addition, the provisions of this interim rule reflect 
mandatory statutory requirements which are non-discretionary. The 
Department, however, wishes to receive comments that might improve the 
administration of these mandatory requirements.

List of Subjects in 7 CFR Part 220

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


0
Accordingly, 7 CFR part 220 is amended as follows:

PART 220--SCHOOL BREAKFAST PROGRAM

0
1. The authority citation for 7 CFR part 220 continues to read as 
follows:

    Authority: 42 U.S.C. 1773 and 1779, unless otherwise noted.


0
2. In Sec.  220.9,
0
a. Paragraph (c) is revised; and
0
b. Paragraph (d) is removed and paragraph (e) is redesignated as 
paragraph (d) and revised.
    The revisions read as follows:


Sec.  220.9  Reimbursement payments.

* * * * *
    (c) The total reimbursement for breakfasts served to eligible 
children in schools not in severe need, and schools in severe need 
during the school year shall not exceed the sum of the products 
obtained by multiplying the total numbers of such free, reduced price 
and paid breakfasts, respectively, by the applicable rate of 
reimbursement for each type of breakfast as prescribed for the school 
year.
    (d) The State agency, or FNSRO where applicable, shall determine 
whether a school is in severe need based on the following eligibility 
criteria:
    (1) The school is participating in or desiring to initiate a 
breakfast program; and
    (2) At least 40 percent of the lunches served to students at the 
school in the second preceding school year were served free or at a 
reduced price. Schools that did not serve lunches in the second 
preceding year and that would like to receive reimbursement at the 
severe need rate may apply to their administering State agency. The 
administering State agency shall approve or deny such requests in 
accordance with guidance, issued by the

[[Page 66250]]

Secretary, that determines that the second preceding school year 
requirement would otherwise have been met.

    Dated: October 20, 2005.
Roberto Salazar,
Administrator, Food and Nutrition Service.
[FR Doc. 05-21785 Filed 11-1-05; 8:45 am]
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