[Federal Register Volume 72, Number 146 (Tuesday, July 31, 2007)]
[Rules and Regulations]
[Pages 41591-41611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14642]



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  Federal Register / Vol. 72, No. 146 / Tuesday, July 31, 2007 / Rules 
and Regulations  

[[Page 41591]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 226

[FNS-2007-0004]
RIN 0584-AD27


Afterschool Snacks in the Child and Adult Care Food Program

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule incorporates into the Child and Adult Care 
Food Program (CACFP) regulations the provisions of the William F. 
Goodling Child Nutrition Reauthorization Act of 1998, which authorized 
afterschool care centers meeting certain criteria to be reimbursed for 
snacks served to at-risk children 18 years of age and younger. This 
rule establishes the eligibility of at-risk afterschool care centers to 
serve free snacks to children who participate in afterschool programs. 
The centers, which must be located in low-income areas, are reimbursed 
at the free rate for snacks. The intended effect of this rule is to 
support afterschool care programs through the provision of snacks that 
meet CACFP meal pattern requirements. The additional benefits provided 
by the 1998 reauthorization act and codified by this final rule were 
extended to institutions and children immediately after enactment. 
These changes were originally proposed by the Department in a 
rulemaking published on October 11, 2000.

DATES: This final rule is effective August 30, 2007.

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: The preamble is organized into two main 
parts. Part I, Background, describes the provisions in this final rule, 
including a discussion of the comments received on the proposed rule. A 
question and answer format is used to guide this discussion. The 
Background concludes with a description of other changes made in the 
final rule that were not part of the proposed rule. Part II, Procedural 
Matters, contains information required to be included in publishing 
Federal rules.

I. Background

What changes did the law make about afterschool snacks?

    The William F. Goodling Child Nutrition Reauthorization Act of 1998 
(Pub. L. 105-336) provided for the nationwide availability of snacks in 
the National School Lunch Program (NSLP), and it expanded the 
availability of snacks to children ages 13 through 18 in the Child and 
Adult Care Food Program (CACFP) through at-risk afterschool care 
centers (at-risk centers). CACFP at-risk centers must be located in the 
attendance area of a school where 50 percent or more of the enrolled 
children are certified as eligible to receive free or reduced price 
school meals.

How did USDA propose to implement these changes?

    The proposed rule to implement the statutory provisions for 
afterschool snacks in the NSLP and CACFP was published on October 11, 
2000 (65 FR 60502). Although we included proposed changes for both 
programs in the same rulemaking, the proposed changes were not 
identical in both programs. Rather, we proposed to implement 
afterschool snacks within each program in a way that fit the unique 
characteristics of each program.
    The proposal had a 90-day comment period. A total of 33 comment 
letters were received, 26 letters were from State and local agencies 
administering the NSLP and/or the CACFP, five letters came from 
advocacy groups, and two comment letters were received from individuals 
not representing any group.

Why is USDA publishing two final rules on afterschool snacks?

    There were a number of reasons why we decided to publish separate 
final rules. Perhaps the strongest reason was that many of the proposed 
procedures for administering afterschool snacks were specific to each 
program. Most commenters provided program-specific comments. In 
addition, not all commenters addressed both programs, reflecting the 
fact that the NSLP and the CACFP are administered by different agencies 
or offices in 15 States.
    Another reason we chose to publish separate afterschool snack final 
rules is the need to explain changes made to the CACFP regulations, 7 
CFR part 226, by previously published final or interim CACFP 
rulemakings.

Which recently published CACFP rules impact the afterschool provisions?

    Published CACFP rules that impact this final rulemaking include:
    1. Implementing Legislative Reforms to Strengthen Program Integrity 
(67 FR 43448) (first integrity rule), an interim rule published in the 
Federal Register on June 27, 2002, which implemented provisions of the 
Agricultural Risk Protection Act of 2000 (Pub. L. 106-224) designed to 
strengthen the integrity of the program;
    2. Improving Management and Program Integrity (69 FR 53502) (second 
integrity rule), an interim rule published in the Federal Register on 
September 1, 2004, which implemented additional provisions of a 
proposed rule by the same name, published on September 10, 2000, to 
improve program integrity through State agency management;
    3. Increasing the Duration of Tiering Determinations for Day Care 
Homes (70 FR 8501) (duration of tiering rule), a final rule published 
in the Federal Register on February 22, 2005, which implemented a 
provision of the Child Nutrition and WIC Reauthorization Act of 2004 
(Pub. L. 108-265) to increase the length of certain tier I 
determinations from three years to five years;
    4. Child and Adult Care Food Program: Age Limits for Children 
Receiving Meals in Emergency Shelters, (71 FR 1), an interim rule 
published on January 3, 2006 (emergency shelter rule), which 
implemented a provision of Public Law 108-265 that raised the age of 
children receiving CACFP meals in emergency shelters from 12 to 18; and

[[Page 41592]]

    5. For-Profit Center Participation in the Child and Adult Care Food 
Program (71 FR 62057) (for-profit center rule), a final rule published 
in the Federal Register on October 23, 2006, which implemented a 
provision of Public Law 108-265 that permanently authorized for-profit 
centers to participate in the program based on the income eligibility 
of children for free or reduced price meals.
    The two integrity rules, published in 2002 and 2004, made 
significant changes to the Program affecting all participating and 
applicant institutions, including at-risk afterschool care centers. In 
doing so, these interim rules revised and reorganized sections of the 
CACFP regulations that are additionally amended by this final rule, 
especially Sec. Sec.  226.6, 226.10, 226.11, 226.15, and 226.19. The 
other three rules, published in 2005 and 2006, impact the afterschool 
snack provisions in specific areas of program operations. We will 
discuss the effect that all five rules have had on the final 
afterschool snack provisions throughout this preamble.

How are comments on the proposed rule addressed in this preamble?

    We organized and analyzed the comments on the proposed rule under 
the following topics:
    1. General comments supporting/opposing the proposed rule.
    2. At-risk afterschool care centers.
    3. Eligible afterschool care programs.
    4. Eligible children.
    5. Area eligibility:

--Definition (eligible area).
--Data used.
--Procedures for determining.

    6. Licensing and approval provisions.
    7. Application processing.
    8. For-profit center provisions.
    9. Meal requirements.
    10. Monitoring:

--By State agencies.
--By sponsors.

    11. Reimbursement provisions.
    12. Reporting and Recordkeeping provisions.
    13. Other provisions.
    Following is a discussion of the comments and our responses to the 
comments received on these topics.
1. Did commenters provide any comments that addressed the general 
design or scope of the proposed CACFP afterschool snack component?
    Yes. We received three comments that generally supported the 
proposed rule. One supportive comment was from a sponsoring 
organization that stated it had been operating under FNS guidance 
issued after the at-risk snack component was authorized, most of which 
was incorporated into the proposed rule, and had experienced few 
problems following the requirements.
    We also received three comments that opposed our general objective 
of ensuring that the snack component made sense within each respective 
child nutrition program. In achieving this objective, we were obliged 
to incorporate some afterschool snack policies that recognize 
differences between the programs, resulting in two similar afterschool 
snack components with some variation in operating provisions. These 
commenters encouraged the Department to make the snack components in 
the CACFP and NSLP as similar as possible. One commenter urged us to 
create a ``seamless'' afterschool snack component that would include 
three child nutrition programs, the NSLP, CACFP, and Summer Food 
Service Program.
    Although we support seamless child nutrition programs, statutory 
requirements vary among the child nutrition programs, and we must draft 
the respective program rules accordingly.
2. What is an at-risk afterschool care center?
    We proposed to define an at-risk afterschool care center as a 
public or private nonprofit organization or a for-profit center that is 
eligible to participate in the CACFP, which provides nonresidential 
child care to children after school through an approved afterschool 
care program in an eligible area, and which participates either as an 
independent center or as a sponsored center.
    We received no comments on our proposed definition of an at-risk 
afterschool care center at Sec.  226.2 or on the proposed requirement 
at Sec.  226.17a(a)(1)(i) that organizations must meet this definition 
in order to receive reimbursement for at-risk afterschool snacks.
    Since the October 2000 publication of the proposed rule, we have 
had to address an issue that was not included in the proposed rule 
concerning eligibility of emergency shelters. Questions were raised 
about the eligibility of homeless children to receive afterschool 
snacks under the at-risk provisions when the emergency shelter where 
they reside is not located in an eligible area. To ensure that homeless 
children receive benefits under the at-risk snack component, we 
provided written guidance in June 2002 that emergency shelters may 
participate in the at-risk afterschool snack component regardless of 
location. This policy on emergency shelters is incorporated in this 
final rule in Sec. Sec.  226.2 (definition of at-risk afterschool care 
centers), 226.17a(b)(1)(iv), and 226.17a(i).
    The Department proposed to add ``at-risk afterschool care center'' 
to the definitions of child care facility, independent center, and 
institution. We received no comments on these proposals. Therefore, the 
proposed revisions are retained in the final rule. For consistency, we 
have also added the term ``at-risk afterschool care center'' to the 
definition of ``Center'' in this final rule.
3. What did commenters say about proposed criteria for eligible 
afterschool programs?
    We proposed that organizations that want to participate in the at-
risk afterschool snack component must have a program that meets the 
following four criteria: (1) is organized primarily to provide care for 
children after school and on weekends, holidays, or school vacations 
during the school year (but not during summer vacation); (2) has 
regularly scheduled activities (i.e., in a structured and supervised 
environment); (3) includes education or enrichment activities; and (4) 
is located in an eligible area. In addition, we proposed to exclude 
organized athletic sports programs that compete interscholastically or 
at the community level. These criteria resemble those proposed for 
afterschool programs serving snacks in the NSLP, except that an 
afterschool snack service under the NSLP may not operate on weekends or 
holidays and does not have to be located in an eligible area.
    We received eight comments on these provisions.
    Commenters asked the Department to clarify the term ``care for 
children''. The Richard B. Russell National School Lunch Act (NSLA) at 
section 17(r)(2)(A), 42 U.S.C. 1766(r)(2)(A), requires that at-risk 
afterschool care centers must be organized primarily to provide care to 
at-risk school children during after school hours, weekends, or 
holidays during the regular school year. Care for children in at-risk 
centers would reasonably encompass:
    1. Adult supervision,
    2. A facility that provides a safe environment, and
    3. An organization that assumes responsibility for the children or 
youth while they are present.
    Care for children should be given in a context that is appropriate 
for the age of the participants. Preschool children, for example, 
require close adult

[[Page 41593]]

supervision in a structured environment; adolescents need adult 
supervision, which may be provided in a more informal, less structured 
environment.
    Commenters also asked us to clarify ``education or enrichment 
activity'' and the State agency's responsibility for reviewing 
organized activities/educational components. Examples of educational or 
enrichment activity would include homework help, tutoring, supervised 
drop-in athletic or other activity programs. A State agency must review 
the activities/educational components to the extent needed in order to 
approve or deny the application for the at-risk center. State agencies 
should instruct applicant organizations to describe the planned 
activities or educational components in enough detail so that it is 
possible for State agencies to determine the adequacy of the program 
based on the information provided in the application.
    Commenters stated that at-risk snack programs should be able to 
operate during the summer. Section 17(r)(2)(A) of the NSLA (42 U.S.C. 
1766(r)(2)(A)) limits reimbursement to snacks served during the regular 
school year. However, afterschool snacks can be served year-round 
through the CACFP if an at-risk center is located in the attendance 
area of a school operating on a year-round schedule. We have clarified 
the restriction on summer service at Sec.  226.17a(b)(1)(i) and 
226.17a(m). At-risk centers that are affected by this restriction 
(i.e., are located in the attendance area of a school that is on a 
traditional school calendar) may be able to participate in the Summer 
Food Service Program.
    Several commenters opposed other restrictions on eligible programs 
that were in the proposed rule, including limiting at-risk programs to 
low-income areas and excluding organized sports from participating in 
the snack service. The NSLA restricts the CACFP afterschool snack 
component to low-income areas, specifically defined at section 
17(r)(1)(B) (42 U.S.C. 1766(r)(1)(B)) as programs that are located in 
the attendance area of a school in which at least 50 percent of the 
enrolled children are certified eligible for free or reduced-price 
school meals. Since this restriction is a statutory requirement, we 
must include it in the regulations.
    Concerning the proposed exclusion of organized sports, some 
commenters stressed the important role of sports in providing 
afterschool activity for youth. However, as we explained in the 
preamble to the proposed rule, House and Senate conferees declared in 
the Conference Report accompanying Public Law 108-265 (House Report 
105-786) that they did not intend for afterschool snacks to be provided 
to members of athletic teams. Rather, the conferees intended that 
children receiving afterschool snacks would be participating in the 
types of programs that provide education or enrichment activities, 
which are known to help reduce or prevent involvement in juvenile 
crime. This statement provides a clear indication of Congressional 
intent, and thus we have retained the restriction on interscholastic or 
community level sports teams in the final rule. This same exclusion 
applies to the NSLP afterschool snack component as proposed, as well.
    We would, however, like to clarify participation by student 
athletes in afterschool snacks. One commenter suggested that even 
though organized athletic teams would be excluded, individual student 
athletes participating in center activities should be allowed to 
receive a snack or a meal from an at-risk afterschool care center that 
is operating to serve children in the eligible area where the athletes 
live or attend school. We agree. This situation would not violate the 
intent of Congress as expressed by the House and Senate conferees, 
which addressed the ineligibility of athletic teams as an afterschool 
activity to qualify as at-risk snack programs.
    We would also like to clarify, as stated in the proposed rule, that 
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.
    Accordingly, the proposed limitation on eligible afterschool care 
programs, proposed at Sec.  226.17a(b)(2), is retained in this final 
rule.
4. Who is eligible for afterschool snacks?
    One of the hallmarks of the afterschool snack provisions for CACFP 
as mandated by section 107(h) of Public Law 105-336 was to extend 
benefits to youth through age 18. Accordingly, we proposed at Sec.  
226.17a(c) and in the definition of ``Children'' at Sec.  226.2 that 
children are eligible for at-risk afterschool snack programs if they 
participate in an approved afterschool care program and are 18 and 
under at the start of the school year or meet the definition of 
``Person with disabilities'', as proposed at Sec.  226.2.
    We received three comments on this proposed provision.
    Two State agencies encouraged the Department to set a minimum age 
limit for participation in the at-risk afterschool snack component. 
They questioned whether this program is really appropriate for infants 
and preschoolers. The statute did not set a minimum age for 
participation in at-risk afterschool snacks. We are concerned that a 
lower age limit might discourage otherwise eligible child care centers 
from offering afterschool programs to the at-risk population if they 
could not be reimbursed for snacks served to pre-school children. 
Furthermore, if centers provided afterschool activities suitable only 
for school-age children, older siblings might not attend the 
afterschool program if care was not extended to their younger brothers 
or sisters.
    One commenter encouraged the Department to expand the age limit to 
18 also for outside-school-hours care centers. We are unable to adopt 
this suggestion because the age limitation for outside-school-hours 
centers remains at age 12 (age 15 for children of migrant workers) as 
mandated at section 17(a)(3) of the NSLA (42 U.S.C. 1766(a)(3)). As 
discussed in the preamble to the proposed rule, both at-risk centers 
and outside-school-hours care centers are reimbursed for snacks served 
to children in afterschool care, but they are intended to serve 
different populations and consequently have different provisions. The 
following chart highlights some of the similarities and differences 
between at-risk centers and outside-school-hours care centers.

[[Page 41594]]



                Comparison Between At-Risk Centers and Outside-School-Hours Care Centers (OSHCCs)
----------------------------------------------------------------------------------------------------------------
                                            At-risk centers                               OSHCCS
                               ---------------------------------------------------------------------------------
           Provision               Regulatory                               Regulatory
                                    citation           Description           citation           Description
----------------------------------------------------------------------------------------------------------------
Eligible institutions.........  Sec.  Sec.        Public, private        Sec.   226.2      Public, private
                                 226.17a(a) and    nonprofit, and for-    definition of     nonprofit, and for-
                                 226.6(b).         profit organizations   ``Outside-        profit organizations
                                                   that operate an        school-hours      that are licensed or
                                                   eligible afterschool   care center''     approved (if
                                                   care program, are      and Sec.          required) to provide
                                                   licensed or approved   226.6(b).         organized
                                                   (if required). In                        nonresidential child
                                                   addition, centers                        care services to
                                                   must meet other                          children during
                                                   CACFP requirements,                      hours outside of
                                                   as applicable.                           school. In addition,
                                                                                            centers must meet
                                                                                            other CACFP
                                                                                            requirements, as
                                                                                            applicable.
Eligible afterschool care       Sec.              Must be organized      N/A.............  N/A.
 program.                        226.17a(b).       primarily to provide
                                                   care for children
                                                   after school or on
                                                   weekend, holidays,
                                                   or school vacations
                                                   during the regular
                                                   school year, have
                                                   organized, regularly
                                                   scheduled
                                                   activities, include
                                                   education or
                                                   enrichment
                                                   activities, and be
                                                   located in a low-
                                                   income area (see
                                                   Eligible area below).
Licensing.....................  Sec.              If there is no         Sec.              If there is no
                                 226.6(d)(1).      Federal, State, or     226.6(d)(1).      Federal, State, or
                                                   local licensing                          local licensing
                                                   requirement, must                        requirement, must
                                                   only meet State or                       only meet State or
                                                   local health and                         local health and
                                                   safety standards                         safety standards
                                                   (see also sec.                           (see also sec.
                                                   17(a)(5) of the                          17(a)(5) of the
                                                   NSLA.).                                  NSLA).
Eligible area.................  Sec.   226.2      Attendance area of an  N/A.............  May operate in any
                                 definition of     elementary, middle,                      area.
                                 ``Eligible        or high school with
                                 area'',           50% or more free/
                                 paragraph (a).    reduced-price
                                                   eligible children.
Reimbursement.................  Sec.              All afterschool        Sec.   226.12(c)  Reimbursement is at
                                 226.17a(n).       snacks are                               the free/reduced
                                                   reimbursed at the                        price/paid rates
                                                   free rate.                               based on individual
                                                                                            income eligibility
                                                                                            of children.
Eligible children.............  Sec.   226.2,     Persons age 18 and     Sec.   226.2,     Children who are age
                                 definition of     under at the start     definition of     12 and under,
                                 ``Children'',     of the school year     ``Children'',     children age 15 and
                                 paragraphs (c)    and persons of any     paragraphs (a),   under who are
                                 and (e).          age who meet the       (b), (c).         children of migrant
                                                   definition of                            workers, and persons
                                                   ``Persons with                           of any age who meet
                                                   disabilities''.                          the definition of
                                                                                            ``Persons with
                                                                                            disabilities''.
Types of meals eligible for     Sec.              Snacks...............  Sec.              Breakfast, snack, and
 reimbursement.                  226.17a(l).                              226.19(b)(4).     supper (lunch may
                                                                                            also be served under
                                                                                            certain conditions).
Number of reimbursable meals..  Sec.              One snack per day....  Sec.              Two meals and one
                                 226.17a(k).                              226.19(b)(5).     snack per child per
                                                                                            day (or two snacks
                                                                                            and one meal).
Meal patterns.................  Sec.  Sec.        Requirements for at-   Sec.  Sec.        Requirements for
                                 226.17a(l) and    risk snacks are the    226.19(b)(6),     meals served by
                                 226.20(b)(6)      same as CACFP snack    226.20(b) and     OSHCCs are the same
                                 and (c)(4).       pattern requirements   (c).              as CACFP meal
                                                   for infants and                          patterns for infants
                                                   children.                                and children.
Days of operation.............  Sec.              School days,           Sec.              School days, school
                                 226.17a(m).       weekends, holidays,    226.19(b)(4).     vacation, including
                                                   and school vacations                     weekends and
                                                   during the school                        holidays; no weekend-
                                                   year; not in the                         only programs.
                                                   summer except in
                                                   areas served by year-
                                                   round schools.
Time restrictions on meal       Sec.   226.20(k)  States may establish   Same............  Same.
 service periods.                                  requirements
                                                   concerning time
                                                   restrictions for
                                                   CACFP institutions.
Monitoring....................  Sec.   226.6(m)   The State agency must  Same............  Same.
                                 for State         review \1/3\ of all
                                 agency review     institutions each
                                 of independent    year; percentages of
                                 centers and       sponsored facilities
                                 sponsoring        sponsored by the
                                 organizations;    institution vary
                                 Sec.              depending on the
                                 226.16(d)(4)(iv   size of the
                                 ) for             institution. Large
                                 sponsoring        sponsoring
                                 organizations     organizations <100
                                 review of their   must be reviewed
                                 facilities.       every two years. New
                                                   institutions with
                                                   five or more
                                                   facilities must be
                                                   reviewed within the
                                                   first 90 days of
                                                   operation.
                                                  Sponsoring
                                                   organizations must
                                                   review their
                                                   facilities three
                                                   times each year. At
                                                   least one review
                                                   must occur during
                                                   the first six weeks
                                                   of program
                                                   operations; reviews
                                                   cannot be spaced
                                                   more than six months
                                                   apart. Two reviews
                                                   must be unannounced.
----------------------------------------------------------------------------------------------------------------


[[Page 41595]]

    Readers should note that Public Law 108-265 raised the age for 
participation in CACFP meals in emergency shelters to 18. FNS notified 
CACFP State agencies of this statutory change, which was effective on 
October 1, 2004, and the emergency shelter rule, published on January 
3, 2006 (71 FR 1) codified the increase to age 18 in the CACFP 
regulations. There are now two types of centers that may serve CACFP 
meals or snacks to children through age 18: at-risk afterschool care 
centers and emergency shelters.
    The provision describing the eligibility of children for receiving 
afterschool snacks as proposed at Sec.  226.17a(c) remains unchanged in 
this final rule. We have made some minor changes, however, to the 
definition of ``Children'', revising proposed text of children's 
eligibility for afterschool snacks and current text of children's 
eligibility for meals at emergency shelters, which was revised by the 
emergency shelter rule. We have removed the references to persons with 
disabilities specific to either at-risk centers or emergency shelters; 
these references are unnecessary because the definition of ``Children'' 
includes persons with disabilities as a category of eligible children. 
This final rule adopts the proposed definition for participation by 
disabled persons with minor changes. Longstanding CACFP policy has 
recognized that disabled persons meeting the regulatory definition are 
eligible to participate in any CACFP component serving children, 
including not only at-risk afterschool care centers or emergency 
shelters, but also child care centers, outside-school-hours care 
centers, and family or group day care homes. This rule codifies the 
policy by providing a separate definition for ``Persons with 
disabilities''.
5. Area Eligibility
    Because of the number of the issues involved in area eligibility, 
the next seven questions address the proposed provisions, comments 
received, and changes made to area eligibility requirements.

How did the Department propose to define area eligibility and did 
anyone comment on the definition?

    We proposed to define an eligible area for the at-risk afterschool 
snack component as 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. As 
previously mentioned, we also proposed to use area eligibility as one 
of four key criteria that an afterschool program must meet in order to 
be eligible for participation in the CACFP at-risk component. We have 
provided guidance on questions of area eligibility of schools involved 
in busing. This policy permits area eligibility to be extended to sites 
if the majority of children at the site come from schools where at 
least 50 percent of the enrolled children are eligible for free or 
reduced-priced school meals.
    We received comments from two State agencies that opposed the 
inclusion of data for middle and high schools; they stated that it 
would be a reporting burden for NSLP State agencies. Although we 
acknowledge that the addition of middle and high schools may require 
more work for NSLP State agencies, we believe it is important to 
identify as many area eligible locations as possible to reach the 
population of needy children and youth targeted by the at-risk snack 
provisions in the NSLA, especially now that the statute expands 
afterschool snacks to teenagers through age 18.
    In this final rule, we have revised the definition for eligible 
area to provide a two-part definition that distinguishes between two 
different uses of the term in CACFP. Although the term is more 
frequently associated with the at-risk snack component, it is also used 
to describe the geographic area of tier I day care homes. Therefore, to 
avoid possible confusion, we have provided both definitions of eligible 
area.
    Eligible area as it applies to the at-risk snack component, which 
is unchanged from the proposed rule, includes 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. Eligible area for tiering purposes, which is taken from 
the definition of tier I day care home in section 
17(f)(3)(A)(ii)(I)(aa) and (bb) of the NSLA (42 U.S.C. 
1766(f)(3)(A)(ii)(I)(aa) and (bb)), includes the attendance areas of 
elementary schools in which at least 50 percent of the total number of 
children are certified eligible to receive free or reduced-price meals, 
or neighborhoods that meet the 50 percent threshold of income 
eligibility for free or reduced-price meals based on census data. 
Eligible areas for at-risk snacks include middle and high school 
attendance areas as well as the attendance areas of elementary schools; 
eligible areas for tiering purposes do not include middle or high 
school attendance areas but do include neighborhood areas defined by 
census data that meet the 50 percent threshold of households eligible 
for free or reduced-price meals. The inclusion of a definition of 
eligible area for tiering purposes is not intended to change any aspect 
of current requirements for determining tier I status for day care 
homes.
    Accordingly, the definition of ``Eligible area'' as proposed in 
Sec.  226.2 is revised, and reference to this definition is added at 
new Sec.  226.17a(i)(1).

What data did the Department propose to require for determining area 
eligibility?

    We proposed that the data used to determine area eligibility must 
be based on the school's total number of children approved for free and 
reduced-price school meals for the preceding October. However, we 
stipulated that the NSLP State agency, which provides the data, may 
designate another month. If the NSLP State agency chooses to designate 
a month other than October, it must do so for the entire State. The 
other critical data element in determining the area eligibility of an 
at-risk center is documentation that the center is located in the 
school's attendance area. If not available from the NSLP State agency, 
information on a school's geographical boundaries would be provided by 
the individual school or by the school district. We did not propose to 
require the NSLP State agency to provide attendance area data.

What did commenters say about data for determining area eligibility?

    One State agency commented that the regulations should restrict the 
use of private school data in establishing area eligibility because 
private schools often have very large attendance areas. This commenter 
stated that Federal regulations should specify that only public school 
data could be used to establish area eligibility.
    We agree that private school data may often be an inappropriate 
source to establish area eligibility for at-risk centers, but we 
recognize that there may be exceptions, making the use of private 
school data reasonable to establish area eligibility in some 
situations. Thus, we conclude that State agencies should have the 
flexibility to approve the use of private school data for establishing 
area eligibility when necessary.
    One commenter suggested that eligibility determinations made for 
open sites in the Summer Food Service Program (SFSP) should be allowed 
to establish area eligibility for at-risk care centers also.
    We are bound by the specific requirement of section 17(r)(1)(B) of 
the NSLA, 42 U.S.C. 1766(r)(1)(B), that area eligibility must be based 
on eligibility for free or reduced-price school meals.

[[Page 41596]]

For this reason, the SFSP open site eligibility may be used only if it 
is based on the same criteria required for determining area eligibility 
for at-risk centers.
    Accordingly, the data required to document the area eligibility of 
an at-risk afterschool care center, proposed at Sec. Sec.  
226.6(f)(9)(i) and 226.17a(h)(2) are retained but redesignated at 
Sec. Sec.  226.6(f)(1)(ix) and 226.17a(i)(2).

What did the Department propose about the process of determining area 
eligibility?

    We proposed a process of determining area eligibility that is 
similar to the process of determining the tiering status of day care 
homes. Like the tiering process, which is redesignated in this final 
rule at Sec.  226.6(f)(1)(viii), the process of determining area 
eligibility starts with the receipt of free and reduced-price school 
data from the NSLP State agency. As with tiering, we charged the CACFP 
State agency with the task of coordinating with the NSLP State agency 
to receive the school data (i.e., the list of elementary, middle, and 
high schools that meet the definition of eligible area) on an annual 
basis. Unlike the tiering process, however, the CACFP State agency is 
not required to provide the school data to sponsoring organizations of 
at-risk centers or to independent at-risk centers by a certain date 
each year. Instead, we proposed that the CACFP State agency must only 
provide the list upon request by sponsoring organizations or 
independent at-risk centers.
    We proposed that CACFP State agencies must determine the area 
eligibility for all independent at-risk centers, using the most recent 
free and reduced-price school data and attendance area data obtained or 
verified from school officials within the last school year. However, we 
proposed that a sponsoring organization must provide information 
required by the State agency that would enable the State to determine 
the area eligibility of each sponsored at-risk center. This information 
may include current free and reduced-price school data from the list 
and related attendance area data. As proposed, area eligibility 
determinations would be valid for three years to match the tiering 
determination provisions for tier I status based on school data, which 
were in effect at the time the proposed rule was published.
    We also proposed two provisions for redetermining area eligibility 
that were consistent with those for tiering determinations based on 
school data. One of these provisions would allow the sponsoring 
organization, the State agency, or FNS to redetermine area eligibility 
if the attendance area data received annually from the NSLP State 
agency indicates that an at-risk center is no longer eligible. The 
second provision would limit this flexibility by prohibiting routine 
redeterminations of area eligibility based on annual data. Both 
provisions duplicate current regulatory language for tiering 
redeterminations found at Sec.  226.6(f)(3)(i) in this final rule.
    The annual collection of area eligibility data provides the State 
agency current and accurate information to approve new applications as 
well as for use in redeterminations at the end of a center's 
eligibility cycle. This annual information can also be used if the 
sponsoring organization, the State agency, or FNS has identified a 
particular area that has had a dramatic change in economic status and 
wants to use this information in redetermining a center's area 
eligibility.

What has changed about area eligibility determinations in the final 
rule?

    We received six comments from State agencies that addressed the 
frequency or timing of the determination or redetermination. Three 
commenters weighed in on the proposal to allow area eligibility to be 
valid for three years; two supported and one opposed.
    Since the October 11, 2000 publication of the proposed rule, 
Congress authorized the increase in the duration of tier I status 
determinations based on school data to five years. The provision of 
Public Law 108-265 was effective on July 1, 2004, and the change was 
codified in the CACFP regulations by the duration of tiering rule.
    This final rule reflects an increase in longevity of area 
eligibility determinations from the proposed three years to five years. 
Please note that those centers that were deemed not eligible to 
participate in the CACFP as at-risk afterschool centers would not have 
to wait for five years before they could apply again to participate in 
the CACFP as an at-risk afterschool center.
    We increased the duration of area eligibility determinations in 
order to achieve the coordinated use of school data for 
redeterminations of tiering and area eligibility that we had sought in 
the proposed rule. The Department wants to point out that because 
applications are approved on a three-year cycle, for administrative 
efficiency State agencies may choose to make area eligibility 
determinations on that three-year cycle. However, we encourage State 
agencies wherever possible to adopt the five-year cycle for area 
eligibility determinations.
    Two commenters addressed the proposal to allow sponsoring 
organizations, State agencies, or FNS the option of changing a 
determination of area eligibility based on updated school data. One 
commenter opposed the option entirely, and the other commenter noted 
what seemed to be conflicting language between proposed Sec.  
226.6(b)(11)(iii), which stated that State agencies must document area 
eligibility at least once every three years, and proposed Sec.  
226.6(f)(9)(v), which stated that State agencies may not routinely 
redetermine area eligibility during the three-year period. In this 
final rule, State agency responsibilities for area eligibility 
redeterminations are clarified and addressed in Sec.  226.6(f)(3)(ii).
    We want to clarify the issue of what was received as conflicting 
language. Although sponsoring organizations, State agencies, or FNS may 
redetermine area eligibility if the attendance area data received 
annually from the NSLP State agency indicates that an at-risk center is 
no longer eligible, they would not be permitted to do so routinely 
based on annual data. The intention is that existing at-risk 
afterschool centers would remain area eligible for the entire period of 
time (i.e. five years), and annual data would not be used to respond to 
minor variations in eligibility (for example, centers that are located 
in the attendance areas of schools where the percentage of students 
eligible for free or reduce-priced meals drops negligibly below the 50 
percent level in any given year during the five-year period). The 
intention is to give sponsoring organizations, State agencies, or FNS 
the flexibility to make redeterminations in those situations where this 
percentage drops markedly due to underlying demographic changes.
    In this final rule, State agency responsibilities for area 
eligibility redeterminations are clarified and addressed in Sec.  
226.6(f)(3)(ii).
    Finally, one State agency commented that eligibility periods should 
begin with the fiscal year or school year, not in the month in which 
the first determination is made; this is too much work for State 
agencies to track.
    We agree that State agencies should have the flexibility to 
determine within the last year of area eligibility when the next cycle 
should begin. This would allow State agencies the option of 
synchronizing all area eligibility redeterminations so that at-risk 
centers could begin the next cycle on a particular date, such as the 
first day of the fiscal year or school year. Note that this flexibility 
to set the date extends

[[Page 41597]]

only with redeterminations, not with the initial determination and 
approval to begin program operations. State agencies that opt to 
synchronize area eligibility redeterminations should notify all newly 
participating at-risk centers of the date in the last year when current 
area eligibility will expire and new area eligibility data must be 
submitted.
    Accordingly, proposed Sec. Sec.  226.6(f)(9)(v) and 226.17a(h)(2) 
are revised and redesignated as Sec. Sec.  226.6(f)(3)(ii) and 
226.17a(i)(3) to increase the duration of area eligibility 
determinations to five years and to specify that State agencies may 
determine the date in the fifth year by which the next five-year cycle 
of area eligibility will begin.

What other changes have been made to the regulations affecting the area 
eligibility determination process?

    The second integrity rule substantially revised Sec.  226.6(f) by 
sorting provisions into annual, triennial or other time periods when 
data are due or actions are required. These changes compelled us to 
sort the proposed afterschool snack provisions in current Sec.  
226.6(f) into the appropriate time periods. The result is that these 
provisions are reorganized and in some instances, revised to clarify 
the process of determining area eligibility; the substance of the 
proposed provisions has not changed, with one exception. That 
exception, as previously described, permits State agencies to determine 
the date during the fifth year of area eligibility when the next cycle 
of area eligibility will begin. We have also included the tiering 
determination process for day care homes in the reorganization of Sec.  
226.6(f); the tiering provisions previously located at Sec.  
226.6(f)(1)(iii) have been revised and redesignated at Sec.  
226.6(f)(1)(viii) and (f)(3)(i).
6. What licensing and approval requirements did the Department propose 
for at-risk centers?
    Public Law 105-336 eased licensing and approval requirements for 
afterschool care programs by allowing institutions to meet State or 
local health and safety standards if Federal, State, or local licensing 
or approval is not required. Accordingly, we proposed to require that 
at-risk and outside-school-hours care centers must only meet State or 
local health and safety standards if Federal, State, or local licensing 
or approval is not otherwise required.

What did commenters say about this proposed change in licensing/
approval standards?

    This proposed provision generated 11 comments from State agencies, 
advocates and associations, and sponsoring organizations. Commenters 
focused on difficulties that exist due to State and local variations in 
establishing health and safety standards appropriate for at-risk 
centers and in maintaining those standards through inspection of 
facilities. At-risk programs in some areas have been prevented from 
operating because of non-existent or inappropriate health and safety 
standards or backlogs in obtaining inspection and approval.
    One State agency opposed the reduced licensing requirements for 
outside-school-hours centers in the proposed rule.
    The statutory language, found at section 17(a)(5)(C) in the NSLA 
(42 U.S.C. 1766(a)(5)(C)), does not distinguish between the types of 
CACFP afterschool centers that may operate based on compliance with 
health and safety standards in the absence of licensing requirements. 
Broadly stated, this provision applies to both types of afterschool 
centers operating in the CACFP, at-risk centers and outside-school-
hours centers. We would like to emphasize that this provision applies 
only in those localities where Federal, State, or local licensing is 
not required for afterschool care programs.
    One commenter asked the Department to clarify whether CACFP State 
agencies could require licensing of at-risk and outside-school-hours 
centers.
    Since the authority to establish standards resides with the 
licensing agency at the Federal, State, or local level, the CACFP State 
agency may establish or change licensing requirements for outside-
school-hours and at-risk centers only if it is also the licensing 
authority for the State.
    Commenters asked what are appropriate health and safety standards 
for at-risk and outside-school-hours centers. State agencies have 
informed us that in some localities these centers must meet stringent 
requirements that apply to restaurants because health authorities are 
unfamiliar with CACFP meal services. In other instances, minimal or no 
standards exist.
    We encourage CACFP State agencies to work closely with State and 
local health and safety authorities to determine the specific 
requirements for each type of facility. This will help ensure that 
appropriate requirements are being applied to organizations seeking to 
participate in the CACFP.
    Some commenters encouraged the Department to specify not only the 
types of standards that are appropriate but also a reasonable time 
interval between inspections. In some localities, an occupancy permit 
may be issued only once, such as prior to initial occupancy of a newly 
constructed building.
    The Department lacks the statutory authority to regulate either 
standards or time intervals for health and safety certification of 
facilities. Because of the variations that exist among communities, the 
CACFP State agency should work with State and/or local health and 
safety officials to promote reasonable standards with appropriate time 
intervals established between inspections and/or certifications.
    Commenters asked what information should be provided to document 
that health and safety standards are met before a State agency approves 
the at-risk or outside-school-hours center for CACFP participation.
    Documentation requirements will vary by State or locality. An 
application for participation as an at-risk center or outside-school-
hours center should include a copy of the documentation that is 
provided by the health or safety inspection agency. Ideally, this would 
include a copy of the permit and/or a copy of the inspection report 
with the date, name, and signature of the inspecting official. In some 
jurisdictions, however, occupancy permits may serve as the only 
evidence that a facility is in compliance with State or local health or 
safety standards. In situations where an at-risk center or outside-
school-hours center is located in a school building where school lunch 
or breakfast is served and food safety inspections have occurred (as 
required by section 9(h) of the NSLA, 42 U.S.C. 1758(h)), the center 
may not need to meet any additional health and safety requirements. The 
school's participation in the National School Lunch Program or the 
School Breakfast Program would be proof of meeting applicable 
standards. In all cases, the State agency should ensure that the 
documentation provided is appropriate and current (i.e., not revoked or 
expired).
    Some commenters suggested that at-risk centers and outside-school-
hours centers be allowed to simply notify the State or local health 
department prior to starting operations, in the same way that sponsors 
of Summer Food Service Program (SFSP) sites are required to do, as 
described at 7 CFR 225.16(a).
    In localities where health and safety standards exist for 
afterschool programs and the health inspection requirements are the 
same for meals served under CACFP afterschool programs and SFSP,

[[Page 41598]]

State agencies may accept documentation of a current health inspection 
of a facility that was previously obtained for the SFSP. CACFP may do 
this as long as the current SFSP inspection has not been revoked or 
expired. However, the notification letter to the health department, 
which serves simply as a notice of intent to begin meal services, must 
not be considered documentation for meeting health and safety standards 
for at-risk or outside-school-hours centers. An inspection of the 
facilities must have occurred.
    Some commenters asked what requirements should apply if there are 
no State or local health and safety standards for at-risk and outside-
school-hours centers.
    The NSLA did not establish any form of ``alternate approval'' for 
centers providing afterschool care, as it did for other types of child 
care facilities (see section 17(a)(5)(B) of the NSLA 42 U.S.C. 
1766(a)(5)(B)). The Department concludes, therefore, that CACFP State 
agencies are not required to develop health and safety standards for 
these facilities.
    To eliminate possible confusion about actions that State agencies 
must take in the absence of licensing or approval standards for 
outside-school-hours care centers, we made the following changes. 
First, we revised the definition of ``CACFP child care standard'' by 
removing the words ``outside-school-hours care centers''. Second, in 
the definition of ``Outside-school-hours care center'', we added a 
reference to Sec.  226.6(d)(1)(v), which provides the specific 
licensing and approval requirements for this type of center. Third, we 
removed Sec.  226.6(d)(3)(ii) because it referred to alternate child 
care standards that may be used as approval standards for outside-
school-hours care centers when no other licensing/approval standards 
are available. This change required a revision to the structure of 
Sec.  226.6(d)(3), which we have set out in this rule.
    The Department wants to make clear that in the absence of licensing 
or approval standards, at-risk centers and outside-school-hours care 
centers must meet State or local health and safety standards. When 
State or local health and safety standards have not been established, 
State agencies are encouraged to work with appropriate State and local 
officials to create such standards. Meeting these standards will remain 
a precondition for any afterschool center's eligibility for CACFP 
nutrition benefits. Therefore, at-risk afterschool care centers and 
outside-school-hours care centers will not be eligible for CACFP in 
areas where State or local health and safety standards have not been 
established. However, as described at Sec.  226.6(d)(1)(iv), an at-risk 
afterschool care center or an outside-school-hours care center in an 
area where State or local health and safety standards have not been 
established will still have the option to demonstrate, to the State 
agency, compliance with CACFP child care standards, as described at 
Sec.  226.6(d)(3).
    This final rule retains the requirement, proposed at Sec.  
226.6(d)(1)(v), which requires at-risk centers and outside-school-hours 
centers to meet State or local health and safety standards in the 
absence of Federal, State, or local licensing requirements. This 
requirement is also restated at Sec.  226.17a(d) for at-risk centers 
and at Sec.  226.19(b)(1) for outside-school-hours centers.
7. What were the features of the Department's proposal for processing 
at-risk center applications?
    We did not propose an extensive application process. An official of 
the applicant organization must apply in writing. The organization must 
meet the general application requirements for CACFP located at 
Sec. Sec.  226.6(b), and 226.15(b) or 226.16(b). Sponsoring 
organizations that are applying on behalf of sponsored at-risk centers 
must provide information, including documentation of area eligibility, 
to enable the State agency to determine each center's eligibility as an 
at-risk center. State agencies must determine the eligibility of 
independent centers that are applying to participate.
    We proposed that once the application is approved, the organization 
must enter into an agreement with the State agency; the agreement or 
amendment to an existing agreement must meet all general requirements 
located at Sec.  226.6(b)(4). We also proposed to allow State agencies 
to require sponsoring organizations of at-risk centers to enter into 
separate agreements for the administration of separate types of CACFP 
facilities. In subsequent years, renewing independent at-risk centers 
or sponsoring organizations must inform the State agency of any 
substantive changes to their afterschool care programs.
    One State agency questioned the proposed inclusion of at-risk 
centers in the provision allowing State agencies to require separate 
agreements for each type of center operated by a sponsoring 
organization. This commenter thought that the provision allowing State 
agencies to require separate agreements conflicted with the movement 
toward single agreements.
    Single agreement requirements mandated by Public Law 105-336 apply 
only to School Food Authorities (SFAs) operating more than one child 
nutrition program under the same State agency. Other CACFP institutions 
are not included in the single agreement requirements. To avoid 
confusion about the type of agreement an SFA must sign to operate an 
at-risk afterschool care center, we have clarified Sec. Sec.  226.16(f) 
and 226.17a(f)(2) in this final rule to specify that SFAs must continue 
to operate under single, permanent agreements in accordance with Sec.  
226.6(b)(4)(ii)(A).

Are there any changes to application processing procedures in the final 
rule?

    There are no new application requirements specific to at-risk 
afterschool care centers. However, applying to participate in the CACFP 
is a more comprehensive process than at the time the proposed rule was 
published. The first integrity rule strengthened application and 
participation requirements for all CACFP institutions. Because the 
application process is the initial opportunity to address an 
institution's fitness in operating the program, applicant institutions 
must provide documentation that demonstrates financial viability, 
demonstrates administrative capability to operate the program, and 
establishes internal controls that ensure program accountability.
    Although at-risk centers must meet all CACFP application 
requirements, which are described at Sec.  226.6(b), we recognize that 
some of the smaller afterschool care organizations that are applying to 
participate in CACFP for the first time may find the application 
process to be complex and demanding. In order to foster their 
participation, we encourage State agencies to offer technical 
assistance whenever possible to independent institutions that want to 
participate in the at-risk afterschool snack component.
    To clarify the process of application renewal for at-risk centers, 
we added language at Sec.  226.17a(g) on the responsibilities of 
renewing independent at-risk centers and sponsoring organizations of 
at-risk centers. We have also clarified in Sec. Sec.  226.17a(h) and 
226.6(f)(3)(iii) how changes are handled between application periods. 
Finally, we updated citations of general application processing 
requirements to reflect

[[Page 41599]]

changes made by the second integrity rule.
    Accordingly, the provisions on application processing for at-risk 
centers are revised and redesignated at Sec.  226.6(f)(2)(ii) and 
(f)(3)(ii); these provisions are also described in Sec.  226.17a(f), 
(g), and (h).
8. For-Profit Center Participation
    The following questions address the issue of for-profit center 
participation in the CACFP and the at-risk snack component.

What did the Department propose regarding for-profit organizations 
participating in at-risk afterschool snacks?

    We proposed that children who only participate in the at-risk 
afterschool snack component at a for-profit center must not be included 
in the count that qualifies the center for program participation each 
month. At the time the proposed rule was published, participating for-
profit centers could be reimbursed for CACFP meals and snacks only 
during the months in which 25 percent of enrolled children or 25 
percent of licensed capacity, whichever is less, were title XX 
beneficiaries.
    We had also proposed to define at Sec.  226.2, the criteria for 
participation in the Iowa/Kentucky demonstration project, which had 
been permanently authorized under Public Law 105-336. The proposed 
definition described the criteria for participation by for-profit 
centers in these two States as: providing nonresidential child care and 
having at least 25 percent of the children, based on the enrollment or 
licensed capacity of the center (whichever is less), eligible to 
receive free or reduced-price meals.

What did commenters say about the proposed provisions about for-profit 
centers?

    Three State agencies commented on the proposed provisions affecting 
for-profit centers; one supported, one opposed, and a third State 
agency encouraged us to allow for-profit organizations to count all 
Federal and State funding sources, not just the title XX funding, 
toward meeting the 25 percent eligibility criteria. The commenter who 
opposed the provision thought it would be confusing because children 
who are enrolled in for-profit centers for part-time care (not 
necessarily as part of the at-risk component) are currently counted 
toward the 25 percent participation qualifying level.
    For purposes of determining a for-profit center's eligibility, 
there is a difference between part-time children who are enrolled in 
the for-profit child care center and children who are not required to 
be enrolled but may just drop-in to participate in the afterschool 
activities and receive a snack. Current program regulations at 
Sec. Sec.  226.10(c), 226.11(b) and (c), 226.17(b)(4), and 
226.19(b)(5), stipulate that participating for-profit centers must meet 
eligibility criteria on a monthly basis in order to be reimbursed.
    For this reason, we are retaining the exclusion of children who 
only participate in the at-risk afterschool snack component toward 
meeting the monthly eligibility criteria for participation and claiming 
reimbursement. This provision is described at Sec. Sec.  226.2 
(definition of ``For-profit center''), 226.9(b)(2), 226.10(c), 
226.11(b)(3) and (c)(4), 226.17(b)(4), and 226.17a(a)(2) in this final 
rule.

How do the recent changes to for-profit center participation impact the 
provisions in this final rule?

    The afterschool snack provisions in this final rule reflect the 
statutory and regulatory changes that permit for-profit centers to 
participate in CACFP based on the income eligibility of children in 
care. The proposed rule was published for comment before the 
Miscellaneous Appropriations Act of 2001 (Appendix D, Division B, Title 
I of the Consolidated Appropriations Act of 2001, Pub. L. 106-554) 
permitted for-profit organizations nationwide to participate in CACFP 
as long as 25 percent of the children served are eligible for free or 
reduced-price meals. Initially, Congress limited this change to one 
year but later extended the provision annually through appropriation 
legislation. Public Law 108-265 permanently established this provision 
in the NSLA. With the permanent authorization of the participation of 
for-profit centers based on children's income eligibility for free or 
reduced-price meals, the pilot project that had operated in Iowa, 
Kentucky, and Delaware was no longer needed; accordingly, its authority 
was removed by Public Law 108-265. (Note: The third state to 
participate in the for-profit pilot project, Delaware, was authorized 
by the Agricultural Risk Protection Act of 2000 (Pub. L. 106-224); for 
reasons of timing, Delaware was not included in the proposed rule.)
    The for-profit center rule codified the for-profit center 
eligibility criteria as mandated by the NSLA, at section 17(a)(2)(B)(i) 
and (ii), 42 U.S.C. 1766(a)(2)(B)(i) and (ii). As defined in Sec.  
226.2, for-profit centers that are otherwise eligible may participate 
if:
    1. 25 percent of the children in care (enrolled or licensed 
capacity, whichever is less) are eligible for free or reduced-price 
meals; or
    2. 25 percent of the children in care (enrolled or licensed 
capacity, whichever is less) receive benefits from title XX funding and 
the center receives compensation from amounts granted to the States 
under title XX.
    The for-profit center rule also changed the terminology used in the 
regulations to describe these types of centers from proprietary title 
XIX and proprietary title XX centers to for-profit centers. This final 
rule uses the new term ``for-profit centers'' to describe participating 
for-profit organizations, replacing all references to ``proprietary 
title XX centers'' used in the proposed rule.
9. Meal Service

Did commenters say anything about the proposed meal pattern 
requirements for afterschool snacks?

    We proposed that current meal pattern requirements for CACFP snacks 
be used for afterschool snacks served to children and youth 
participating in at-risk afterschool programs. Two State agency 
commenters urged the Department to establish different quantities for 
snacks served to children ages 13 through 18. One of these commenters 
also suggested that the CACFP adult portions be used for adolescents.
    Although we agree that CACFP meal pattern requirements need to 
address the nutritional needs of adolescents ages 13 through 18, this 
would require a separate rulemaking.
    Concerning the suggestion to permit at-risk centers to serve adult 
quantities to the 13-18 age group, we do not believe that this is an 
appropriate substitution. The CACFP adult meal patterns are intended 
for adults over the age of 60, and the quantities provided for some 
food groups do not address the nutritional needs of youth. We recommend 
that snack portion sizes larger than those for the 6 to 12 age group, 
as described at Sec.  226.20(c)(4), be given to adolescents. To clarify 
the difference between portions for adult participants and teenage 
participants, we have made a technical correction to the footnote 
following the meal pattern tables at Sec.  226.20(c)(1), (c)(2), 
(c)(3), and (c)(4). More information about the correction to the 
footnote is provided in topic  13 of this preamble.
    Accordingly, the proposed provision on meal pattern requirements 
for afterschool snacks served by at-risk centers is retained but is 
redesignated as Sec.  226.17a(l).

[[Page 41600]]

Were other comments made about meal service requirements for at-risk 
afterschool snacks?

    One State agency asked us to clarify whether family style service 
is allowed for afterschool snacks. If so, the commenter stated that 
this flexibility conflicts with prohibiting offer versus serve in the 
NSLP afterschool snack component. CACFP snacks, whether served at a 
child care center, day care home, or at-risk facility, may be served 
family style if conducive to the meal service. At-risk centers that 
choose a family style snack service must comply with the procedures 
outlined in FNS Instruction 783-9, Rev. 2. Given the nature of 
afterschool programs, we don't expect that family style service will be 
commonly used.
    We also received a comment from an at-risk center that noted the 
difficulty in observing the time restrictions that require that three 
hours elapse between the beginning of one meal service and the 
beginning of the next meal service.
    The second integrity rule eliminated Federal regulatory time 
restrictions for all CACFP centers and provided State agencies with the 
authority to determine appropriate serving times for meals (see Sec.  
226.20(k)). This change had been proposed in a rulemaking published on 
September 12, 2000 (65 FR 55101) and overwhelmingly approved by 
commenters of that proposed rule. This provision gives State agencies a 
tool to respond to situations in order to better meet children's needs.
    As previously discussed in this preamble, we have clarified that 
afterschool snacks may be served in the summer by an at-risk center 
that is located in the attendance area of a school that operates on a 
continuous year schedule. Accordingly, we have revised the provision on 
time periods for snack service, which was proposed at Sec.  226.17a(l) 
and is redesignated at Sec.  226.17a(m) in this final rule.
10. Monitoring Requirements

How did commenters respond to the proposed monitoring requirements by 
State agencies?

    Twelve commenters responded to our proposal at Sec.  226.6(l)(4) to 
require State agencies to conduct a technical assistance visit to all 
newly participating independent at-risk afterschool care centers during 
the first 90 days of program operation. All but one opposed the 
proposed requirement. Most commenters objected that the visits would 
duplicate pre-approval visits that State agencies must conduct before 
approving new independent private child care centers (as well as 
sponsors of group and home day care facilities). Commenters pointed out 
that under this proposal, State agencies would be obligated to visit 
the same centers twice within 120 days. This additional visit, 
commenters believed, would strain State agency workloads and possibly 
even discourage the State from promoting the afterschool snack 
component to at-risk care centers. Instead, several commenters urged 
the Department to allow State agencies flexibility in providing 
technical assistance to new centers. They suggested several 
alternatives to the on-site visits such as allowing States to require 
attendance at pre-approval training sessions, substituting desk reviews 
of menus or claim records with follow-up visits as necessary, and 
extending the time period for conducting the technical visit.
    We recognize that many State agencies are over-burdened due to 
financial restraints in response to economic conditions. As a result, 
many State agencies have found it necessary to prioritize CACFP 
administrative activities. Although we continue to believe that 
technical assistance visits would be very helpful to independent at-
risk afterschool care centers that are new to CACFP, we believe that 
limited State resources would be better spent in conducting the reviews 
as required at Sec.  226.6(m)(6). We encourage State agencies to find 
ways to assist these newly participating CACFP institutions, using the 
above-mentioned activities suggested by State agency commenters. We 
also encourage State agencies to make use of the pre-approval visits to 
provide technical assistance to newly participating CACFP institutions.
    Accordingly, in response to the concerns expressed about State 
agency workload, we have not included in this final rule the proposed 
requirement for technical assistance visits by State agencies within 
the first 90 days of new participating independent at-risk centers.

What did commenters say about proposed monitoring requirements by 
sponsoring organizations?

    We had proposed that sponsors must review at-risk afterschool care 
centers three times each year, including at least one review during the 
first six weeks of program operations and not more than six months 
between reviews. Three commenters supported this proposal and two 
commenters provided suggestions for improving monitoring of at-risk 
facilities. Other commenters either recommended adopting these 
monitoring provisions for outside-school-hours care centers or noted 
that the number and frequency of CACFP monitoring requirements by 
sponsoring organizations of facilities had been changed by Public Law 
106-224.
    Due to the changes made to monitoring requirements in the second 
integrity rule, the monitoring provisions as proposed for at-risk 
centers are not included in this final rule. Instead, the monitoring 
requirements that are now in place at Sec.  226.16(d)(4) include all 
sponsored centers, including at-risk centers and outside-school-hours 
centers. The principle features of these new monitoring requirements by 
sponsors of their sponsored centers, which are similar to the proposed 
at-risk monitoring requirements in frequency and number, include the 
following:
    1. Centers must be reviewed at least three times per year;
    2. Two of the three reviews must be unannounced;
    3. At least one of the unannounced reviews must include observation 
of a meal service;
    4. At least one review must be made within four weeks of a newly 
participating center; and
    5. Reviews must be no more than six months apart.
    Accordingly, for the reasons stated above, the proposed monitoring 
provisions at Sec. Sec.  226.6(l)(4) and 226.16(d)(4)(iii) are not 
adopted in this final rule.
11. What did the Department propose about reimbursement for afterschool 
snacks and did anyone comment?
    We proposed that at-risk centers may claim only one afterschool 
snack per child per day. An organization that provides care to a child 
under another CACFP component (such as a child care center) may not 
claim reimbursement for more than two meals and one snack or one meal 
and two snacks served to the same child on the same day, including a 
snack served in an at-risk program. This provision ties the provision 
of at-risk afterschool snacks to the total number of reimbursable meals 
permitted under CACFP, and it is specified in the final rule at 
Sec. Sec.  226.17(b)(6) and 226.17a(k).
    We received only one comment on these provisions, and this 
commenter supported the proposal to count the snacks served by at-risk 
afterschool care centers toward the total number of meals that may be 
reimbursed to the organization under the CACFP.
    Accordingly, the provision allowing one afterschool snack per child 
per day is adopted as proposed.

[[Page 41601]]

12. What types of reporting and recordkeeping requirements did the 
Department propose for at-risk centers?
    Due to the drop-in nature of many afterschool programs, we did not 
propose extensive reporting and recordkeeping requirements. Consistent 
with the objective of keeping program administration for at-risk 
centers minimal, we purposely excluded enrollment records and point-of-
service meal counts from recordkeeping requirements. We proposed 
minimum recordkeeping requirements for at-risk centers. In addition to 
other records that an at-risk center must keep as a participating 
organization in the CACFP, an at-risk center must document:
    1. Daily attendance using rosters, sign-in sheets, or other methods 
of recording attendance as required by the CACFP State agency;
    2. The number of snacks prepared or delivered for each meal 
service;
    3. The number of snacks served to children; and
    4. Menus for each snack service.
    Another recordkeeping requirement is that applicant organizations 
must be able to document afterschool program eligibility and area 
eligibility (although State agencies are responsible for determining 
area eligibility of independent at-risk centers).
    We proposed only one additional reporting requirement at Sec.  
226.17a(o) that at-risk centers must report the total number of snacks 
served to children who meet the age limitation requirements.
    We received eight comments on recordkeeping and reporting issues. 
Commenters were split on their opinions of our proposal for limited 
recordkeeping/reporting requirements for at-risk centers. Three out of 
four commenters who addressed the issue supported the proposal to not 
require enrollment records of children who only participate in the at-
risk snack service. However, other commenters objected to the proposal 
to allow attendance rosters or sign-in sheets instead of requiring 
point-of-service meal counts. One opposing commenter reasoned that 
since NSLP State agencies have the option of requiring point-of-service 
counts at the afterschool snack service, CACFP State agencies should 
also have this flexibility. Another commenter argued in favor of 
allowing States to require point-of-service counts because of the need 
to improve program integrity.
    The Department appreciates concerns expressed about the need to 
protect program integrity. However, we believe that at-risk afterschool 
care centers should be able to participate under reduced administrative 
requirements to the extent possible.
    As stated at Sec.  226.17a(o) in this final rule, institutions 
providing afterschool care to at-risk children, whether sponsoring 
organizations or independent at-risk afterschool care centers, are 
bound by the applicable recordkeeping requirements for CACFP 
institutions. General recordkeeping requirements, found at Sec.  
226.15(e), were amended by the second integrity rule. In addition, this 
final rule revises Sec.  226.15(e)(2) to specifically exclude at-risk 
centers and outside-school-hours centers from maintaining enrollment 
records and to exclude at-risk centers from the requirement to maintain 
participant information used to determine eligibility for free or 
reduced-price meals.
    Following is a summary of those recordkeeping requirements at Sec.  
226.15(e), as amended, that are applicable to at-risk centers. In 
addition to the requirements of Sec.  226.17a(o), at-risk centers must 
keep:
    1. Daily records of the number of meals (snacks for at-risk 
centers) served to adults who provide the meal service;
    2. Copies of invoices, receipts, or other records as required by 
the State agency;
    3. Copies of claims for reimbursement;
    4. Receipts for Program payments received from the State agency;
    5. In addition to copies of menus, other food service records that 
the State agency may require;
    6. Records on staff training conducted including dates, locations, 
topics and participants; and
    7. Documentation of nonprofit food service.
    Sponsoring organizations of at-risk centers must also keep:
    1. Records of the dates and amounts of funds disbursed to sponsored 
facilities;
    2. Records of dates and locations of reviews of facilities, 
problems noted, and corrective action required; and
    3. Records verifying training provided to monitoring staff.
    Accordingly, proposed recordkeeping requirements at Sec.  
226.17a(n) are retained but redesignated at Sec.  226.17a(o). Section 
226.15(e)(2) is revised in this final rule to exclude at-risk centers 
from the requirement to maintain enrollment records of children and to 
exclude at-risk centers from the requirement to maintain information on 
the eligibility of participating children for free and reduced-price 
meals. Reporting requirements for at-risk centers as proposed at Sec.  
226.17a(o) are retained but redesignated at Sec.  226.17a(p).
13. What other changes to the CACFP regulations are made in this 
rulemaking?
    This final rule incorporates a mandatory provision from section 
107(a)(2) of the William F. Goodling Child Nutrition Reauthorization 
Act of 1998 (Pub. L. 105-336), which amended section 17(a)(1) of the 
NSLA, 42 U.S.C. 1766(a)(1), to remove the receipt of title XX funds by 
institutions or group or family day care homes as an acceptable 
substitute for Federal, State or local licensing or approval. As stated 
in the Conference Report (105-786) accompanying Public Law 105-336, 
this change is not intended to disqualify any institution that 
originally qualified under title XX.
    Accordingly, Sec. Sec.  226.6(d)(1), 226.17(b)(1), and 226.19(b)(1) 
are revised to remove references to receipt of title XX funds as a 
substitute for licensing or approval by a Federal, State, or local 
licensing authority.
    We proposed to revise the definitions of ``Nonpricing program'' and 
``Pricing program'' at Sec.  226.2 to include child care facilities and 
adult day care facilities. This ensures that all sponsored facilities 
of institutions, including sponsored at-risk centers, are covered in 
the requirements for pricing and nonpricing programs described in 
Sec. Sec.  226.6(f)(1)(i) and 226.23(e) and (h).
    We received no comments on these proposed revisions to the 
definitions of nonpricing programs and pricing programs. Accordingly, 
we have adopted the revisions to the definitions of ``Nonpricing 
program'' and ``Pricing program'' at Sec.  226.2.
    Another change that we made in this final rule was to specify in 
the definition of ``Meals'' in Sec.  226.2 that at-risk centers, 
emergency shelters, and outside-school-hours care centers do not have 
to enroll children in CACFP in order to receive reimbursement for the 
meals served to these participants. CACFP enrollment continues to be 
required for participants of day care homes, traditional child care 
centers, and adult day care centers.
    Finally, a revision is made in this final rule to correct the first 
footnote that is displayed under the tables for meal pattern 
requirements in Sec.  226.20(c)(1), (c)(2), (c)(3), and (c)(4). This 
footnote states that children age 12 and up may be served adult size 
portions. The adult portions in the meal pattern requirements are based 
on the nutritional needs of adults age 60 and older and do not take 
into account the

[[Page 41602]]

different nutritional needs of youth. Therefore, we have revised this 
footnote to state that children ages 13 through 18 may be served larger 
portions based on greater food needs but must be served not less than 
the minimum quantities required for children ages 6 through 12.
    Accordingly, the first footnote under the tables that display meal 
pattern requirements in Sec.  226.20 (c)(1), (c)(2), (c)(3), and (c)(4) 
is revised.

II. Procedural Matters

Executive Order 12866

    This final rule has been determined to be significant and was 
reviewed by the Office of Management and Budget (OMB) under Executive 
Order 12866.

Regulatory Impact Analysis

Need for Action
    This final rule changes the Child and Adult Care Food Program 
(CACFP) regulations as proposed by the Department in a rulemaking 
published on October 11, 2000 (65 FR 60502). These changes implement 
provisions of Public Law 105-336, which authorized afterschool care 
centers meeting certain criteria to be reimbursed for snacks served to 
at-risk children 18 years of age and younger. In addition to codifying 
these benefits, this rule establishes the administrative provisions 
necessary to manage afterschool snacks.
Benefits
    This final rule codifies benefits provided by Public Law 105-336, 
which expands the opportunity for children to receive subsidized snacks 
through afterschool programs, thereby encouraging positive youth 
development. A regulatory impact analysis of the rule indicated that 
since the enactment of Public Law 105-336, participation in afterschool 
programs has increased. Research indicates that afterschool programs 
can have a positive effect on juvenile crime, drug and alcohol use, and 
teen pregnancy, and can also improve educational achievement and 
support personal development, although it is not feasible to assign a 
monetary value to these benefits.
Costs
    The analysis of the rule estimated that these provisions will cost 
the Federal government about $120 million between Fiscal Years 2005-
2009. Also, due to the training, monitoring, recordkeeping, and other 
administrative and managerial requirements of the provisions, some 
additional burden will be imposed on the staff of at-risk centers, at-
risk sponsors, State agencies, and the USDA.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act (5 U.S.C. 601-612). Nancy Montanez Johner, 
Under Secretary for Food, Nutrition, and Consumer Services, has 
certified that this rule will not have a significant impact on a 
substantial number of small entities. Institutions choose whether they 
wish to participate in this additional meal service. Because most 
institutions that will choose to add a snack service are already 
participating in the CACFP, the snack service will not have a 
significant paperwork or reporting burden because it is incorporated 
under the existing agreement and Claim for Reimbursement.

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, the 
Department 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 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 the Department 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 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. Therefore, 
this 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 
published at 48 FR 29114, June 24, 1983, this program is included in 
the scope of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials.

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 regulation 
describing the agency's considerations in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132.
Prior Consultation With State and Local Officials
    Since the CACFP is a State-administered, federally funded program, 
our regional offices have had informal and formal discussions with 
State and local officials on an ongoing basis regarding program 
implementation and performance. This arrangement allows State agencies 
and sponsoring organizations to provide feedback that forms the basis 
for any discretionary decisions in this and other CACFP rules. 
Additionally, the issue of this rule, at-risk afterschool snacks, has 
been discussed in many formal and informal meetings.
Nature of Concerns and the Need To Issue This Rule
    This component of the CACFP responds to a growing national concern 
that at-risk children need appropriate and meaningful activities in a 
safe environment during the hours after school. The provision of 
reimbursable nutritious snacks assists organizations currently 
providing afterschool care to at-risk children and encourages other 
organizations to begin serving the at-risk population. The William F. 
Goodling Child Nutrition Reauthorization Act of 1998 (Pub. L. 105-336) 
enlarged the scope of the CACFP by authorizing the reimbursement of 
snacks served to at-risk children through age 18 by organizations 
operating eligible afterschool programs in low-income areas. This final 
rule implements the at-risk afterschool provisions mandated by the law.
Extent To Which We Meet These Concerns
    This final rule amends the CACFP regulations at 7 CFR part 226 by 
incorporating at-risk afterschool provisions that were proposed on 
October 11, 2000 and commented on by the public. We analyzed the public 
comments, most of which were provided by State agencies that administer 
the CACFP. In this final rule, we responded to commenters' requests for 
clarification, and where possible, accommodated preferences stated by 
the

[[Page 41603]]

majority of commenters on discretionary provisions contained in the 
rule.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is intended to 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 Care Food Program, the 
administrative procedures are set forth at 7 CFR 226.6(k), which 
establishes appeal procedures, and 7 CFR 226.22, 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 
Sec.  226.6(b)(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 Sec.  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 
part 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. The information collection requirements 
contained in this rule have been approved by OMB under OMB Number 0584-
0055.

E-Government Act Compliance

    FNS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.

List of Subjects in 7 CFR Part 226

    Accounting, Aged, Day care, 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. Sec.  226.4, 226.13, 226.19, and 226.23  [Amended]

0
2. In part 226, remove the words ``supplement'' or ``supplements'' 
wherever they appear in the following locations 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.  226.4(d)(7); 
Sec.  226.4(d)(8); Sec.  226.4(d)(9); Sec.  226.13(b); Sec.  
226.19(b)(4); and Sec.  226.23(c)(6).

0
3. In Sec.  226.2:
0
a. Add new definitions of ``At-risk afterschool care center'', 
``Eligible area'', ``Persons with disabilities'', and ``Snack'' in 
alphabetical order;
0
b. Amend the definition of ``CACFP child care standards'' by removing 
the words ``, outside-school-hours care centers,'';
0
c. Revise the definitions of ``Children'', ``Nonpricing program'', 
``Pricing program'', ``Reduced-price meal'', and ``Sponsoring 
organization'';
0
d. Add a new last sentence to the definition of ``Enrolled child'';
0
e. Revise the introductory paragraph of the definition of ``For-profit 
center'';
0
f. Amend the definition of ``Free meal'' by adding in the first 
sentence the words ``a child participating in an approved at-risk 
afterschool care program;'' after the words ``a child who is receiving 
temporary housing and meal services from an approved emergency 
shelter;'';
0
g. Amend the definitions of ``Center'' and ``Child care facility'' by 
adding the words ``at-risk afterschool care center,'' after the words 
``child care center,'';
0
h. Amend the definitions of ``Independent center'' and ``Institution'' 
by adding the words ``at-risk afterschool care center,'' after the 
words ``child care center,'';
0
i. Amend the definition of ``Meals'' by adding a new last sentence; and
0
j. 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 additions and revisions read as follows:


Sec.  226.2  Definitions.

* * * * *
    At-risk afterschool care center means a public or private nonprofit 
organization that is participating or is eligible to participate in the 
CACFP as an institution or as a sponsored facility and that provides 
nonresidential child care to children after school through an approved 
afterschool care program located in an eligible area. However, an 
Emergency shelter, as defined in this section, may participate as an 
at-risk afterschool care center without regard to location.
* * * * *
    Children means:
    (a) Persons age 12 and under;
    (b) Persons age 15 and under who are children of migrant workers;
    (c) Persons with disabilities as defined in this section;
    (d) For emergency shelters, persons age 18 and under; and
    (e) For at-risk afterschool care centers, persons age 18 and under 
at the start of the school year.
* * * * *
    Eligible area means:
    (a) For the purpose of determining the eligibility of at-risk 
afterschool care centers, 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; or
    (b) For the purpose of determining the tiering status of day care 
homes, the area served by an elementary school in which at least 50 
percent of the total number of children are certified eligible to 
receive free or reduced-price meals, or the area based on census data 
in which at least 50 percent of the children residing in the area are 
members of households that meet the income

[[Page 41604]]

standards for free or reduced-price meals.
* * * * *
    Enrolled child * * * For at-risk afterschool care centers, outside-
school-hours care centers, or emergency shelters, the term ``enrolled 
child'' or ``enrolled participant'' does not apply.
* * * * *
    For-profit center means a child care center, outside-school-hours 
care center, or adult day care center providing nonresidential care to 
adults or children that does not qualify for tax-exempt status under 
the Internal Revenue Code of 1986. For-profit centers serving adults 
must meet the criteria described in paragraph (a) of this definition. 
For-profit centers serving children must meet the criteria described in 
paragraphs (b)(1) or (b)(2) of this definition, except that children 
who only participate in the at-risk afterschool snack component of the 
Program must not be considered in determining the percentages under 
paragraphs (b)(1) or (b)(2) of this definition.
* * * * *
    Meals * * * However, children participating in at-risk afterschool 
care centers, emergency shelters, or outside-schools-hours care centers 
do not have to be enrolled.
* * * * *
    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.
* * * * *
    Persons with disabilities means persons of any age who have one or 
more disabilities, as determined by the State, and who are 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.
* * * * *
    Reduced-price meal means a meal served under the Program to a 
participant from a family that 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 in 
the food service program for a reduced-price meal.
* * * * *
    Snack means a meal supplement that meets the meal pattern 
requirements specified in Sec.  226.20(b)(6) or (c)(4).
    Sponsoring organization means a public or nonprofit private 
organization that is entirely responsible for the administration of the 
food program in:
    (a) One or more day care homes;
    (b) A child care center, emergency shelter, 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, emergency shelters, at-risk 
afterschool care centers, outside-school-hours care center, or adult 
day care centers; or
    (d) Any combination of child care centers, emergency shelters, at-
risk afterschool care centers, outside-school-hours care centers, adult 
day care centers, and day care homes. The term ``sponsoring 
organization'' also includes an organization that 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 or outside-school-hours care centers, which meet the 
definition of For-profit center in this section and are part of the 
same legal entity as the sponsoring organization.
* * * * *

0
4. In Sec.  226.4:
0
a. Revise the second and third sentences of paragraph (a);
0
b. Redesignate paragraphs (d) through (k) as paragraphs (e) through 
(l), respectively;
0
c. Add a new paragraph (d);
0
d. Amend the first sentence of newly redesignated paragraph (i)(1) by 
adding the words, ``, including snacks,'' after the word ``meals''; and
0
e. Revise the first sentence of newly redesignated paragraph (i)(2).
    The revisions and addition read as follows:


Sec.  226.4  Payments to States and use of funds.

    (a) * * * Funds must be made available in an amount no less than 
the sum of the totals obtained under paragraphs (b), (c), (d), (e), 
(f), (g), and (j) of this section. However, in any fiscal year, the 
aggregate amount of assistance provided to a State under this part 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 (j) and (l) of this 
section.
* * * * *
    (d) 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.
* * * * *
    (i) * * *
    (2) The rates for meals, including snacks, served in child care 
centers, emergency shelters, 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. * * *
* * * * *

0
5. In Sec.  226.6:
0
a. Redesignate paragraphs (b)(1)(viii) through (b)(1)(xvii) as 
paragraphs (b)(1)(ix) through (b)(1)(xviii), respectively, and add a 
new paragraph (b)(1)(viii);
0
b. Amend paragraphs (c)(2)(ii)(B) and (c)(3)(ii)(C) by removing the 
reference ``(b)(1)(xvii)'' and adding in its place the reference 
``(b)(1)(xviii)'';
0
c. Amend paragraphs (c)(7)(ii), (c)(7)(iii), (c)(7)(iv)(A), 
(c)(7)(iv)(B), and (c)(7)(iv)(C) by removing the reference 
``(b)(1)(xi)'' and adding in its place the reference ``(b)(1)(xii)'';
0
d. Revise the first sentence of the introductory text of paragraph (d);
0
e. Revise paragraphs (d)(1) and (d)(3);
0
f. Amend the second sentence of paragraph (d)(4) by removing the words, 
``, outside-school-hours care centers,'';
0
g. Remove paragraphs (f)(1)(iii), (f)(1)(iv), and (f)(1)(x) and 
redesignate paragraphs (f)(1)(v) through (f)(1)(ix) as paragraphs 
(f)(1)(iii) through (f)(1)(vii), respectively, and add new paragraphs 
(f)(1)(viii) and (f)(1)(ix);
0
h. Revise paragraphs (f)(2) and (f)(3); and
0
i. Remove the words ``, outside-school-hours care centers,'' from the 
first sentence of paragraph (o).
    The additions and revisions read as follows:


Sec.  226.6  State agency administrative responsibilities.

* * * * *
    (b) * * *
    (1) * * *
    (viii) At-risk afterschool care centers. Institutions (independent 
at-risk afterschool care centers and sponsoring organizations of at-
risk afterschool care centers) must submit documentation

[[Page 41605]]

sufficient to determine that each at-risk afterschool care center meets 
the program eligibility requirements in Sec.  226.17a(a), and 
sponsoring organizations must submit documentation that each sponsored 
at-risk afterschool care center meets the area eligibility requirements 
in Sec.  226.17a(i).
* * * * *
    (d) * * * This section prescribes State agency responsibilities to 
ensure that child care centers, at-risk afterschool care centers, 
outside-school-hours care centers, and day care homes meet the 
licensing/approval criteria set forth in this part. * * *
    (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, 
outside-school hours care centers, and day care homes:
    (i) Are licensed or approved by Federal, State, or local 
authorities, provided that institutions that are approved for Federal 
programs on the basis of State or local licensing are not eligible for 
the Program if their licenses lapse or are terminated; or
    (ii) Are complying with applicable procedures to renew licensing or 
approval in situations where the State agency has no information that 
licensing or approval will be denied; or
    (iii) Demonstrate compliance with applicable State or local child 
care standards to the State agency, if licensing is not available; or
    (iv) Demonstrate compliance with CACFP child care standards to the 
State agency, if licensing or approval is not available; or
    (v) 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. When State or local health and safety standards have not 
been established, State agencies are encouraged to work with 
appropriate State and local officials to create such standards. Meeting 
these standards will remain a precondition for any afterschool center's 
eligibility for CACFP nutrition benefits.
* * * * *
    (3) CACFP child care standards. When licensing or approval is not 
available, independent child care centers, and sponsoring organizations 
on behalf of their child care centers or day care homes, may elect to 
demonstrate compliance, annually, with the following CACFP child care 
standards or other standards specified in paragraph (d)(4) of this 
section:
    (i) Staff/child ratios. (A) Day care homes provide care for no more 
than 12 children at any one time. One home caregiver is responsible for 
no more than 6 children ages 3 and above, or no more than 5 children 
ages 0 and above. No more than 2 children under the age of 3 are in the 
care of 1 caregiver. The home provider's own children who are in care 
and under the age of 14 are counted in the maximum ratios of caregivers 
to children.
    (B) Child care centers do not fall below the following staff/child 
ratios:
    (1) For children under 6 weeks of age--1:1;
    (2) For children ages 6 weeks up to 3 years--1:4;
    (3) For children ages 3 years up to 6 years--1:6;
    (4) For children ages 6 years up to 10 years--1:15; and
    (5) For children ages 10 and above--1:20.
    (ii) Nondiscrimination. Day care services are available without 
discrimination on the basis of race, color, national origin, sex, age, 
or handicap.
    (iii) Safety and sanitation. (A) A current health/sanitation permit 
or satisfactory report of an inspection conducted by local authorities 
within the past 12 months shall be submitted.
    (B) A current fire/building safety permit or satisfactory report of 
an inspection conducted by local authorities within the past 12 months 
shall be submitted.
    (C) Fire drills are held in accordance with local fire/building 
safety requirements.
    (iv) Suitability of facilities. (A) Ventilation, temperature, and 
lighting are adequate for children's safety and comfort.
    (B) Floors and walls are cleaned and maintained in a condition safe 
for children.
    (C) Space and equipment, including rest arrangements for preschool 
age children, are adequate for the number of age range of participating 
children.
    (v) Social services. Independent centers, and sponsoring 
organizations in coordination with their facilities, have procedures 
for referring families of children in care to appropriate local health 
and social service agencies.
    (vi) Health services. (A) Each child is observed daily for 
indications of difficulties in social adjustment, illness, neglect, and 
abuse, and appropriate action is initiated.
    (B) A procedure is established to ensure prompt notification of the 
parent or guardian in the event of a child's illness or injury, and to 
ensure prompt medical treatment in case of emergency.
    (C) Health records, including records of medical examinations and 
immunizations, are maintained for each enrolled child. (Not applicable 
to day care homes.)
    (D) At least one full-time staff member is currently qualified in 
first aid, including artificial respiration techniques. (Not applicable 
to day care homes.)
    (E) First aid supplies are available.
    (F) Staff members undergo initial and periodic health assessments.
    (vii) Staff training. The institution provides for orientation and 
ongoing training in child care for all caregivers.
    (viii) Parental involvement. Parents are afforded the opportunity 
to observe their children in day care.
    (ix) Self-evaluation. The institution has established a procedure 
for periodic self-evaluation on the basis of CACFP child care 
standards.
* * * * *
    (f) * * *
    (1) * * *
    (viii) Comply with the following requirements for tiering of day 
care homes:
    (A) Coordinate with the State agency that administers the National 
School Lunch Program (the NSLP State agency) to ensure the receipt of a 
list of elementary schools in the State in which at least one-half of 
the children enrolled are certified eligible to receive free or 
reduced-price meals. The State agency must provide the list of 
elementary schools to sponsoring organizations of day care homes by 
February 15 each year unless the NSLP State agency 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 NSLP State 
agency.
    (B) For tiering determinations of day care homes that are based on 
school or census data, the State agency must ensure that sponsoring 
organizations of day care homes use the most recent available data, as 
described in Sec.  226.15(f).
    (C) For tiering determinations of day care homes that are based on 
the provider's household income, the State agency must ensure that 
sponsoring organizations annually determine the eligibility of each day 
care home, as described in Sec.  226.15(f).
    (D) The State agency must provide all sponsoring organizations of 
day care homes in the State with a listing of State-funded programs, 
participation in which by a parent or child will qualify a meal served 
to a child in a tier II home for the tier I rate of reimbursement.

[[Page 41606]]

    (E) The State agency must require each sponsoring organization of 
family day care homes to submit to the State agency a list of family 
day care home providers receiving tier I benefits on the basis of their 
participation in the Food Stamp Program. Within 30 days of receiving 
this list, the State agency will provide this list to the State agency 
responsible for the administration of the Food Stamp Program.
    (ix) Comply with the following requirements for determining the 
eligibility of at-risk afterschool care centers:
    (A) Coordinate with the NSLP State agency to ensure the receipt of 
a list of elementary, middle, 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. The State agency must provide the 
list of elementary, middle, and high schools to independent at-risk 
afterschool care centers and sponsoring organizations of at-risk 
afterschool care centers upon request. The list must represent data 
from the preceding October, unless the NSLP State agency has elected to 
base data for the list on a month other than October. If the NSLP State 
agency chooses a month other than October, it must do so for the entire 
State.
    (B) 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, as described in Sec.  
226.6(f)(1)(ix)(A). 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.
    (C) The State agency must determine the area eligibility of each 
sponsored at-risk afterschool care center based on the documentation 
submitted by the sponsoring organization in accordance with Sec.  
226.15(g).
    (D) The State agency must determine whether the afterschool care 
programs of at-risk afterschool care centers meet the requirements of 
Sec.  226.17a(b) before the centers begin participating in the Program.
    (2) Triennial Responsibilities--(i) General reapplication 
requirements. At intervals not to exceed 36 months, each State agency 
must require participating institutions to reapply to continue their 
participation and must require sponsoring organizations to submit a 
management plan with the elements set forth in Sec.  226.6(b)(1)(iv).
    (ii) Redeterminations of afterschool program eligibility. The State 
agency must determine whether institutions reapplying as at-risk 
afterschool care centers continue to meet the eligibility requirements, 
as described in Sec.  226.17a(b).
    (3) Responsibilities at other time intervals--(i) Day care home 
tiering redeterminations based on school data. As described in Sec.  
226.15(f), tiering determinations are valid for five years if based on 
school data. The State agency must ensure that the most recent 
available data is used if the determination of a day care home's 
eligibility as a tier I day care home is made using school data. The 
State agency must not routinely require annual redeterminations of the 
tiering status of tier I day care homes based on updated elementary 
school data. However, a sponsoring organization, the State agency, or 
FNS may change the determination if information becomes available 
indicating that a day care home is no longer in a qualified area.
    (ii) Area eligibility redeterminations for at-risk afterschool care 
centers. Area eligibility determinations are valid for five years for 
at-risk afterschool care centers that are already participating in the 
Program. The State agency may determine the date in the fifth year when 
the next five-year cycle of area eligibility will begin. The State 
agency must redetermine the area eligibility for each independent at-
risk afterschool care center in accordance with Sec.  
226.6(f)(1)(ix)(B). The State agency must redetermine the area 
eligibility of each sponsored at-risk afterschool care center based on 
the documentation submitted by the sponsoring organization in 
accordance with Sec.  226.15(g). The State agency must not routinely 
require annual redeterminations of area eligibility based on updated 
school data during the five-year period, except in cases where the 
State agency has determined it is most efficient to incorporate area 
eligibility decisions into the three-year application cycle. However, a 
sponsoring organization, the State agency, or FNS may change the 
determination if information becomes available indicating that an at-
risk afterschool care center is no longer area eligible.
    (iii) State agency transmittal of census data. Upon receipt of 
census data from FNS (on a decennial basis), the State agency must 
provide each sponsoring organization of day care homes with census data 
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.
    (iv) Additional institution requirements. At intervals and in a 
manner specified by the State agency, but not more frequently than 
annually, the State agency may:
    (A) Require independent centers to submit a budget with 
sufficiently detailed information and documentation to enable the State 
agency to make an assessment of the independent center's qualifications 
to manage Program funds. Such budget must demonstrate that the 
independent center will expend and account for funds in accordance with 
regulatory requirements, FNS Instruction 796-2 (``Financial Management 
in the Child and Adult Care Food Program''), and parts 3015, 3016, and 
3019 of this title and applicable Office of Management and Budget 
circulars;
    (B) Request institutions to report their commodity preference;
    (C) Require a private nonprofit institution to submit evidence of 
tax exempt status in accordance with Sec.  226.16(a);
    (D) Require for-profit institutions to submit documentation on 
behalf of their centers of:
    (1) Eligibility of at least 25 percent of children in care 
(enrolled or licensed capacity, whichever is less) for free or reduced-
price meals; or
    (2) Compensation received under title XX of the Social Security Act 
of nonresidential day care services and certification that at least 25 
percent of children in care (enrolled or licensed capacity, whichever 
is less) were title XX beneficiaries during the most recent calendar 
month.
    (E) Require for-profit adult care centers to submit documentation 
that they are currently providing nonresidential day care services for 
which they receive compensation under title XIX or title XX of the 
Social Security Act, and certification that not less than 25 percent of 
enrolled participants in each such center during the most recent 
calendar month were title XIX or title XX beneficiaries;
    (F) Request each institution to indicate its choice to receive all, 
part or none of advance payments, if the State agency chooses to make 
advance payments available; and
    (G) Perform verification in accordance with Sec.  226.23(h) and 
paragraph (m)(4) of this section. State agencies verifying the 
information on free and reduced-price applications must ensure that 
verification activities are conducted without regard to the 
participant's race, color, national origin, sex, age, or disability.
* * * * *

0
6. In Sec.  226.7, revise paragraph (f) to read as follows:

[[Page 41607]]

Sec.  226.7  State agency responsibilities for financial management.

* * * * *
    (f) Rate assignment. Each State agency must require institutions 
(other than emergency shelters, at-risk afterschool care centers, and 
sponsoring organizations of emergency shelters, at-risk afterschool 
care centers, or 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]

0
7. In Sec.  226.8, remove the reference ``Sec.  226.4(i)'' 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 its place the 
reference ``Sec.  226.4(j)''.

0
8. In Sec.  226.9:
0
a. Revise the second sentence of paragraph (a);
0
b. Revise paragraph (b) introductory text; and
0
c. Revise paragraph (b)(2).
    The revisions read as follows:


Sec.  226.9  Assignment of rates of reimbursement for centers.

    (a) * * * However, no rates should be assigned for emergency 
shelters and at-risk afterschool care centers. * * *
    (b) Except for emergency shelters and 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, except 
that children who only participate in emergency shelters or the at-risk 
afterschool snack component of the Program must not be considered to be 
enrolled participants for the purpose of establishing claiming 
percentages; or
* * * * *

0
9. In Sec.  226.10:
0
a. In paragraph (a), remove the reference ``Sec.  226.6(f)(3)(vi)'' in 
the first sentence and add in its place the reference ``Sec.  
226.6(f)(3)(iv)(F)''; and
0
b. Add a new sentence after the third sentence in the introductory text 
of paragraph (c).
    The addition reads as follows:


Sec.  226.10  Program payment procedures.

* * * * *
    (c) * * * However, children who only participate in the at-risk 
afterschool snack component of the Program must not be considered in 
determining this percentage. * * *
* * * * *
0
10. In Sec.  226.11:
0
a. Revise paragraphs (a), (b) and (c); and
0
b. Add a heading to paragraphs (d) and (e).
    The revisions and additions read as follows:


Sec.  226.11  Program payments for 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 day care centers, 
emergency shelters, and outside-school-hours care centers. A State 
agency may develop a policy under which centers are reimbursed for 
meals served in accordance with provisions of the Program in the 
calendar month preceding the calendar month in which the agreement is 
executed, or the State agency may develop a policy under which centers 
receive reimbursement only for meals served in approved centers on and 
after the effective date of the Program agreement. If the State 
agency's policy permits centers to earn reimbursement for meals served 
prior to the execution of a Program agreement, program reimbursement 
must not be received by the center until the agreement is executed.
    (b) Institutions--(1) Edit checks of sponsored centers. Prior to 
submitting its consolidated monthly claim to the State agency, each 
sponsoring organization must conduct reasonable edit checks on the 
sponsored centers' meal claims, which at a minimum, must include those 
edit checks specified at Sec.  226.10(c).
    (2) 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)(3) of this section.
    (3) For-profit center exception. For-profit child care centers, 
including for-profit at-risk afterschool care centers and outside-
school-hours care centers, must provide the reports required in 
paragraph (b)(2) of this section only for calendar months during which 
at least 25 percent of the children in care (enrolled or licensed 
capacity, whichever is less) were eligible for free or reduced-price 
meals or were title XX beneficiaries. However, children who only 
participate in an at-risk afterschool snack component of the Program 
must not be considered in determining this percentage. For-profit adult 
day care centers must provide the reports required in paragraph (b)(2) 
of this section only for calendar months during which at least 25 
percent of enrolled adult participants were beneficiaries of title XIX, 
title XX, or a combination of titles XIX and XX.
    (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 actual time of service 
meal counts of meals, by type, served to children or adult participants 
multiplied by the assigned rates of reimbursement, except as provided 
in paragraph (c)(4) of this section.
    (2) At-risk afterschool care centers. Each State agency must base 
reimbursement to each at-risk afterschool care center on the number of 
snacks served to children multiplied by the free rate for snacks, 
except as provided in paragraph (c)(4) of this section.
    (3) Emergency shelters. Each State agency must base reimbursement 
to each emergency shelter on the number of meals served to children 
multiplied by the free rates for meals and snacks.
    (4) For-profit center exception. For-profit child care centers, 
including for-profit at-risk and outside-school-hours care centers, 
must be reimbursed only for the calendar months during which at least 
25 percent of the children in care (enrolled or licensed capacity, 
whichever is less) were eligible for free or reduced-price meals or 
were title XX beneficiaries. However, children who only participate in 
an at-risk afterschool snack component of the Program must not be 
considered in determining this percentage. For-profit adult day care 
centers must be reimbursed only for the calendar months during which at 
least 25 percent of enrolled adult participants were beneficiaries of 
title XIX, title XX, or a combination of titles XIX and XX.
    (5) Computation of reimbursement. Except for at-risk afterschool 
care centers and emergency shelters, the State agency must compute 
reimbursement by either:
    (i) Actual counts. Base reimbursement to institutions on actual 
time of service counts of meals served, and multiply the number of 
meals, by type, served to participants that are 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

[[Page 41608]]

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. * * *

0
11. In Sec.  226.15:
0
a. Amend the second sentence in paragraph (b) by removing the reference 
``Sec.  226.6(b)(1)(xvii)'' and adding in its place the reference 
``Sec.  226.6(b)(1)(xviii)'';
0
b. Revise the first two sentences of paragraph (e)(2); and
0
c. Redesignate paragraphs (g) through (n) as paragraphs (h) through 
(o), respectively, and add a new paragraph (g).
    The revisions and addition read as follows:


Sec.  226.15  Institution provisions.

* * * * *
    (e) * * *
    (2) Documentation of the enrollment of each participant at centers 
(except for outside-school-hours care centers, emergency shelters, and 
at-risk afterschool care centers). All types of centers, except for 
emergency shelters and at-risk afterschool care centers, must maintain 
information used to determine eligibility for free or reduced-price 
meals in accordance with Sec.  226.23(e)(1). * * *
* * * * *
    (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)(1)(ix) and attendance area information that it has obtained, 
or verified with the appropriate school officials to be current, within 
the last school year.
* * * * *

0
12. In Sec.  226.16:
0
a. Amend the first sentence of paragraph (b)(1) by removing the 
references ``226.6(f)(2)(ii)'' and ``226.6(b)(1)(xvii)'' and adding in 
their place the references ``226.6(f)(2)(i)'' and ``226.6(b)(1)(xviii), 
respectively;
0
b. Revise paragraph (f); and
0
c. Amend the first sentence of paragraph (h) by adding the words ``at-
risk afterschool care centers,'' after the words ``emergency 
shelters,''.
    The revision reads as follows:


Sec.  226.16  Sponsoring organization provisions.

* * * * *
    (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, day care homes, adult day care centers, 
emergency shelters, at-risk afterschool care centers, and outside-
school-hours care centers). However, if a school food authority 
provides child care and is applying to participate in the Program, the 
State agency must enter into a single permanent agreement, as specified 
in Sec.  226.6(b)(4)(ii)(A).
* * * * *

0
13. In Sec.  226.17:
0
a. Revise paragraphs (b)(1), (b)(3), and (b)(5);
0
b. Add a new sentence between the second and third sentence in 
paragraph (b)(4); and
0
c. Redesignate paragraphs (b)(6) through (b)(9) as paragraphs (b)(7) 
through (b)(10), respectively, and add a new paragraph (b)(6).
    The revisions and additions read as follows:


Sec.  226.17  Child care center provisions.

* * * * *
    (b) * * *
    (1) Child care centers must have Federal, State, or local licensing 
or approval to provide day care services to children. 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 that indicates 
that renewal will be denied. If licensing or approval is not available, 
a child care center may participate if it demonstrates compliance with 
the CACFP child care standards or any applicable State or local child 
care standards to the State agency.
* * * * *
    (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 must not be claimed for more than two meals and 
one snack or one meal and two snacks provided daily to each child.
    (4) * * * However, children who only receive snacks in an approved 
afterschool care program must not be included in this percentage. * * *
    (5) A child care center with preschool children may also be 
approved to serve a breakfast, snack, and supper to school-age children 
participating in an outside-school-hours care program meeting the 
criteria of Sec.  226.19(b) that is distinct from its day care program 
for preschool-age children. The State agency may authorize the service 
of lunch to such participating children who attend a school that does 
not offer a lunch program, provided that the limit of two meals and one 
snack, or one meal and two snacks, per child per day is not exceeded.
    (6) A child care center with preschool children may also be 
approved to serve a snack to school age children participating in an 
afterschool care program meeting the requirements of Sec.  226.17a that 
is distinct from its day care program for preschool children, provided 
that the limit of two meals, and one snack, or one meal and two snacks, 
per child per day is not exceeded.
* * * * *

0
14. Add a new Sec.  226.17a to read as follows:


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

    (a) Organizations eligible to receive reimbursement for afterschool 
snacks--(1) Eligible organizations. In order to be eligible to receive 
reimbursement, organizations must meet 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 as a child care 
facility under the auspices of a sponsoring organization. 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 for-profit 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, as described in paragraph (b) of 
this section. In addition, centers may only claim reimbursement for 
snacks served at any one time to children within the at-risk 
afterschool care center's authorized capacity. For-profit centers

[[Page 41609]]

may only claim reimbursement for snacks served during a calendar month 
in which at least 25 percent of the children in care (enrolled or 
licensed capacity, whichever is less) were eligible for free or 
reduced-price meals or 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) Eligible at-risk afterschool care programs--(1) Eligible 
programs. 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 during the regular 
school year (an at-risk afterschool care center may not claim snacks 
during summer vacation, unless it is located in the attendance area of 
a school operating on a year-round calendar);
    (ii) Have organized, regularly scheduled activities (i.e., in a 
structured and supervised environment);
    (iii) Include education or enrichment activities; and
    (iv) Except for Emergency shelters as defined in Sec.  226.2, be 
located in an eligible area, as described in paragraph (i) of this 
section.
    (2) Eligibility limitation. Organized athletic programs engaged in 
interscholastic or community level competitive sports are not eligible 
afterschool care programs.
    (c) 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 are age 18 
or under at the start of the school year.
    (d) Licensing requirements for at-risk afterschool care centers. In 
accordance with Sec.  226.6(d)(1), if Federal, State or local licensing 
or approval is not otherwise required, at-risk afterschool care centers 
must meet State or local health and safety standards. When State or 
local health and safety standards have not been established, State 
agencies are encouraged to work with appropriate State and local 
officials to create such standards. Meeting these standards will remain 
a precondition for any afterschool center's eligibility for CACFP 
nutrition benefits. In cases where Federal, State or local licensing or 
approval is required, at-risk afterschool care centers that 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 that indicates the renewal will be denied.
    (e) Application procedures--(1) Application. An official of the 
organization must make written application to the State agency for any 
afterschool care program that 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 that permits the State agency to confirm that 
all applicant afterschool care centers are located in an eligible area, 
as described in paragraph (i) of this section; and
    (v) Other information required as a condition of eligibility in the 
CACFP must be submitted with an application for participation in 
accordance with Sec.  226.6(b)(1).
    (f) State agency action on applications--(1) State agency approval. 
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 in accordance with 
Sec. Sec.  226.6(b)(1) and 226.15(g) and the requirements of this 
section. The State agency must determine the eligibility of the 
afterschool care programs of independent afterschool care centers based 
on the information submitted by the independent center in accordance 
with Sec.  226.6(b)(1) and the requirements of this section. The State 
agency must determine the area eligibility of independent at-risk 
afterschool care centers in accordance with the requirements of Sec.  
226.6(f)(1)(ix)(B). An approved organization must enter into an 
agreement with the State agency as described in paragraph (f)(2) of 
this section.
    (2) Agreement. The State agency must enter into an agreement or 
amend an existing agreement with an institution approved to operate one 
or more at-risk afterschool care centers pursuant to Sec.  226.6(b)(4). 
The agreement must describe the approved afterschool care program(s) 
and list the approved center(s). The agreement must also require the 
institution to comply with the applicable requirements of this part. If 
the institution is a school food authority that is applying to 
participate as an at-risk afterschool care center, the State agency 
must enter into a single permanent agreement, as specified in Sec.  
226.6(b)(4)(ii)(A).
    (g) Application process in subsequent years. To continue 
participating in the Program, independent at-risk afterschool care 
centers or sponsoring organizations of at-risk afterschool care centers 
must reapply at time intervals required by the State agency, as 
described in Sec.  226.6(b)(3) and (f)(2). Sponsoring organizations of 
at-risk afterschool care centers must provide area eligibility data in 
compliance with the provisions of Sec.  226.15(g). In accordance with 
Sec.  226.6(f)(3)(ii), State agencies must determine the area 
eligibility of each independent at-risk afterschool care center that is 
reapplying to participate in the Program.
    (h) Changes to participating centers. Independent at-risk 
afterschool care centers or sponsors of at-risk afterschool care 
centers must advise the State agency of any substantive changes to the 
afterschool care program. Sponsoring organizations that want to add new 
at-risk afterschool care centers must provide the State agency with the 
information sufficient to demonstrate that the new centers meet the 
requirements of this section.
    (i) Area eligibility. Except for emergency shelters, at-risk 
afterschool care centers must be located in an area described in 
paragraph (a) of the Eligible area definition in Sec.  226.2 and in 
paragraph (i)(1) of this section.
    (1) Definition. An at-risk afterschool care center is 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 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 (the 
NSLP State agency). If the NSLP State agency chooses a month other than 
October, it must do so for the entire State.
    (3) Frequency of area eligibility determinations. Area eligibility 
determinations are valid for five years. The State agency may determine 
the date in the fifth year in which the next five-year cycle of area 
eligibility will begin. The State agency must not routinely require 
redeterminations of area eligibility based on updated school data 
during the five-year period, except in cases where the State agency has 
determined it is most efficient to incorporate area eligibility 
decisions

[[Page 41610]]

into the three-year application cycle. However, a sponsoring 
organization, the State agency, or FNS may change the determination of 
area eligibility if information becomes available indicating that an 
at-risk afterschool care center is no longer area eligible.
    (j) Cost of afterschool snacks. All afterschool snacks served under 
this section must be made available to participating children at no 
charge.
    (k) Limit on daily reimbursements. 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.
    (l) Meal pattern requirements for afterschool snacks. Afterschool 
snacks must meet the meal pattern requirements for snacks described in 
Sec.  226.20(b)(6) and (c)(4).
    (m) Time periods for snack service. At-risk afterschool care 
centers may only claim snacks served in approved afterschool care 
programs after a child's school day or on weekends, holidays, or school 
vacations during the regular school year. Afterschool snacks may not be 
claimed during summer vacation, unless the at-risk afterschool care 
center is located in the attendance area of a school operating on a 
year-round calendar.
    (n) Reimbursement rate. All snacks served in at-risk afterschool 
care centers will be reimbursed at the free snack rate.
    (o) Recordkeeping requirements. 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.
    (p) Reporting requirements. 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 based on 
daily attendance rosters or sign-in sheets.
    (q) Monitoring requirements. State agencies must monitor 
independent centers in accordance with Sec.  226.6(m). Sponsoring 
organizations of at-risk afterschool care centers must monitor their 
centers in accordance with Sec.  226.16(d)(4).

0
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.
* * * * *

0
16. In Sec.  226.19, revise paragraph (b)(1) to read as follows:


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

* * * * *
    (b) * * *
    (1) In accordance with Sec.  226.6(d)(1), 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. When State or local health and safety standards have not 
been established, State agencies are encouraged to work with 
appropriate State and local officials to create such standards. Meeting 
these standards will remain a precondition for any outside-school-hours 
care center's eligibility for CACFP nutrition benefits. In cases where 
Federal, State or local licensing or approval is required, outside-
school-hours care centers that 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 that 
indicates the renewal will be denied.
* * * * *

0
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.
* * * * *

0
18. In Sec.  226.20:
0
a. Amend the introductory text of paragraph (a)(4) by removing the 
words ``Supplemental food'' and adding in their place the word 
``Snacks'';
0
b. Revise footnote 1 in the tables of paragraphs (c)(1), (c)(2), 
(c)(3), and (c)(4); and
0
c. Amend paragraph (d)(2) by removing the words ``supplemental food'' 
and adding in their place the word ``snacks''.
    The revisions read as follows:


Sec.  226.20  Requirements for meals.

* * * * *
    (c) * * *
    (1) * * *

    \1\ Children ages 13 through 18 must be served minimum or larger 
portion sizes specified in this section for children ages 6 through 
12.
* * * * *
    (2) * * *

    \1\ Children ages 13 through 18 must be served minimum or larger 
portion sizes specified in this section for children ages 6 through 
12.
* * * * *
    (3) * * *
    \1\ Children ages 13 through 18 must be served minimum or larger 
portion sizes specified in this section for children ages 6 through 
12.
* * * * *
    (4) * * *

    \1\ Children ages 13 through 18 must be served minimum or larger 
portion sizes specified in this section for children ages 6 through 
12.
* * * * *

0
19. In Sec.  226.23:
0
a. Revise the first sentence in paragraph (b);
0
b. Revise the second and third sentences of paragraph (d); and
0
c. Add in the first sentence of paragraph (e)(1)(i), the words `` and 
at-risk afterschool care centers'' after the word ``emergency 
shelters''.
    The revisions read as follows:


Sec.  226.23  Free and reduced-price meals.

* * * * *
    (b) Institutions that may not serve meals at a separate charge to 
children (including emergency shelters, at-risk afterschool care 
centers, and sponsoring organizations of emergency shelters, at-risk 
afterschool care centers, and day care homes) and other institutions 
that 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 disability and 
that there is

[[Page 41611]]

no discrimination in the course of the food service. * * *
* * * * *
    (d) * * * All media releases issued by institutions other than 
emergency shelters, at-risk afterschool care centers, and sponsoring 
organizations of emergency shelters, at-risk afterschool care centers, 
or day care homes must include the Secretary's Income Eligibility 
Guidelines for Free and Reduced-Price Meals. The release issued by all 
emergency shelters, at-risk afterschool care centers, and sponsoring 
organizations of emergency shelters, at-risk afterschool care centers, 
or 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. * * *
* * * * *

    Dated: July 16, 2007.
Kate J. Houston,
Deputy Under Secretary, Food, Nutrition, and Consumer Services.
 [FR Doc. E7-14642 Filed 7-30-07; 8:45 am]
BILLING CODE 3410-30-P