Federal Register, Volume 77 Issue 17 (Thursday, January 26, 2012)

[Federal Register Volume 77, Number 17 (Thursday, January 26, 2012)]
[Rules and Regulations]
[Pages 4088-4167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-1010]

[[Page 4087]]

Vol. 77

Thursday,

No. 17

January 26, 2012

Part II

Department of Agriculture

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Food and Nutrition Service

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7 CFR Parts 210 and 220

Nutrition Standards in the National School Lunch and School Breakfast
Programs; Final Rule

Federal Register / Vol. 77 , No. 17 / Thursday, January 26, 2012 /
Rules and Regulations

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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 210 and 220

[FNS-2007-0038]
RIN 0584-AD59

Nutrition Standards in the National School Lunch and School
Breakfast Programs

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Final rule.

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SUMMARY: This final rule updates the meal patterns and nutrition
standards for the National School Lunch and School Breakfast Programs
to align them with the Dietary Guidelines for Americans. This rule
requires most schools to increase the availability of fruits,
vegetables, whole grains, and fat-free and low-fat fluid milk in school
meals; reduce the levels of sodium, saturated fat and trans fat in
meals; and meet the nutrition needs of school children within their
calorie requirements. These improvements to the school meal programs,
largely based on recommendations made by the Institute of Medicine of
the National Academies, are expected to enhance the diet and health of
school children, and help mitigate the childhood obesity trend.

DATES: Effective date: This rule is effective March 26, 2012.
Compliance date: Compliance with the provisions of this rule must
begin July 1, 2012, except as otherwise noted on the implementation
table provided in the preamble under SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: William Wagoner or Marisol Aldahondo-
Aponte, Policy and Program Development Branch, Child Nutrition
Division, Food and Nutrition Service at (703) 305-2590.

SUPPLEMENTARY INFORMATION:

Executive Summary

This final rule modifies several key proposed requirements to
respond to commenter concerns and facilitate successful implementation
of the requirements at the State and local levels. The rule phases in
many of the changes to help ensure that all stakeholders--the children,
the schools, and their supply chains--have time to adapt. Most notably,
this final rule provides additional time for implementation of the
breakfast requirements and modifies those requirements in a manner that
reduces the estimated costs of breakfast changes, as compared to the
proposed rule. As a result, the final rule is estimated to add $3.2
billion to school meal costs over 5 years, considerably less than the
estimated cost of the proposed rule.
When considered in the context of other related provisions of the
Healthy Hunger-Free Kids Act (HHFKA) of 2010, sufficient resources are
expected to be available to school food authorities to cover the
additional costs of updated meal offerings to meet the new standards.
Specifically, in addition to improving nutritional quality, the
HHFKA mandated that beginning July 1, 2011, revenue streams for a la
carte foods relative to their costs be at least as high as the revenue
streams for Program meals compared to their costs. Consequently schools
should receive over $1 billion a year in new food revenues beginning in
School Year 2011-2012. That will help schools work toward implementing
the new standards effective the following year, i.e., July 1, 2012. In
addition, USDA estimates that the ``School Food Authorities revenues''
rule will increase participation in school meal programs by 800,000
children.
In addition, the six-cent per lunch performance-based reimbursement
increase included in the HHFKA will provide additional revenue
beginning October 1, 2012. The Congressional Budget Office estimated
about $1.5 billion over 5 years will be provided in performance-based
funding.

I. Background

The Richard B. Russell National School Lunch Act (NSLA) in Section
9(a)(4), 42 U.S.C. 1758(a)(4), requires that school meals reflect the
latest ``Dietary Guidelines for Americans'' (Dietary Guidelines). In
addition, section 201 of the Healthy, Hunger-Free Kids Act of 2010
(Pub. L. 111-296, HHFKA) amended Section 4(b) of the NSLA, 42 U.S.C.
1753(b), to require the Department of Agriculture (USDA) to issue
regulations to update the meal patterns and nutrition standards for
school lunches and breakfasts based on the recommendations issued by
the Food and Nutrition Board of the National Research Council of the
National Academies of Science, part of the Institute of Medicine (IOM).
On January 13, 2011, USDA published a proposed rule in the Federal
Register (76 FR 2494) to update the meal patterns and nutrition
standards for the National School Lunch Program (NSLP) and the School
Breakfast Program (SBP) to align them with the 2005 Dietary Guidelines.
The proposed rule sought to increase the availability of fruits,
vegetables, whole grains, and fat-free and low-fat fluid milk in the
school menu; reduce the levels of sodium, saturated fat and trans fat
in school meals; and meet the nutrition needs of school children within
their calorie requirements. The intent of the proposed rule was to
provide nutrient-dense meals (high in nutrients and low in calories)
that better meet the dietary needs of school children and protect their
health. The proposed changes, designed for meals offered to school
children in grades Kindergarten (K) to 12, were largely based on the
IOM recommendations set forth in the report ``School Meals: Building
Blocks for Healthy Children'' (October 2009).
In summary, the January 2011 proposed rule sought to improve
lunches and breakfasts by requiring schools to:
Offer fruits and vegetables as two separate meal
components;
Offer fruit daily at breakfast and lunch;
Offer vegetables daily at lunch, including specific
vegetable subgroups weekly (dark green, orange, legumes, and other as
defined in the 2005 Dietary Guidelines) and a limited quantity of
starchy vegetables throughout the week;
Offer whole grains: half of the grains would be whole
grain-rich upon implementation of the rule and all grains would be
whole-grain rich two years post implementation;
Offer a daily meat/meat alternate at breakfast;
Offer fluid milk that is fat-free (unflavored and
flavored) and low-fat (unflavored only);
Offer meals that meet specific calorie ranges for each
age/grade group;
Reduce the sodium content of meals gradually over a 10-
year period through two intermediate sodium targets at two and four
years post implementation;
Prepare meals using food products or ingredients that
contain zero grams of trans fat per serving;
Require students to select a fruit or a vegetable as part
of the reimbursable meal;
Use a single food-based menu planning approach; and
Use narrower age/grade groups for menu planning.
In addition, the proposed rule sought to improve school meals by
requiring State agencies (SAs) to:
Conduct a nutritional review of school lunches and
breakfasts as part of the administrative review process;
Determine compliance with the meal patterns and dietary
specifications based on a review of menu and

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production records for a two-week period; and
Review school lunches and breakfasts every 3 years,
consistent with the HHFKA.
The 2010 Dietary Guidelines were released on January 31, 2011,
after USDA published the proposed rule. On March 21, 2011 USDA issued a
Notice in the Federal Register (76 FR 15225) seeking public comment on
the need to modify the proposed rule to reflect the 2010 Dietary
Guidelines recommendations to consume red-orange vegetables and protein
subgroups: (1) Seafood; (2) meat, poultry and eggs, and (3) nuts,
seeds, and soy products. The public comments to the Notice (76 FR
15225) were added to the proposed rule docket and all comments
associated with the proposed rule were considered in preparing this
final rule.
USDA received a total of 133,268 public comments during the comment
period January 13-April 13, 2011. This total included several single
submissions with thousands of comments. The types of comments received
included 7,107 unique letters, 122,715 form letters from 159 mass mail
campaigns, 3,353 non-germane letters, and 93 duplicates. Comments were
analyzed using computer software that facilitated the identification of
the key issues addressed by the commenters, as well as by USDA policy
officials.
Although USDA considered all comments, the description and analysis
in this final rule preamble focuses on the most frequent comments and
those that influenced revisions to the proposed rule, and discusses
modifications made to the proposed rule in response to public input.
USDA greatly appreciates the public comments as they have been
essential in developing a final rule that is expected to improve school
meals in a sound and practical manner. To view all public comments on
the proposed rule go to www.regulations.gov and search for public
submissions under docket number FNS-2007-0038. A Summary of Public
Comments is available as supporting material under the docket folder
summary.

Note: This final rule does not update the Pre-K school meal
patterns. These are under review and will be updated in a future
rulemaking amending regulations implementing the USDA's Child and
Adult Care Food Program. However, two provisions in this final rule,
menu planning approach and fluid milk requirements, impact Pre-K
meals as discussed later in this preamble.

II. Public Comments and USDA Response

USDA received comments from nutrition, health, and child advocates
at the national, state and local levels; SAs that administer the school
meal programs; school districts/boards; schools; school food service
staff; superintendents, principals, and teachers; food manufacturers
and distributors; food industry representatives; food service
management companies; academia; nutritionists/dietitians; community
organizations; parents and students; and many other interested groups
and individuals. Overall, the comments provided were generally more
supportive of the proposed rule than opposed. Comments from nutrition,
health and child advocates; community organizations; academia; and
parents favor the proposed rule, citing concern about the national
childhood obesity problem and the increased likelihood of preventable
diseases such as cardiovascular disease, high blood pressure, high
cholesterol, stroke, and type 2 diabetes, all of which increase the
cost of healthcare nationally. Many comments enthusiastically supported
the increase in fruits, vegetables, whole grains, fat-free milk/low-fat
milk in the school menus, and most other proposed changes designed to
improve the nutritional quality of school meals.
Comments from SAs and school food authorities (SFAs), food
industry, industry representatives, food service management companies,
and others in the public and private sectors associated with the
operation of the school meals programs also supported improving school
meals but voiced strong concerns about some aspects of the proposed
rule. The proposed food quantities, meat/meat alternate component at
breakfast, weekly vegetable subgroup requirement at lunch, starchy
vegetables limit, sodium reductions, whole grains requirement, and
frequency of administrative review were the parts of the proposal that
prompted most of their concerns. Program operators also raised concerns
about the rule cost and implementation timeline, the impact of the
proposed changes on student participation in the meal programs, and the
potential for increased plate waste if meals are not acceptable to
students. A number of commenters suggested that USDA conduct additional
research or pilot test the proposed changes before implementation. All
of the above concerns are more prevalent in the SBP than the NSLP.
Schools that operate the SBP voiced significant concern about the
estimated 50 cents increase in food and labor costs for each
reimbursable breakfast in FY 2015, when all the requirements will be in
place as stated in the proposed rule.
USDA has taken into consideration the different views expressed by
commenters and seeks to be responsive to the concerns raised by
stakeholders, especially those responsible for the management and day
to day operation of the school meal programs. At the same time, we are
mindful that the overweight and obesity epidemic affecting many
children in America requires that all sectors of our society, including
schools, help children make significant changes in their diet to
improve their overall health and become productive adults. This final
rule makes significant improvements to the NSLP and SBP to facilitate
successful implementation of the requirements at the State and local
levels. This final rule modifies several key proposed requirements to
respond to commenter concerns as well as to address requirements of the
Consolidated and Further Continuing Appropriations Act, 2012, Public
Law 112-55. Most notably, this final rule provides additional time for
implementation of the SBP requirements and modifies those requirements
in a manner that reduces the estimated costs of breakfast changes, as
compared to the proposed rule.
No changes to the SBP meal pattern take effect immediately upon
publication of this final rule, except limiting flavor to fat-free
milk, and requiring the service of only fat-free and low-fat milk (the
latter is a statutory requirement codified in the NSLA in the HHFKA.
See the discussion on ``Milk'' for further details). Furthermore, this
rule introduces selected requirements into the SBP beginning SY 2013-
2014 (the second year of implementation) to ease the estimated increase
in breakfast costs and minimize impact on SBP operations. This approach
is intended to enable program operators to concentrate on improving
school lunches first and then focus on the breakfast changes. It also
allows USDA to meet the statutory requirement to offer meals that
reflect the Dietary Guidelines while being responsive to the concerns
raised by program operators and other stakeholders. However, SFAs that
are able to implement the new meal requirements concurrently in the SBP
and NSLP are encouraged to do so with SA approval.
Section G of the Regulatory Impact Analysis discusses in greater
detail the key differences between the proposed and final rules. Most
of the estimated reduction in cost is due to the policy changes
discussed above, including the

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phased in breakfast meal pattern requirements and the elimination of a
separate meat component at breakfast, as well as more modest changes to
the lunch meal pattern requirements' grain and vegetable components. In
addition to these policy changes, lower food inflation since
preparation of the proposed rule cost estimate contributes to the
reduction in the cost of the final rule compared to the proposed rule.
The following is a summary of the key public comments on the
proposed rule and USDA's response. Public comments unrelated to the
specific provisions of the rule (e.g., standards for cholesterol,
dietary fiber, artificial sweeteners, caffeine) are not discussed here
but are addressed in the Summary of Public Comments. For a more
detailed discussion of the public comments see the Summary of Public
Comments posted online at www.Regulations.gov.

Menu Planning Approach

Proposed Rule: Follow a single Food-Based Menu Planning (FBMP)
approach.
Comments: Nutrition, health and child advocates; community
organizations; academia; parents; and SAs support the FBMP approach
because it helps children easily identify the key food groups necessary
for a well-balanced meal. According to a health advocate, FBMP also
minimizes the opportunity to offer unhealthy foods that have been
fortified to meet the nutrient requirements. SAs support a single menu
planning approach as it supports a more cost effective delivery of
training and technical assistance resources.
However, a number of SFAs that currently use the Nutrient Standard
Menu Planning (NSMP) and some school advocacy organizations, trade
associations, food manufacturers, nutritionists, and other commenters
suggested that NSMP be allowed as an option. SFAs that use NSMP claimed
that they would still have to conduct a nutrient analysis to assess if
they are meeting the new dietary specifications (calories, sodium, and
saturated fat levels). Several commenters also claimed that NSMP
schools are better able to control costs and that changing to FBMP
would result in increased training costs. Some stated that eliminating
NSMP decreases menu planning flexibility and menu variety.
USDA Response: To ensure that school meals reflect the key food
groups recommended by the Dietary Guidelines, this final rule
establishes FBMP as the single menu planning approach for the NSLP
(including for Pre-K meals) in SY 2012-2013. A single food-based menu
planning approach simplifies menu planning, serves as a teaching tool
to help children choose a balanced meal, and assures that students
nationwide have access to key food groups recommended by the Dietary
Guidelines. It also makes it easier for schools to communicate the meal
improvements to parents and the community-at-large. Simplifying program
management, training and monitoring is expected to result in program
savings. Over 70 percent of the program operators currently use FBMP,
and training and technical assistance resources will be available to
help all schools successfully transition to the new meal patterns.
In response to commenters' concerns about the estimated cost
increase of the breakfast meal, this final rule gives those SBP program
operators not currently using FBMP additional time to convert to this
planning approach. SBP operators who are not currently using FBMP may
continue with their current menu planning approach through SY 2012-
2013. However, all SBP operators must use a single FBMP approach
beginning SY 2013-2014 (the second year of implementation).
This final rule sets forth the new food-based meal patterns in 7
CFR 210.10 for lunches and Sec. 220.8 for breakfasts. In order to
accommodate the extended implementation for non-FBMP operators, this
final rule creates a new Sec. 220.23 that restates the nutrition
standards and menu planning approaches that apply to all SBP operators
in SY 2012-2013 only. Individual SFAs wishing to adopt the provisions
of Sec. 220.8 prior to the required implementation date specified
therein may do so with the approval of the SA.
Accordingly, this final rule implements the proposed FBMP approach
and codifies the proposal under Sec. 210.10(a)(1)(i) of the regulatory
text for the NSLP and Sec. 220.8(a)(1) for the SBP. Menu planning
approaches applicable to the SBP in SY 2012-2013 are under Sec.
220.23(a)(5).

Age/Grade Groups

Proposed Rule: Plan lunches and breakfasts using age/grade groups
K-5, 6-8, and 9-12.
Comments: A number of nutrition, health and child advocates; and
dietitians agreed that the proposed age/grade groups would result in
more age-appropriate school meals. They also supported the provision
allowing schools to serve the same breakfast and lunch meal patterns
for students in grades K through 8, provided that the meals meet the
calorie, saturated fat, and sodium standards for each the of the age/
grade groups.
Several commenters argued the proposed meal patterns offer too much
food, especially for young children. Some commenters recommended
different age/grade groups, and an SA recommended that USDA retain the
current age/grade groups. Some SFAs requested flexibility in the use of
the age/grade groups (e.g., a one-grade level leeway). A number of
commenters expressed concerns regarding use of the age/grade groups in
the SBP, as schools generally serve K-12 students in the same line.
USDA Response: This final rule requires schools to use the age/
grade groups K-5, 6-8, and 9-12 to plan menus in the NSLP upon
implementation of this rule in SY 2012-2013. These age/grade groups
reflect predominant school grade configurations and are consistent with
the IOM's Dietary Reference Intake (DRI) groupings. This rule allows
reasonable flexibility in the use of the age/grade groups and permits a
school to use one meal pattern for students in grades K through 8 as
food quantity requirements for groups K-5 and 6-8 overlap. In such a
case, the school continues to be responsible for meeting the calorie,
saturated fat, and sodium standards for each of the age/grade groups
receiving the school meals. The following example illustrates this
concept:
Example: A school could offer all students in grade groups K-5 and
6-8 the same lunch choices for the fruit, vegetable, grains, meat/meat
alternate, and milk components because the quantity requirements are
the same or overlap. Similarly, the calorie requirements for grades K-5
(550-650 average calories per week) and grades 6-8 (600-700 average
calories per week) overlap. Therefore, a school could offer both grade
groups a range of 600-650 average calories per week to meet the
requirement for each grade group. While the saturated fat and trans fat
requirement are the same for both grade groups, the school must
carefully consider the sodium requirements. The school would have to
comply with the lower sodium standard that was developed for age/grades
K-5 but would also meet the requirement for students in age/grades 6-8.
In the SBP, the new age/grade groups take effect in SY 2013-2014
(the second year of implementation) to ease the burden on program
operators. Until then, schools have the option to continue the age/
grade group K-12 for planning breakfasts. Meals planned for the age/
grade group K-12 must meet the nutrition standards developed for that

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age/grade group, which have been moved from Sec. 220.8 to a new Sec.
220.23 of the regulatory text.
Accordingly, this final rule implements the proposed age/grade
groups and codifies the proposal under Sec. 210.10(c)(1) of the
regulatory text for the NSLP and Sec. 220.8(c)(1) for the SBP. Age/
grade groups applicable to the SBP in SY 2012-2013 are under Sec.
220.23(b) for nutrient standards menu planning, and under Sec.
220.23(g) for food based menu planning.

Meal Components

Fruits
Proposed Rule: Offer fruit as a separate food component at lunch
daily. Increase the fruit and vegetable amounts at lunch and double the
minimum required fruit quantity at breakfast. Allow schools to offer a
non-starchy vegetable in place of fruit/fruit juice at breakfast. Allow
frozen fruit without added sugar only.
Comments: There is general support for the proposal to establish
fruit as separate food component. Stakeholders such as nutrition,
health and child advocates supported the proposal because they are
concerned that children are not consuming the recommended intake of
fruits. One major health advocate noted that it is possible to
significantly increase the quantity of fruits and vegetables in the
school menu in a cost effective way, stating that many schools already
exceed the current NSLP meal requirements, and noting that of thousands
of schools participating in the Alliance for a Healthier Generation's
Healthy School Program, 85 percent provide at least one fruit (fresh,
canned, or frozen in fruit juice or light syrup) at breakfast and 72
percent provide at least four non-fried, no-added-sugars fruit or
vegetable options daily.
However, many commenters opposed the proposed minimum required
fruit quantities, and were particularly concerned about the fruit
requirement for breakfast. A number of commenters stated that one cup
of fruit at breakfast is too much for young children to consume at one
time and will result in significant plate waste. Commenters also
emphasized that students usually have very little time to eat breakfast
at school and are concerned about the logistics of offering more food
through alternative breakfast delivery methods such as Breakfast in the
Classroom or on the bus. In general, these commenters argued that the
proposal to double the amount of fruit at breakfast would contribute to
higher costs for food, labor, equipment, and storage.
Regarding the types of fruit to be offered, several commenters
supported the proposed limitation on added sugar in frozen fruit to
limit the sources of discretionary calories. Some commenters
recommended a prohibition on canned fruit in light syrup. Some program
operators asked how to credit whole fresh fruit, and other commenters
requested that the quantities in the meal patterns be changed from cups
to servings to better account for fresh whole fruit. A few suggested
that USDA adopt the HealthierUS School Challenge Gold Level requirement
to serve fresh fruit twice per week with school meals.
USDA Response: This final rule establishes fruits and vegetables as
separate food components in the NSLP and adds a fruits requirement at
lunch beginning SY 2012-2013. The intent of the new requirements is to
promote the consumption of these fruits, as recommended by the Dietary
Guidelines. Fruits (and vegetables) that are prepared without added
solid fats, sugars, refined starches, and sodium are nutrient rich
foods and supply important nutrients that are under-consumed by school
children in the United States (including potassium and dietary fiber)
with relatively little calories.
This rule also gives program operators additional time to meet the
required minimum fruit quantity increase in the SBP. Schools are
required to offer 1 cup of fruit to all age/grade groups at breakfast
beginning in SY 2014-2015 (the third year of implementation). This
modification gives program operators more time to prepare for this
important change to SBP menus. This rule also gives schools the option
to offer vegetables in place of all or part of the required fruit
component for menu flexibility and as a potential cost control measure.
However, the first two cups per week of any such substitution must be
from the dark green, red/orange, beans and peas (legumes) or other
vegetable subgroups. These vegetable subgroups have been identified as
being under-consumed by school children, according to the IOM report.
Starchy vegetables may also be offered in substitution of fruits, once
the first two cups offering of non-starchy vegetables have been met.
This change to the proposed rule allows schools flexibility and the
option to offer vegetables in place of fruit in accordance with the
substitution protocol specified here.
Although schools must offer the full amount of the required food
component, to minimize the potential for food waste in the NSLP and
SBP, all students are allowed to select \1/2\ cup of fruit for a
reimbursable meal under Offer versus Serve (OVS), instead of requiring
them to take the full fruit component. This change in the application
of OVS with regard to the fruits and vegetables components is further
discussed in ``Standards for Meals Selected by the Student (Offer
versus Serve).''
Schools may meet the fruit component at lunch and breakfast by
offering fruit that is fresh; canned in fruit juice, water, or light
syrup; frozen without added sugar, or dried. Through its USDA Foods
Programs, USDA offers schools a range of fresh, frozen without added
sugar, dried and canned fruits. Although 100 percent juice can be
offered, no more than half of the per-meal fruit component may be juice
because it lacks dietary fiber and when consumed in excess can
contribute extra calories. Schools should offer fresh fruit whenever
possible.
Although some commenters suggested that the meal patterns set the
fruit and other food requirements as servings rather than cups, this
final rule does not adopt this suggestion, as a serving can be any
amount of food determined by the menu planner and does not ensure
uniformity. The 2005 Dietary Guidelines recommended amounts were given
in cups and ounce equivalents (oz. eq.), which are standard defined
amounts. Menu planners must continue to use the Food Buying Guide for
Child Nutrition Programs to determine how to credit whole fruit. USDA
will update the Food Buying Guide as soon as possible, and will also
develop other technical assistance resources as needed.
Accordingly, this final rule implements the proposed fruit
requirements, with modifications, and codifies them under Sec.
210.10(c) for the NSLP and under Sec. 220.8(c) for the SBP. Fruit
requirements applicable to the SBP in SY 2012-2013 are under Sec.
220.23(g).

Vegetables

Proposed Rule: Offer vegetables as a separate food component at
lunch daily. Increase the variety of vegetables over the week to
include the following subgroups: dark green, orange, legumes, and other
as defined in the Dietary Guidelines. Limit starchy vegetables at lunch
to 1 cup per week for all age/grade groups. Allow non-starchy
vegetables in place of fruit at breakfast.
Comments: Nutrition, health and child advocates; community
organizations; academia; and parents welcomed the proposal to divide
fruits and vegetables into two separate components and expressed
support for the proposed weekly vegetable requirements. Some of these

[[Page 4092]]

commenters stated the proposed increase in vegetable variety and
quantity should positively impact overall consumption.
State and local program operators, however, suggested that the
vegetable subgroups be encouraged, rather than required (similar to the
approach in the HealthierUS School Challenge guidelines). Some
commenters stated that the vegetable subgroup requirements are too
complicated. Others argued that children will not eat vegetables they
are not familiar with and, therefore, the vegetable subgroup
requirements will result in plate waste. Several commenters expressed
concern that procuring some vegetable subgroups will be difficult and
costly during specific times of the year in certain parts of the
country. Others requested clarification regarding when beans should be
considered a legume versus a meat alternate.
Many State and local program operators opposed the starchy
vegetable limit. They argued that all vegetables should be encouraged,
and that a limit on starchy vegetables will lead to a decrease in
vegetable consumption, or a decrease in participation in the NSLP. Some
suggested that the weekly limit only apply to potatoes. Several
suggested that instead of limiting starchy vegetables, USDA should
prohibit French fries or deep-fried preparation methods for all
vegetables. Others requested gradual introduction of the weekly limit
on starchy vegetables. Many program operators argued that white
potatoes are inexpensive and would need to be replaced by more
expensive fruits and vegetables, which will be a costly strain on
school/state budgets. A few asked that starchy vegetables in mixed
dishes, such as soups, not count towards the weekly starchy vegetable
limit.
Nutrition and health advocates favored allowing non-starchy
vegetables in place of fruit in the SBP. However, numerous commenters
opposed disallowing starchy vegetables at breakfast. These commenters,
including SFAs, food industry, and some parents, stated that starchy
vegetables such as potatoes are affordable and popular, and complement
many breakfast dishes. They also noted that potatoes supply potassium
and other minerals, vitamins and fiber, and are naturally low in fat
and sodium. Many stakeholders suggested that USDA ease the proposed
restrictions on starchy vegetables.
Program operators also addressed the use of salad bars to meet the
vegetable requirement. They stated that salad bars are good ways to
serve a wide variety of fruits and vegetables and are an effective
strategy to increase children's consumption of these food groups.
However, they expressed concern that the proposed vegetable
requirements increase challenges with or could discourage the use of
self-serve salad bars. Schools asked how to determine if the required
foods/portions are being served.
USDA Response: This final rule establishes vegetables as a separate
food component in the NSLP, and requires schools to offer all the
vegetable subgroups identified by the 2010 Dietary Guidelines (dark
green, red/orange, beans and peas (legumes), starchy, and other) over
the course of the week at minimum required quantities as part of the
lunch menus in SY 2012-2013. As required by the Consolidated and
Further Continuing Appropriations Act, 2012, Public Law 112-55 (FY 2012
Agriculture Appropriations Act), we are removing the proposed rule
limit on starchy vegetables, and instead requiring schools to offer at
least minimum quantities of all vegetable subgroups in the NSLP over
the course of the week. This change encourages consumption from all
vegetable subgroups, and is consistent with the Dietary Guidelines'
recommendation to increase variety in vegetable consumption. In
addition, to be consistent with the 2010 Dietary Guidelines
classification of vegetable subgroups, this final rule expands the
proposed orange vegetable subgroup to include red/orange vegetables.
USDA asked commenters about this change in the vegetable subgroups in
the Notice published by USDA in the Federal Register (76 CFR 15225) on
March 21, 2011 and there was no public opposition.
This final rule also allows schools the option to offer vegetables
in place of all or part of the fruits requirement at breakfast
beginning July 1, 2014. This is consistent with the Dietary Guidelines'
recommendation to eat a variety of vegetables, especially dark green,
red and orange vegetables, and beans and peas (legumes). This
recommendation is applicable to the school meals because most
vegetables and fruits are major contributors of nutrients that are
under-consumed in the United States, including potassium and dietary
fiber. Consumption of vegetables and fruits is also associated with
reduced risk of many chronic diseases, including obesity, heart attack,
stroke, and cancer. By providing more and a variety of vegetables in a
nutrient-dense form (without added solid fats, sugars, refined
starches, and sodium), schools help students obtain important nutrients
and maintain a healthy weight.
This final rule does not implement the proposed rule limitation on
servings of starchy vegetables offered as part of the lunch and
breakfast reimbursable meals. This change is in response to commenters'
concerns and the requirements of the FY 2012 Agriculture Appropriations
Act, which specifically prevented USDA from adopting the IOM
recommendation for setting maximum limits on starchy vegetables,
providing for fiscal year 2012 USDA appropriations. Therefore, schools
are allowed to offer any vegetable subgroup identified by the 2010
Dietary Guidelines to meet the vegetables component required for each
reimbursable school meal. The vegetable quantities in the lunch meal
pattern have been modified to reflect this change to the proposal while
remaining consistent with the Dietary Guidelines' focus on increasing
the intake of vegetables that are under-consumed.
Commenters asked USDA to clarify when to credit beans and peas
(legumes) toward the vegetable component. Local menu planners decide
how to incorporate beans and peas (legumes) into the school meal but
may not offer one serving of beans and peas (legumes) to meet the
requirements for both vegetables and meat/meat alternate components.
Beans and peas (legumes) can be credited toward the vegetable component
because they are excellent sources of dietary fiber and nutrients such
as folate and potassium. These nutrients are often low in the diets of
many Americans. Because of their high nutrient content and low cost,
USDA encourages menu planners to include beans and peas (legumes) in
the school menu regularly, either as a vegetable or as a meat alternate
(as discussed later). Some foods commonly referred to as beans and peas
(e.g., green peas, green lima beans, and green (string) beans) are not
considered part of the beans and peas subgroup because their nutrient
profile is dissimilar. More information on the use and categorization
of beans and peas (legumes) is available online at http://www.choosemyplate.gov/foodgroups/proteinfoods_beanspeas.html.
In response to commenter questions about how to use salad bars to
meet the new meal requirements, the Department would like to emphasize
that schools may continue to use salad bars to enhance the variety of
vegetables in the school menu. See FNS memorandum SP 02-2010--Revised
(January 21, 2011) for more information on how salad bars can be used
effectively as part of the reimbursable meals. The memorandum is
available online at http://www.fns.usda.gov/cnd/governance/

[[Page 4093]]

Policy-Memos/2011/SP02-2011revised--os.pdf.
As with the proposed rule, this final rule allows schools to use
fresh, frozen, and canned products to meet the vegetable requirement.
Schools have access to nutritious vegetable choices through USDA Foods.
For example, USDA Foods offers only reduced sodium canned vegetables at
no more than 140 mg of sodium per half-cup serving, which is in line
with the 2010 Dietary Guidelines. Schools also have the option to order
frozen vegetables with no added salt, including green beans, carrots,
corn, peas, and sweet potatoes.
Accordingly, this final rule implements the proposed vegetables
requirements, with modifications, and codifies them under Sec.
210.10(c) for the NSLP and under Sec. 220.8(c) for the SBP. Vegetable
requirements applicable to the SBP in SY 2012-2013 are under Sec.
220.23(g).

Grains

Proposed Rule: Offer at least a daily serving of grains at
breakfast and lunch. When this rule is initially implemented, at least
half of the grains offered during the week must be whole grain-rich.
Two years after implementation, all grains offered during the week must
be whole grain-rich. In addition, allow schools the option to offer up
to one serving of a grain-based dessert daily to meet part of the
weekly grains requirement.
Comments: Many commenters, primarily nutrition and health
advocates, and parents, favored introducing a whole grains requirement
in the NSLP and SBP. A number of program operators, however, objected
to the final whole grains requirement (that all grains offered must be
whole grain-rich), and stated that the initial requirement (at least
half of grains offered must be whole grain-rich) is sufficient. These
commenters asserted that prohibiting all refined grains would restrict
many grains that children and adolescents enjoy such as white rice and
white bread. Other program operators that objected to the final whole
grains requirement expressed concern with the timeline and the higher
food costs associated with using only whole grain-rich products, which
they argued are generally more expensive than refined grain products.
Many commenters asked that USDA clarify the criteria schools must use
to identify whole grain-rich products.
USDA Response: While children generally eat enough total grains,
most of the grains they consume are refined grains rather than whole
grains. Whole grains (e.g., whole-wheat flour, oatmeal, whole cornmeal,
and brown rice) are a source of nutrients such as iron, magnesium,
selenium, B vitamins, and dietary fiber. Evidence suggests that eating
whole grains in nutrient dense forms may lower body weight and reduce
the risk of cardiovascular disease. Currently, schools may offer
enriched or whole grains, and are allowed to offer enriched, refined
grains only. Therefore, this final rule establishes a minimum whole
grain-rich requirement in the NSLP and SBP to help children increase
their intake of whole grains and benefit from the important nutrients
they provide.
For the NSLP, the whole grain requirement takes effect upon
implementation of the rule. Therefore, in SY 2012-2013 and SY 2013-2014
(the first two years of implementation) whole grain-rich products must
make up half of all grain products offered to students. During this
time only, refined-grain foods that are enriched may be included in the
lunch menu. In SY 2014-2015 (the third year of implementation) and
beyond, schools must offer only whole grain-rich products.
In the SBP, this final rule provides that schools must offer the
weekly grain ranges and half of the grains as whole grain-rich
beginning July 1, 2013 (SY 2013-2014, the second year of
implementation). All grains offered in the SBP must be whole grain-rich
in SY 2014-2015 (the third year of implementation) and beyond. Once
schools meet the daily minimum grain quantity required (1 oz. eq. for
all age-grade groups) for breakfast, they are allowed to offer a meat/
meat alternate in place of grains. The meat/meat alternate can count
toward the weekly grains requirement (credited as 1 oz. eq. of meat/
meat alternate is equivalent to 1 oz. eq. of grain). This modification
is intended to retain the flexibility that menu planners currently have
to offer a combination of grains and meats/meat alternates at
breakfast. This final rule eliminates the proposed provision to require
a meat/meat alternate daily at breakfast due to the cost concerns
voiced by program operators. (For more details, please see the
discussion on meat/meat alternate.)
In this final rule, to receive credit in the meal programs, a whole
grain-rich food must contain at least 51 percent whole grains and the
remaining grain content of the product must be enriched. Because
current labeling regulations and practices may limit the school's
ability to determine the actual whole grain content of many grain
products, schools would use both elements of the following criterion to
identify whole grain-rich foods. This is consistent with USDA's
approach on whole grains in the HealthierUS School Challenge
(HealthierUS School Challenge Whole-Grains Resource, http://teamnutrition.usda.gov/healthierUS/NFSMI/lesson2handouts.pdf).
Therefore, until the whole grain content of food products is required
on a product label by the Food and Drug Administration (FDA), schools
must evaluate a grain product according to forthcoming FNS guidance as
follows:
Element #1. A serving of the food item must meet portion size
requirements for the Grains/Breads component as defined in FNS
guidance.

And

Element #2. The food must meet at least one of the following:
a. The whole grains per serving (based on minimum serving sizes
specified for grains/breads in FNS guidance) must be >= 8 grams. This
may be determined from information provided on the product packaging or
by the manufacturer, if available. Also, manufacturers currently may
apply for a Child Nutrition Label for qualifying products to indicate
the number of grains/breads servings that are whole grain-rich.
b. The product includes the following Food and Drug Administration
(FDA)-approved whole grain health claim on its packaging. ``Diets rich
in whole grain foods and other plant foods and low in total fat,
saturated fat and cholesterol may reduce the risk of heart disease and
some cancers.''
c. Product ingredient listing lists whole grain first,
specifically:
I. Non-mixed dishes (e.g., breads, cereals): Whole grains must be
the primary ingredient by weight (a whole grain is the first ingredient
in the list).
II. Mixed dishes (e.g., pizza, corn dogs): Whole grains must be the
primary grain ingredient by weight (a whole grain is the first grain
ingredient in the list).
For foods prepared by the school food service, the recipe is used
as the basis for a calculation to determine whether the total weight of
whole grain ingredients exceeds the total weight of non-whole grain
ingredients.
Several commenters noted that the industry standard of identity for
whole grain products is 14.75 grams, while the IOM recommendations for
school meals were based on 16 grams per serving. They suggested that
schools be permitted to round up to the nearest quarter on gram
equivalents in products. USDA will continue to provide SAs and schools
guidance on this subject.
Many program operators expressed concern about the increased
quantity of

[[Page 4094]]

food offered to children. The weekly grains quantity for the NSLP is
reduced to 8-9 oz. eq. for age/grade group K-5, to 8-10 oz. eq. for
age/grade group 6-8, and to 10-12 oz. eq. for age/grade group 9-12.
This grains requirement still reflects the Dietary Guidelines'
recommendation to increase consumption of whole grains as half of all
grains offered must be whole grain-rich during the first two years of
implementation, and all grains must be whole grain-rich thereafter.
Commenters also expressed concerns regarding the cost and
availability of whole grain-rich products. USDA would like to emphasize
that such products are now available through USDA Foods, including:
brown rice; parboiled brown rice; rolled oats; whole-wheat flour;
whole-grain kernel corn; and whole-grain rotini, spaghetti, and
macaroni.
This final rule modifies the provision in the proposed rule to
allow schools the option to meet part of the weekly grains requirement
with grain-based desserts. USDA had proposed to allow up to one serving
of grain-based dessert per day to allow additional opportunities to
incorporate whole grains in the lunch menu. However, the 2010 Dietary
Guidelines cite grain-based desserts as a significant source of solid
fats and added sugars in Americans' diets. Therefore, this final rule
reduces the number of allowable grain-based desserts from five to two
per school week, as recommended by several commenters.
Accordingly, this final rule implements the proposed grains
requirements and codifies them under Sec. 210.10(c) for the NSLP and
under Sec. 220.8(c) for the SBP. Grains requirements applicable to the
SBP in SY 2012-2013 are under Sec. 220.23(g).

Meats/Meat Alternates

Proposed Rule: Offer a meat/meat alternate at lunch and breakfast
daily to meet weekly requirements. Solicit comments on whether or not
the meat/meat alternate component should include the three protein food
subgroups recommended by the 2010 Dietary Guidelines: (1) Seafood; (2)
meat, poultry, and eggs; and (3) nuts, seeds, and soy products. Solicit
comments on whether or not tofu should be an allowable meat alternate
and a methodology for crediting commercially prepared tofu.
Comments: A few commenters, primarily health advocates, expressed
support for the overall meat/meat alternate requirement. They supported
the proposed rule's emphasis on lean sources of protein and on lower-
sodium meats/meat alternates. Several commenters, however, indicated
that applying a weekly meat/meat alternate requirement, rather than a
daily source of protein, might decrease the estimated meal cost and
increase menu planning flexibility.
Many of the public comments focused on the proposed requirement to
offer a meat/meat alternate daily at breakfast. Commenters who favored
the proposal stated that a breakfast with a meat/meat alternate would
provide greater satiety and help increase the protein intake for
children that do not drink milk. They said the protein requirement
would result in a more nutritious and balanced breakfast.
However, many school districts expressed concerns about offering a
daily meat/meat alternate at breakfast. Several of these commenters
argued that there is insufficient scientific support for the proposed
meat/meat alternate requirement at breakfast. Others asserted that the
daily requirement would be costly, create logistical difficulties and
food safety challenges for schools, make it difficult for schools to
achieve the new sodium limits, and discourage new breakfast modalities
and school participation in the SBP. Some also noted that children in
most schools have very limited time to eat breakfast and offering more
food would result in increased plate waste.
A few commenters also expressed concerns about the availability of
meat/meat alternate products that will enable schools to offer meals
that meet the dietary specifications for sodium, saturated fat, and
trans fat. A commenter asked whether USDA Foods is able to provide low-
sodium processed meats, cheeses, and other meat/meat alternate
products.
Commenters had different opinions on whether or not the meal
pattern should require that schools offer the specific protein food
subgroups identified in the 2010 Dietary Guidelines. Those in favor
stated that it would diversify students' diet and provide health
benefits. Those against it said that requiring protein food subgroups
would be cost-prohibitive to many schools and that it might not be
feasible in certain geographical areas. They also indicated that many
parents do not recognize nuts, seeds, and soy products as a substitute
for meats.
Many commenters suggested that USDA allow schools to offer tofu as
a meat/meat alternate. A range of stakeholders, including SAs,
nutrition professionals, advocacy organizations, and individual
commenters, expressed support for allowing commercially prepared tofu
in the school meal programs. Some commenters suggested a methodology
for crediting commercially prepared tofu as a meat alternate. The
predominant approach suggested is that USDA credit tofu based on the
grams of protein per ounce equivalent.
USDA Response: This final rule implements the meat/meat alternate
requirements for the NSLP as proposed. Schools must offer at least a
minimum amount of meat/meat alternate daily (2 oz eq. for students in
grades 9-12, and 1 oz eq. for younger students), and provide a weekly
required amount for each age/grade group. Offering a meat/meat
alternate daily as part of the school lunch supplies protein, B
vitamins, vitamin E, iron, zinc, and magnesium to the diet of children,
and also teaches them to recognize the components of a balanced meal.
Menu planners are encouraged to offer a variety of protein foods (e.g.,
lean or extra lean meats, seafood, and poultry; beans and peas; fat-
free and low-fat milk products; and unsalted nuts and seeds) to meet
the meat/meat alternate requirement.
The Department is mindful of the cost and operational concerns
expressed by schools and other stakeholders regarding the proposed
meat/meat alternate component in the SBP. Previously, schools have had
the flexibility to offer one serving each of grains and meat/meat
alternate, or two servings of either one at breakfast. We have seen a
steady increase in the number of schools participating in the SBP and
more schools are offering breakfast in the classroom and other creative
delivery options. Therefore, this final rule retains some flexibility
offered by the grains and meat/meat alternate combination available in
the current SBP meal pattern, and does not require a daily meat/meat
alternate in the SBP. Menu planners may offer a meat/meat alternate in
place of grains after the minimum daily grains requirement is met. For
example, for the K-5 age-grade group, the SBP minimum daily grain
requirement is 1 oz. eq. As long as at least 1 oz. eq. of grain is
served as part of the breakfast menu, a meat/meat alternate may also be
served. The meat/meat alternate may count toward meeting the weekly
grains requirement. For crediting, 1 oz. eq. of meat/meat alternate is
equivalent to 1 oz. eq. of grains.
As suggested by many stakeholders, this final rule gives schools
the option to offer commercially prepared tofu as a meat alternate in
the NSLP and SBP. This provision, which is codified under Sec.
210.10(c)(2)(i)(D) of the regulatory text for the NSLP, allows schools
to diversify the sources of protein available to students and better
meet the dietary

[[Page 4095]]

needs of vegetarians and culturally diverse groups in schools. Although
tofu does not have an FDA standard of identity, the Dietary Guidelines
recognize plant-based sources of protein such as tofu. USDA will
continue to provide SAs and schools guidance on this issue.
USDA wishes to clarify that schools have the option to offer mature
beans and dry peas (e.g., kidney beans, pinto beans, black beans,
garbanzo beans/chickpeas, black-eyed peas, split peas and lentils) as
meat alternates. Mature beans and peas dry longer on the plant, fix
more nitrogen, and have a higher protein content, which makes them
nutritionally comparable to protein foods. They are also excellent
sources of other nutrients such as iron and zinc. Because beans and
peas are similar to meats, poultry, and fish in their contribution of
these nutrients, they can be credited as a meat alternate.
Note that a serving of beans and peas must not be offered as a meat
alternate and as a vegetable in the same meal. Some foods commonly
referred to as beans and peas (e.g., green peas, green lima beans, and
green (string) beans) are not considered part of the beans and peas
subgroup because their nutrient profile is dissimilar. For more
information about the use and categorization of beans and peas see
http://www.choosemyplate.gov/foodgroups/proteinfoods_beanspeas.html.
Schools also have discretion to offer ready-to-eat foods such as
cold cuts, cheese, and yogurt to meet the meat/meat alternate
component. Regardless of the protein foods offered, schools must plan
all meals with the goal to meet the dietary specifications for sodium,
saturated fat, trans fat, and calories. When selecting protein foods
that are affordable and easy to prepare, we strongly encourage menu
planners to use low-fat and low-sodium products that contribute to
improved nutrient intake and health benefits (e.g., fat-free/low-fat
yogurt and unsalted nuts and seeds).
To support school meal improvements, USDA Foods has reduced the
upper salt limit on mozzarella cheese from 2 percent to 1.6 percent.
The current range for mozzarella is 130-175 mg of sodium per 28 g (1
oz.) serving. The sodium in processed and blended cheeses has been
reduced from 450 milligrams or more, to between 200 and 300 milligrams
per 28 g (1 oz.) serving, which is closer to the sodium levels found in
natural cheeses.
USDA had solicited comments on whether schools should be required
to offer the protein food subgroups recommended by the 2010 Dietary
Guidelines. In response to program operators' concerns, this final rule
does not require the three protein food subgroups recommended by the
2010 Dietary Guidelines. However, USDA is developing technical
assistance to assist schools in offering students a variety of protein
foods consistent with the Dietary Guidelines.
Accordingly, this final rule implements the proposed meat/meat
alternate requirements, with modifications, and codifies them under
Sec. 210.10(c) for the NSLP and under Sec. 220.8(c) for the SBP.
Meat/meat alternate requirements applicable to the SBP in SY 2012-2013
are under Sec. 220.23(g).

Fluid Milk

Proposed Rule: Offer plain or flavored fat-free milk and unflavored
low-fat milk (1 percent milk fat or less), and include variety that is
consistent with Dietary Guidelines recommendations.
Comments: Many parents and nutrition and health advocates favored
the proposed requirement to limit flavor to fat-free milk. They believe
that saturated fat and sugar in children's diets can be reduced by
restricting milk choices to fat-free and low-fat, and by limiting
flavor to fat-free milk. Several commenters stated that schools have
already limited flavor to fat-free milk and student acceptability has
been good. Some commenters recommended a total ban on flavored milk and
argued that several states are in the process of banning flavored milk.
However, more commenters stated that flavored low-fat (1 percent or
\1/2\ percent) milk should be allowed. Many of these cited a lack of
availability of flavored fat-free milk. Others were concerned that poor
student acceptability of flavored fat-free milk could result in lower
milk consumption or participation in the school meal programs. Some
commenters said that the amount of extra calories and fat in low-fat
flavored milk is not significant enough to warrant allowing only
flavored fat-free milk. A few asked that USDA phase in the limit on
flavored milk, and others suggested that USDA set a maximum level of
added sugar in flavored milk instead of allowing flavor only in fat-
free milk.
Several commenters addressed the need to accommodate lactose-
intolerant students and, others requested USDA to clarify milk variety
in school meals. Also, although the proposed rule did not address meal
variations for special dietary reasons, some commenters discussed the
nutrition standards for non-dairy milk substitutes (e.g., soy drinks)
and other miscellaneous topics related to the milk component, including
OVS.
USDA Response: This final rule allows flavor in fat-free milk only,
and fat-free and low-fat choices only (consistent with Dietary
Guidelines recommendations and the NSLA as amended by the HHFKA).
Flavored low-fat (1 percent or \1/2\ percent) milk is not allowed in
the NSLP or the SBP upon implementation of the rule in SY 2012-2013
because it contributes added sugars and fat to the meal and would make
it more difficult for schools to offer meals that meet the limits on
calories and saturated fat. We anticipate that the new calorie limits
will lead menu planners to select milk with the lowest levels of added
sugar. Implementing calorie maximums gives menu planners more
flexibility than limiting added sugar.
Schools already have the option to offer lactose-free and reduced-
lactose milk (fat-free and/or low-fat) as part of the reimbursable
meal. Offering lactose free/reduced milk (fat-free or low-fat) is
allowed and counts toward the milk variety requirement established by
in the NSLA by the HHFKA. For the NSLP and SBP, variety (at least two
choices of milk) can be accomplished by offering different allowable
fat levels (fat-free and low-fat) and milk flavor in fat-free milk
only. For additional guidance on milk variety, please see the FNS
memorandum SP-29-2011, Child Nutrition Reauthorization: Nutrition
Requirements for Fluid Milk, dated April 14, 2011.)
The milk fat restriction established by this final rule also
applies to the meals for children in the age group 3-4 even though the
meal patterns for preschoolers will be updated later through a separate
rule. The amendments made to the NSLA by the HHFKA require fat-free and
low-fat milk for all school lunches. Although this change was not
addressed in the proposed rule due to the timing of publication, USDA
notified program operators of this requirement for all school meals
through implementation memorandum SP-29-2011. The milk flavor
restriction also extends to the milk offered to children in age group
3-4.
As requested by commenters, we wish to clarify that this final rule
does not change the nutrition standards for the optional non-dairy
drinks offered to students with special dietary needs (not
disabilities) in place of milk at the request from parents. Those
products (e.g., soy, rice and almond drinks) are offered as meal
exceptions on a case by

[[Page 4096]]

case basis and are not intended for general consumption with the school
meal. The nutrition standards for non-dairy milk substitutes for
children without disabilities were established through a separate final
rule ``Fluid Milk Substitutions in the School Nutrition Program,''
which was published in the Federal Register (73 FR 52903) on September
12, 2008. Those standards do not include fat or flavor/sugar
restrictions.
We also wish to clarify that although fluid milk must be offered
with every school meal, students may decline milk under OVS. In
addition, water may not be offered in place of fluid milk as part of
the reimbursable meal, but must be available in the food service area
for students who wish to drink it in accordance with the NSLA as
amended by the HHFKA and as discussed in the memorandum ``SP-28-2011
Revised Child Nutrition Reauthorization 2010: Water Availability During
National School Lunch Program Meal Service'' dated July 12, 2011.
Accordingly, this final rule implements the proposed milk
requirements and codifies them under Sec. 210.10(d) for the NSLP and
under Sec. 220.8(d) for the SBP.

Dietary Specifications

Calories
Proposed Rule: Offer lunches and breakfasts that supply, on average
over the school week, a number of calories that is within the
established minimum and maximum levels for each age/grade group.
Comments: Many commenters agreed in general with the proposal to
establish minimum and maximum calorie levels, and were particularly
supportive of the maximum calorie levels. These commenters included
advocacy organizations, food banks, a health department, a professional
association, and an industry association. Many stated that setting
minimum and maximum calorie levels along with providing nutrient dense
meals will help address food insecurity and obesity concerns.
A few commenters said many students are not active enough and
recommended lower calorie limits. Others, however, indicated that the
proposed maximum calorie limits for school lunch might not be adequate
to meet the dietary needs of taller and active students. Several
commenters asserted that the calorie levels must be adequate enough to
support the dietary needs of children who may not have access to
sufficient food outside of school. There is also a concern among
commenters about the ability of schools to adhere to the minimum and
maximum calorie limits in the absence of a nutritional analysis.
In order to control calorie intake, some commenters suggested that
USDA establish limits on added sugars for products such as such ready-
to-eat cereal, grain-based desserts, and dairy-based desserts to
improve the diet of school children. A few commenters, including an
advocacy organization, suggested adopting the World Health
Organization's recommendation to limit added sugars to ``no more than
10 percent of a person's daily caloric intake.'' An advocacy
organization and a professional association of health nutrition
directors suggested adopting the Special Supplemental Nutrition Program
for Women, Infants and Children (WIC) breakfast standard, which sets
the added sugars limit to no more than 6 grams of sugars per ounce of
dry cereal.
USDA Response: This final rule is intended to respond to serious
concerns about childhood obesity, and the importance for children to
consume nutritious school meals within their calorie needs. Therefore,
this rule implements the proposed minimum and maximum calorie levels
for each grade group. In the NSLP, the calorie limits for each age/
grade group take effect upon implementation of this final rule. In the
SBP, however, calorie limits are not implemented until the SY 2013-2014
(the second year of implementation). This modification from the
proposed rule is intended to give program operators additional time to
implement the new meal requirements in the SBP.
USDA acknowledges the school meal programs provide a nutrition
safety net for food-insecure children and agrees with commenters that
meals must supply adequate calories for growth and development. IOM
considered this aspect of the Child Nutrition Program missions when
developing the minimum and maximum calorie levels for various age/grade
groups in the NSLP and SBP. They also took into consideration other
opportunities for food intake available to most children outside of
school, and the role of community organizations and other groups in
supporting the nutritional needs of low-income children.
Although some commenters suggested setting a limit on added sugars
for products such as flavored milk, USDA, consistent with the Institute
of Medicine recommendations, does not believe a standard is necessary
and would unnecessarily restrict menu planning flexibility. The
required maximum calorie levels are expected to drive menu planners to
select nutrient dense foods and ingredients to prepare meals, and avoid
products that are high in fats and added sugars. In addition, this
final rule includes other provisions that limit the sources of
discretionary calories.
We also wish to clarify that the calorie standards established for
each age/grade group are to be met on average over the course of the
week. On any given school day, the calorie level for the meal may fall
outside of the minimum and maximum levels as long as the average number
of calories for the week is within the required range. This provides
some flexibility to menu planners, but careful procurement, planning
and preparation are important to stay within the calorie ranges.
Accordingly, this final rule implements the proposed calorie
requirements and codifies them under Sec. 210.10(f) for the NSLP and
under Sec. 220.8(f) for the SBP. Calorie requirements applicable to
the SBP in SY 2012-2013 are under Sec. 220.23(b) and Sec. 220.23(c).

Saturated Fat

Proposed Rule: Offer lunches and breakfasts that supply, on average
over the school week, less than 10 percent of total calories from
saturated fat.
Comments: Most commenters concerned about childhood obesity also
expressed general support for limiting saturated fat in school meals at
less than 10 percent of total calories. This is the same as the current
saturated fat restriction and the 2010 Dietary Guidelines did not
change this recommendation. A small number of commenters (a health care
professional, a member of academia, and an advocacy organization)
suggested a more restrictive standard, recommending that USDA require
less than 7 percent of total calories from saturated fat. This limit is
listed in the Dietary Guidelines Advisory Committee report but was not
adopted as a recommendation in the 2010 Dietary Guidelines.
USDA Response: This final rule implements the proposed saturated
fat standard, which is the same as the restriction currently in place
in the NSLP and SBP. Schools must continue to limit saturated fat in
the school meals to help reduce childhood obesity and children's risk
of cardiovascular disease later in life. Many schools are still having
difficulty meeting this requirement in the NSLP. Several major sources
of saturated fat in the American diet are popular items in the lunch
menu.
This final rule implements two new requirements set forth in the
proposed rule and are anticipated to encourage

[[Page 4097]]

schools to reduce the saturated fat in meals: allowing only fat-free
and low-fat milk, and establishing maximum calorie limits. USDA's
technical assistance will continue to emphasize the need to purchase
and prepare foods in ways that help reduce the saturated fat level in
school meals (e.g., procuring skinless chicken or using meat from which
fat has been trimmed, and using vegetable oils that are rich in
monounsaturated and polyunsaturated fatty acids such as canola and corn
oils).
This rule does not require schools to meet a total fat standard
under current regulations. The IOM report did not recommend that USDA
require a total fat standard for school meals. The expectation is that
the new meal requirements, including the dietary specifications for
calories, saturated fat and trans fat, will enable schools to offer
meals that are low in total fat.
Accordingly, this final rule implements the proposed saturated
requirement and codifies it under Sec. 210.10(f) for the NSLP and
under Sec. 220.8(f) for the SBP.

Sodium

Proposed Rule: Offer lunches and breakfasts that supply, on average
over the school week, no more than the maximum sodium levels set for
each age/grade group. Meet the intermediate sodium targets (two and
four years post implementation of the rule), and the final sodium
targets (ten years post implementation of the rule; changes represent a
sodium reduction of approximately 25-50 percent in breakfasts and
lunches). The proposed targets aimed to help reduce students' sodium
intakes to less than the Tolerable Upper Intake Levels established in
the Dietary Reference Intakes, which range from 1,900-2,300 milligrams
per day for children ages 4-18.
Comments: Nutrition and health advocates, community-action groups,
individuals, and some school districts expressed support for the
proposed sodium restrictions and timeline. A medical association and an
advocacy organization supported the proposed sodium restriction to help
address the health risks associated with high sodium intake. A
professional association recommended that USDA consider further
reductions in sodium limits after progress has been assessed. An
advocacy organization suggested that USDA base the proposed
restrictions on the Dietary Guidelines recommendation of 1,500 mg of
sodium per day for special population groups. The 2010 Dietary
Guidelines recommend that persons who are 51 years and older, African
American children and adults, and persons of any age that have
hypertension, diabetes, or chronic kidney disease limit sodium intake
to 1,500 mg per day (compared to the 2,300 mg per day recommended for
the general population).
However, many commenters were concerned that schools will likely
struggle to meet the proposed intermediate sodium limits and fail to
achieve the final target within 10 years. Some commenters asserted that
the final targets for each age/grade group are lower than the
therapeutic levels set for certain high-risk populations and should be
increased. A school advocacy organization and school districts argued
that it would be difficult for schools to prepare palatable foods at
the proposed final sodium targets and, therefore, students would be
motivated to drop from the meal program and pack lunches that contain
high levels of sodium.
Some commenters expressed concerns about the potential use of
sodium substitutes in schools. Commenters also indicated that industry
needs time for product development and testing, and schools need time
for procurement changes, menu development, sampling, and to foster
student acceptance. Two food manufacturers commented that pizza
manufacturers would need to complete research in order to secure low
sodium cheeses that adhere to the proposed final target and that
children like. Some argued that many schools rely on canned and
processed food items and have limited access to reduced-sodium
products.
School food service staff, a food manufacturer, a nutrition
professional and individual commenters suggested that USDA lengthen the
time to reach the intermediate sodium targets, and eliminate or
reevaluate the final target. Commenters also encouraged USDA to monitor
the progress of sodium reductions toward targets before moving forward.
Some offered various alternatives to the proposed sodium limits and
timeline (e.g., a food manufacturer suggested 33 percent reduction over
ten years and a school food service staff member suggested 30 percent
over ten years). Several commenters suggested a 10-20 percent reduction
over ten years to allow schools to continue purchasing affordable
processed foods while working on recipe modification, in order to
reduce food costs and potential loss of student participation. Others
recommended establishing daily limits for each school meal (e.g.,
1,000-1,200 mg/day for lunch and 1,000 mg/day for breakfast).
Some school districts and a child nutrition consultant stated that
there is not enough scientific data linking sodium consumption with
health issues in children, and did not agree with claims that
children's early exposure to sodium leads them to develop a preference
for salty foods. A child nutrition consultant, a school nutrition
directors' association, a professional association, and a school
district argued that further studies should be conducted so that the
final target levels are science-based.
USDA Response: Reducing the sodium content of school meals is a key
objective of this final rule reflecting the Dietary Guidelines
recommendation for children and adults to limit sodium intake to lower
the risk of chronic diseases. USDA has encouraged schools to reduce
sodium since the implementation of the School Meals Initiative in 1995.
According to the SNDA-III study, the average sodium content of school
lunches (for all schools) remains high: More than 1400 mg. Therefore,
this final rule requires schools to make a gradual reduction in the
sodium content of the meals, as recommended by IOM and consistent with
the requirements of the FY 2012 Agriculture Appropriations Act.
Schools will be required to meet the first intermediate sodium
target for each age/grade group (target 1 in the chart) in the NSLP and
SBP no later than July 1, 2014 (SY 2014-2015), two years post
implementation of this final rule. To meet target 1, schools are
expected to modify menus and recipes promptly to reduce the sodium
content of school lunches by approximately 5-10 percent from their
baseline.
Prior to the implementation of the second (target 2) and final
sodium targets contained in this rule, USDA will evaluate relevant
studies on sodium intake and human health, as required by Section 743
of the FY 2012 Agriculture Appropriations Act. The scheduled compliance
date for target 2 is no later than July 1, 2017 (SY 2017-2018), five
years post implementation of the final rule for both meal programs. In
response to stakeholders' concerns, and the provisions of Section 743
of the FY 2012 Agriculture Appropriations Act, this final rule
lengthens the time to reach the second intermediate targets from 4 to 5
years. This modification to the sodium proposal is intended to allow
food manufacturers additional time to reformulate products and schools
more time to build student acceptance of lower sodium meals. To meet
target 2, schools have to reduce sodium in school lunches by
approximately 15-30 percent from their baseline. We

[[Page 4098]]

anticipate schools will have to incorporate new low-sodium products and
ingredients in meals offered in order to meet this target.
The scheduled compliance date for the final sodium targets is no
later than July 1, 2022 (SY 2022-2023), ten years post implementation
of the final rule. To meet the final sodium target, schools will have
to reduce the sodium content of the meals by approximately 25-50
percent from the school baseline. This will require innovation on the
part of product manufacturers in the form of new technology and/or food
products. As required by Section 743 of the FY 2012 Agriculture
Appropriations Act, USDA will certify that it has evaluated relevant
data on sodium intake and human health prior to requiring compliance
with the second and final sodium targets.
Meeting the final sodium targets will enable schools to offer meals
that reflect the 2010 Dietary Guidelines' recommendation to limit
sodium intake to less than 2,300 mg per day. Nearly all schools have to
reduce the sodium content of school meals to meet final sodium targets,
but the extent of the needed reduction varies by school/district as
sodium limits for school meals do not currently exist. The following
chart illustrates the sodium reduction in school meals:

--------------------------------------------------------------------------------------------------------------------------------------------------------
Sodium reduction: Timeline and amount
------------------------------------------------------------------------------------------
Baseline: Current Percent change
Age/grade group average sodium levels Target 1: meet by July Target 2: meet by July Final target: \2\ Meet (current levels
as offered \1\ (mg) 1, 2014 (SY 2014-2015) 1, 2017 (SY 2017-2018) by July 1, 2022 (SY vs. final
(mg) (mg) 2022-2023) (mg) targets)
--------------------------------------------------------------------------------------------------------------------------------------------------------
School Breakfast Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
K-5................................. 573 (elementary)....... <= 540 (28.4% of UL)... <= 485 (25.5% of UL).. <= 430 (22.6% of UL).. -25
6-8................................. 629 (middle)........... <= 600 (27.3% of UL)... <= 535 (24.3% of UL).. <= 470 (21.4% of UL).. -25
9-12................................ 686 (high)............. <= 640 (27.8% of UL)... <= 570 (24.8% of UL).. <= 500 (21.7% of UL).. -27
--------------------------------------------------------------------------------------------------------------------------------------------------------
National School Lunch Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
K-5................................. 1,377 (elementary)..... <= 1,230 (64.8% of UL). <= 935 (49.2% of UL).. <= 640 (33.7% of UL).. -54
6-8................................. 1,520 (middle)......... <= 1,360 (61.8% of UL). <= 1,035 (47.0% of UL) <= 710 (32.3% of UL).. -53
9-12................................ 1,588 (high)........... <= 1,420 (61.7% of UL). <= 1,080 (47.0% of UL) <= 740 (32.2% of UL).. -53
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Current Average Sodium Levels as Offered are from the School Nutrition and Dietary Assessment Study-III. Data were collected in the 2004-05 school
year.
\2\ The IOM final targets are based on the Tolerable Upper Intake Limits (ULs) for sodium, established in the Dietary Reference Intakes (DRI) (IOM,
2004). The sodium ULs for school-aged children are 2,300 mg (ages 14-18), 2,200 mg (ages 9-13), and 1,900 mg (ages 4-8). The final sodium targets
represent the UL for each age/grade group multiplied by the percentage of nutrients supplied by each meal (approximately 21.5% for breakfast, 32% for
lunch), as recommended by IOM. IOM's recommended final sodium targets for the K-5 age/grade group breakfasts and lunches are slightly higher than
21.5% and 32% 32%, respectively, of the UL because this proposed elementary school group spans part of two DRI age groups (ages 4-8 and 9-13 years).

USDA is committed to helping program operators reduce sodium in
school menus. USDA's Team Nutrition and the National School Food
Service Management Institute have developed guidance for reducing
sodium. USDA also continues to make low-sodium USDA Foods available to
schools. For example, USDA offers only reduced sodium canned beans and
vegetables at no more than 140 mg per half-cup serving, including
spaghetti sauce, salsa, and tomato paste. Canned whole kernel corn,
whole tomatoes, and diced tomatoes are being offered with no added
salt. Frozen vegetables, including green beans, carrots, corn, peas,
and sweet potatoes are available with no added salt. USDA has also
reduced the upper salt limit on mozzarella cheese (current range is
130-175 mg of sodium per 1 oz. serving) and chicken fajita strips (220
mg per 2 oz serving).
Accordingly, this final rule implements the proposed sodium limits,
with modifications, and codifies them under Sec. 210.10(f) for the
NSLP and under Sec. 220.8(f) for the SBP.

Tracking Calories, Saturated Fat, and Sodium

Proposed Rule: State agencies must monitor compliance with the
dietary specifications (calories, saturated fat and sodium levels) by
conducting a weighted nutrient analysis for the schools selected for
administrative review every 3 years. The analysis must cover menu and
production records for a 2-week period.
Comments: Commenters did not specifically address the proposal to
combine the nutritional assessment of school meals with the
administrative review for stronger program accountability. Overall,
health and child nutrition advocates welcomed the new SA requirement to
conduct administrative reviews every 3 years, which is codified through
this final rule. They also agreed in general that reviewing menu and
production records for a 2-week period and conducting a weighted
nutrient analysis offer a more accurate assessment of school meals than
current regulations.
However, State and local program operators expressed concern about
the requirement to conduct administrative reviews every 3 years.
Several commenters stated that SAs have limited time and resources to
conduct more frequent administrative reviews and provide technical
assistance to all SFAs. In addition, school districts, SAs, trade
associations, advocacy organizations and others opposed removing
responsibility to conduct a nutrient analysis from the SFAs, believing
this change limit the SFAs' ability to assess their own efforts to
reduce sodium and saturated fat, and comply with the calorie ranges.
Other commenters also opposed the requirement for a weighted nutrient
analysis because it would not identify issues in menu planning or
reflect what students actually consume. Several commenters requested
that a tool be developed for SAs to identify issues and help implement
the new meal requirements for schools.
USDA Response: The HHFKA amended the NSLA to require improvements
to school meals and more frequent monitoring of school meals to
facilitate transition to the new meal requirements. This rule requires
SAs to begin the 3-year Coordinated Review Effort (CRE) cycle on July
1, 2013 (SY 2013-2014) for the NSLP and SBP. To

[[Page 4099]]

help SAs meet this requirement, USDA will develop technical assistance
tools to facilitate monitoring of school meals.
This rule requires SAs to conduct the nutrient analysis of school
lunches and breakfasts as part of the administrative review, but does
not limit SFA discretion to conduct a nutrient analysis of the school
meals to determine if they are in line with the dietary specifications.
We understand that many SFAs currently have the ability to conduct a
nutrient analysis.
USDA is mindful of SA concerns about increased administrative
burden. In response to concerns about the requirement to conduct a
nutrient analysis of school meals using menus for a two-week period,
this final rule reduces the time period to one-week, which is the
current requirement. This modification to the proposed rule is expected
to lessen the information collection burden on SAs without affecting
their ability to assess the nutritional integrity of the meals offered
and the general quality of the food service operation.
Accordingly, this final rule implements the proposed monitoring
requirements, with modifications, and codifies them under Sec.
210.18(c), Sec. 210.18(g)(2), Sec. 210.18(i)(3), Sec. 210.18(m), and
Sec. 210.19(c) for the NSLP and under Sec. 220.8(h), Sec. 220.8(i),
and Sec. 220.8(j) for the SBP.

Tracking Trans Fat

Proposed Rule: Food products and ingredients used to prepare school
lunches and breakfasts must contain zero grams of trans fat per serving
(less than 0.5 grams per serving) according to the nutrition labeling
or manufacturer's specifications.
Comments: Many commenters, including advocacy organizations,
schools, health care professionals, community organizations and others
expressed support for the proposal to restrict trans fat in school
meals. Several of them asked that naturally-occurring trans fat be
excluded from the trans fat limit. A few commenters suggested that the
trans fat limit be greater than zero due to concerns over potential
increased use of hydrogenated oils and saturated fats in school meals.
No commenters opposed the proposal to restrict trans fat.
USDA Response: A number of studies suggest an association between
trans fatty acid intake and increased risk of cardiovascular disease.
The Dietary Guidelines recommend that all persons keep trans fatty acid
consumption as low as possible by limiting foods that contain synthetic
sources of trans fats, such as partially hydrogenated oils, and by
limiting other solid fats. Therefore, to safeguard children's health,
this final rule requires that food products and ingredients used to
prepare school meals contain zero grams of added trans fat per serving
(less than 0.5 grams per serving as defined by FDA) according to the
nutrition labeling or manufacturer's specifications. This requirement
takes effect in the NSLP on July 1, 2012 (SY 2012-2013). In the SBP,
the requirement is effective on July 1 2013 (SY 2013-2014, the second
year of implementation).
This requirement is intended to restrict synthetic trans fatty
acids and does not apply to naturally occurring trans fats, which are
present in meat and dairy products. Synthetic trans fatty acids are
found in partially hydrogenated oils used in some margarines, snack
foods, and prepared desserts. See USDA Foods guidance on trans fat at
http://www.fns.usda.gov/fdd/facts/nutrition/TransFatFactSheet.pdf.
Accordingly, this final rule implements the proposed trans fat
restriction and codifies it under Sec. 210.10(g) Sec. 210.10(h) and
Sec. 210.10(j), for the NSLP and under Sec. 220.8(g), Sec. 220.8(h),
and Sec. 220.8(j) for the SBP.

Standards for Meals Selected by the Student (Offer versus Serve (OVS)

Proposed Rule: Under OVS, students may not decline more than two
food items at lunch and one food item at breakfast, and must select a
fruit or a vegetable at each meal.
Comments: Many commenters expressed their views about this proposed
requirement. Nutrition and health advocates, a professional
association, a State department of health, some school districts and
food service staff, and individuals expressed support for the proposed
requirement to require a fruit or a vegetable as part of the
reimbursable meal. They viewed this requirement as a means to encourage
children to eat more fruits and vegetables. An advocacy group commented
that requiring students to take a fruit or a vegetable should help
increase actual fruit and vegetable consumption citing a pilot study in
which more students consumed fruit when prompted to take a fruit item.
However, many commenters expressed concerns about potential food
waste and overall costs associated with this proposed requirement. The
commenters that opposed this proposal included a State department of
education, school districts, school food service staff, school advocacy
organizations, a teachers union, students, a child nutrition industry
consultant, a food manufacturer, food service industry firms, nutrition
professionals, and individuals. Generally, these commenters argued the
proposed requirement that a reimbursable meal include a fruit or a
vegetable would result in increased plate waste and increased cost by
requiring students to choose a food they do not intend to eat. School
food service staff also argued that indirect costs such as more
frequent trash collection would increase if the students throw away
more food. These commenters asserted that this proposed requirement
would negate the purpose of OVS.
Commenters asked USDA to clarify the minimum amount of fruit or
vegetable that a student must take for a reimbursable meal. Many
commenters suggested that USDA allows students to select less than the
full fruit or vegetable component under OVS. Suggestions included a
minimum of \1/2\ cup, \1/4\ cup, and \1/8\ cup of fruit or vegetable
for a reimbursable meal.
USDA Response: Increased vegetable and fruit intake is a key
recommendation of the Dietary Guidelines. This recommendation applies
to the NSLP and SBP because these programs are intended to nourish
children but also help them develop healthy eating patterns. By
requiring students to take a fruit or a vegetable, schools emphasize
food choices that are high in nutrients and low in calories. Therefore,
consistent with the Dietary Guidelines and the IOM recommendations,
this final rule requires that the reimbursable lunch selected by the
student includes a fruit or a vegetable beginning SY 2012-2013. In the
SBP, this requirement is effective in SY 2014-2015 (the third year of
implementation), when the fruit quantities for breakfast are required
to increase.
However, in response to the commenters' concerns about potential
food waste and cost increases, this final rule allows students to take
\1/2\ cup of a fruit or a vegetable as suggested by several commenters,
rather than the full component, to have a reimbursable meal under OVS.
For example, if a school is offering \1/2\ cup of fruit pieces and \1/
2\ cup fruit juice to meet the 1 cup fruit component at lunch, the
student must select at least one of those two items to have a
reimbursable lunch under OVS.
This rule continues the current OVS practice under FBMP to allow
students to decline up to two food components at lunch (preferred OVS
option presented in the IOM report). Some commenters suggested that
USDA implement the second OVS option identified in the IOM report to
allow

[[Page 4100]]

students to decline more food components and, thus, have greater
control of the amount of food on their plate. USDA is not adopting this
suggestion. Although the second option would give school districts
greater flexibility, it could negatively affect the nutritional
integrity of the meal.
In the SBP, OVS applies to food items rather than food components
because of the flexibility to substitute meats/meat alternates for
grains (once the daily grain requirement is met). In SBP, schools must
offer fruit, milk, and grains daily. On multiple days per week, schools
will need to offer more than the minimum daily grains requirement of 1
oz. eq. per day to meet the weekly grain requirement. To accomplish
this, schools will need to offer at least three or four food items on
the breakfast menu. When a school offers four food items at breakfast,
students may decline one food item. If only three food items are
offered, students must take all the food items to preserve the
nutritional integrity of the breakfast. More details about OVS will be
provided in guidance.
Schools that offer salad bars must follow the OVS requirements. To
ensure that students actually take the minimum required portion size
from a salad bar, foods may be pre-portioned to allow staff to quickly
identify if the student has a reimbursable meal under OVS. If not pre-
portioning, then the cashier must be trained to judge accurately the
quantities of self-serve items on student trays, to determine if the
food item can count toward a reimbursable meal. For more information,
see FNS memorandum SP 02-2010--Revised, dated January 21, 2011.
Accordingly, this final rule implements the proposed requirements,
with modifications, and codifies them under Sec. 210.10(e) for the
NSLP and under Sec. 220.8(e) for the SBP. The OVS requirements
applicable to the SBP in SY 2012-2013 are under Sec. 220.23(e)(2) and
Sec. 220.23(g)(4).

Monitoring Procedures

Proposed Rule:
State agencies must review school lunches and breakfasts
every three years during scheduled administrative reviews to monitor
compliance with the meal requirements (meal patterns and dietary
specifications for calories, saturated fat, sodium and trans fats).
State agencies must conduct a weighted nutrient analysis
for the schools selected for an administrative review to monitor
compliance with the specifications for calories, saturated fat, and
sodium. The analysis must cover menu and production records for a two-
week meal period.
State agencies must take immediate fiscal action if a
required food component is not offered.
For repeat violations of the vegetable subgroup and milk
requirements, State agencies must take fiscal action if technical
assistance and corrective action have not resolved these violations.
For repeat violations of the food quantity and whole grain
requirements, and the dietary specifications (calorie, sodium,
saturated fat and trans fat), State agencies have discretion to take
fiscal action if technical assistance and corrective action have not
resolved these violations.
Comments: Various commenters, including a health care association,
State department of education, trade association, nutrition
professional, food service staff, and advocacy organizations supported
the proposal to eliminate the School Meals Initiative (SMI) review and
monitor the nutritional quality of school meals through the scheduled
administrative review. Although a few commenters expressed concern with
eliminating the SMI review, several commenters voiced support for a
single monitoring system.
However, numerous commenters said that this proposal would not
simplify monitoring because it increases the frequency of the review
cycle and the meal review period, and requires SAs to conduct a
nutrient analysis for the SFAs to determine compliance with the dietary
specifications. Some commenters argued that SFAs would still have to
conduct their own nutrient analysis to plan meals that meet the
calorie, saturated fat, and sodium restrictions. They expressed concern
that many food-based SFAs do not have the specialized tools to ensure
compliance with the dietary specifications, and that SAs do not have
enough time or resources to provide technical assistance to all SFAs.
Although some commenters supported establishing a 3-year review
cycle, most commenters opposed increasing the frequency of the
administrative reviews. Those in favor of the proposal (health and
nutrition advocates and providers) stated that it would increase
opportunities to provide technical assistance to the SFAs and result in
improved meals. Those opposed included school districts, food service
management companies, school food service staff, a school advocacy
organization, State departments of education, and nutrition
professionals. These commenters argued that retaining the 5-year review
cycle would give SAs more time to provide training and technical
assistance to the SFAs. They indicated that SAs would not have the
staff to handle the increased workload of a 3-year review cycle and,
therefore, the quality of the reviews could suffer.
Regarding the proposal to review menu and production records for a
two-week meal period, most commenters expressed opposition. These
commenters, including State and local operators, school food service
staff, school advocacy organizations, professional associations, trade
associations, and other groups argued that reviewing menus for one week
is a reasonable amount of time to determine if an SFA is meeting the
meal requirements. Some commenters estimated that the increased
paperwork of a 3-year review cycle and a 2-week review of menus would
triple the cost of completing the administrative review.
There was a mixed response to the proposal to include breakfast in
the administrative reviews. Commenters that agreed school breakfasts
should be included argued that these meals often contain less nutrient-
dense foods than lunch. A similar number of commenters opposed the
proposal because of cost concerns. The latter group stated that the
reviews should only include lunch to offset the increased time and
effort involved in conducting reviews every 3 years rather than every 5
years.
There were few and mixed opinions about the use of fiscal action.
School food service staff argued that fiscal penalties are
counterproductive and create an adversarial relationship between the SA
and the SFA. They recommended that more emphasis be placed on providing
technical assistance, not fiscal action. Other commenters favored
increasing accountability to improve meal quality.
Commenters offered some suggestions regarding monitoring
procedures, including that SAs monitoring report be made available on-
line to the public. Another suggested that SAs target schools with
prior non-compliance rather that assess a broad sample of schools.
USDA Response: Section 207 of the HHFKA amended the NSLA to require
USDA to establish a unified monitoring system. Accordingly, this final
rule eliminates the SMI review and strengthens the administrative
review to assess compliance with the new meal requirements. As required
by this rule, SAs must monitor compliance with the meal patterns and
the dietary specifications (calories, saturated fat, sodium and trans
fat) under the administrative review responsibilities established in 7
CFR 210.18. This

[[Page 4101]]

change is intended to focus more attention on the importance of
providing lunches and breakfasts that reflect the science-based meal
requirements, in accordance with Sec. 9 of the NSLA and Sec. 201 of
the HHFKA.
In addition to observing the serving line and the meals counted at
point of service during the administrative review, the SAs must conduct
a nutrient analysis to ensure that the average levels of calories,
saturated fat, and sodium in the meals offered over the school week are
within the values specified in this final rule. However, in response to
commenters' concerns, this final rule requires SAs to review menu and
production records for one week only within the review period, instead
of the two weeks stated in the proposed rule. This modification reduces
the information collection burden for SAs. USDA is reviewing potential
alternative approaches to nutrient analysis and will provide further
guidance to SAs.
This final rule changes the administrative review cycle from 5 to 3
years in accordance with the NSLA, as amended by Sec. 207 of the
HHFKA. This change takes effect in SY 2013-2014, after the current 5-
year review cycle ends. More frequent monitoring is intended to
increase opportunities for the SAs to provide guidance and technical
assistance to the SFAs during implementation of the new meal
requirements. USDA is aware of program operators' concerns regarding
increased monitoring and will provide technical assistance resources
and guidance to SAs to facilitate transition to the 3-year review
cycle.
This final rule also makes several improvements to the SBP to bring
those meals closer to the recommendations of the Dietary Guidelines.
Therefore, and in accordance with the NSLA as amended by the HHFKA,
beginning SY 2013-2014, SAs must monitor breakfasts under the
administrative review. However, because the new meal requirements
(other than limiting types of milk) are being implemented gradually in
the SBP, part of the compliance assessment must be based on prior
nutrition standards (which are now in Sec. 220.23) until new
requirements in the SBP regulations at Sec. 220.8 take effect. The
requirement to conduct a nutrient analysis of breakfast menu records
for one-week period begins July 1, 2013 (SY 2013-2014).
SAs must continue to use technical assistance and corrective action
as the primary strategies to help schools comply with the meal
requirements. However, this final rule gives SAs the ability to use
fiscal action to enforce compliance with specific meal requirements. As
currently done, SAs must apply immediate fiscal action if the meals
offered are completely missing one of the required food components. SAs
must also take fiscal action for repeated violations of the vegetable
subgroup and milk type requirements when technical assistance efforts
and required corrective action have not resolved these violations.
However, SAs have discretion to take fiscal action for repeated
violations of the food quantity and whole grain requirements, and for
repeated violations of the dietary specifications (calories, saturated
fat, sodium and trans fats).
A commenter suggested public disclosure of the administrative
review findings. The NSLA, as amended by the HHFKA, requires schools to
post review final findings and make findings available to the public.
Also, the NSLA requires local education agencies to report on the
school nutrition environment to USDA and to the public, including
information on food safety inspections, local wellness policies, school
meal program participation, and nutritional quality of program meals.
These statutory requirements will be implemented through a separate
rule.
Accordingly, this final rule implements the proposed monitoring
requirements, with the modification discussed above, and codifies them
under Sec. 210.18(a), Sec. 210.18(c), Sec. 210.18(g) and Sec.
210.18(m) for the NSLP and under Sec. 220.8(h) and Sec. 220.8(j) for
the SBP.

Identification of Reimbursable Meal

Proposed Rule: Identify the foods that are part of the reimbursable
meal(s) for the day at or near the beginning of the serving line(s).
Comments: Most of the commenters that addressed this proposal
supported it because they believe it helps students avoid unintentional
purchase of food items not included in the reimbursable meal. A few
commenters opposed the proposed requirement and argued that it will
overtly identify students that receive free and reduced price meals.
USDA Response: Beginning July 1, 2012 (SY 2012-2013), this final
rule requires schools to identify the components of the reimbursable
meal at or near the beginning of the serving line(s) as students and
parents often are not aware of what is included in the school meal.
Identifying the components of the reimbursable meal also reinforces
nutrition education messages that emphasize selecting healthy choices
for a balanced meal. Schools have discretion to determine the best way
to present this information on the serving line. Implementing this
requirement must not result in overt identification of any student
participating in the NSLP or SBP through use of a separate serving line
for the reimbursable meal or other segregation of certified students.
Accordingly, this final rule implements the proposed requirement
and codifies it under Sec. 210.10(a)(2) for the NSLP, and under Sec.
220.8(h) and Sec. 220.8(j) for the SBP.

Crediting

Proposed Rule:
Disallow the crediting of any snack-type fruit or
vegetable products (such as fruit strips and fruit drops), regardless
of their nutrient content, toward the fruits component or the
vegetables component.
Require that all fruits and vegetables (and their
concentrates, purees, and pastes) be credited based on volume as served
with two exceptions: (1) Dried whole fruit and dried whole fruit pieces
would be credited for twice the volume served; and (2) leafy salad
greens would be credited for half the volume served.
Comments: Comments in favor of disallowing snack-type fruit or
vegetable products exceeded the comments opposed. Those in favor stated
that permitting such products sends the wrong nutrition message to
children. Others said that children should be offered a variety of
whole fruits and vegetables. However, some commenters opposed the
requirement due to concerns over the cost of providing whole fruit.
They suggested that USDA allow products made with 100 percent fruit.
Many commenters opposed the proposal that all fruits and vegetables
(and their concentrates, purees, and pastes) be credited based on
volume as served. These commenters included school districts, school
advocacy organizations, trade associations, food manufacturers, a food
service management company, a State department of education and others.
They expressed concern over the potential cost increase due to product
reformulation and reduced product acceptability. Many commenters
recommended that USDA keep the current practice to credit tomato paste
and puree based on their whole-food equivalency using the percent
natural tomato soluble solids in paste and puree.
USDA Response: One of the goals of the School Meal Programs is to
help children easily recognize the key food groups that contribute to a
balanced meal, including fruits and vegetables.

[[Page 4102]]

Effective July 1, 2012 (SY 2012-2013), reimbursable meals must not
include snack-type fruit products that have been previously credited by
calculating the whole-fruit equivalency of the processed fruit in the
product using the FDA's standards of identity for canned fruit nectars
(21 CFR 146.113). FDA revoked the standard of identity for canned fruit
nectars through a final rule published in the Federal Register (60 FR
56513) on November 9, 1995; therefore, there is no regulatory basis for
allowing the crediting of these snack-type fruit products.
As a result of Section 743 of the FY 2012 Agriculture
Appropriations Act, this final rule does not adopt the proposed
crediting change for tomato paste and puree. USDA will credit tomato
paste and puree as a calculated volume based on the whole food
equivalency. Although this specific proposal was intended to promote
consistency and improved nutrition by crediting all fruits and
vegetables (and their concentrates, purees, and pastes) based on volume
as served, this final rule must comply with the statutory provision.
Accordingly, this final rule disallows the crediting of any snack-
type fruit or vegetable products, and continues the crediting of tomato
paste and puree as a calculated volume under Sec. 210.10(c)(2)(iii) of
the regulatory text.

Fortification

Proposed Rule: Disallow the use of formulated grain-fruit products
as defined in Appendix A to 7 CFR part 220.
Comments: Most commenters were in favor of removing formulated
grain-fruit products from the School Meal Programs. They indicated that
such products do not support the Dietary Guidelines' recommendation to
consume fruits as a separate food group. However, some commenters
opposed the removal of formulated grain-fruit products, and claimed
that these products are cost-effective and convenient in new breakfast
delivery systems such as Grab and Go and Breakfast in the Classroom.
USDA Response: This final rule disallows the use of formulated
grain-fruit products to meet the grain and fruit components in the SBP
beginning July 1, 2012 (SY 2012-2013). Formulated grain-fruit products,
as defined in Appendix A to 7 CFR part 220, are (1) grain-type products
that have grain as the primary ingredient, and (2) grain-fruit type
products that have fruit as the primary ingredient. Both types of
products must have at least 25 percent of their weight derived from
grain. These products typically contain high levels of fortification,
rather than naturally occurring nutrients, and are high in sugar and
fat. Furthermore, they no longer meet a need in the school meal
programs because schools can procure more nutrient-dense breakfast
options with a similar shelf-life. This rule does not prohibit the use
of fortified cereals or cereals with fruit (e.g., ready-to-eat cereals)
which may provide good sources of whole grains, fiber, and other
important nutrients. In most instances, however, the use of highly-
fortified food products is inconsistent with the Dietary Guidelines.
Accordingly, this final rule amends Appendix A to 7 CFR part 220 by
removing Formulated Grain-Fruit Products in its entirety. It also makes
a technical change to Appendix B to 7 CFR part 210 by removing the
statement that affirms that Appendix B will be updated to exclude
individual foods that have been determined to be exempted from the
categories of Foods of Minimal Nutritional Value. Although USDA has
published Federal Register Notices in the past to inform the public of
exempted foods, Appendix B has not been amended subsequently to reflect
these exemptions. A list of these exempted foods is maintained and
available to all State agencies participating in the Programs. There
have been no changes to the categories of exempted foods and USDA is
maintaining the requirement to publish a Federal Register Notice and
update the regulations to reflect any changes to the categories.
Accordingly, this final rule implements the proposed change by
removing the Formulated Grain-Fruit Products from Appendix A to 7 CFR
part 220.

III New Meal Patterns and Dietary Specifications

The following meal patterns must be implemented in SY 2012-2013 for
the NSLP, and phased-in the SBP as specified in the footnotes and
regulatory text.

----------------------------------------------------------------------------------------------------------------
Breakfast meal pattern Lunch meal pattern
---------------------------------------------------------------------------------
Meal pattern Grades K-5 Grades 6-8 Grades 9-12
\a\ \a\ \a\ Grades K-5 Grades 6-8 Grades 9-12
----------------------------------------------------------------------------------------------------------------
Amount of food \b\ per week (minimum per day)
----------------------------------------------------------------------------------------------------------------
Fruits (cups) \c\ \d\......... 5 (1) \e\ 5 (1) \e\ 5 (1) \e\ 2\1/2\ (\1/ 2\1/2\ (\1/ 5 (1)
2\) 2\)
Vegetables (cups) \c\ \d\..... 0 0 0 3\3/4\ (\3/ 3\3/4\ (\3/ 5 (1)
4\) 4\)
Dark green \ f\........... 0 0 0 \1/2\ \1/2\ \1/2\
Red/Orange \ f\........... 0 0 0 \3/4\ \3/4\ 1\1/4\
Beans/Peas (Legumes) \ f\. 0 0 0 \1/2\ \1/2\ \1/2\
Starchy \f\............... 0 0 0 \1/2\ \1/2\ \1/2\
Other \f\ \g\............. 0 0 0 \1/2\ \1/2\ \3/4\
Additional Veg to Reach Total 0 0 0 1 1 1\1/2\
\h\.
Grains (oz eq) \i\............ 7-10 (1) \j\ 8-10 (1) \j\ 9-10 (1) \j\ 8-9 (1) 8-10 (1) 10-12 (2)
Meats/Meat Alternates (oz eq). 0 k 0 k 0 k 8-10 (1) 9-10 (1) 10-12 (2)
Fluid milk (cups) \l\......... 5 (1) 5 (1) 5 (1) 5 (1) 5 (1) 5 (1)
----------------------------------------------------------------------------------------------------------------
Other Specifications: Daily Amount Based on the Average for a 5-Day Week
----------------------------------------------------------------------------------------------------------------
Min-max calories (kcal) \m\ 350-500 400-550 450-600 550-650 600-700 750-850
\n\ \o\.
Saturated fat % of total < 10 < 10 < 10 < 10 < 10 < 10
calories) \n\ \o\.
Sodium (mg) \n\ \p\........... <= 430 <= 470 <= 500 <= 640 <= 710 <= 740
----------------------------------------------------------------------------------------------------------------
Trans fat \n\ \o\............. Nutrition label or manufacturer specifications must indicate zero grams of trans
fat per serving.
----------------------------------------------------------------------------------------------------------------
\a\ In the SBP, the above age-grade groups are required beginning July 1, 2013 (SY 2013-14). In SY 2012-2013
only, schools may continue to use the meal pattern for grades K-12 (see Sec. 220.23).
\b\ Food items included in each food group and subgroup and amount equivalents. Minimum creditable serving is \1/
8\ cup.

[[Page 4103]]

\c\ One quarter-cup of dried fruit counts as \1/2\ cup of fruit; 1 cup of leafy greens counts as \1/2\ cup of
vegetables. No more than half of the fruit or vegetable offerings may be in the form of juice. All juice must
be 100% full-strength.
\d\ For breakfast, vegetables may be substituted for fruits, but the first two cups per week of any such
substitution must be from the dark green, red/orange, beans and peas (legumes) or ``Other vegetables''
subgroups as defined in Sec. 210.10(c)(2)(iii).
\e\ The fruit quantity requirement for the SBP (5 cups/week and a minimum of 1 cup/day) is effective July 1,
2014 (SY 2014-2015).
\f\ Larger amounts of these vegetables may be served.
\g\ This category consists of ``Other vegetables'' as defined in Sec. 210.10(c)(2)(iii)(E). For the purposes
of the NSLP, ``Other vegetables'' requirement may be met with any additional amounts from the dark green, red/
orange, and beans/peas (legumes) vegetable subgroups as defined in Sec. 210.10(c)(2)(iii).
\h\ Any vegetable subgroup may be offered to meet the total weekly vegetable requirement.
\i\ At least half of the grains offered must be whole grain-rich in the NSLP beginning July 1, 2012 (SY 2012-
2013), and in the SBP beginning July 1, 2013 (SY 2013-2014). All grains must be whole grain-rich in both the
NSLP and the SBP beginning July 1, 2014 (SY 2014-15).
\j\ In the SBP, the grain ranges must be offered beginning July 1, 2013 (SY 2013-2014).
\k\ There is no separate meat/meat alternate component in the SBP. Beginning July 1, 2013 (SY 2013-2014),
schools may substitute 1 oz. eq. of meat/meat alternate for 1 oz. eq. of grains after the minimum daily grains
requirement is met.
\l\ Fluid milk must be low-fat (1 percent milk fat or less, unflavored) or fat-free (unflavored or flavored).
\m\ The average daily amount of calories for a 5-day school week must be within the range (at least the minimum
and no more than the maximum values).
\n\ Discretionary sources of calories (solid fats and added sugars) may be added to the meal pattern if within
the specifications for calories, saturated fat, trans fat, and sodium. Foods of minimal nutritional value and
fluid milk with fat content greater than 1 percent milk fat are not allowed.
\o\ In the SBP, calories and trans fat specifications take effect beginning July 1, 2013 (SY 2013-2014).
\p\ Final sodium specifications are to be reached by SY 2022-2023 or July 1, 2022. Intermediate sodium
specifications are established for SY 2014-2015 and 2017-2018. See required intermediate specifications in
Sec. 210.10(f)(3) for lunches and Sec. 220.8(f)(3) for breakfasts.

IV Implementation Timeline

The following chart provides a summary of the new requirements and
the required implementation dates in the NSLP and SBP. Refer to the
regulatory text for details.

----------------------------------------------------------------------------------------------------------------
Implementation (school year) for NSLP (L) and SBP (B)
New requirements -----------------------------------------------------------------------------------
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2022/23
----------------------------------------------------------------------------------------------------------------
Fruits Component:
Offer fruit L......... .......... .......... .......... .......... .......... ..........
daily.
Fruit quantity .......... .......... B......... .......... .......... .......... ..........
increase to 5 cups/week
(minimum 1 cup/day).
Vegetables Component:
Offer L......... .......... .......... .......... .......... .......... ..........
vegetables subgroups
weekly.
Grains Component:
Half of grains L......... B......... .......... .......... .......... .......... ..........
must be whole grain-
rich.
All grains must L, B...... .......... .......... .......... ..........
be whole-grain rich.
Offer weekly L......... B......... .......... .......... .......... .......... ..........
grains ranges.
Meats/Meat Alternates
Component:
Offer weekly L......... .......... .......... .......... .......... .......... ..........
meats/meat alternates
ranges (daily min.).
Milk Component:
Offer only fat- L, B...... .......... .......... .......... .......... .......... ..........
free (unflavored or
flavored) and low-fat
(unflavored) milk.
Dietary Specifications (to
be met on average over a
week):
Calorie ranges. L......... B......... .......... .......... .......... .......... ..........
Saturated fat L, B...... .......... .......... .......... .......... .......... ..........
limit (no change).
Sodium Targets .......... .......... L, B...... .......... .......... .......... L, B
\1\.
[cir] Target 1......
[cir] Target 2......
[cir] Final target..
Zero grams of L......... B......... .......... .......... .......... .......... ..........
trans fat per portion.
Menu Planning:
A single FBMP L......... B......... .......... .......... .......... .......... ..........
approach.
Age-Grade Groups:
Establish age/ L......... B......... .......... .......... .......... .......... ..........
grade groups: K-5, 6-8,
and 9-12.
Offer vs. Serve:
Reimbursable L......... B......... .......... .......... .......... ..........
meals must contain a
fruit or vegetable (\1/
2\ cup minimum).
Monitoring:
3-year adm. .......... L, B...... .......... .......... .......... .......... ..........
review cycle.
Conduct L......... B......... .......... .......... .......... .......... ..........
weighted nutrient
analysis on 1 week of
menus.
----------------------------------------------------------------------------------------------------------------
\1\ Target 2 and the final target will only be required after USDA evaluates relevant data on sodium intake and
human health, as required by Section 743 of the FY 2012 Agriculture Appropriations Act.

Implementation Resources

With respect to resources for the changes, USDA estimates suggest
that the common-sense revenue reforms for school food businesses
included in the HHFKA will provide an additional $7.5 billion in non-
Federal revenues over 5 years to the food service accounts of local
school districts. This includes over $5.3 billion in additional revenue
from a la carte foods, over $300 million in additional payments from
paid lunches, and over $1.9 billion in additional revenue schools
resulting from making school meals more competitive with a la carte
foods.
Since the statute mandated that revenue streams from non-Program

[[Page 4104]]

foods relative to the costs of those foods, should be at least as high
as the revenue stream for Program meals bears to costs beginning July
1, 2011, schools should receive over $1 billion in new revenues in
School Year 2011-2012. That will help schools work toward implementing
the new standards effective the following year, i.e., July 1, 2012. In
addition, USDA estimates that the interim rule ``National School Lunch
Program: School Food Service Account Revenue Amendments Related to the
Healthy, Hunger-Free Kids Act of 2010'' will increase participation in
school meals programs by 800,000 children.
The six-cent performance-based reimbursement increase included in
the HHFKA will provide additional revenue beyond this amount. The
Congressional Budget Office estimated about $1.5 billion over the same
period in performance-based funding.
USDA will work with the SAs to facilitate transition to the new
meal requirements. USDA and the National Food Service Management
Institute are developing technical assistance resources and training to
help school foodservice staff improve menus, order appropriate foods to
meet the new meal requirements, and control costs while maintaining
quality. Resources and training materials being developed include
identifying and purchasing whole grain-rich foods, lowering the sodium
on menus, and meeting the new meal pattern requirements. Training will
be available through a variety of methods including webinars and online
learning modules.
We are updating the Child Nutrition Database and will reevaluate
nutrient analysis software systems available from industry to assist
SAs with monitoring calories, saturated fat, and sodium in the meals
offered to students in grades K through 12 during the administrative
review. The Child Nutrition Labeling Program is being updated to report
whole grain-rich contributions to the grains component and to provide
standardized claims for the vegetable subgroups consistent with the
2010 Dietary Guidelines.
In addition, the HHFKA provides USDA $50 million for each of the
first two years of the new meal requirements for use in assisting SAs
implement the new requirements. These funds, combined with increases in
State Administrative Expense funding, should assist States and local
operators in improving the quality of school meals provided to
children.

V. Procedural Matters

Executive Order 12866 and Executive Order 13563

Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated an ``economically
significant regulatory action'' under section 3(f) of Executive Order
12866. Accordingly, the rule has been reviewed by the Office of
Management and Budget.

Regulatory Flexibility Act

This final rule has been reviewed with regard to the requirements
of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Pursuant
to that review, it has been determined that this rule will have a
significant impact on a substantial number of small entities.
The requirements established by this final rule will apply to
school districts, which meet the definitions of ``small governmental
jurisdiction'' and ``small entity'' in the Regulatory Flexibility Act.
A Regulatory Flexibility Act analysis is included in the preamble.

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, USDA
generally must prepare a written statement, including a cost/benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures by 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 USDA to identify and consider a reasonable
number of regulatory alternatives and adopt the most cost-effective or
least burdensome alternative that achieves the objectives of the rule.
The Regulatory Impact Analysis conducted by FNS in connection with this
final rule includes a cost/benefit analysis and explains the options
considered to implement the Dietary Guidelines in the school meal
programs.
USDA sought the assistance of the Institute of Medicine of the
National Academies to recommend changes to school meal standards in the
least burdensome and costly manner consistent with the Dietary
Guidelines. However, this final rule contains Federal mandates (under
the regulatory provisions of Title II of the UMRA) that could result in
costs to State, local, or tribal governments or to the private sector
of $100 million or more in any one year. The HHFKA authorizes $50
million over two years to help State agencies implement the new meal
pattern requirements. These funds, combined with increases in State
Administrative Expense funding, should assist States and local
operators in implementing the requirements established by this final
rule. Local program operators need to optimize the use of USDA Foods
and adopt other cost-savings strategies in various areas of the food
service operation, including procurement, menu planning, and meal
production to meet the rule requirements in a cost-effective manner.

Executive Order 12372

The NSLP is listed in the Catalog of Federal Domestic Assistance
under No. 10.555 and the SBP is listed under No. 10.553. 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, these Programs
are included in the scope of Executive Order 12372, which requires
intergovernmental consultation with State and local officials.
Since the NSLP and SBP are State-administered, federally funded
programs, FNS headquarters staff and regional offices have formal and
informal discussions with State and local officials, including ITO
representatives, on an ongoing basis regarding program requirements and
operation. This structure allows FNS to receive regular input which
contributes to the development of meaningful and feasible Program
requirements.

Federalism Summary Impact Statement

Executive Order 13132 requires Federal agencies to consider the
impact of their regulatory actions on State and local governments.
Where such actions have federalism implications, agencies are directed
to provide a statement for inclusion in the preamble to the regulations
describing the agency's considerations in terms of the three categories
called for under section (6)(b)(2)(B) of Executive Order 13132.

[[Page 4105]]

Prior Consultation With State Officials
FNS staff received informal input from various stakeholders while
participating in various State, regional, national, and professional
conferences. Various departments of education, boards of education,
departments of health, and other state and local organizations provided
input during the public comment period. The School Nutrition
Association, School Food Industry Roundtable, National Alliance for
Nutrition and Activity, Association of State and Territorial Public
Health Nutrition Directors, and the Center for Science in the Public
Interest shared their views about changes to the school meals. Numerous
stakeholders also provided input at the public meetings held by the
Institute of Medicine in connection with its school meals study.
Nature of Concerns and the Need to Issue This Rule
State Agencies and school food authorities want to provide the best
possible school meals through the NSLP and SBP but are concerned about
program costs, food waste, and increasing administrative burden. While
FNS is aware of these concerns, section 9(a)(4) and section 9(f)(1) of
the National School Lunch Act, 42 U.S.C. 1758(a)(4) and (f)(1), require
that school meals reflect the most recent ``Dietary Guidelines for
Americans'' and promote the intake of the food groups recommended by
the Dietary Guidelines.
Extent To Which We Meet Those Concerns
Although there is general support for the meal requirements
established by this final rule, State and local program operators, food
industry, and others associated with the operation of the school meals
programs expressed concern about the proposed increase in food
quantities, limit on starchy vegetables, sodium reductions, and
implementation timeline, as well as the estimated meal costs. USDA has
taken into consideration these concerns, and the requirements of the FY
2012 Agriculture Appropriations Act, and has modified several of the
key meal requirements to be responsive to the concerns of State and
local program operators. This final rule makes significant improvements
to the school meals, while modifying the following provisions to
facilitate successful implementation of the final rule at the State and
local levels:
Reduce the proposed grains quantities at lunch to reduce
food cost,
Remove the proposed starchy vegetable restrictions at
lunch and breakfast as required by the FY 2012 Agriculture
Appropriations Act,
Allow students to select \1/2\ cup of a fruit or a
vegetable to reduce food waste,
Allow more time to comply with the second intermediate
sodium targets,
Remove the daily meat/meat alternate requirement at
breakfast to reduce food cost,
Provide additional time for implementation of the
breakfast requirements, and
Reduce the administrative burden by requiring State
agencies to conduct a nutrient analysis of school meals using one week
of menus, rather than two weeks as proposed.

Executive Order 12988

This final rule has been reviewed under Executive Order 12988,
``Civil Justice Reform.'' This final rule is intended to have
preemptive effect with respect to any State or local laws, regulations
or policies which conflict with its provisions or which would otherwise
impede its full and timely implementation. This rule would permit State
or local agencies operating the National School Lunch and School
Breakfast Programs to establish more rigorous nutrition requirements or
additional requirements for school meals that are not inconsistent with
the nutritional provisions of the rule. Such additional requirements
would be permissible as part of an effort by a State or local agency to
enhance the school meals and/or the school nutrition environment. To
illustrate, State or local agencies would be permitted to establish
more restrictive saturated fat and sodium limits. For these components,
quantities are stated as maximums (e.g., <=) and could not be exceeded;
however, lesser amounts than the maximum could be offered. Likewise,
State or local agencies could accelerate implementation of the
breakfast requirements in an effort to improve all school meals
promptly. This rule is not intended to have a retroactive effect. Prior
to any judicial challenge to the provisions of this rule or the
application of its provisions, all applicable administrative procedures
under Sec. 210.18(q) or Sec. 235.11(f) must be exhausted.

Civil Rights Impact Analysis

FNS has reviewed this final rule in accordance with USDA Regulation
4300-4, ``Civil Rights Impact Analysis,'' to identify and address any
major civil rights impacts the rule might have on program participants
on the basis of age, race, color, national origin, sex or disability.
After a careful review of the rule's intent and provisions, FNS has
determined that this final rule is not expected to affect the
participation of protected individuals in the NSLP and SBP. This final
rule is intended to improve the nutritional quality of school meals and
is not expected to limit program access or otherwise adversely impact
the protected classes.

Executive Order 13175--Consultation and Coordination With Indian Tribal
Governments

USDA is unaware of any current Tribal laws that could be in
conflict with the requirements of this final rule. However, we have
made special efforts to reach out to Tribal communities. We held five
consultations (webinars and conference calls) with Indian Tribal
Organizations in 2011 to discuss implementation of the Healthy, Hunger-
Free Kids Act of 2010. These sessions provided the opportunity to
address Tribal concerns related to school meals, clarify that
traditional foods and local products can be incorporated into the
school meals, and highlight the proposed changes to the meal pattern
(increase in whole grains, fruits and vegetables) that are expected to
support Tribal efforts to reduce diabetes in the community.
In addition, USDA will undertake, within 6 months after this final
rule implementation, a series of Tribal consultation sessions to gain
input by elected Tribal officials or their designees concerning the
impact of this rule on Tribal governments, communities and individuals.
These sessions will establish a baseline of consultation for future
actions, should any be necessary, regarding this rule. Reports from
these sessions for consultation will be made part of the USDA annual
reporting on Tribal Consultation and Collaboration. USDA will respond
in a timely and meaningful manner to all Tribal government requests for
consultation concerning this final rule and will provide additional
venues, such as webinars and teleconferences, to periodically host
collaborative conversations with Tribal leaders and their
representatives concerning ways to improve this rule in Indian country.

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (44 U.S.C. chap. 35; see 5 CFR
1320) requires the Office of Management and Budget (OMB) approve all
collections of information by a Federal agency 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.
This rule contains information

[[Page 4106]]

collection requirements subject to approval by OMB under the Paperwork
Reduction Act of 1995. FNS will merge these burden hours into National
School Lunch Program, OMB 0584-0006 which is currently under
review. A 60-day notice was published in the Federal Register at 76 FR
2509 on January 13, 2011 which provided the public an opportunity to
submit comments on the information collection burden resulting from
this rule. This information collection burden has not yet been approved
by OMB. FNS will publish a document in the Federal Register once these
requirements have been approved. The current total estimated annual
burden for OMB No. 0584-0006 is now 11,880,415 hours, rather than the
11,882,408 indicated in the proposed rule.
The average burden per response and the annual burden hours are
explained below and summarized in the chart which follows:
Respondents for this rule: State Education Agencies (57) and School
Food Authorities (6,983).
Estimated Number of Respondents for this rule: 7040.
Estimated Number of Responses per Respondent for this rule:
3.87217.
Estimated Total Annual Responses: 27,260.
Estimated Total Annual Burden on Respondents for this rule: 73,849
hours.

Estimated Annual Burden For 0584-New, National School Lunch Program, 7 CFR 210
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated Average Average
Section number of Frequency of annual burden per Annual
respondents response responses response burden hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting:
SA shall verify compliance with critical 7 CFR 210.18(g) & 210.18(h)...... 57 1 57 33 1,881
and general areas of review.
SFA shall submit to SA documented 7 CFR 210.18(k)(2)............... 6,983 1 6,983 6 41,898
corrective action, no later than 30 days
from the deadline for completion, for
violations of critical or general area
identified on administrative follow-up
review.
--------------------------------------------------------------------------------------------------------
Total Reporting for DGA rule........... ................................. 7,040 ............ 7,040 6.2186 43,779
--------------------------------------------------------------------------------------------------------
Total Existing Reporting Burden for ................................. ............ ............ ............ ............ 2,912,745
Part 210.
--------------------------------------------------------------------------------------------------------
Total Reporting Burden for Part 210 ................................. ............ ............ ............ ............ 2,956,524
with DGA rule.
--------------------------------------------------------------------------------------------------------
Recordkeeping:
SA establishes guidelines and approves 7 CFR 210.10 (1)................. 0 0 0 0 * (57)
School Food Authorities menu planning
alternatives. (Burden removed by proposed
rule).
SA modifies menu planning alternatives or 7 CFR 210.10 (1)................. 0 0 0 0 * (100)
develops menu planning alternatives.
(Burden removed by proposed rule).
SA records document the details of all 7 CFR 210.18 (k), 210.18 (p), & 57 93.23 5,314 2.0 10,628
reviews and the degree of compliance with 210.20 (b)(6).
the critical and general areas of review.
To include documented action on file for
review by FNS.
SA documentation of fiscal action taken to 7 CFR 210.19 (c ) & 210.18 (p)... 57 139 7,923 0.50 3,962
disallow improper claims submitted by
SFAs, as determined through claims
processing, CRE reviews, and USDA audits.
Contracts awarded by SFAs to FSMCs.
SFAs adopt menu planning alternatives, 7 CFR 210.10(1).................. 0 0 0 0 * (26,261)
modify menu planning alternatives or
develop menu planning alternatives and
submit them to the State agency for
approval at SFA level. (Burden removed by
proposed rule.).
SFA documentation of corrective action 7 CFR 210.18 (k)(2).............. 6,983 1 6,983 6 41,898
taken on program disclosed by review or
audit.
--------------------------------------------------------------------------------------------------------
Total Recordkeeping for New burden..... ................................. 7,040 ............ 20,220 1.4871 30,070
--------------------------------------------------------------------------------------------------------
Total Existing Recordkeeping Burden for ................................. ............ ............ ............ ............ 8,893,821
0584-0006, Part 210.
--------------------------------------------------------------------------------------------------------
Total Recordkeeping Burden for 0584- ................................. ............ ............ ............ ............ 8,923,891
0006, Part 210 with proposed rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Indicates reduced burden hours due to changes in proposed DGA rule.

[[Page 4107]]

Summary of Burden (OMB 0584-New)
------------------------------------------------------------------------

------------------------------------------------------------------------
Total No. Respondents................................... 7,040
Average No. Responses Per Respondent.................... 3.87217
Total Annual Responses.................................. 27,260
Average Hours Per Response.............................. 2.70
Total Annual Burden Hours Requested..................... 11,880,415
Current OMB Inventory................................... 11,806,566
Difference.............................................. 73,849
------------------------------------------------------------------------

Reporting: Affected citation is 7 CFR 210.18(g) and 7 CFR
210.18(h)--Based on the comments received, this final rule changed the
requirement to analyze two weeks' worth of menus to one week. Hence,
average burden time per response is reduced from 40 hours to 33 hours
for this citation.
Recordkeeping: 7 CFR 210.18 (k) and (p) and 210.20 (b)(6). As the
record keeping time related to administrative review documents is
reduced, average burden time per response is reduced from 2.3 hours to
2 hours. The current total estimated annual burden for OMB No. 0584-
0006 is now 11,880,415 hours, rather than the 11,882,408 indicated in
the proposed rule.

E-Government Act Compliance

The Food and Nutrition Service is committed to complying with the
E-Government Act, 2002 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.

Regulatory Impact Analysis Summary

As required for all rules that have been designated significant by
the Office of Management and Budget, a Regulatory Impact Analysis (RIA)
was developed for this final rule. The following is a summary of the
RIA. The complete RIA appears later in this document.

Need for Action

Under Section 9(a)(4) and Section 9(f)(1) of the NSLA, schools that
participate in the NSLP or SBP must offer lunches and breakfasts that
are consistent with the goals of the most recent Dietary Guidelines for
Americans. School lunches must provide one-third of the Recommended
Dietary Allowances (RDA) for protein, calcium, iron, and vitamins A and
C, on average over the course of a week; school breakfasts must satisfy
one-fourth of the RDAs for the same nutrients. Current nutrition
requirements for school lunches and breakfasts are based on the 1995
Dietary Guidelines and the 1989 RDAs. School lunches and breakfasts
were not updated when the 2000 Dietary Guidelines were issued because
those recommendations did not require significant changes to the school
meal patterns. The 2005 and 2010 Dietary Guidelines, provide more
prescriptive and specific nutrition guidance than earlier releases, and
require significant changes to school meal requirements.

Benefits

The United States Department of Agriculture's Food and Nutrition
Service (FNS) contracted with the National Academies' Institute of
Medicine (IOM) in 2008 to examine current NSLP and SBP nutrition
requirements. IOM formed an expert committee tasked with comparing
current school meal requirements to the 2005 Dietary Guidelines and to
current Dietary Reference Intakes. The committee released its
recommendations in late 2009 (IOM 2009).
In developing its recommendations, the IOM sought to address low
intakes of fruits, vegetables, and whole grains among school-age
children, and excessive intakes of sodium and discretionary calories
from solid fats and added sugar. The final rule addresses these
concerns by increasing the amount of fruit, the amount and the variety
of vegetables, and the amount of whole grains offered each week to
students who participate in the school meals programs. The rule also
replaces higher fat fluid milk with low-fat and skim fluid milk in
school meals. And it limits the levels of calories, sodium, and
saturated fat in those meals.
A proposed rule, published by USDA in January 2011, made only small
changes to the IOM recommendations. The final rule makes additional
changes. These changes respond primarily to comments received from
school and State officials, nutrition and child advocates, industry
groups, parents of schoolchildren, and the general public. The most
significant of these changes reduce the immediate and long-term costs
of implementing the rule. Additional changes respond to recommendations
contained in the 2010 Dietary Guidelines which were released after
development of the proposed rule.
The linkage between poor diets and health problems such as
childhood obesity are a matter of particular policy concern, given
their significant social costs. One in every three children (31.7
percent) ages 2-19 is overweight or obese. Along with the effects on
our children's health, childhood overweight and obesity imposes
substantial economic costs, and the epidemic is associated with an
estimated $3 billion in direct medical costs. Perhaps more
significantly, obese children and adolescents are more likely to become
obese as adults. In 2008, medical spending on adults that was
attributed to obesity increased to an estimated $147 billion.
Because of the complexity of factors that contribute both to
overall food consumption and to obesity, we are not able to define a
level of disease or cost reduction that is attributable to the changes
in meals expected to result from implementation of the rule. As the
rule is projected to make substantial improvements in meals served to
more than half of all school-aged children on an average school day, we
judge that the likelihood is reasonable that the benefits of the rule
exceed the costs, and that the final rule thus represents a cost-
effective means of conforming NSLP and SBP regulations to the statutory
requirements for school meals. Beyond these changes a number of
qualitative benefits--including alignment between Federal program
benefits and national nutrition policy, improved confidence of parents
and families in the nutritional quality of school meals, and the
contribution that improved school meals can make to the overall school
nutrition environment, are expected from the rule.

Costs

This final rule will increase the amount of fruits, vegetables, and
whole grains offered to participants in the NSLP and SBP. The final
rule will also limit certain fats and reduce calories and sodium in
school meals. Because some foods that meet these requirements are more
expensive than foods served in the school meal programs today, the food
cost component of preparing and serving school meals will increase.
The biggest contributors to this increase are the costs of serving
more vegetables and more fruit, and replacing refined grains with whole
grains. We estimate that food costs will increase by 2.5 cents per
lunch served, as compared with prior requirements, on initial
implementation of the final rule requirements. There is no immediate
increase in breakfast food costs. Two years after implementation, when
the fruit requirement is phased in for breakfast, and when all grains
served at breakfast and lunch must be whole grain rich, we estimate
that food costs will increase by 5 cents per lunch served and 14 cents
per breakfast, as compared with prior requirements.
Compliance with this rule is also likely to increase labor costs.
Serving

[[Page 4108]]

healthier school meals that are acceptable to students may require more
on-site preparation, and less reliance on prepared foods. For purposes
of this impact analysis, labor costs are assumed to grow so that they
maintain a constant ratio with food costs, consistent with findings
from a national study of school lunch and breakfast meal costs (USDA
2008). In practice, this suggests that food and labor costs may
increase by nearly equal amounts relative to current costs.
The estimated overall costs of compliance are summarized below.
Increased food and labor costs will be incurred by the local and State
agencies that control school food service accounts. The rule will also
increase the administrative costs incurred by the State agencies
responsible for reviewing school district compliance with the new meal
patterns. The analysis estimates that total costs may increase by $3.2
billion from fiscal year (FY) 2012 through fiscal year (FY) 2016, or
roughly 8 percent when the rule's food group requirements are fully
implemented in FY 2015. The estimated increases in food and labor costs
are equivalent to about 10 cents for each reimbursable school lunch and
about 27 cents for each reimbursable breakfast in FY 2015.
[GRAPHIC] [TIFF OMITTED] TR26JA12.000

Alternatives

One alternative to the final rule is to retain the proposed rule
without change. The proposed rule closely followed IOM's
recommendations. IOM developed its recommendations to encourage student
consumption of foods recommended by the Dietary Guidelines in
quantities designed to provide necessary nutrients without excess
calories. The final rule still achieves that goal. Students will still
be presented with choices from the food groups and vegetable subgroups
recommended by the Dietary Guidelines. In that way, the final rule,
like the proposed rule, will help children recognize and choose foods
consistent with a healthy diet.
The most significant differences between the proposed and final
rules are in the breakfast meal patterns, and those differences are
largely a matter of timing. The final rule allows schools more time to
phase-in key IOM recommendations on fruit and grains at breakfast. Once
fully implemented, the most important difference between the final and
proposed rule breakfast meal patterns is the elimination of a separate
meat/meat alternate requirement. That change preserves current rules
that allow the substitution of meat for grains at breakfast. It also
responds to general public comments on cost, and on the need to
preserve schools' flexibility to serve breakfast outside of a
traditional cafeteria setting.
Even with these changes, and with the less significant changes to
the proposed lunch standards, the final rule remains consistent with
Dietary Guidelines recommendations. The added flexibility and reduced
cost of the final rule relative to the proposed rule should increase
schools' ability to comply with the new meal patterns. The final rule's
less costly breakfast patterns will make it easier for schools to
maintain or expand current breakfast programs, and may encourage other
schools to adopt a breakfast program. These changes reduce the
estimated 5-year cost of the final rule, relative to the proposed rule,
by $2.9 billion.
A second alternative would implement the final rule's lunch meal
pattern changes, but retain the proposed rule's breakfast meal pattern
recommendations. Adopting all of the lunch provisions contained in the
final rule, but retaining the proposed rule's breakfast provisions,
would cost an estimated $5.9 billion over 5 years, or $2.7 billion more
than the final rule. This alternative responds less effectively than
the final rule to comments received by USDA from SFA and school
administrators who expressed concerns about the cost of the proposed
rule.
An alternative that implements the final rule's breakfast meal
pattern changes, but retains the proposed rule's lunch meal pattern
recommendations, would cost $3.4 billion over 5 years, about $180
million more than the final rule.

Regulatory Impact Analysis

Title: Nutrition Standards in the National School Lunch and School
Breakfast Programs
Action
a. Nature: Final Rule.
b. Need: Section 103 of the Child Nutrition and WIC Reauthorization
Act of 2004 inserted Section 9(a)(4) into the National School Lunch Act
requiring the Secretary to promulgate rules revising nutrition
requirements, based on the most recent Dietary Guidelines for
Americans, that reflect specific recommendations, expressed in serving
recommendations, for increased consumption of foods and food
ingredients offered in school nutrition. This final rule amends
Sections 210 and 220 of the regulations that govern the National School
Lunch Program (NSLP) and the School Breakfast Program (SBP). The rule
implements many of the recommendations of the National Academies'
Institute of Medicine (IOM). Under contract to the United States
Department of Agriculture (USDA), IOM proposed changes to NSLP and SBP
meal pattern requirements consistent with the 2005 Dietary Guidelines
and IOM's Dietary Reference Intakes. The final rule advances the
mission of the Food and Nutrition Service (FNS) to provide children
access to food, a healthful diet, and nutrition education in a manner
that promotes American agriculture and inspires public confidence.
c. Affected Parties: The programs affected by this rule are the
NSLP and the SBP. The parties affected by this regulation are USDA's
Food and Nutrition Service, State education agencies, local school food
authorities, schools, students, and the food

[[Page 4109]]

production, distribution and service industry.

Contents

Abbreviations

I. Background
II. Summary of Final Rule Meal Requirements
III. Cost/Benefit Assessment
A. Summary
1. Costs
2. Benefits
B. Food and Labor Costs
1. Baseline Cost Estimate
2. Final Rule Cost Estimate
3. Food Cost Drivers
4. Comparison of FNS and IOM Cost Estimates
C. Administrative Impact
D. Food Service Equipment
E. Comments on Proposed Rule
F. Uncertainties
G. Comparison of Proposed Rule and Final Rule Costs
H. Implementation of Final Rule--SFA Resources
I. Impact on Participation
J. Benefits
IV. Alternatives
V. Accounting Statement
VI. References
VII. Appendix A

Abbreviations

The following abbreviations are used throughout this document:

CN Child Nutrition Programs
CPI Consumer Price Index
CRE Coordinated Review Effort
DRI Dietary Reference Intake
FNS Food and Nutrition Service
FY Fiscal Year
IOM Institute of Medicine
NSLA National School Lunch Act
NSLP National School Lunch Program
RDA Recommended Dietary Allowance
SA State Agency
SBP School Breakfast Program
SY School Year
SFA School Food Authority
SLBCS-II School Lunch and Breakfast Cost Study II
SMI USDA School Meals Initiative for Healthy Children
SNDA-III School Nutrition Dietary Assessment III
USDA United States Department of Agriculture

I. Background

The National School Lunch Program (NSLP) is available to over 50
million children each school day; an average of 31.7 million children
per day ate a reimbursable lunch in fiscal year (FY) 2010. The School
Breakfast Program (SBP) served an average of 11.7 million children
daily. Schools that participate in the NSLP and SBP receive Federal
reimbursement and USDA Foods (donated commodities) for lunches and
breakfasts that meet program requirements. In exchange for this
assistance schools serve meals at no cost or at reduced price to
income-eligible children. Federal meal reimbursements and USDA Foods
totaled $13.7 billion in FY 2010. FNS projections of the number of
meals served and Federal program costs are summarized in Table 1.\1\
---------------------------------------------------------------------------

\1\ The figures in Table 1 are USDA projections of the number of
program meals served and the value of USDA reimbursements for those
meals. These figures are baseline Federal government costs of the
NSLP and the SBP estimated for the President's budget proposal for
FY 2012. Elsewhere in this document, baseline costs refer to the
cost to schools of serving meals that satisfy current program
requirements.

Table 1--Projected Number of Meals Served and Total Federal Program Costs
[In millions]
----------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016
----------------------------------------------------------------------------------------------------------------
NSLP:
--Lunches Served.............. 5,386.7 5,465.3 5,530.9 5,586.2 5,630.9 5,675.9
--Program Cost................ $11,822.8 $12,373.0 $12,499.8 $12,584.9 $12,679.3 $12,782.4
SBP:
--Breakfasts Served........... 2,090.9 2,187.0 2,252.7 2,297.7 2,332.2 2,367.2
--Program Cost................ $3,115.3 $3,337.7 $3,469.8 $3,556.7 $3,628.6 $3,721.0
----------------------------------------------------------------------------------------------------------------

In FY 2010, schools served 2.9 billion free NSLP lunches, 0.5
billion reduced price lunches, and 1.8 billion full price or ``paid''
lunches. Schools served 1.5 billion free breakfasts, 0.2 billion
reduced price breakfasts, and 0.3 billion paid breakfasts. These
figures do not include non-Federally reimbursable [agrave] la carte
meals or other non-program foods.\2\
---------------------------------------------------------------------------

\2\ USDA program data.
---------------------------------------------------------------------------

Reimbursement rates for meals served under the current meal
patterns are established by law and are adjusted annually for
inflation.\3\ For school year (SY) 2011-2012, the Federal reimbursement
for a free breakfast for schools in the contiguous United States and
``not in severe need'' is $1.51; the Federal reimbursement for a free
lunch to schools in SFAs in the contiguous United States that served
fewer than 60 percent free and reduced price lunches was $2.77. Schools
that participate in the NSLP also receive USDA Foods for each free,
reduced price, and paid lunch served, as provided by Section 6 of the
Richard B. Russell National School Lunch Act (NSLA). Table 2 provides a
breakdown of breakfast and lunch reimbursements in SY 2011-2012,
including USDA Foods.
---------------------------------------------------------------------------

\3\ Reimbursement rates and annual inflation adjustments are set
by statute, not regulation. The final rule does not alter current
reimbursement rates. Reimbursement rates for school lunch under
current nutrition standards are specified in Sections 4(b)(2) and
11(a)(2) of the NSLA (42 U.S.C. 1753(b)(2) and 42 U.S.C.
1759a(a)(2)). Breakfast reimbursement rates are specified in Section
4(b)(1)(B) of the Child Nutrition Act (42 U.S.C. 1773(b)(1)(B)).
Both lunch and breakfast reimbursement rates are subject to the
annual inflation adjustment prescribed by Section 11(a)(3) of the
NSLA (42 U.S.C. 1759a(a)(3)).

[[Page 4110]]

Table 2--Federal Per-Meal Reimbursement and Minimum Value of USDA Foods, SY 2011-2012 \4\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Breakfast reimbursement Lunch reimbursement Minimum value of
------------------------------------------------------------------------ donated foods
-----------------
SFAs that serve SFAs that serve Additional
Schools in Schools not in at least 60% of fewer than 60% Federal
``severe need'' ``severe need'' lunches free or of lunches free assistance for
at reduced price or at reduced each NSLP lunch
price served
--------------------------------------------------------------------------------------------------------------------------------------------------------
Contiguous States:
--Free.................................................... $1.80 $1.51 $2.79 $2.77 $0.2225
--Reduced Price........................................... 1.50 1.21 2.39 2.37 0.2225
--Paid................................................... 0.27 0.27 0.28 0.26 0.2225
Alaska:
--Free.................................................... 2.88 2.41 4.52 4.50 0.2225
--Reduced Price........................................... 2.58 2.11 4.12 4.10 0.2225
--Paid.................................................... 0.40 0.40 0.45 0.43 0.2225
Hawaii:
--Free.................................................... 2.10 1.76 3.27 3.25 0.2225
--Reduced Price........................................... 1.80 1.46 2.87 2.85 0.2225
--Paid.................................................... 0.30 0.30 0.33 0.31 0.2225
--------------------------------------------------------------------------------------------------------------------------------------------------------

Under Section 9(a)(4) and Section 9(f)(1) of the NSLA, schools that
participate in the NSLP or SBP must offer lunches and breakfasts that
are consistent with the goals of the most recent Dietary Guidelines for
Americans. School lunches must provide one-third of the Recommended
Dietary Allowances (RDA) for protein, calcium, iron, and vitamins A and
C, on average over the course of a week; school breakfasts must satisfy
one-fourth of the RDAs for the same nutrients. Current nutrition
requirements for school lunches and breakfasts are based on the 1995
Dietary Guidelines and the 1989 RDAs. (School lunches and breakfasts
were not updated when the 2000 Dietary Guidelines were issued because
those recommendations did not require significant changes to the school
meal patterns.) The 2005 and 2010 Dietary Guidelines, provide more
prescriptive and specific nutrition guidance than earlier releases, and
require significant changes to school meal requirements.
---------------------------------------------------------------------------

\4\ School year 2011-2012 NSLP and SBP reimbursement rates, and
the minimum value of donated foods, can be found in the July 20,
2011 Federal Register, Vol. 76, No. 139, pp. 43256 and 43258.
---------------------------------------------------------------------------

\5\ Federal Register, Vol. 76, No. 9, pp. 2494-2570.
---------------------------------------------------------------------------

II. Summary of Final Rule Meal Requirements

The proposed rule, published in January 2011, made only minor
changes to the IOM recommendations. This final rule makes more
significant changes. These changes respond primarily to comments
received from school and State officials, nutrition and child
advocates, industry groups, parents of schoolchildren, and the general
public. Additional changes respond to recommendations contained in the
2010 Dietary Guidelines which were released after development of the
proposed rule. As a group, these changes reduce program costs relative
to the proposed rule. The final rule is effective at the start of SY
2012-2013.
The final rule, like the proposed rule, makes the following changes
to current NSLP and SBP meal standards:
Increases the amount and variety of fruits, vegetables,
and whole grains;
Sets minimum and maximum levels of calories; and
Increases the focus on reducing the amounts of saturated
fat and sodium provided in school meals.
Table 3 summarizes the breakfast and lunch meal standards with all
provisions fully phased in. The following provisions are subject to a
phased implementation; all other provisions are effective July 1, 2012:
Minimum breakfast fruit requirement is effective July 1,
2014,
Minimum breakfast grain requirement is effective July 1,
2013,
Intermediate sodium targets take effect on July 1, 2014
and July 1, 2017; the final sodium target (in Table 3) takes effect on
July 1, 2022. (See Table 3a.)
---------------------------------------------------------------------------

\6\ Table taken from preamble to the final rule.

Table 3--Summary of Final Rule Meal Requirements \6\
----------------------------------------------------------------------------------------------------------------
Breakfast meal pattern Lunch meal pattern
-----------------------------------------------------------------------------
Meal pattern Grades K-5 Grades 6-8 Grades 9-12
\a\ \a\ \a\ Grades K-5 Grades 6-8 Grades 9-12
----------------------------------------------------------------------------------------------------------------
Amount of food \b\ per week (minimum per day)
----------------------------------------------------------------------------------------------------------------
Fruits (cups) c d................. 5 (1) \e\ 5 (1) \e\ 5 (1) \e\ 2\1/2\ (\1/ 2\1/2\ (\1/ 5 (1)
2\) 2\)
Vegetables (cups) c d............. 0 0 0 3\3/4\ (\3/ 3\3/4\ (\3/ 5 (1)
4\) 4\)
Dark green \f\................ 0 0 0 \1/2\ \1/2\ \1/2\

[[Page 4111]]

Red/Orange \f\................ 0 0 0 \3/4\ \3/4\ 1\1/4\
Beans/Peas (Legumes) \f\...... 0 0 0 \1/2\ \1/2\ \1/2\
Starchy \f\................... 0 0 0 \1/2\ \1/2\ \1/2\
Other f g..................... 0 0 0 \1/2\ \1/2\ \3/4\
Additional Veg to Reach Total \h\. 0 0 0 1 1 1\1/2\
Grains (oz eq) \i\................ 7-10 (1) 8-10 (1) 9-10 (1) 8-9 (1) 8-10 (1) 10-12 (2)
\j\ \j\ \j\
Means/Meat Alternates (oz eq)..... 0 k 0 k 0 k 8-10 (1) 9-10 (1) 10-12 (2)
Fluid milk (cups) \l\............. 5 (1) 5 (1) 5 (1) 5 (1) 5 (1) 5 (1)
----------------------------------------------------------------------------------------------------------------
Other Specifications: Daily Amount Based on the Average for a 5-Day Week
----------------------------------------------------------------------------------------------------------------
Min-max calories (kcal) m n o..... 350-500 400-500 450-600 550-650 600-700 750-850
Saturated fat (% of total < 10 < 10 < 10 < 10 < 10 < 10
calories) n o....................
Sodium (mg) n p................... <= 430 <= 470 <= 500 <= 640 <= 710 <= 740
----------------------------------------------------------------------------------------------------------------
Trans fat \o\..................... Nutrition label or manufacturer specifications must indicate zero grams of
trans fat per serving.
----------------------------------------------------------------------------------------------------------------
\a\ In the SBP, the above age-grade groups are required beginning July 1, 2013 (SY 2013-14). In SY 2012-2013
only, schools may continue to use the meal pattern for grades K-12 (See Sec. 220.23).
\b\ Food items included in each food group and subgroup and amount equivalents. Minimum creditable serving is \1/
8\ cup.
\c\ One quarter-cup of dried fruit counts as \1/2\ cup of fruit; 1 cup of leafy greens counts as \1/2\ cup of
vegetables. No more than half of the fruit or vegetable offerings may be in the form of juice. All juice must
be 100% full-strength.
\d\ For breakfast, vegetables may be substituted for fruits, but the first two cups per week of any such
substitution must be from the dark green, red/orange, beans and peas (legumes) or ``Other vegetables''
subgroups, as defined in 210.10(c)(2)(iii).
\e\ The fruit quantity requirement for the SBP (5 cups/week or a minimum of 1 cup/day) is effective July 1, 2014
(SY 2014-2015).
\f\ Larger amounts of these vegetables may be served.
\g\ This category consists of ``Other vegetables'' as defined in Section 210.10(c)(2)(iii)(E). For the purposes
of the NSLP, the ``Other vegetables'' requirement may be met with any additional this category also includes
any additional amounts from the dark green, red/orange, and beans/peas (legumes) as defined in
210.10(c)(2)(iii) vegetable subgroups.
\h\ Any vegetable subgroup may be offered to meet the total weekly vegetable requirement.
\i\ At least half of the grains offered must be whole grain-rich in the NSLP beginning July 1, 2012 (SY 2012-
2013), and in the SBP beginning July 1, 2013 (SY 2013-2014). All grains must be whole grain-rich in both the
NSLP and the SBP beginning July 1, 2014 (SY 2014-15).
\j\ In the SBP, the grain ranges must be offered beginning July 1, 2013 (SY 2013-2014).
\k\ There is no separate meat/meat alternate component in the SBP. Beginning July 1, 2013 (SY 2013-2014),
schools may substitute 1 oz. eq. of meat/meat alternate for 1 oz. eq. of grains after the minimum daily grains
requirement is met.
\l\ Fluid milk must be low-fat (1 percent milk fat or less, unflavored) or fat-free (unflavored or flavored).
\m\ The average daily amount of calories for a 5-day school week must be within the range (at least the minimum
and no more than the maximum values).
\n\ Discretionary sources of calories (solid fats and added sugars) may be added to the meal pattern if within
the specifications for calories, saturated fat, trans fat, and sodium. Foods of minimal nutritional value and
fluid milk with fat content greater than 1 percent milk fat are not allowed.
\o\ In the SBP, calories and trans fat specifications take effect beginning July 1, 2013 (SY 2013-2014).
\p\ Final sodium specifications are to be reached by SY 2022-2023 or July 1, 2022. Intermediate sodium
specifications are established for SY 2014-2015 and 2017-2018. See required intermediate specifications in
Sec. 210.10(f)(3) for lunches and Sec. 220.8(f)(3) for breakfasts.

Table 3a--Intermediate and Final Sodium Targets
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sodium reduction: timeline and amount
--------------------------------------------------------------------------------------
Age/grade group Target 1: July 1, 2014 (SY Target 2: July 1, 2017 (SY Final target: July 1, 2022
2014-2015) (mg) 2017-2018) (mg) (SY 2022-2023) (mg)
--------------------------------------------------------------------------------------------------------------------------------------------------------
K-5.............................................................. <= 1,230 <= 935 <= 640
6-8.............................................................. <= 1,360 <= 1,035 <= 710
9-12............................................................. <= 1,420 <= 1,080 <= 740
--------------------------------------------------------------------------------------------------------------------------------------------------------

Key differences between current meal pattern requirements and the
final rule include:
The number of fruit and vegetable servings offered to
students over the course of a week would double at breakfast and would
rise substantially at lunch.
Schools would no longer be permitted to substitute between
fruits and vegetables; each has its own requirement, ensuring that
students are offered both fruits and vegetables every day.
A minimum number of vegetable servings would be required
from each of 5 vegetable subgroups. The proposed rule included tomatoes
in the ``other'' vegetable category, consistent with the 2005 Dietary
Guidelines. The 2010 Dietary Guidelines and this final rule create a
new ``red/orange'' group that combines tomatoes with all of the
vegetables in the previous ``orange'' category.
Initially, half of grains offered to students would have
to be whole grain rich. Two years after implementation, all grain
products offered would have to be whole grain rich.
Schools would be required to substitute low fat and fat
free milk for higher fat content milk. This is a separate requirement
of the Healthy Hunger-Free Kids Act of 2010 (HHFKA).

[[Page 4112]]

Section 202 of HHFKA requires schools to offer a variety of fluid milk
consistent with the recommendations of the most recent Dietary
Guidelines for Americans. The 2010 Dietary Guidelines recommends fat
free or low fat milk (1 percent milkfat) for children ages 2 and older.

[[Page 4113]]

[GRAPHIC] [TIFF OMITTED] TR26JA12.001

[[Page 4114]]

III. Cost/Benefit Assessment

A. Summary

1. Costs
The final rule will more closely align school meal pattern
requirements with the science-based recommendations of the 2005 and
2010 Dietary Guidelines. These changes will increase the amount of
fruits, vegetables, and whole grains offered to participants in the
NSLP and SBP.\7\ The final rule meal patterns will also limit certain
fats and reduce calories and sodium in school meals. Because some foods
that meet these requirements are more expensive than foods served in
the school meal programs today, the food cost component of preparing
and serving school meals will increase.
---------------------------------------------------------------------------

\7\ Although a separate rulemaking will propose changes to the
meal patterns for preschoolers, this rule makes one significant
change for that age/grade group. Section 202 of the Healthy Hunger-
Free Kids Act (Pub. L. 11-296) requires that schools offer a variety
of milk, and that the milk offered comply with the recommendations
of the most recent Dietary Guidelines. Consistent with that
statutory requirement, this rule requires that schools serve only
fat-free and low-fat milk in school lunches and breakfasts. That
requirement applies to meals served by schools to children ages 3-4
as well as to older children in grades K-12. Because low-fat and
fat-free milk tend to cost less than milk with higher fat content,
that change will have a small negative effect on the cost of meals
served to pre-K children. In addition to that change, the rule
requires that schools serving meals to pre-K children adopt food-
based menu planning (FBMP) for consistency with the rule's FBMP
requirement for meals served to older children. Because the switch
to FBMP, where necessary, makes no substantive change to the pre-K
meal requirements, our analysis assumes that this provision of the
rule has no impact on the cost of serving meals to these children.
More than \2/3\ of elementary schools used traditional or enhanced
FBMP in SY 2004-2005 (USDA 2008, vol. 1, p. 36) and would need to
make no changes at all to comply with the rule's pre-K menu planning
requirement. For elementary schools that serve meals to pre-K
children using a nutrient based menu planning system, the rule would
require a change to FBMP. But that change is required for meals
served to older children as well, and the administrative cost of
that change is incorporated into the labor cost estimate of this
analysis.
---------------------------------------------------------------------------

The biggest contributors to this increase are the costs of serving
more vegetables and more fruit, and replacing refined grains with whole
grains. We estimate that food costs will increase by 2.5 cents per
lunch served, as compared with prior requirements, on initial
implementation of the final rule requirements. There is no immediate
increase in breakfast food costs. Two years after implementation, when
the fruit requirement is phased in for breakfast, and when all grains
served at breakfast and lunch must be whole grain rich, we estimate
that food costs will increase by 5 cents per lunch served and 14 cents
per breakfast, as compared with prior requirements.\8\ In aggregate, we
estimate that the rule may increase SFA food costs by $1.6 billion from
FY 2012 through FY 2016. The annual increase in food costs relative to
current standards is estimated to be about $0.6 billion by FY 2015.
---------------------------------------------------------------------------

\8\ The 2.5 cent per lunch figure is an estimate for the end of
FY 2012 (the start of SY 2012-2013). The higher numbers are for FY
2015.
---------------------------------------------------------------------------

The rule sets sodium targets that will not be fully implemented in
the five year period covered by this analysis. The rule's initial
sodium targets take effect in SY 2014-2015. Our cost estimate does not
include an explicit adjustment to meet those targets. The rule's
initial sodium targets impose relatively modest reductions from levels
observed in SY 2004-2005.\9\ Our estimate assumes that schools will
meet the rule's initial targets as they reformulate recipes to meet the
rule's food group requirements; that cost is contained in our
estimate's food group and labor components.
---------------------------------------------------------------------------

\9\ USDA 2008, volume 1, pp. 162 and 196.
---------------------------------------------------------------------------

Compliance with this rule is likely to increase labor costs.
Serving healthier school meals that are acceptable to students may
require more on-site preparation, and less reliance on prepared foods.
IOM did not estimate the overall required increase in labor costs to
implement its recommended changes in meal requirements, but noted an
analysis of data from some Minnesota school districts that showed that
``healthier'' meals had higher labor costs--principally because of
increased use of on-site preparation.\10\.
---------------------------------------------------------------------------

\10\ IOM 2009, p. 148.
---------------------------------------------------------------------------

For purposes of this impact analysis, labor costs are assumed to
grow so that they maintain a constant ratio with food costs, consistent
with findings from a national study of school lunch and breakfast meal
costs (USDA 2008). In practice, this suggests that food and labor costs
may increase by nearly equal amounts relative to current costs.
Additional costs of compliance with the rule are discussed in
subsections III C and III D of this analysis.\11\
---------------------------------------------------------------------------

\11\ The SLBCS-II found that costs other than food and labor
accounted for 9.9 percent of reported SFA costs. These costs include
``supplies, contract services, capital expenditures, indirect
charges by the school district, etc.'' (USDA 2008, pp. 3-5).
---------------------------------------------------------------------------

The estimated overall costs of compliance are summarized in Table
6. For purposes of this analysis, the rule is assumed to take effect on
July 1, 2012, the start of school year (SY) 2012-2013. The additional
requirement to offer only whole grain rich grain products is assumed to
begin in SY 2014-2015.
The analysis estimates that total costs may increase by $3.2
billion through fiscal year (FY) 2016, or roughly 8 percent when the
rule's food group requirements are fully implemented in FY 2015. The
estimated increases in food and labor costs are equivalent to about 10
cents for each reimbursable school lunch and about 27 cents for each
reimbursable breakfast in FY 2015. These costs would be incurred by the
local and State agencies that control school food service accounts.

Table 6--Projected Cost of Final Rule
[Dollars in Millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year
----------------------------------------------------------------------------------------------------------------------
2012 2013 2014 2015 2016 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Food Costs....................... $20.8 $135.4 $178.7 $612.8 $642.8 $1,590.5
Labor Costs...................... 20.7 141.9 174.4 598.0 627.2 1,562.3
State Agency Administrative Costs 0.1 8.9 9.1 9.4 9.7 37.1
----------------------------------------------------------------------------------------------------------------------
Total........................ $41.6 $286.2 $362.1 $1,220.2 $1,279.7 $3,189.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent Change Over Baseline..... 2.0% 2.0% 2.5% 8.0% 8.1% 5.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 4115]]

2. Benefits
The primary benefit of this rule is to align the regulations with
the requirements placed on schools under NSLA to ensure that meals are
consistent with the goals of the most recent Dietary Guidelines and the
Dietary Reference Intakes. In increasing access to children for such
meals it will address key inconsistencies between the diets of school
children and Dietary Guidelines by (1) Increasing servings of fruits
and vegetables, (2) replacing refined-grain foods with whole-grain rich
foods, and (3) replacing higher-fat dairy products with low-fat
varieties. It also results in a number of additional benefits,
including alignment between Federal program benefits and national
nutrition policy, improved confidence by parents and families in the
nutritional quality of school meals, and the contribution that improved
school meals can make to the overall school nutrition environment.

B. Food and Labor Costs

1. Baseline Cost Estimate
Food Costs: The analysis begins with an assessment of the cost of
purchasing food to meet the rule's food-based meal requirements. The
estimated increase in food cost is the difference between the cost of
serving the quantities and types of foods used to meet current
requirements and the cost of serving the quantities and types of foods
outlined in the rule.
Figure 1: Baseline Food Cost Estimate Under Current Requirements and
Practices
Objective: Use price and quantity data collected from schools to
compute the total cost of NSLP and SBP meals served under current
program rules.
[GRAPHIC] [TIFF OMITTED] TR26JA12.003

The data sources that we use in this analysis, and their
contribution to our food cost estimate, are summarized in Table 7.

Table 7--Summary of Food Cost Estimate Data Sources
----------------------------------------------------------------------------------------------------------------
Data source Contribution to food cost estimate
----------------------------------------------------------------------------------------------------------------
School Nutrition Dietary Assessment Study Food codes and descriptions and food quantities served to
III (USDA 2007). students in SY 2004-05. Prices are applied to these food
quantities to determine baseline food costs.
Meals served, quantities served, and quantities offered
(``offer weights'') by food type, by school type (elementary,
middle, and high). Used to determine students' inclinations to
take an offered menu item (``take rates''). Take rates are
applied to the types and quantities of food that must be offered
to students under the rule to estimate quantities served.
School Lunch and Breakfast Cost Study II Food codes and descriptions, number of servings, average
(USDA 2008). gram weight per serving, total grams served, cost per serving.
These are used, along with other data sources, to estimate the
cost per cup or ounce equivalent of each of the rule's required
food types and combination entr[eacute]es.
Also used to estimate the relative cost of food group
subtypes: whole versus refined grain products, and the various
vegetable varieties with separate serving requirements under the
rule.

[[Page 4116]]

USDA Child Nutrition Food Labels............ USDA food labels contain information on food group
crediting for child nutrition program administrators. USDA
maintains a collection of food labels for thousands of
commercially-prepared entrees. Food group crediting information
is used to determine the cup or ounce equivalents of meat, meat
alternate, grain, vegetable, and fruit that may be credited by
schools for a particular entr[eacute]e.
Food group crediting is used to determine how much of the
rule's food group requirements are satisfied by prepared foods
offered by schools, and how much remains to be met with single
food or non-entr[eacute]e items.
USDA, National Food Service Management The recipe database is used to supplement the information
Institute, Recipe Database. from USDA food labels. The recipe records, like the food labels,
contain food group crediting information used to determine how
much of the rule's food group requirements are satisfied by
particular food items.
USDA Food Buying Guide...................... The Food Buying Guide also contains information on food
group crediting. The crediting information for various grain
products is used in this estimate.
USDA, Agricultural Research Service, The SR22 is used to supplement the other food group
National Nutrient Database for Standard crediting resources listed above. SR22 information was used to
Reference, SR22. estimate food credits for food items without a CN food label, or
a USDA recipe. SR22 provides protein and fiber content per given
volume of a particular food. That information is used to estimate
the food group credits for foods that are similar, but not
identical, to foods with CN labels or USDA recipe records.
SR22 data is also used to compute the proper conversion
factor from grams to cups for various school foods.
USDA, Agricultural Research Service, Used to determine the relative share of vegetables in
MyPyramid Equivalents Database for USDA combination foods and entr[eacute]es by each of the varieties
Food Codes, Version 1.0. with separate serving requirements under the rule.
School Nutrition Dietary Assessment Study II Average food group crediting information for school salad
(USDA 2001). bars is taken from SNDA-II.
----------------------------------------------------------------------------------------------------------------

We first totaled the value of food served by food group, as
reported by schools in a national school nutrition assessment (SNDA-
III), separately for lunch and breakfast. SNDA-III provides an estimate
of the amount or quantity (in grams) of foods offered and served in the
school lunch and breakfast programs for SY 2004-2005, based on a
nationally representative sample of all participating public
schools.\12\ SNDA-III provides quantities of both minimally processed
single foods (such as whole fruit, fruit juice, milk, and vegetables)
and combination foods or entrees (such as beef stew, macaroni and
cheese, and breakfast burritos). We summed the quantities of foods
served to generate total gram weights for each single food and
combination food category. We then divided these sums by SNDA-III's
count of total meals served to generate average per-meal gram amounts
for the same broad food categories.
---------------------------------------------------------------------------

\12\ If patterns of student selection of foods are different in
private schools than they are in public schools, then the reliance
on public school data alone may bias our results. However,
enrollment in public schools accounts for 97 percent of total
enrollment in NSLP participating schools. Public schools account for
more than 98 percent of total enrollment in SBP participating
schools (USDA program data). Because public schools account for such
a large share of total enrollment by participating schools, we
expect that any differences in selection patterns between public and
private schools would have little impact on our analysis.
---------------------------------------------------------------------------

We estimated the cost per gram within each food category using
detailed price and quantity information collected as part of another
nationally representative sample of public schools in SY 2005-2006
(SLBCS-II). SLBCS-II provides information on the number of servings,
the average gram weight per serving, total grams served, and the cost
per serving for a comprehensive list of single foods and combination
entrees. The SLBCS-II dataset provides sufficient information to
estimate weighted average prices for the same broad food categories
identified in SNDA-III.
We computed preliminary per-meal baseline costs for breakfast and
lunch as the product of the food quantities reported in SNDA-III and
the unit prices computed from the SLBCS-II. Because the food prices
available for this analysis are from SY 2005-2006, we inflated our
estimates by the actual and projected increase in prices since that
time. We computed a set of food group inflators weighted by SNDA-III's
relative mix of foods served by schools in SY 2004-2005. We used the
Consumer Price Index (CPI-U) for the specific food items in our
weighted group averages. Because the mix of foods served in school
breakfasts differs from the mix served at lunch (the grain group, for
example, is weighted more heavily with bread at lunch, and more heavily
with cereal at breakfast) we computed two sets of food group inflators.
Through August 2011, these inflators are constructed with actual CPI
values.\13\ For years after 2011, the food group inflators rely on
historic 7-year averages.
---------------------------------------------------------------------------

\13\ We used index values for the 11 months ending in August
2011 to estimate average index values for all of FY 2011.
---------------------------------------------------------------------------

Our proposed rule analysis computed 5-year historic averages
through FY 2009. Price inflation for most major food groups in the two
years since FY 2009 was lower than inflation in the 5 years ending in
September 2009. For our final rule cost analysis we use a 7-year
average to project future prices. This 7-year average adds the most
recent 2 years of price data to the 5 years used in the proposed rule
methodology. We use a 7-year average, retaining all of the 5 years used
in the proposed rule methodology, to avoid giving too much weight to
the reduction in price inflation observed during the most recent two
years, a period of weak economic growth and consumer demand. Use of a
5-year average ending in FY 2011 would produce a lower cost estimate
than the one presented here.\14\
---------------------------------------------------------------------------

\14\ If, instead, we entirely discount the most recent two years
of inflation, and instead used a 5-year average ending in FY 2009 to
project future food prices, then our cost estimate would be higher.
That scenario is discussed in Section F.
---------------------------------------------------------------------------

Food group inflation factors are summarized in Table 8.

[[Page 4117]]

Table 8--Food Group Price Inflators \15\
------------------------------------------------------------------------
7-year
Cumulative Historic
increase 2006 average (for
to 2011 years after
(percent) 2011)
(percent)
------------------------------------------------------------------------
Lunch inflators:
--Milk.............................. 12.33 2.03
--Meat or Meat Alternate............ 17.54 2.75
--Fruit Juice....................... 19.18 2.82
--Fruit (non-juice)................. 12.39 2.82
--Vegetables........................ 18.52 3.97
--Refined and Whole Grains.......... 25.16 3.85
--Combination Foods/Entrees......... 15.62 2.67
Breakfast inflators:
--Milk.............................. 12.33 2.03
--Meat or Meat Alternate............ 16.52 2.63
--Fruit Juice....................... 19.18 2.82
--Fruit (non-juice)................. 10.38 2.66
--Vegetables........................ 19.81 4.83
--Refined and Whole Grains.......... 17.39 2.50
--Combination Foods/Entrees......... 15.62 2.67
------------------------------------------------------------------------

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

\15\ Computed by USDA from CPI figures from the Bureau of Labor
Statistics. The figures for combination foods are based on the CPI
values for the Food at Home series.
---------------------------------------------------------------------------

The value of USDA Foods and the value of cash in lieu of such food
donations enters into both our baseline and final rule cost estimates;
we treat them as food ``costs'' in both estimates. This is the same
approach used in the SLBCS-II to estimate the cost of preparing and
serving school meals.
We assume in the analysis that the types of commodities offered to
schools in future years may satisfy the food group requirements of the
final rule as effectively as they do now. USDA's annual commodity
purchase plan, developed by FNS in consultation with the Agricultural
Marketing Service and the Farm Service Agency, is driven by school
demand for particular products as well as by current prices, available
funds, and the variable nature of agricultural surpluses.\16\
---------------------------------------------------------------------------

\16\ For more information see http://www.commodityfoods.usda.gov/fd_purchasing.htm.
---------------------------------------------------------------------------

In large measure, USDA Foods offered to schools are already well
positioned to support the final rule's requirements. In recent years
USDA has purchased relatively more canned foods and meats with reduced
levels of fat, sodium, and sugar for school distribution. As products
such as butter and shortening have been removed from the USDA Foods
available to schools, new products such as whole grain pasta have been
added. The rule is likely to move school demand towards a greater
emphasis on these new offerings as schools introduce new menus. We
assume that the contribution of USDA Foods to the cost of preparing
school meals will not change after implementation of the rule.
The final step in constructing the baseline cost estimate was to
multiply the per-meal cost estimates by the projected number of
breakfasts and lunches served through our 5-year forecast period.
Projected growth in the number of NSLP and SBP meals served in the
absence of the rule is shown in Table 9.

Table 9--Projected Baseline Growth in Reimbursable Meals Served \17\
----------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------------------------
2011 2012 2013 2014 2015 2016
----------------------------------------------------------------------------------------------------------------
Lunches:
Meals (billions).......................... 5.4 5.5 5.5 5.6 5.6 5.7
Percent change............................ 2.4% 1.5% 1.2% 1.0% 0.8% 0.8%
Breakfasts:
Meals (billions).......................... 2.1 2.2 2.3 2.3 2.3 2.4
Percent change............................ 6.8% 4.6% 3.0% 2.0% 1.5% 1.5%
----------------------------------------------------------------------------------------------------------------

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

\17\ The projected growth above in meals served through FY 2011
reflects the difference between FNS estimates for FY 2011 prepared
for the 2012 President's Budget and actual meals served in FY 2010.
The remaining percentages are FNS projections prepared for the FY
2012 President's Budget.
---------------------------------------------------------------------------

Appendix A contains a set of tables that detail the calculations
described above. The appendix tables present baseline and final rule
food prices, food quantities, and meals served for each year from FY
2012 through FY 2016.
Note that our baseline per-meal cost estimates are averages. They
reflect the variety of meals served across all NSLP and SBP
participating schools. Some schools may be much closer than others to
serving meals that meet the requirements of the rule, and the costs of
compliance with the rule may therefore vary at the school level. The
use of an average baseline cost estimate is appropriate, however, for
estimating the aggregate cost of compliance across all schools.

[[Page 4118]]

2. Final Rule Cost Estimate
Food Costs: Both our baseline and final rule food cost estimates
rely on quantity and price information reported by schools in SNDA-III
and SLBCS-II. These datasets contain detailed information on the
quantity, variety, and unit prices of foods offered and served to
students. Many of the records on these datasets describe single item
foods that are served alone or are used in school recipes. But other
records describe prepared or heat-and-serve entrees and other
``combination foods.'' As described above, we developed our baseline
cost estimate by multiplying the gram weight of food items served by
their cost per gram. For both single item foods and combination foods,
prices and quantities are given in SLBCS-II and SNDA-III; our baseline
cost estimate required limited processing of these datasets.
For the final rule cost estimate we continue to rely on prices per
gram from SLBCS-II. But for quantities served we need to look to the
requirements of the rule rather than to SNDA-III. We use the midpoints
of the rule's food group requirements, expressed in servings rather
than grams, to estimate the quantities of food that schools must
purchase.\18\ For single foods, the number of program-creditable food
group servings per gram is a function of the foods themselves (density
and fat content, for example) and whether the foods (primarily
vegetables) are served raw or cooked. We relied on several sources for
this information, including the USDA Food Buying Guide and the National
Nutrient Database for Standard Reference. For combination foods we
relied on the USDA's child nutrition food labels and the USDA's recipe
database; these sources contain the result of analyses performed by
food manufacturers and USDA. Because the sources for program-creditable
servings per gram are different for single foods and combination foods,
we need to separate single foods from combination foods and estimate
their costs separately.
---------------------------------------------------------------------------

\18\ The rule's food group requirements are expressed in
servings per week. Because we are developing an average cost per
meal we divide these weekly figures by 5. Some of the rule's
requirements are given in ranges of servings, such as 10-12 meat or
meat alternate servings (for lunches) per high school child per week
(see Table 3). FNS's primary cost estimate targets the midpoints of
the rule's food group requirements where requirements are expressed
as ranges.
---------------------------------------------------------------------------

A basic assumption underlying the estimated cost of reimbursable
meals under the final rule is that schools will continue to serve
entrees that have proven popular with students on current school menus.
Some of these entrees may be modified to replace a portion of their
refined grains with whole grains, or starchy vegetables with other
vegetable varieties. But, because pizza, burritos, and salad bars are
successful items today, this impact analysis assumes that they will
remain on school menus after implementation of the rule.
Figure 2: Food Costs Under Final Rule
Objective: Use price data collected from schools and new meal
pattern requirements to estimate the cost of serving meals under the
final rule.

[[Page 4119]]

[GRAPHIC] [TIFF OMITTED] TR26JA12.004

We separated combination foods from single food items in the SNDA-
III and SLBCS-II datasets.\19\ Using USDA food codes and the
descriptive food labels found on the records of both datasets, we
divided the combination foods into sub-categories such as chili, beef
dishes, lasagna, chicken sandwiches, macaroni and cheese, and peanut
butter and jelly. Recognizing that there is variation within these
groups, we selected a sample of the most commonly served varieties, and
retrieved paper food labels with matching USDA food codes from USDA's
Child Nutrition food label collection (CN labels).
---------------------------------------------------------------------------

\19\ As with the baseline estimate, we prepared separate
estimates of meals served under the final rule for breakfast and
lunch.
---------------------------------------------------------------------------

CN labels are affixed to many of the commercially prepared and
processed foods purchased by school food authorities. The labels
provide information on serving size and the number of cup and ounce
equivalents of meat, meat alternate (such as cheese, eggs, legumes, or
soy protein), grains, or vegetables that schools may credit toward
current reimbursable meal pattern requirements.\20\ We averaged the
crediting information for several varieties within each combination
food category to generate representative food credits for the category.
---------------------------------------------------------------------------

\20\ Many large commercial food vendors prepare their own CN
labels to help market their foods to SFAs. Other labels are
developed by USDA.
---------------------------------------------------------------------------

CN labels are not available for some combination foods. However,
foods with similar descriptions are often found in USDA's recipe
database. The USDA recipe database provides the same type of food
crediting information found on CN labels. We used the crediting
information from the recipe database when CN labels were unavailable
for sampled combination foods. FNS averaged the crediting information
from labels and recipes when both sources returned data for particular
combination foods.

[[Page 4120]]

CN labels and USDA recipes do not indicate whether creditable grain
servings are refined or whole grains, nor do they specify what fraction
of creditable vegetable servings are satisfied by dark green, deep
yellow, starchy, or other varieties. But, USDA's MyPyramid database
breaks down total grain and vegetable content for given foods into
those subcategories or varieties. We matched USDA food codes for the
sample of combination foods against the MyPyramid database in order to
estimate relative shares of whole and refined grains, and vegetable
varieties for the combination foods served.\21\
---------------------------------------------------------------------------

\21\ Because CN crediting values and MyPyramid equivalents are
not the same, information from the MyPyramid database was used only
to determine relative shares of vegetable or grain subtypes. FNS
also used the MyPyramid database to determine if particular
combination foods contained any dark green vegetables, orange
vegetables, etc.
---------------------------------------------------------------------------

With these average food credits, and with unit prices from the
SLBCS-II, we estimated a price per creditable ounce or cup equivalent
of meat, grain, vegetable, and fruit for each combination food served.
We then computed a weighted average price per food credit for
combination foods as a whole, using the SLBCS-II's relative gram weight
of each item. Finally, we multiplied the average price and food credit
per gram by SNDA-III's total gram weight of combination foods served
per reimbursable meal at the elementary, middle, and high school
levels.
These steps generate a price, and a set of food group credits,
contributed by combination foods to the average elementary, middle, and
high school lunch and breakfast.
We subtracted the food credits accrued by combination foods from a
set of school-level food group targets that represent the requirements
of the rule after adjustment for student selection. Under the final
rule, as under current program rules, students need not take all of the
food items offered to them in order for their lunch or breakfast to
qualify for Federal reimbursement. The difference between what is
offered to students and what they select is the ``take rate.'' We
computed average take rates by school level for milk, meat/meat
alternate, fruit, vegetables, and grains from SNDA-III and applied
those rates, unchanged, to the final rule's food group requirements
from Tables 4 and 5.\22\
These adjusted requirements are estimates of what elementary,
middle, and high schools are likely to serve to students after
implementation of the rule. The unadjusted requirements are what
schools must offer to their students to be in compliance.
---------------------------------------------------------------------------

\22\ Our take rates are weighted averages computed from all
school level records on SNDA-III. SNDA data allows the computation
of take rates for single food items and combination entrees. We use
estimates of the component foods contained in combination entrees to
estimate overall take rates for each of the final rule's food
groups, whether those foods are served separately or as part of a
combination entr[eacute]e. We cap individual school take rates for
any food group at 100%. We assume that these take rates remain
unchanged after implementation of the rule for two primary reasons:
lack of an evidence-based alternative, and to avoid understating the
costs of the rule.
---------------------------------------------------------------------------

The take-rate adjusted requirements not satisfied by combination
foods must be met with single offerings of meat or meat alternates,
grains, fruit, vegetables, and milk. We computed weighted average
prices for these broad food groups, and for dark green, deep yellow and
other vegetable varieties, from the SLBCS-II dataset. We estimated the
cost of whole grains relative to all grain and bread products with
information contained in a food price database developed by USDA's
Center for Nutrition Policy and Promotion. The prices per unit of these
foods, multiplied by the balance of the rule's requirements that are
not met by combination foods, give a total cost per meal for single
item foods.
Note that this analytic framework uses an identical set of
combination foods in the baseline and final rule cost estimates; we do
not attempt to construct a reformulated set of combination foods to
satisfy the rule's requirements for whole grains or dark green, yellow,
and other vegetable varieties. The deficits in whole grains and in dark
green and other vegetable varieties are satisfied entirely through
increased offerings of single foods.\23\ As a result, the cost per unit
of combination foods served is unchanged in the baseline and under the
final rule, and the entire cost of meeting the new rule's requirements
is reflected in the cost of single foods.
---------------------------------------------------------------------------

\23\ The amount of refined grains in combination foods in excess
of final rule requirements are offset by subtracting the value of an
equivalent amount of single food refined grain products from the
rule's per-meal cost.
---------------------------------------------------------------------------

In practice, we expect manufacturers will offer reformulated
versions of popular combination foods, and that schools will
incorporate more whole grains and vegetable varieties in their entree
recipes, so that students will not be expected to consume all of their
whole grains and healthier vegetables as single foods. Implicit in this
modeling approach is the assumption that the cost of serving more whole
grains and vegetable varieties is similar, whether those foods are part
of combination recipes or single items. The reasoning behind this
assumption is that the likely effect of these reformulations on the
cost of combination foods is uncertain. While some varieties of
combination foods may help schools meet the new requirements at lower
cost than single foods, others may be developed to provide greater
student acceptance or ease of preparation than single items. These
products could command higher prices. We thus assume that, on average,
these two propensities combine to result in no net difference in the
cost of whole grains and vegetable varieties as combination foods or as
single items.\24\
---------------------------------------------------------------------------

\24\ Note that we are only referring to the incremental cost of
foods above the quantities already purchased by schools (singly or
in combination items), not the overall cost of all foods in the
final rule's meal patterns.
---------------------------------------------------------------------------

The final rule requires that no more than half of the fruit
requirement be met with fruit juice because juice lacks fiber and may
contribute to excessive calorie consumption. Schools may therefore find
it necessary to offer more whole or cut-up fruit relative to fruit
juice than they offer today. For this reason, this cost estimate
assumes that the rule's entire increase in the fruit group requirement
will be satisfied with additional servings of whole or cut-up fruit;
the estimate assumes that schools will serve no more fruit juice to
students under the final rule than they serve today. As a result, there
is no added cost for fruit juice in Table 11.
The methodology outlined above generates a set of per-meal cost
estimates for breakfast and lunch under the requirements of the final
rule. Like our baseline estimates, these are multiplied by weighted
food group inflation factors, then multiplied by the projected number
of meals served to generate projected aggregate costs through FY 2016.
Labor costs: Compliance with this rule is also likely to increase
labor costs because of the need for more on-site preparation, and less
reliance on prepared foods, than current requirements. The challenge
faced by schools in reducing the sodium content of school meals, one
element of both the IOM recommendations and this rule, illustrates the
need for additional labor hours by school kitchen staff.
More local food preparation and the use of a greater proportion of
fresh foods and frozen vegetables could result in acceptable school
meals with a lower sodium content. However, many food production
kitchens are designed to heat and hold food items rather than to
prepare them.\25\
---------------------------------------------------------------------------

\25\ IOM 2009, p. 110.
---------------------------------------------------------------------------

In addition to the implied need for new kitchen equipment, IOM
notes that

[[Page 4121]]

``switching from heat and hold to food production requires the addition
of staff. Those districts that estimate meals per labor hour (MPLH) to
monitor productivity may see an unfavorable decrease in their
numbers.'' \26\
---------------------------------------------------------------------------

\26\ Ibid.
---------------------------------------------------------------------------

If schools choose to prepare more meals on-site to meet new
requirements, IOM sees the need for ``greater managerial skill,'' and
``more skilled labor and/or training.'' \27\ At the same time, lesser
reliance on prepared foods offers some opportunity for offsetting
savings.
---------------------------------------------------------------------------

\27\ IOM 2009, p. 148.
---------------------------------------------------------------------------

An empirical analysis of data from 330 Minnesota school districts
found that ``healthier'' meals had higher labor costs (for on-site
preparation) but lower costs for processed foods (Wagner, et al.,
2007). The authors call for funds to be made available for labor
training and kitchen upgrades. They suggest that higher federal meal
reimbursement rates may be unnecessary (under the assumption that the
meals do not cost more to produce because lower food costs offset
higher labor costs).\28\
---------------------------------------------------------------------------

\28\ Ibid.
---------------------------------------------------------------------------

The effect of the final rule's meal requirements on the mix of food
and labor costs is unclear. The rule requires schools to offer
relatively more foods with higher unit costs than schools now offer to
their students. The rule requires, for example, that schools replace
many of their refined grain foods with whole grain substitutes. Because
prices for whole grain products tend to exceed the prices of similar
products made with refined grains, savings from eliminating a
particular refined grain product is more than offset by the cost of its
whole grain counterpart. Where pre-baked whole grain foods are simply
substituted for pre-baked refined grain products, or whole grain flour
is substituted for refined flour in existing recipes, the added cost of
serving these new foods is strictly a food cost; labor costs may not
increase at all.
But the rule includes other provisions that are likely to increase
both food and labor costs. One is the requirement that schools offer
more vegetables, from a variety of vegetable subgroups, than schools
tend to offer today. Some schools may choose to meet those targets by
offering vegetables in school salad bars. It is possible that the cost
of installing and maintaining a salad bar could increase the overall
cost of school meal production. Similarly, to meet the rule's calorie
and fat requirements, schools may find it necessary to rely less on
pre-purchased entrees, and hire more central kitchen or cafeteria
workers to prepare healthier meals from scratch.
SLBCS-II data show that the cost of purchasing food accounted for
45.6 percent of SFA reported costs, on average. Labor accounted for an
additional 44.5 percent of reported SFA costs. The remaining 9.9
percent of reported costs are attributable to ``supplies, contract
services, capital expenditures, indirect charges by the school
district, etc.'' \29\ Labor costs are broadly defined in the SLBCS-II
to include the costs of foodservice administrative tasks such as
planning, budgeting, and management, and foodservice equipment
maintenance.\30\ Some of these tasks are detailed in section III.C.1.
These tasks include training food preparation staff, servers, and
cashiers. They also include the work of individuals who plan menus and
prepare recipes.
---------------------------------------------------------------------------

\29\ USDA 2008, p. 3-5
\30\ USDA 2008, p. 3-9
---------------------------------------------------------------------------

For purposes of this analysis, we assume that the relative
contributions of food and labor to the total cost of preparing
reimbursable school meals will remain fixed at the levels observed in
the SLBCS-II. As a result, we estimate that labor costs increase on a
nearly dollar for dollar basis with estimated food costs.\31\ We
estimate that the rule may increase schools' food costs by about 8
percent by FY 2015. Although labor costs relative to food costs have
held steady over many years,\32\ this approach may overstate labor
costs. We explore the potential effect of labor costs growing at a
somewhat lower rate in section F.
---------------------------------------------------------------------------

\31\ The estimates contained in this analysis assume labor costs
equal to food costs multiplied by (44.5/45.6), the ratio of reported
labor to food costs in the SLBCS-II.
\32\ Labor costs as a share of the total costs of preparing
school meals were found to be 43.8 percent in FNS's SY 1992-1993
School Lunch and Breakfast Cost Study I, and 44.5 percent in the SY
2005-2006 School Lunch and Breakfast Cost Study II (a statistically
insignificant difference). Food costs as a percent of total costs
grew slightly from 45.6 percent in SY 1992-1993 to 48.3 percent in
SY 2005-2006. But this change, too, is statistically insignificant.
USDA 2008, p. 9-2.
---------------------------------------------------------------------------

Food and Labor Cost Summary: Table 10 summarizes the estimated
increase in food and labor costs associated with the final rule through
FY 2016.\33\ (The final two rows of Table 10 also include the estimated
administrative costs to State agencies.) Overall, we estimate that the
rule may increase the total cost of reimbursable school meals by $3.2
billion over five years; the cost of food would increase by $1.6
billion, and the cost of labor would increase by $1.6 billion. In the
first year of full implementation (FY 2015),\34\ the combined cost of
food and labor is expected to be about 8 percent higher under the final
rule than under existing requirements. The estimated additional cost of
food for a reimbursable lunch increases from about 2.5 cents in FY 2012
to 5.4 cents in FY 2016; food costs for a reimbursable breakfast grow
to 14.1 cents in FY 2016. These per meal increases roughly double--to
11 cents and 28 cents by FY 2016--when the estimated cost of labor is
included.
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\33\ The new standards will take effect at the start of SY 2012-
2013. Because the 2012-2013 school year begins in July 2012, there
is just a small cost in Federal FY 2012. Note that these figures
assume no effect on student participation. We discuss the possible
effects of the rule on student participation in section III.F. We
examine the effect of alternate participation assumptions in section
F.
\34\ Two years after implementation of the rule, in SY 2014-
2015, all grains servings offered to meet meal pattern requirements
must be whole grain rich. The new minimum fruit requirement at
breakfast also takes effect in SY 2014-2015; this is the last of the
rule's major changes to the breakfast meal patterns.

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[[Page 4122]]

[GRAPHIC] [TIFF OMITTED] TR26JA12.005

3. Food Cost Drivers
Table 11 provides a breakdown in the estimated food costs of the
final rule by seven broad food categories. Consistent with the Dietary
Guidelines, the rule will require schools to offer more fruits,
vegetables, and whole grains than they currently offer today.
Changes in school demand also impact food producers. The figures in
Table 11 indicate that the economic costs and benefits of the rule may
not be shared equally by producer groups.

[[Page 4123]]

[GRAPHIC] [TIFF OMITTED] TR26JA12.006

Milk: This impact analysis estimates that the amount of milk served
to students will not change after implementation of the rule.\35\
However, the rule does require schools to serve only low-fat or fat-
free milk in the school meals programs.\36\ Because the per-unit cost
of low-fat and fat-free milk is less than the average per-unit cost of
the mix of milk products now served in schools, the estimated cost of
serving milk under the rule is reduced. Some comments on the proposed
rule noted that schools had already made the transition to fat-free and
low-fat milk, and that there would be no savings as a result of this
provision. We discuss this and other comments in Section E.
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\35\ See section F. for an examination of the cost implications
of altering this assumption.
\36\ This provision is required by Section 202 of the HHFKA and
has already taken effect. Through implementation memo SP-29--2011,
dated April 14, 2011, schools were required to offer a variety of
milk that meets Dietary Guidelines recommendations. The USDA
implementation memo clarifies that schools must offer at least two
fat-free or low-fat (1 percent milkfat) varieties effective with the
start of SY 2011-2012. This final rule includes the additional
requirement that flavored milk be offered in fat-free form only.
---------------------------------------------------------------------------

Fruit Juice: The estimate assumes that schools will satisfy the
rule's increased fruit requirement entirely through additional servings
of whole or cut-up fruit, not fruit juice. We expect that schools will
have to encourage consumption of additional whole or cut-up fruit in
order to satisfy this requirement. The cost estimate assumes that the
amount of fruit juice served to students will not increase above the
levels assumed in the baseline estimate. As a result, the relative
share of whole or cut-up fruit to fruit juice servings offered to (and
taken by) students will increase after implementation of the rule.
Grains: The rule initially requires that half of grains offered to
students be whole grain rich. Beginning in SY 2014-2015, the rule
requires that all grains served be whole grain rich. This transition is
reflected in the large changes in both the whole grain and refined
grain figures between FY 2014 and FY 2016.
This analysis estimates that the total amount of grain products
served will be less after implementation of the final rule than the
amount served in our baseline (the per-meal amount taken by students
according to SNDA-III). The effect of this net reduction in total
grains served is reflected in figures for fiscal years 2012 to 2014,
where the cost decrease for refined grains is substantially greater
than the cost increase for whole grains. Throughout the estimation
period, we assume that the unit cost of whole grains exceeds the unit
cost of comparable refined grain products. Despite this, the net
reduction in total grain products served through FY 2014 more than
offsets the increased unit cost of whole grains. After FY 2014, when
the rule's 100 percent whole grain rich requirement takes effect, the
added cost of serving higher priced whole grain products about equals
the savings from a reduction in grains products served.
4. Comparison of FNS and IOM Cost Estimates
IOM prepared its own food cost estimate for its recommended meal
pattern changes. The methodology behind that estimate is discussed in
School Meals: Building Blocks for Healthy Children (IOM 2009). While
IOM relies on SLBCS-II and SNDA-III, the same primary sources used by
FNS, to estimate unit costs and baseline quantities served, its
methodology differs from ours in several ways.
Perhaps the most significant difference is in the establishment of
baselines. We used all records on the SNDA-III dataset to estimate
baseline quantities of food served and student take rates. IOM limited
its analysis to a set of six representative baseline menus selected
from the SNDA-III dataset. IOM selected one 5-day lunch menu and one 5-
day breakfast menu for each of three age-grade groups (elementary,
middle, and high school) at random from a subset that excluded
practices identified as uncommon.\37\ The goal of both methodologies is
to estimate a baseline food cost representative of all schools that
participate in the Federal school meals programs. We have not attempted
to isolate and quantify the effect of this methodological difference on
our cost estimates. Another important difference between the IOM and
FNS estimates is our use of different student take rates in preparing
food cost estimates for the recommended meal patterns. We computed take
rates from SNDA-III and applied them, largely unchanged, to the food
group serving requirements of the final rule.\38\ We do not increase
take rates in anticipation of greater demand for better meals, nor
reduce take rates in anticipation of a decline in student acceptance of
new vegetable varieties, whole grains, or low fat milk relative to the
starchy

[[Page 4124]]

vegetables, refined grains, and higher fat milk on current school
menus.\39\ IOM modified observed take rates from SNDA-III where the
expert judgment of committee members and school meal practitioners
deemed it appropriate.\40\ Additional differences in FNS and IOM take
rates can be attributed to IOM's use of six representative school menus
in its analysis; IOM computed its take rates from those schools alone.
FNS take rates are computed from all schools on the SNDA-III dataset.
---------------------------------------------------------------------------

\37\ IOM excluded menus that did not offer a reduced fat or fat
free unflavored milk, offered only one entree, offered 15 or more
entree options, offered juice drinks rather than 100% fruit juice,
or offered dessert every day. IOM 2009, p. 307
\38\ FNS caps individual school take rates at the food group
category to 100 percent. We also attempt to include the contribution
of component foods in combination entrees in our estimates of take
rates for the major food groups (fruit, milk, vegetables, grains,
and meat/meat alternates).
\39\ As discussed elsewhere in this impact analysis, our take
rate assumptions are intended to avoid understating the cost of the
rule given the uncertain response of both students and school
foodservice workers to the new meal pattern requirements. We test
the cost implications of adopting different take rates in section F.
\40\ IOM 2009, p. 136.
---------------------------------------------------------------------------

C. Administrative Impact

1. School Food Authorities (SFA)
An initial increase in administrative staff time for training and
implementation is anticipated at the SFA level. Most of these impacts
will be limited to the transition to the rule's new requirements as a
result of:
Training staff on the required components of reimbursable
lunches and breakfasts;
Changes to menus and portion size may necessitate
revisions to menus and recipes currently used by SFAs;
Changes to food purchasing and commodity food use (for
example, increasing purchases for fresh fruit and vegetables, whole
grain products, and lower sodium products), as well as changes in the
methods of preparation of food, may be necessary for many schools;
Changes in SFA financial structure, as SFAs may need to
review finances in order to determine how to deal with any cost changes
associated with the rule's requirements;
Forging new relationships with local farmers to supply
fresh produce appealing to the tastes of school children; and
Modifying a la carte foods and other foods at school to
maintain NSLP and SBP participation rates.
The rule also increases the scope of State Agency administrative
reviews of SFAs by combining the current Coordinated Review Effort
(CRE) with the requirements of School Meals Initiative (SMI) reviews,
and increases their frequency to once every three years. SFAs that
previously held separate CREs and SMIs may experience a decrease in
burden, because they will undergo just one State Agency administrative
review every three years, rather than two reviews (one CRE and one SMI)
every five years.
FNS expects these additional burdens on SFA staff time and budgets
may be offset by other benefits. For instance, new age/grade groupings
would require school districts to offer different portion sizes instead
of the same portions to all ages/grades. While this could be an
additional burden to some SFAs, it could also reduce plate waste with
use of more appropriate age/grade groupings. Moreover, it is expected
that, as food service workers gain experience and become comfortable
with the new requirements, administrative efforts associated with
implementation may decline. Therefore, although an initial
administrative impact is anticipated, FNS does not expect any
significant long-term increase in administrative burden.
2. State Agencies
State Child Nutrition Agencies (SAs) play a key role in the
implementation of school meal programs through their agreements and
partnership with local SFAs. FNS anticipates that SAs that administer
the school meals programs will work closely with SFAs to meet the
requirements of the rule, and to remove barriers that may hinder
compliance.
Many changes associated with implementation of the rule may result
in an increased burden and additional required level of effort from
States, such as:
Training and technical assistance: SAs will provide
training and technical assistance to SFAs on new calorie and meal
pattern requirements, age/grade groupings, and revised nutrient
requirements. Moving to a single, food-based menu planning system may
simplify the meal service for some schools and will likely streamline
the meal planning process, but may require initial training to
accomplish.
Although SAs may meet most of this demand by modifying current
training and technical assistance efforts, we recognize that SAs may
incur additional costs assisting SFAs with the transition to the final
rule requirements. Our cost estimate provides for an additional 80
hours per SA in each of fiscal years 2012 and 2013, for a total of $0.2
million.
Systems assistance: SAs may assist SFAs with any changes
in the meal planning process occurring as a result of this rule. This
is included in our $0.2 million estimate for training and technical
assistance.
Food procurement and preparation: More fruits, vegetables,
whole grains, and foods that are lower in sodium may be necessary to
align meals with the new meal patterns. SAs may also review SFA
contracts with food service management companies (FSMCs). We have not
estimated this cost, but expect that it will be small.
Monitoring and compliance: SAs will be required to conduct
administrative reviews (formerly CREs and SMIs) more frequently, once
every 3 years for each SFA beginning in SY 2013-2014. Nutrient analysis
will be required for all SFAs and will become an additional component
of each review (separate SMIs will be eliminated). Nutrient-based menus
will be eliminated and only food-based menu planning will be permitted.
The final rule drops the proposed rule requirement to require
administrative reviews to cover two weeks of menus and production
records; instead, the final rule keeps the current one week review
requirement. The final rule, like the proposed rule, would include
breakfast in SA administrative reviews.\41\
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\41\ FNS estimated in 1994 that extending the SFA review cycle
from four to five years would decrease costs associated with this
effort by 20 percent. (June 10, 1994, Federal Register Vol. 59, No.
111, p. 30234) A similar, but opposite, effect might be expected
from shortening the cycle from five to three years.
---------------------------------------------------------------------------

SAs are currently required to conduct a CRE for each SFA once every
5 years; to conduct a nutrient analysis via SMI review for only those
SFAs with food-based menu planning systems (although approximately 30
percent of these SFAs elect to conduct the nutrient analysis
themselves); to review menus from a one-week period preceding the
review date; and to review a breakfast meal only in the case of a
follow-up CRE (which is only conducted in those cases in which problems
are noted in the initial CRE). Total costs for each SA to complete a
CRE include costs for staff labor, travel (including transportation,
accommodations, and meals/incidental expenses), and possible printing
costs for those SAs that provide CRE results to SFAs and FNS in hard
copy rather than electronically.
Limited discussion with a small number of SA and FNS Regional
Office officials suggest that a typical CRE or SMI review costs about
$2,000 in 2010, with about half of that cost used for staff travel.
Because travel is a largely fixed cost, SAs that previously conducted
separate CRE and SMI reviews should realize some savings once SMIs are
ended and the nutrient analysis is made part of the consolidated
administrative review. That may help offset some of the cost of
increased review frequency. A mid-sized State that now conducts 100 CRE
reviews might incur annual

[[Page 4125]]

expenses of $200,000. Under the final rule, that SA could expect to
conduct \2/3\ more administrative reviews, or roughly 167 per year. If
we assume conservatively that the SA realizes no savings from
elimination of SMI reviews, its review costs would increase by $134,000
per year--an upper-bound estimate. If all SAs incurred this same
expense, the total cost would be roughly $8 million per year by FY
2013.
3. USDA/FNS
FNS will assist State Agencies by providing nutrition education,
training, guidance, and technical assistance to facilitate their work
with local school food professionals. This may include developing
training standards, materials, updated measures for nutrition analysis,
and revisions to the food buying guide.
While we expect a small increase in administrative burden for FNS
under the rule because of the need to provide additional training and
technical assistance to SAs, and to support their role in the
administrative review process, this may largely be met by adapting
existing efforts to the new requirements.

D. Food Service Equipment

Changes in meal pattern requirements may require some SFAs to
replace or purchase additional foodservice equipment. For example, some
SFAs may need to replace fryers with ovens or steamers. In FY 2009, FNS
solicited requests from SFAs for food service equipment grants. In
response to its solicitation, FNS received a total of approximately
$600 million in grant requests from SFAs. FNS awarded grants for such
purposes totaling $125 million, using $100 million from funds provided
by the 2009 American Recovery and Reinvestment Act (ARRA) and $25
million provided by the FY 2010 Agriculture Appropriations Act. The
strong response to these grant programs indicates that schools could
make productive use of an even greater investment in kitchen equipment.
FNS awarded grants for such purposes totaling $125 million, using $100
million from funds provided by the 2009 American Recovery and
Reinvestment Act (ARRA) and $25 million provided by the FY 2010
Agriculture Appropriations Act. However, much of that demand is
associated with the routine need to replace equipment that is nearing
the end of its useful life--a cost that is appropriately covered by
USDA meal reimbursements and other sources of food service revenue.
Although some schools may need additional upgrades to prepare meals
that meet the new standards, we do not have the data necessary to
assess that need or to estimate the associated cost. The $125 million
in kitchen equipment grants distributed to schools through ARRA funds
and the FY 2010 appropriation should have addressed much of the most
pressing need. For these reasons, we do not include additional
incremental equipment costs in our final rule estimate.
Our decision not to include an additional equipment cost in our
proposed rule estimate generated comments from school officials and
foodservice industry representatives. Those comments do not provide
enough information on which to base a reliable estimate of the need for
additional kitchen equipment as a result of the rule. The comments
confirm that the need, where it exists, will vary significantly.
Although we cannot reliably estimate the aggregate cost of meeting the
need for additional equipment, we provide one estimate in the Section F
below. Additional detail on the comments received from schools and the
foodservice industry on this point is discussed in Section E.

E. Comments on Proposed Rule

As noted in the preamble to the final rule, USDA received more than
130,000 comments on the proposed rule. Comments on the content of the
rule itself are discussed in the preamble. Other comments, addressed
specifically to the proposed rule's impact analysis, are discussed
here.
a. Proposed Rule is Too Costly
Many commenters expressed concern that the proposed rule was too
costly. Schools and school districts would not be able to meet the
proposed rule's meal standards without additional resources from
Federal, State, or local governments. Some of these commenters noted
that the cost of the proposed rule exceeded the 6 cents per lunch that
would follow adoption of the new meal requirements. Many also noted
that State and local governments were not in a position to provide
school districts with additional funding. The result, some commenters
warned, was that schools might stop serving reimbursable breakfasts
under the SBP. Other commenters suggested that schools might even stop
serving reimbursable NSLP lunches.
In response to these comments, the final rule modifies the proposed
rule's meal pattern requirements. The effect of those modifications is
to reduce the cost to schools and SFAs of implementing the rule. The
modifications are discussed in detail in the rule, and summarized in
Section II of this impact analysis. The modifications offer schools
short term savings, relative to the proposed rule, by phasing in the
rule's breakfast fruit and grain requirements. As a result of
elimination of the proposed rule's breakfast meat requirement, the
ongoing cost of the final rule after full implementation is also
reduced.
Eliminating the proposed limit on the amount of starchy vegetables
that schools may offer at lunch has little effect on the cost of the
final rule relative to the proposed rule. Significant savings are
realized through a reduction in the lunch pattern's grain requirement.
Part of the difference in the estimated 5-year costs of the
proposed and final rules is due to lower projected food cost inflation
and increased student participation since preparation of the proposed
rule estimate. To facilitate comparison of the estimated costs of the
proposed and final rules, we prepared two estimates of the final rule's
provisions. The first uses the most current food inflation and student
participation figures; this is our primary estimate summarized in Table
6. The second applies the same food inflation and student participation
estimates that we used in our proposed rule cost estimate. That is, we
use the projections of food inflation for years after FY 2009 that we
developed for the proposed rule. (Our primary estimate for the final
rule uses actual inflation through August 2011, and an updated
projection for years after FY 2011.) The difference between this second
estimate and the estimated cost of the proposed rule provides a more
direct measure of the reduction in cost due to changes in the content
of the proposed and final rules. Using that difference as our basis of
comparison, the final rule reduces costs over the first 5 years by
almost $3 billion, or 44 percent, as compared to the proposed rule.

[[Page 4126]]

Table 12--Reduction in Estimated Cost of Final Rule Relative to Proposed Rule
----------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------------------------------------
2012 2013 2014 2015 2016 Total
----------------------------------------------------------------------------------------------------------------
Proposed rule..................... $181.5 $1,246.8 $1,401.9 $1,923.8 $2,041.3 $6,795.2
Final rule--primary estimate...... 41.6 286.2 362.1 1,220.2 1,279.7 3,189.9
-----------------------------------------------------------------------------
Difference.................... -139.8 -960.6 -1,039.7 -703.6 -761.6 -3,605.3
Proposed rule..................... $181.5 $1,246.8 $1,401.9 $1,923.8 $2,041.3 $6,795.2
Final rule--with proposed rule 53.5 376.0 474.8 1,419.0 1,511.1 3,834.5
inflation and participation
estimates........................
-----------------------------------------------------------------------------
Difference.................... -127.9 -870.6 - 927.0 -504.8 -530.2 -2,960.7
----------------------------------------------------------------------------------------------------------------

In response to comments that an additional 6 cents per reimbursable
lunch \42\ falls short of our estimated per meal cost of the proposed
rule, we point out that the HHFKA contains a comprehensive package of
school lunch and breakfast reforms. These reforms are intended to both
increase the quality of school meals and competitive school foods
offered to students, and to address financial and funding issues. These
latter provisions are expected to increase the amount of revenue
generated by SFAs while eliminating the subsidization of paid lunches
and non-program foods with Federal funds meant to support reimbursable
meals generally, and meals served to free and reduced-price eligible
children in particular. The impact analysis contained in the interim
final rule prepared for Sections 205 and 206 of HHFKA estimates that
those provisions will increase SFA revenues by $7.5 billion through FY
2015.\43\ HHFKA section 205 is designed to gradually reduce the
disparity in per-meal school revenue from reimbursable paid lunches
relative to the per-meal Federal reimbursement for free lunches.
Section 206 requires schools to increase the share of SFA revenue
generated by nonprogram foods to a level at least as great as
nonprogram food's contribution to total SFA food costs.
---------------------------------------------------------------------------

\42\ Section 201 of HHFKA provides an additional 6 cents to
schools for each NSLP lunch that meets this rule's meal pattern
requirements.
\43\ Federal Register, Vol. 76, No. 117, pp. 35301-35318.
---------------------------------------------------------------------------

b. Costs Are Understated
Some commenters felt that the cost estimate presented in the
proposed rule is understated. As we describe in Section III.B.2., our
methodology relies primarily on data collected by USDA in SNDA-III to
estimate the types and quantities of food offered by schools to program
participants. SNDA-III collected information from schools in SY 2004-
2005. We believe that our use of the data from that study, which is
several years old, presents a greater risk of overstatement than
understatement of the cost of the rule, holding other factors constant.
The Dietary Guidelines Advisory Committee completed its 2005 report in
August 2004, just as SY 2004-2005 began. The 2005 Dietary Guidelines
policy document was released by the U.S. Department of Health and Human
Services and USDA in January 2005. These documents were released as
SNDA-III data was being collected--too soon for substantial changes
prompted by the Dietary Guidelines to be reflected in meals offered to
students.
In the years since data was collected for SNDA-III, schools and
USDA have taken steps to bring school meals into closer compliance with
the 2005 Dietary Guidelines. One example, cited by IOM, is the recent
improvement in USDA Foods offered to schools through the USDA's
commodity programs.\44\ These changes provide schools with an increased
variety of whole grain, low fat, and low sodium products for use in
healthier school meals. Other changes have been initiated by schools.
The School Nutrition Association's 2010 ``Back to School Trends
Report'' highlights some of the most recent changes that schools are
making in anticipation of new Federal standards: \45\
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\44\ ``The [USDA] Commodity Program has made substantial
improvements in its offerings in recent years to become better
aligned with Dietary Guidelines for Americans and to be more
responsive to its `customers.' '' (IOM 2009, p. 188)
\45\ This is just a summary of recent changes adopted by
schools. Schools have been moving toward 2005 Dietary Guidelines
standards over several years.
---------------------------------------------------------------------------

95% of schools districts are increasing offerings of whole grain
products.
90.5% are increasing availability of fresh fruits/vegetables.
69% of districts are reducing or eliminating sodium in foods.
66% of districts are reducing or limiting added sugar.
51% of districts are increasing vegetarian options.\46\
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\46\ Figures taken from the SNA's Web site (http://www.schoolnutrition.org/Content.aspx?id=6926, accessed 10/10/11).
---------------------------------------------------------------------------

Our use of SNDA-III data means that our cost estimate does not
reflect the most recent progress that schools have made toward adoption
of Dietary Guidelines recommendations. At least one non-profit
organization offered a comment on the proposed rule that concurs with
that assessment. The commenter's primary point was that we overstate
the savings from replacing more expensive high fat milk with less
expensive low fat and fat free varieties; the commenter notes that many
schools have already made that transition. We acknowledge that the
potential savings of the final rule's milk provision may be overstated
in our cost estimate. But that savings is potentially overstated for
the same reason that the costs of meeting the rule's other food group
requirements may be overstated. Schools have taken recent steps to
adopt Dietary Guidelines recommendations on vegetables, fruit, whole
grains, and sodium; schools' gradual adoption of Dietary Guidelines
recommendations has not been limited to milk. Because our projected
savings from the rule's milk provision is much lower than our projected
cost of the rule's vegetable, fruit, and whole grains provisions, we
believe that the risk that we overstate the cost of the rule exceeds
the risk that we understate its cost.
c. Analysis Does Not Capture Full Effect of Recent Food Inflation
Some commenters argued that we understated or did not adequately
account for food inflation in our proposed rule cost estimate. Both our
proposed and final rule cost estimates use food group specific
inflation figures from the BLS to estimate current year prices (FY 2011
prices for the final rule analysis) from a set of baseline prices paid
by schools in SY 2005-2006 (taken from the SLBCS-II). Both analyses use

[[Page 4127]]

those current year estimates to project prices through FY 2016.
In our final rule estimate we use a 7-year historic average of food
inflation, by food group, to project prices. Our proposed rule estimate
used a 5-year historic average to inflate food costs. In developing our
final rule estimate we recognized that actual food price inflation
since we prepared our proposed rule estimate was substantially lower
than inflation over the previous 5 years. We adopted a 7-year historic
average in our final rule cost projections in order to temper the
effects of relatively low recent food price inflation. This yields a
slightly higher estimate for our final rule than we would have gotten
had we used an updated 5-year average projection factor. We do this to
avoid the risk of understating the cost of the final rule.
d. Analysis Does Not Account for Higher Costs of Healthier Foods
Some commenters referred specifically to the higher costs of whole
grains and vegetables emphasized by the rule. Others referred to the
additional costs necessary to produce low-sodium school meals. We
address these separately.
Higher Prices for Food Groups Emphasized by the Rule
Our proposed rule and final rule cost estimates develop separate
prices for each of the food subgroups with specific standards in the
rule. For example, we estimate separate prices for whole grains and
refined grains, for whole fruit and fruit juice, and for the dark
green, red-orange, starchy, and ``other'' vegetable subgroups. In each
of these cases, we estimate higher unit prices for the food subgroups
emphasized by the rule. In some cases the price premium for these food
subgroups may reflect lower supply in the school food marketplace. As
industry increases the supply of these products in response to higher
school demand, economies of scale may reduce their cost. Our cost
estimates for both the proposed and final rules discount the
possibility that prices for these foods may moderate over time. Again,
we do this to avoid understating the cost of the rule.
Added Cost of Producing Meals With Less Sodium
The proposed rule's first intermediate sodium targets were designed
to be met by schools through menu and recipe changes using currently
available foods. The proposed rule's second intermediate target was
designed to be met with the help of the food industry through changes
that can be met with current food processing technology. The proposed
rule analysis stated that ``a reduction in sodium can be achieved at
minimal cost, at least over the short term, when sodium requirements
are only partially phased-in.'' But the analysis also noted that
meeting the rule's sodium targets would likely require replacing some
packaged foods with foods prepared from scratch. To clarify, we
recognize that meeting even the first sodium target has some cost;
however, we do not estimate that as a separate component cost in either
the proposed or final rule analyses. Much of the cost of meeting the
proposed and final rules' short term sodium targets is contained in the
cost of substituting prepared foods for foods cooked from scratch in
schools or central kitchens. We account for this in our labor cost
estimate. Our proposed and final rule analyses estimate that labor
costs will rise nearly dollar for dollar with food costs. Over 5 years,
the final rule estimates that labor costs will increase by $1.6
billion.
Our cost estimate extends only through FY 2016, two years before
the final rule's second sodium target takes effect. As a result, we do
not estimate the cost of meeting that target in SY 2017-2018, or the
rule's final sodium target in SY 2022-2023. However, two provisions in
the final rule respond to the challenge of meeting those targets. The
first is a delay in the second intermediate target from 4 years post-
implementation in the proposed rule to 5 years in the final rule.
Lengthening the transition to lower sodium foods is intended, in part,
to facilitate student acceptance. But it also gives industry more time
to develop products that meet the rule's standards. To the extent that
limited supply is a school cost issue, delaying the second intermediate
target to 5 years should help reduce costs. The final rule also
promises USDA review of schools' progress toward the rule's final
sodium target, and allows for modifications to the sodium targets if
necessary.
e. Analysis Understates Need for Additional Equipment and
Infrastructure
School officials and others commented that our proposed rule
analysis understated the need for additional investment in food
preparation and storage equipment as schools move away from a ``heat
and hold'' foodservice model, to a model that relies more on on-site
preparation. Our proposed rule analysis discussed the $125 million for
school foodservice equipment provided to schools through the 2009
American Recovery and Reinvestment Act (ARRA) and the FY 2010
Agriculture Appropriations Act. Although the proposed rule analysis
recognized that the demand for ARRA grants greatly exceeded the amount
available, the analysis noted that much of that demand was driven by
the routine need to replace aging equipment, costs that are
appropriately covered by USDA meal reimbursements and other sources of
food service revenue. The proposed rule analysis did not include an
additional cost tied specifically to meeting the proposed rule meal
patterns.
Some commenters offered estimates of the cost required to equip
schools to produce more foods on site. These costs ranged from $4,000
per school for new equipment, to $500,000 or more for a full kitchen
and serving site renovation (an estimate given by a foodservice
industry representative). Commenters indicated that preparing more
meals on-site would require investment in additional refrigeration
equipment, microwaves and combination ovens, storage space, sinks,
cutting boards and knives. What these comments cannot tell us is the
percent of schools in need of new equipment, or the average per-school
cost to meet that need. If fully half of all schools require
investments averaging $5,000, then the total cost of new equipment
necessary to prepare meals that meet the final rule standards would be
$250 million. In the end, we do not have the data necessary to develop
a reliable estimate of need in excess of the routine costs of replacing
outdated equipment. In Section F we present an alternate cost estimate
of the final rule under a different assumption about the need for
additional investment in school kitchen equipment.

F. Uncertainties

We made several simplifying assumptions in developing this cost
estimate, reflecting gaps in available data and evidence. The most
significant simplifications are discussed in Table 13. In most cases,
our primary estimate reflects conservative assumptions, to avoid
understating the costs of the rule. In this section, we describe the
impact of several alternative assumptions on the estimate. The cost
impacts of these alternatives are presented in Table 14.

[[Page 4128]]

Table 13--Simplifying Assumptions
------------------------------------------------------------------------
Explanation and Implications
Item of Simplifying Assumptions
------------------------------------------------------------------------
Take Rates................................ For each of several food
groups, we used SNDA-III
data to compute average
``take rates'' equal to the
percentage of food servings
taken by students for each
serving offered to them.
Take rates under current
program rules vary by
school, grade level, and
menu planning system. They
are, at best, a rough
predictor of student
behavior under the new
rule, which imposes a
single food-based meal
planning system across all
schools, and requires
schools to offer a mix of
foods somewhat different
than many students are
accustomed to. We apply
these take rates to
generate our final rule
cost estimate. Different
take rate assumptions could
produce higher or lower
cost estimates. Take rates
higher than the ones used
in our estimate imply that
students will select more
foods from menus that meet
final rule standards than
they now select from more
familiar current school
menus; we believe that risk
is reasonably low, at least
in the short term. It may
be more likely that actual
take rates will fall below
our estimates. However, the
possibility of lower take
rates is constrained by the
requirement that students
select enough components to
constitute a reimbursable
meal.
Student Participation..................... The cost estimate assumes no
change in student
participation following
introduction of the rule's
new meal pattern
requirements. However, we
recognize that
participation may increase
due to better meals or
decrease when favorite
school foods are replaced
with unfamiliar or less
appealing options. We chose
not to estimate a
participation effect given
the uncertainty about how
schools will incorporate
new foods into their menus,
and what changes schools
will make to a la carte and
other non-NSLP/SBP
``competitive'' foods,
factors known to affect
NSLP/SBP participation.
Schools have a financial
interest in preserving the
revenue stream that comes
with serving Federally-
reimbursable school meals.
It is also unclear whether
participation effects, if
any, may prove temporary or
permanent. We estimate the
cost of the rule under an
assumption of increased and
reduced student
participation in the
uncertainties section.
USDA Foods................................ We include USDA Foods
(formerly USDA commodities)
in both the quantity and
value of food served in its
baseline and final rule
cost estimates. This
treatment of USDA Foods is
consistent with the SLBCS-
II which includes the value
of USDA Foods in its
computation of the cost of
producing a school meal. We
assume that USDA Foods will
contribute comparably to
the overall cost of
preparing school meals
under current rules and
under the new rule. We
believe it is reasonable to
ignore the value of USDA
Foods in computing the
estimated cost increase of
the rule.
Whole Grains.............................. We apply a single take rate
to both whole grain rich
and refined grain products.
A less conservative
approach would have applied
a lower take rate to whole
grain foods, at least when
offered singly, rather than
as part of a combination
entree. Further, this take
rate is the same take rate
observed in SNDA-III where
the relative share of whole
grain rich products is
lower than the 50 percent
share that schools must
offer in the first two
years of implementation,
and much lower than the 100
percent share that must be
offered thereafter.
Testimony before the IOM
expert committee by
University of Minnesota
Professor Leonard Marquart
documented steps SFAs can
take to phase in whole
grains in a manner that
promotes high take rates.
Labor Rates............................... We assume that the relative
contributions of food and
labor to the total cost of
preparing reimbursable
school meals will remain
fixed at the levels
observed in the SLBCS-II
study. The study found that
the cost of purchasing food
accounted for 45.6 percent
of SFA reported costs on
average, while labor
accounted for 44.5 percent
of reported costs. We
therefore estimate that
labor costs will increase
on a nearly dollar for
dollar basis with estimated
food costs. Our assumption
leads to a substantial
increase in estimated labor
costs, one that assumes
schools may rely less on
prepared foods and more on
on-site preparation.
Nevertheless, USDA received
comments from some
individuals and
organizations indicating
that our proposed rule
understates the likely
increase in labor costs. To
respond to these comments,
we re-estimate the cost of
the proposed rule assuming
a bigger increase in labor
costs in Section F. The
cost estimate developed in
this impact analysis is
based entirely on the cost
of adding or deleting foods
from particular food
groups.
The cost estimate accounts
for current price
differences in whole grains
compared to refined grain
products, fat free and low
fat milk compared to 2
percent or whole milk,
whole fruit compared to
fruit juice, and vegetables
by subgroup. But it does
not account directly for
differences in the costs of
comparable combination
entrees with different
levels of sodium, fat, or
calories. SNDA-III found
that school lunches offered
to students in SY 2004-2005
provided, on average, about
11 percent of calories from
saturated fat. The final
rule would limit this to 10
percent--a relatively
modest reduction.
Macronutrient Requirements and Calories... Our cost estimate does take
into account the added cost
of more fruits and
vegetables. It also takes
into account the cost of
shifting to a wider variety
of vegetables.
Finally, the estimate
accounts for the
replacement of higher fat
content milk with low fat
and skim milk. All of these
steps implicitly
incorporate the cost of
offering lower calorie and
lower fat content meals
into our estimate. We
mention above that that the
first intermediate sodium
target can be achieved with
changes to school menus and
preparation methods using
foods already available in
the marketplace. To the
extent that the rule's
first sodium target
requires more on-site
preparation of meals, we
account for that in our
labor cost estimate. We
estimate that the
additional cost of
acquiring lower sodium
versions of processed foods
to meet the rule's initial
sodium target will be
minimal. This is one of the
very few assumptions that,
if wrong, tends to
understate the cost of the
rule. But, given the
decision to err on the side
of overstating costs when
making most other
assumptions, we believe
that the upside risk to an
error on this assumption is
small.
------------------------------------------------------------------------

a. Change in Participation--2 Percent Increase
As discussed in Table 13 above, we assumed that student
participation would not change following the introduction of new meal
requirements. Table 14 Sections A and B model the effects of altering
that assumption.
Section A estimates the effect of a two percent increase in student
participation on the cost of the rule relative to our primary cost
estimate in Table 6. The dollar figures in Section A are the estimated
cost to schools of preparing all meals served under our baseline
assumption plus an additional 2 percent; the costs are not just limited
to the incremental per-meal costs of the final rule. The additional
meals are eligible for USDA reimbursement at the appropriate free,
reduced price, or paid rates. However, the figures shown in

[[Page 4129]]

Section A are not offset by these increased Federal reimbursements. The
net cost to schools, after accounting for Federal reimbursements, would
be lower. Because these costs reflect the provision of improved meals
to additional children, we would expect a commensurate increase in the
benefits resulting from addition of more fruits, vegetables, and whole
grains to the diets of participating children. This participation
assumption would result in a $1.3 billion increase over the cost of our
primary estimate.
b. Change in Participation--2 Percent Decrease
Table 14, Section B models the effect of a two percent decrease in
participation upon implementation of the new rule. A reduction in
participation reduces the cost of compliance with the rule, relative to
the primary cost estimate in Table 6.\47\ Again, because the cost
reduction reflects the provision of improved meals to fewer children,
we would expect a proportionate decrease in the rule's benefits for
participating children. This reduction in cost is a reduction in the
entire cost of serving 2 percent fewer meals, not just the incremental
per-meal cost of complying with the final rule. Schools would realize a
partially offsetting decrease in Federal meal reimbursements; that
offset is not shown in Table 14. The effect of a 2 percent decrease in
student participation would be to decrease the cost of implementing the
final rule by $1.3 billion.
---------------------------------------------------------------------------

\47\ This reduction in cost comes at the expense of reduced
federal meal reimbursements.
---------------------------------------------------------------------------

c. Higher Rate of Increase in Labor Costs than Food Costs
Our primary cost estimate assumes that the ratio of labor to food
costs will remain fixed at the ratio observed in the SLBCS-II. Because
we estimate a substantial increase in school food costs, our fixed
labor to food cost assumption leads to a substantial increase in labor
costs.
Some increase in labor costs is likely. Schools may find it
necessary to prepare more meals on site to incorporate added vegetables
and whole grains, and to reduce levels of sodium and fat. In addition,
schools are likely to incur additional expense to train foodservice
workers on the new meal requirements. However, commercial suppliers can
be expected to develop and introduce healthier products for the school
market ahead of implementation of a final rule; other products may be
introduced after implementation. Schools may find that new training
replaces some training planned in existing budgets.
At least one change reflected in the final rule is intended, in
part, to help reduce labor costs relative to the proposed rule. The
proposed rule included a separate meat standard for breakfast. The
final rule drops that requirement, preserving schools' ability to serve
meat as a substitute for grains at breakfast, but not requiring schools
to offer meat. USDA expects that this change will support schools that
serve breakfast in the classroom, a model that may require less labor
cost than breakfast served in the school cafeteria.
Although we believe that the risk that we overstate the labor costs
necessary to implement the rule is as likely as the risk that we
understate labor costs, comments received from school officials and
foodservice and nutrition professionals argue that our labor cost
estimate may be too low. Commenters cited the need to hire new kitchen
staff to prepare more meals from scratch as a factor that might change
the current ratio of labor to food costs.
Our primary labor cost estimate relies on the observation that the
ratio of labor to food costs was about the same at two points measured
13 years apart. We acknowledge the uncertainty inherent in the
assumption that this ratio will remain unchanged even as substantial
changes to the meal patterns are implemented by schools. And we
therefore recognize the risk that the absolute dollar cost for labor in
our final rule estimate is too low. If the cost of labor needed to
implement the final rule exceeds the amount in our primary estimate by
10 percent, then the cost of the final rule would rise by $160 million.
d. Higher Food Inflation
The final rule estimate's food inflation methodology in described
section III.B.1. That discussion notes that inflation over the most
recent 2 years was lower for most food subgroups than inflation over
the five years prior to those two. Our proposed rule estimate used a 5-
year historic average to project food costs through FY 2016. In an
effort to limit the effects of low recent inflation on our cost
estimate, our final rule methodology uses a 7-year average to project
food costs, rather than a revised 5-year estimate using only the most
recent food inflation figures. This methodology retains all of the 5
years of relatively high food inflation that we used in our proposed
rule methodology. We took this step to minimize the risk of
understating the cost of the final rule. It is possible, nevertheless,
that food inflation will accelerate in the short term. If food prices
from fiscal years 2012 through 2016 match the rate of inflation over
the five years that ended in FY 2009, then the cost of the final rule
would increase by $240 million.\48\
---------------------------------------------------------------------------

\48\ This estimate includes a proportionate increase in labor
costs to remain consistent with our labor cost methodology.
---------------------------------------------------------------------------

e. Additional Need for Foodservice Equipment
The cost estimate in our proposed rule (and the primary estimate in
this final rule analysis) does not include an additional cost for new
foodservice equipment. As we discuss in section E above, commenters
offer much different estimates of the need for new kitchen equipment to
prepare more foods on site as a means of complying with the rule. These
figures do not allow us to estimate the dollar value of that need with
any certainty. Table 14 includes a revised final rule estimate that
assumes half of all schools will need to invest $5,000 in new kitchen
equipment soon after implementation of the rule. We show half of this
$250 million cost as an upfront expense, and the other half as an
expense incurred in the first full year of implementation of the rule.
Table 14 below assumes that State administrative costs are not
impacted by any of the alternate assumptions (a-e) listed above.

[[Page 4130]]

[GRAPHIC] [TIFF OMITTED] TR26JA12.007

G. Comparison of Proposed Rule and Final Rule Costs

The key differences between our proposed rule and final rule cost
estimates are discussed in previous sections of this RIA. Most of the
estimated reduction in cost is due to policy changes, but a significant
reduction is also realized by lower food inflation since preparation of
the proposed rule cost estimate.
Inflation and Other Economic Assumptions
The proposed rule used actual food price inflation through the end
of FY 2009. The final rule incorporates nearly two additional years of
actual food price inflation. Inflation over the two years ending in
August 2011 was lower for most of the food groups affected by the rule
than it was in the five previous years. This reduces our baseline cost
of food as well as our projection of food prices through the RIA's
forecast period. The final rule also uses USDA projections of school
meal participation contained in the 2012 President's budget. The
proposed rule relied on data in the 2011 President's budget. The more
recent participation projections slightly increase the cost of the
breakfast meal patterns and reduce the cost of the lunch meal patterns
relative to the proposed rule. The net effect of changes to our food
inflation and student participation projections is a 5-year $730
million reduction in the cost of the final rule relative to the
proposal.
Breakfast Meal Patterns
The most significant reduction in the estimated cost of the final
rule relative to the proposed rule is due to changes in the final
rule's breakfast provisions. The final rule's phased implementation of
the meal pattern's fruit and grain requirements, and elimination of the
proposed rule's separate meat and meat alternate requirement reduce the
cost of the rule by $2.7 billion over 5 years.
Lunch Meal Patterns
Additional savings are realized through a reduction in the final
rule's lunch meal pattern grain requirement relative to the proposed
rule. The final

[[Page 4131]]

rule also includes changes to the vegetable component of the proposed
rule's lunch meal pattern. The final rule eliminates the proposed
rule's 1 cup per week limit on starchy vegetables, and it replaces the
proposed rule's orange vegetable subgroup with a red/orange group that
now includes tomatoes. Replacement of the orange vegetable subgroup
with a red/orange subgroup was prompted by the 2010 Dietary Guidelines.
The final rule reduces the weekly requirement for ``other'' vegetables,
which previously included tomatoes, and increases the requirement for
red/orange vegetables relative to the proposed rule requirement for
orange vegetables. The net effect of changes to the vegetable and grain
requirements at lunch is a relatively modest $150 million reduction in
cost over 5 years.

Table 15--Changes in Cost of the Final Rule Relative to the Proposed Rule
----------------------------------------------------------------------------------------------------------------
Fiscal year
-----------------------------------------------------------------------------
2012 2013 2014 2015 2016 Total
----------------------------------------------------------------------------------------------------------------
Proposed rule..................... $181.5 $1,246.8 $1,401.9 $1,923.8 $2,041.3 $6,795.2
Updated economic and -15.9 -114.8 -141.1 -211.3 -248.2 -731.2
participation projections....
Changes to breakfast meal -120.5 -822.7 -871.4 -446.4 -465.6 -2,726.7
pattern requirements.........
Changes to lunch meal pattern -3.4 -23.0 -27.1 -45.8 -47.8 -147.3
requirements.................
Final rule........................ 41.6 286.2 362.1 1,220.2 1,279.7 3,189.9
----------------------------------------------------------------------------------------------------------------

H. Implementation of Final Rule--SFA Resources

We estimate that the new meal patterns may raise the average cost
of producing and serving school lunches by about 5 cents on initial
implementation of the rule. By FY 2015, when the food group components
are fully phased in, the cost per lunch may be 10 cents higher than our
baseline estimate; the cost per breakfast may be 27 cents higher than
our baseline.
As we discuss in Section E, the Healthy, Hunger-Free Kids Act
contains a comprehensive package of school meal reforms that call for
an update to the meal patterns and provide for increased SFA revenue.
USDA estimates that the $3.2 billion 5-year cost of this rule is more
than offset by the impact of other HHFKA provisions on SFA revenues.
HHFKA's meal pattern and revenue raising provisions are linked
directly in the performance-based increase in Federal financing for
school lunches. Schools that successfully implement the final rule
standards will receive an additional 6 cent reimbursement for each
lunch served. The Congressional Budget Office estimates that an
additional 6 cents per lunch would raise $1.5 billion for SFAs in the
first 5 years after implementation of the rule.\49\
---------------------------------------------------------------------------

\49\ $1.5 billion is CBO's estimate of additional budget
authority for HHFKA's ``Performance-Based Rate Increase'' through FY
2016, less $100 million ($50 million for administrative expenses in
fiscal years 2012 and 2013) . See Table 2 in CBO's April 20, 2010
cost estimate for HHFKA. http://www.cbo.gov/ftpdocs/114xx/doc11451/HealthyHungerFreeKidsAct.pdf (accessed 11/06/11).
---------------------------------------------------------------------------

HHFKA contains two additional provisions to ensure that Federal
reimbursements are used as intended to provide quality meals to program
participants. The first requires schools to gradually raise the per-
meal revenue generated from paid lunches to an amount equal to the
Federal reimbursement for free lunches. That revenue could come from
student payments or State or local sources. The second requires that
the revenue generated from non-program foods as a percent of food costs
match the revenue to food cost ratio of program meals. USDA estimates
that these two provisions will raise a combined $7.5 billion in the 5
years following their July 1, 2011 effective date.\50\
---------------------------------------------------------------------------

\50\ See the interim final rule and regulatory impact analysis
for ``School Food Service Account Revenue Amendments Related to the
Healthy, Hunger-Free Kids Act of 2010'', Federal Register, Vol. 76,
No. 117, pp. 35301-35318.
---------------------------------------------------------------------------

Schools will face different costs to implement this final rule.
Schools with menus that already emphasize fruits, a variety of
vegetables, and whole grains may need to make fewer changes, and the
costs of implementation in those schools may be lower than average.
Because the per-meal costs of complying with the new requirements are
much higher for breakfast than for lunch, the overall costs of
implementation in schools that serve more school breakfasts relative to
lunches may be higher than the costs faced by schools that do not serve
breakfast.
Schools will also benefit differently from HHFKA's revenue
provisions. Schools with relatively few students who pay full price for
program meals stand to gain little from HHFKA's paid lunch provision.
Similarly, schools that sell few [agrave] la carte items will realize
little revenue from an increase in [agrave] la carte prices. At the
same time, schools that serve mostly free and reduced-price students
and sell little [agrave] la carte can rely on significant Federal
funding for each SFA dollar spent to purchase and prepare school foods.
The experience of some schools suggests that substantial progress
toward implementation of the rule can even be achieved with existing
resources. USDA's HealthierUS Schools Challenge (HUSSC) recognizes
elementary schools that meet voluntary school meal and physical
activity standards. HUSSC school meal standards exceed NSLP
requirements on several levels, including requirements for a variety of
vegetables each week, including dark green and orange vegetables and
legumes; a variety of whole fruits, and limits on fruit juice; and
whole grain and low fat milk requirements. USDA has certified more than
2,161 HUSSC schools since 2004. HUSSC schools have demonstrated an
ability to operate cost-effective school meals programs that emphasize
many of the same foods required by the final rule. These schools
receive no financial assistance from USDA beyond the meal
reimbursements and USDA Foods available to other schools that
participate in the Federal school lunch and breakfast programs. Like
other service businesses, schools may need to consider changes to their
operations to increase efficiency and meet the requirements of the
rule. HUSSC schools have demonstrated an ability to operate cost-
effective school meals programs that meet many of the final rule's
requirements. These schools may offer models for others as
implementation moves forward.

I. Impact on Participation

As noted in Table 13, the cost estimate in this analysis assumes no
net change in student participation following introduction of the
rule's new meal pattern requirements. This assumption reflects
uncertainties in a number of areas, including how schools will reflect
the new requirements in menus, the acceptance of those changes by
students, and potential changes in

[[Page 4132]]

prices for reimbursable paid meals to provide additional revenue. These
factors are discussed below.
1. Acceptance of Meals
Any revision to the content of school meals or the method of
preparation may have an effect on the acceptance of school meals.
Concerns are often raised that students may react negatively to changes
designed to improve nutrition. USDA launched the School Meals
Initiative for Healthy Children (SMI) in 1995 to help schools improve
the nutritional quality of NSLP and SBP meals. The SMI offers an
opportunity to examine how students react to substantial changes in
school meal patterns.
As a result of the SMI many school food service directors reported
making changes in procurement and preparation practices (Abraham,
2002). For example, they reported increased purchases of low-fat/
reduced-fat foods (81 percent) and fresh fruits and vegetables (75
percent). The majority reported no change in food waste. However, to
the extent that there was change in the amount of food wasted, more
respondents reported a reduction rather than an increase in food waste
(with the exception of cooked vegetables). School food service
directors report that the SMI has generally had a neutral-to-positive
impact on program performance.
SNDA-III found that ``[c]haracteristics of NSLP lunches offered,
including percent of calories from fat, whether dessert or French fries
were frequently offered, and average number of fresh fruits and
vegetables offered per day, were generally not significantly associated
with NSLP participation.'' \51\ This suggests that changes in meal
patterns that enhance nutrition can be well received by students.
Furthermore, the increased emphasis on a healthy school nutrition
environment in recent years, and greater awareness of the importance of
healthy eating habits in schools, may help to support student
acceptance of changes in program meals.
---------------------------------------------------------------------------

\51\ For breakfast, the study estimated that projected
participation rates ``were higher in schools that offered a greater
percentage of calories from fat in the SBP breakfast; however, these
differences were not statistically significant at conventional
levels.'' USDA 2007, vol. II, pp. 113 and 127.
---------------------------------------------------------------------------

There is also a strong and growing school nutrition effort and
infrastructure already in place.
For example, Team Nutrition is an FNS initiative to support
healthier meals through training and technical assistance for food
service, nutrition education for children and their caregivers, and
school and community support for healthy eating and physical activity.
Similarly, in 2004 Congress required all school districts to establish
local wellness policies. Through these policies schools have made
changes to their school nutrition environments and improved the quality
of foods offered to students. In the context of these initiatives,
implementation of the final rule is only the next step in a process of
ongoing local, State, and Federal efforts to promote children's
nutrition and health.
2. Impact of Price on Participation
FNS estimates that the average cost of preparing and serving school
meals may increase by 8 percent by FY 2015. Some SFAs may raise student
prices for paid meals (above the paid lunch revenue target required by
HHFKA) to compensate for some of this increase in cost. We recognize
that increased paid meal prices may reduce NSLP paid meal
participation. Mathematica[supreg], Inc. modeled the effect of paid
meal prices on student participation as part of the SNDA-III study.\52\
All else equal, students who were not income-eligible for free or
reduced-price meals were less likely to participate in the program when
the full price of the meals was higher. For lunch, the model estimates
a 0.11 percent decrease in participation for each 1 cent increase in
paid lunch prices.\53\ For breakfast, the model estimates a 0.12
percent decrease in participation per 1 cent increase in price.
---------------------------------------------------------------------------

\52\ USDA 2007, vol. II, pp. 116-117, 123-124.
\53\ This relationship between price and participation applies
to prices in the range of $1.50 to $2.00 in SY 2004-2005 dollars. A
much bigger price increase might trigger a bigger reduction in
participation.
---------------------------------------------------------------------------

The model's predicted student participation rate was 54 percent in
schools that charged $2.00 for an NSLP lunch, compared to 59 percent in
schools that charged $1.50. The study also predicts lower breakfast
participation in schools that charged higher prices. Predicted
participation was 10.3 percent in schools that charged $0.70 for an SBP
breakfast versus 7.2 percent in schools that charged $1.00. Since meals
meeting the new requirements will be improved in nutritional content it
is not clear how this factor would balance against the effects of
higher meal prices. Although price changes may be a necessary option
for some SFAs, FNS expects that efforts designed to maintain
participation would be concurrently implemented.

J. Benefits

As noted in the preamble to this final rule, NSLA requires that
schools serving lunches and breakfasts under its program authority
ensure that those meals are consistent with the goals of the most
recent Dietary Guidelines for Americans and the Dietary Reference
Intakes. The final rule, by updating program regulations consistent
with Dietary Guidelines goals and aligning the regulations with the
requirements placed on schools under the statute, will ensure that
school meal nutrition requirements reflect current nutrition science,
increase the availability of key food groups, better meet the
nutritional needs of children, and foster healthy eating habits.
In so doing, it also provides a clear means of meeting the
statutory requirements through a food-based meal pattern designed with
the particular circumstances and challenges of school food service in
mind, to ensure that it is feasible for school foodservice operators
and does not jeopardize student and school participation in the meal
programs. A related benefit of the rule is that it simplifies meal
requirements to create a single, food-based approach to meal planning.
This approach helps to simplify menu planning and monitoring, and
streamline training and technical assistance needs.
Once implemented by schools, USDA projects that this rule will
change the types and quantities of foods prepared, offered and served
through the school meals programs (the sources of the costs described
in this analysis). The rule is expected to result in (1) increased
servings of fruits and vegetables, (2) replacement of refined-grain
foods with whole-grain rich foods, and (3) replacement of higher-fat
dairy products with low-fat varieties. As documented in the IOM
recommendations, each of these changes corresponds to an inconsistency
between the typical diets of school-aged children in the United States
and the Dietary Guidelines/MyPyramid recommendations. In particular,
the report cited an analysis of NHANES 1999-2002 data that showed that:
Total vegetable intake was only about 40 percent of the
MyPyramid levels, with intake of dark green and orange vegetables less
than 20 percent of MyPyramid levels.
Total fruit intake was about 80 percent of the MyPyramid
levels for children ages 5-8, with far lower levels for older children.
Intake of whole grains was less than one-quarter of
MyPyramid levels,

[[Page 4133]]

although total grain intake was at or above MyPyramid levels.
Intake of dairy products varied by age, with the intakes
of the youngest children exceeding MyPyramid levels, while those of
older children were below those levels. However, most dairy consumed
contained 2 percent or more milk fat, while the Dietary Guidelines
recommend fat-free or low-fat dairy products.\54\
---------------------------------------------------------------------------

\54\ IOM 2009, pp. 49-53.
---------------------------------------------------------------------------

In addition, the rule would make significant changes to the level
of sodium in school meals over time. Research suggests that modest
population-wide reductions in dietary salt could substantially reduce
cardiovascular events and medical costs.\55\ More specifically, a
forthcoming study suggests that reducing dietary salt in adolescents
could yield substantial health benefits by decreasing the number of
teenagers with hypertension and the rates of cardiovascular disease and
death as these teenagers reach young and middle age adulthood.\56\
---------------------------------------------------------------------------

\55\ See, for example, Smith-Spangler, 2010; Bibbins-Domingo,
2010.
\56\ Bibbins-Domingo, 2010b.
---------------------------------------------------------------------------

The rule also makes substantial changes in the calorie targets for
meals that are designed to promote healthful energy balance for the
children served by these programs. For the first time, the rule sets
maximum as well as minimum calorie targets, and creates a finer
gradation of calorie levels by age. As a result, minimum calorie
requirements for some groups are reduced by as much as 225 calories per
lunch.\57\ Implemented consistent with other requirements that ensure
that lunches provide appropriate nutrient content, these changes in
calorie levels can help to reduce the energy imbalance that contributes
to obesity among the Nation's children, without compromising nutrition
to support healthy growth and development.
---------------------------------------------------------------------------

\57\ The minimum calorie level for a lunch served to Grade 7
students is 825 calories under current standards (Grades 7-12); this
would change to a range of 600 calories minimum, 700 calories
maximum under the new standards (Grades 6-8).
---------------------------------------------------------------------------

This approach is fully consistent with the recommendations of the
Dietary Guidelines for Americans. Recognizing that the Dietary
Guidelines apply to a total diet, rather than a specific meal or
portion of an individual's consumption, the intention of the rule is to
make changes to school meals nutrition requirements to promote diets
more consistent with the Guidelines among program participants. Such
diets, in turn, are useful behavioral contributors to health and well-
being. As the report of the 2010 Dietary Guidelines Advisory Committee
notes, ``evidence is accumulating that selecting diets that comply with
the Guidelines reduces the risk of chronic disease and promotes
health.'' \58\ The report describes and synthesizes the evidence
linking diet and different chronic disease risks, including
cardiovascular disease and blood pressure, as well as the effects of
dietary patterns on total mortality. Children are a subpopulation of
particular focus for the Committee; the report emphasizes the
increasing common evidence of chronic disease risk factors, such as
glucose intolerance and hypertension, among children, and explains that
``[e]vidence documents the importance of optimal nutrition starting
during the fetal period through childhood and adolescence because this
has a substantial influence on the risk of chronic disease with age.''
\59\
---------------------------------------------------------------------------

\58\ Dietary Guidelines Advisory Committee, p. B1-2.
\59\ Dietary Guidelines Advisory Committee, pp. B1-2, B1-3.
---------------------------------------------------------------------------

In response, the report notes improvements in food at schools as a
critical strategy to prevent obesity, and related health risks, among
children. Indeed, the Committee recommends ``[i]mprov[ing] foods sold
and served in schools, including school breakfast, lunch, and after-
school meals and competitive foods so that they meet the
recommendations of the IOM report on school meals (IOM, 2009) and the
key findings of the 2010 DGAC. This includes all age groups of
children, from preschool through high school.'' \60\
---------------------------------------------------------------------------

\60\ Dietary Guidelines Advisory Committee, p. B3-6.
---------------------------------------------------------------------------

The linkage between poor diets and health problems such as
childhood obesity are also a matter of particular policy concern, given
their significant social costs. One in every three children (31.7
percent) ages 2-19 is overweight or obese.\61\ Along with the effects
on our children's health, childhood overweight and obesity imposes
substantial economic costs, and the epidemic is associated with an
estimated $3 billion in direct medical costs.\62\ Perhaps more
significantly, obese children and adolescents are more likely to become
obese as adults.\63\ In 2008, medical spending on adults that was
attributed to obesity increased to an estimated $147 billion.\64\
---------------------------------------------------------------------------

\61\ Ogden et al., 2010.
\62\ Trasande et al., 2009.
\63\ Whitaker et al., 1997; Serdula et al., May 1993.
\64\ Finkelstein et al., 2009
---------------------------------------------------------------------------

Because of the complexity of factors that contribute both to
overall food consumption and to obesity, we are not able to define a
level of disease or cost reduction that is attributable to the changes
in meals expected to result from implementation of the rule. As the
rule is projected to make substantial improvements in meals served to
more than half of all school-aged children on an average school day, we
judge that the likelihood is reasonable that the benefits of the rule
exceed the costs, and that the final rule thus represents a cost-
effective means of conforming NSLP and SBP regulations to the statutory
requirements for school meals.
There are other, corollary benefits to improvement in school meals
that are worthy of note. The changes could increase confidence by
parents and families in the nutritional quality of school meals, which
may encourage more families to opt for them as a reliable source of
nutritious food for their children. Improved school meals can reinforce
school-based nutrition education and promotion efforts and contribute
significantly to the overall effectiveness of the school nutrition
environment in promoting healthful food and physical activity choices.
Finally, the new requirements provide a clearer alignment between
Federal program benefits and national nutrition policy, which can help
to reinforce overall understanding of the linkages between diet and
health.

IV. Alternatives

1. Make No Changes to Proposed Rule

The proposed rule closely followed the recommendations contained in
the 2010 report of the IOM committee commissioned by USDA to propose
changes to the NSLP and SBP meal patterns. Those recommendations were
designed to reflect current nutrition science, the Dietary Guidelines,
and IOM's Dietary Reference Intakes. The reforms contained in the
proposed rule were well received by health and nutrition professionals,
child advocates, academics, and parents. But, as summarized in the
preamble to the final rule and in this analysis, school and SFA
officials, other public sector officials, and the food industry
expressed concern about the cost and feasibility of the proposed rule.
The final rule reflects those concerns by scaling back the quantity of
food contained in the proposal, especially at breakfast, eliminating
the proposed rule's limitations on starchy vegetables, phasing in some
provisions, and extending target dates for meeting the proposed rule's
sodium standards. Those changes result in a significantly less costly
final rule.
One alternative to the final rule is to retain the proposed rule
without change. The proposed rule closely

[[Page 4134]]

followed IOM's recommendations. IOM developed its recommendations to
encourage student consumption of foods recommended by the Dietary
Guidelines in quantities designed to provide necessary nutrients
without excess calories. The final rule still achieves that goal.
Students will still be presented with choices from the food groups and
vegetable subgroups recommended by the Dietary Guidelines. In that way,
the final rule, like the proposed rule, will help children recognize
and choose foods consistent with a healthy diet.
The most significant differences between the proposed and final
rules are in the breakfast meal patterns, and those differences are
largely a matter of timing. The final rule allows schools more time to
phase-in key IOM recommendations on fruit and grains at breakfast. Once
fully implemented, the most important difference between the final and
proposed rule breakfast meal patterns is the elimination of a separate
meat/meat alternate requirement. That change preserves current rules
that allow the substitution of meat for grains at breakfast. It also
responds to general public comments on cost, and on the need to
preserve schools' flexibility to serve breakfast outside of a
traditional cafeteria setting.
Even with these changes, and with the less significant changes to
the proposed lunch standards, the final rule remains consistent with
Dietary Guidelines recommendations. The added flexibility and reduced
cost of the final rule relative to the proposed rule should increase
schools' ability to comply with the new meal patterns. The final rule's
less costly breakfast patterns will make it easier for schools to
maintain or expand current breakfast programs, and may encourage other
schools to adopt a breakfast program.
Table 16 estimates the cost of the proposed rule using updated
projections of student participation and food inflation. The estimated
5-year cost of the final rule, from Table 6, is $2.9 billion lower than
this updated cost estimate of the proposed rule.
[Note that the estimate in Table 16 is about 10 percent lower than
our cost estimate for the same set of provisions in the proposed rule
Regulatory Impact Analysis. The difference between the two estimates
reflects lower food inflation for most food groups since preparation of
the proposed rule estimate.\65\ As we discuss in Section III.B.1.,
lower recent inflation also reduces our projection of future price
increases.]
---------------------------------------------------------------------------

\65\ Table 16 also includes the effect of reclassifying tomatoes
as a ``red/orange'' vegetable. Tomatoes were included in the
``other'' vegetable subgroup in our proposed rule cost estimate.
Moving tomatoes from the ``other'' vegetable subgroup to the new
``red/orange'' subgroup is one of the changes contained in the 2010
Dietary Guidelines. Moving tomatoes back to the ``other'' vegetable
subgroup for school meals was not considered by USDA and is
therefore not reflected in this alternative to the final rule.
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2. Adopt Final Rule Lunch Meal Pattern Changes; Retain Proposed Rule
Breakfast Patterns

From Alternative 1, above, we estimate that cost of the final rule
is $2.9 billion lower than the cost of the proposed rule. Table 17
makes clear that most of this reduction is due to the final rule's
breakfast meal pattern changes. Adopting all of the lunch provisions
contained in the final rule,\66\ but retaining the proposed rule's
breakfast provisions, would cost an estimated $5.9 billion over 5
years, or $2.7 billion more than final rule. This alternative responds
less effectively than the final rule to comments received by USDA from
SFA and school administrators who expressed concerns about the cost of
the proposed rule.
---------------------------------------------------------------------------

\66\ For purposes of this estimate, reclassifying tomatoes as a
``red/orange'' vegetable is considered to be one of the final rule's
lunch meal pattern changes.
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[[Page 4135]]

3. Adopt Final Rule Breakfast Meal Pattern Changes; Retain Proposed
Rule Lunch Patterns

This alternative highlights the relatively small difference in the
cost of the proposed and final rule lunch provisions. The two key
differences in the proposed and final rule lunch provisions have
largely offsetting costs. The combined effect of moving tomatoes to the
new red/orange vegetable subgroup, and the associated changes in the
minimum cup requirements of the red/orange, starchy, and ``other''
vegetable subgroups have the effect of increasing the cost of the final
rule relative to the proposed rule. The final rule's reduction in the
lunch meal pattern's grain ounce equivalent requirement reduces the
cost of the final rule relative to the proposed rule.
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V. Accounting Statement

As required by OMB Circular A-4 (available at http://www.whitehouse.gov/sites/default/files/omb/assets/regulatory_matters_pdf/a-4.pdf), we have prepared an accounting statement showing the
annualized estimates of benefits, costs and transfers associated with
the provisions of this final rule.
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VI. References

Abraham, S., M. Chattopadhyay, M. Montgomery, D. M. Steiger, L.
Daft, B. Wilbraham. (Abraham, 2002) The School Meals Initiative
Implementation Study-Third Year Report. U.S. Department of
Agriculture, Food and Nutrition Service.
Bibbins-Domingo K et al. (Bibbins-Domingo, 2010) Projected effect of
dietary salt reductions on future cardiovascular disease. New
England Journal of Medicine, 2010 Feb 18;362(7):590-9. Epub 2010 Jan
20.
Bibbins-Domingo K. (Bibbins-Domingo, 2010b) Abstract 18899:
Cardiovascular Benefits of Dietary Salt Reduction for US
Adolescents. Presented at: American Heart Association Scientific
Sessions 2010; Nov. 13-17; Chicago.
Dietary Guidelines Advisory Committee. Report of the Dietary
Guidelines Advisory Committee on the Dietary Guidelines for
Americans, 2010 (http://www.cnpp.usda.gov/DGAs2010-DGACReport.htm).
Finkelstein, E., Trogdon, J., Cohen J., Dietz, W. (2009). Annual
Medical Spending Attributable to Obesity: Payer-And Service-Specific
Estimates. Health Affairs, 28(5).
Institute of Medicine (IOM 2009). School Meals: Building Blocks for
Healthy Children. Washington, D.C: The National Academies Press.
http://www.fns.usda.gov/ora/MENU/Published/CNP/FILES/SchoolMealsIOM.pdf.

[[Page 4136]]

Institute of Medicine (IOM 2009). Nutrition Standards for Foods in
Schools: Leading the Way toward Healthier Youth. Washington, D.C:
The National Academies Press. http://books.nap.edu/openbook.php?record_id=11899.
Maurer, K. The National Evaluation of School Nutrition Programs:
Program Impact on Family Food Expenditures. The American Journal of
Clinical Nutrition 40: August 1984, pp 448-453.
Ogden, C.L., Carroll, M., Curtin, L., Lamb, M., Flegal, K. (2010).
Prevalence of High Body Mass Index in US Children and Adolescents
2007-2008. Journal of American Medical Association, 303(3), 242-249.
Smith-Spangler CM et al. (2010) Population strategies to decrease
sodium intake and the burden of cardiovascular disease: a cost-
effectiveness analysis. Annals of Internal Medicine, 2010 Apr
20;152(8):481-7, W170-3. Epub 2010 Mar 1.
Serdula MK, Ivery D, Coates RJ, Freedman DS. Mayiamson DF. Byers T.
Do obese children become obese adults? A review of the literature.
Prev Med 1993;22:167-177.
Trasande, L., Chatterjee, S. (2009). Corrigendum: The Impact of
Obesity on Health Service Utilization and Costs in Childhood.
Obesity, 17(9).
Whitaker RC, Wright JA, Pepe MS, Seidel KD, Dietz WH. Predicting
obesity in young adulthood from childhood and parental obesity. N
Engl J Med 1997; 37(13):869-873;
U.S. Department of Agriculture, Food and Nutrition Service (USDA
2008). School Lunch and Breakfast Cost Study-II, Final Report, by
Susan Bartlett, et al.http://www.fns.usda.gov/ora/MENU/Published/CNP/FILES/MealCostStudy.pdf.
U.S. Department of Agriculture, Food and Nutrition Service (USDA
2007). School Nutrition Dietary Assessment Study-III by Anne Gordon,
et al. http://www.fns.usda.gov/ora/MENU/Published/CNP/FILES/SNDAIII-SummaryofFindings.pdf.
U.S. Department of Agriculture, Food and Nutrition Service (USDA
2007a). White Paper: USDA Commodities in the National School Lunch
Program.
U.S. Department of Agriculture, Food and Nutrition Service (USDA
2007b). NSLP/SBP Access, Participation, Eligibility, and
Certification Study--Erroneous Payments in the NSLP and SBP, by
Michael Ponza, et al. http://www.fns.usda.gov/ora/MENU/Published/CNP/FILES/apecvol1.pdf.
U.S. Department of Agriculture, Dietary Guidelines Advisory
Committee (USDA 2004). Report of the Dietary Guidelines Advisory
Committee on the Dietary Guidelines for Americans, 2005 http://www.health.gov/dietaryguidelines/dga2005/report/.
U.S. Department of Agriculture, Food and Nutrition Service (USDA
2001). School Nutrition Dietary Assessment Study-II by Mary Kay Fox,
et al. http://www.fns.usda.gov/ora/MENU/Published/CNP/FILES/SNDAIIfind.pdf.
U.S. Department of Agriculture, Food and Nutrition Service. The
Impact of the School Nutrition Programs on Household Food
Expenditures. Prepared by Mathematica Policy Research, Inc., October
30, 1987.
U.S. Department of Health and Human Services (HHS 2010). The Surgeon
General's Vision for a Healthy and Fit Nation. http://www.surgeongeneral.gov/library/obesityvision/obesityvision2010.pdf
U.S. Department of Health and Human Services and U.S. Department of
Agriculture (HHS/USDA 2005). Dietary Guidelines for Americans, 6th
Edition. http://www.cnpp.usda.gov/Publications/DietaryGuidelines/2005/2005DGPolicyDocument.pdf.
U.S. Department of Agriculture and U.S. Department of Health and
Human Services. (USDA/HHS 2010) Dietary Guidelines for Americans,
2010. 7th Edition. http://www.cnpp.usda.gov/Publications/DietaryGuidelines/2010/PolicyDoc/PolicyDoc.pdf.
Wagner, B., B. Senauer, and F. C. Runge. (Wagner, 2007). An
Empirical Analysis of and Policy Recommendations to Improve the
Nutritional Quality of School Meals. Review of Agricultural
Economics 29(4):672-688.

VII. Appendix A

The following tables detail the major steps in the computation of
food cost estimates described in the main body of the impact analysis.
The tables develop both a baseline food cost estimate and an estimate
under the proposed rule.
Table A-1 contains total food and labor cost estimates for the
baseline and under the proposed rule. The difference is summarized in
the shaded panel at the bottom of the table. That difference is the
estimated cost of the rule, as presented in Table 6 in section III.A.1.
Table A-2 shows each of the major inputs into our baseline cost
estimate. The first 5 columns give the estimated food cost per school
meal served. We inflate each of the meal components by historic and
projected changes in food group specific prices to estimate per meal
costs through FY 2016. Inflation factors, not shown in Table A-2, are
weighted averages, computed from CPI-U data from the Bureau of Labor
Statistics. The next set of columns contains projections of meals
served through FY 2016. Total baseline costs, in the five rightmost
columns of Table A-2, are the product of the estimated costs per meal
and FNS projections of the number of meals served.
Our estimate of total cost under the proposed rule is developed in
Table A-3. Table A-3 summarizes the steps that we took to estimate a
per-meal food cost in FY 2012, the year in which the rule is expected
to take effect, and shows our projection of total costs through FY
2016.
Table A-3 resembles Table A-2. It takes the weighted average prices
per meal by meal component for FY 2012, projects them through FY 2016
using food group specific inflation factors, then multiplies those
inflated per meal figures by FNS projections of meals served. The final
estimated cost of meals served under the proposed rule is displayed in
the last five columns of the table.
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Final Regulatory Flexibility Analysis
Final rule: Nutrition Standards in the National School Lunch and
School Breakfast Programs
[RIN 0584-AD59]
AGENCY: Food and Nutrition Service, USDA.
Background: The Regulatory Flexibility Act (RFA) requires agencies
to consider the impact of their rules on small entities and to evaluate
alternatives that would accomplish the objectives of the rules without
unduly burdening small entities when the rules impose a significant
economic impact on a substantial number of small entities. Inherent in
the RFA is Congress' desire to remove barriers to competition and
encourage agencies to consider ways of tailoring regulations to the
size of the regulated entities.
The RFA does not require that agencies necessarily minimize a
rule's impact on small entities if there are significant legal, policy,
factual, or other reasons for the rule's having such an impact. The RFA
requires only that agencies determine, to the extent feasible, the
rule's economic impact on small entities, explore regulatory
alternatives for reducing any significant economic impact on a
substantial number of such entities, and explain the reasons for their
regulatory choices.
Reasons That Action Is Being Considered
Section 103 of the Child Nutrition and WIC Reauthorization Act of
2004 inserted Section 9(a)(4) into the National School Lunch Act
requiring the Secretary to promulgate rules revising nutrition
requirements, based on the most recent Dietary Guidelines for
Americans, that reflect specific recommendations for increased
consumption of foods and food ingredients offered in school meal
programs. In addition, Section 201 of the Healthy, Hunger-Free Kids Act
of 2010 (HHFKA) requires the Secretary to issue regulations to update
the school meal patterns based on recommendations of the Institute of
Medicine. This final rule amends Sections 210 and 220 of the
regulations that govern the National School Lunch Program (NSLP) and
the School Breakfast Program (SBP). USDA published a proposed rule in
the Federal Register on January 13, 2011 (76 FR 2494) that closely
followed IOM's recommendations. USDA received and processed more than
130,000 comments on the proposed rule. USDA considered those comments
in developing a final rule that continues to advance the goals of the
IOM while responding to concerns about the cost of implementation, and
the need for flexibility in administration at the school district
level.
Objectives of, and Legal Basis for, the Final Rule
Under Section 9(a)(4) and Section 9(f)(1) of the NSLA, schools that
participate in the NSLP or SBP must offer lunches and breakfasts that
are consistent with the goals of the most recent Dietary Guidelines for
Americans. Current nutrition requirements for school lunches and
breakfasts are based on the 1995 Dietary Guidelines and the 1989 RDAs.
(School lunches and breakfasts were not updated when the 2000 Dietary
Guidelines were issued because those recommendations did not require
significant changes to the school meal patterns.) The 2005 and 2010
Dietary Guidelines provide more prescriptive and specific nutrition
guidance than earlier releases and require significant changes to
school meal requirements.
Number of Small Entities To Which the Final Rule Will Apply
This rule directly regulates the 55 State education agencies and 2
State Departments of Agriculture (SAs) that operate the NSLP and SBP
pursuant to agreements with USDA's Food and Nutrition Service (FNS); in
turn, its provisions apply to entities that prepare and provide NSLP
and SBP meals to students. While SAs are not small entities under the
RFA as State populations exceed the 50,000 threshold for a small
government jurisdiction, many of the service-providing institutions
that work with them to implement the program do meet definitions of
small entities:
There are currently about 19,000 School Food Authorities
(SFAs) participating in NSLP and SBP. More than 99 percent of these
have fewer than 50,000 students.\67\ About 26 percent of SFAs with
fewer than 50,000 students are private. However, private school SFAs
account for only 3 percent of all students in SFAs with enrollments
under 50,000.\68\
---------------------------------------------------------------------------

\67\ FNS 742 School Food Verification Survey, School Year 2009-
2010. This number is approximate, not all SFAs are required to
submit the 742 form.
\68\ Ibid. RCCIs include but are not limited to juvenile
detention centers, orphanages, and medical institutions. We do not
have information on the number of children enrolled in these
institutions.
---------------------------------------------------------------------------

Nearly 102,000 schools and residential child care
institutions participate in the NSLP. These include more than 90,000
public schools, 6,000 private schools, and about 5,000 residential
child care institutions (RCCIs).\69\ We focus on the impact at the SFA
level in this document, rather than the school level, because SFAs are
responsible for the administration of the NSLP and the SBP.
---------------------------------------------------------------------------

\69\ FNS program data for FY 2010.
---------------------------------------------------------------------------

Food service management companies (FSMCs) that prepare
school meals or menus under contract to SFAs are affected indirectly by
the proposed rule. Thirteen percent of public school SFAs contracted
with FSMCs in school year (SY) 2004-2005.\70\ Of the 2,460 firms
categorized as ``food service contractors'' under NAICS code 72231, 96
percent employ fewer than 500 workers.\71\
---------------------------------------------------------------------------

\70\ U.S. Department of Agriculture, Food and Nutrition Service,
Office of Research, Nutrition and Analysis, School Nutrition Dietary
Assessment Study-III, Vol. I, 2007, p. 34 http://www.fns.usda.gov/ora/MENU/Published/CNP/FILES/SNDAIII-Vol1.pdf.
\71\ Ibid.
---------------------------------------------------------------------------

Response to Public Comments on Initial Regulatory Flexibility Analysis
USDA received comments on the Initial Regulatory Flexibility
Analysis from school, SFA, and State education officials, advocacy
organizations, and foodservice industry representatives. Most of those
individuals were concerned with the cost of complying with the rule.
Commenters pointed to the particular cost challenges faced by small
schools with few foodservice employees, limited space for storage and
on-site meal preparation, and the inability to purchase food in
quantities necessary to get the lowest prices. These comments are
discussed in the relevant sections below.
Projected Reporting, Recordkeeping and Other Compliance Requirements
The analysis below covers only those organizations impacted by the
final rule that were determined to be small entities.

School Food Authorities (SFA)/Schools

Increased Cost To Produce School Meals
USDA estimates that the proposed rule will raise the average cost
of producing and serving school lunches by 5 cents on initial
implementation. Phased implementation of the rule's breakfast meal
patterns results in no first year costs. By FY 2015, when all of the
lunch and breakfast food group requirements are in place, the cost per
lunch will be about 10 cents higher than our baseline estimate; the
cost per breakfast will be about 27 cents higher. Across all SFAs we
estimate that the total cost of compliance will be $3.2 billion over
five years. Although about 99 percent of SFAs enroll fewer than

[[Page 4141]]

50,000 students, they enroll only about 80 percent of all students. If
they serve about 80 percent of all meals (we do not have data on meals
served by SFA size) then these small entities would incur roughly 80
percent of estimated costs.
With exceptions for individual schools, USDA expects that the cost
of the rule will increase with meals served and will not be
proportionately higher for small schools. Small schools that face
average labor and food costs, and have menus typical of the average
school are expected to incur per-meal costs comparable to larger
schools. We expect that those costs will equal our estimated cost per
meal multiplied by the number of meals served.
The most important factors that separate schools with higher than
average per-meal costs from those with lower than average costs are not
necessarily associated with the size of the SFA. For instance, schools
with menus that already emphasize fruits, non-starchy vegetables, and
whole grains will need to make fewer changes, and the costs of
implementation in those schools should be lower than average. Also,
because the per-meal cost of complying with the proposed requirements
is much higher for breakfast than for lunch, the overall costs of
implementation in schools that serve the most school breakfasts
relative to lunches will be higher than the costs faced by schools that
do not serve breakfast.
Some commenters note that small districts pay more for food than
larger districts that benefit from volume discounts. Others suggest
that prices for whole grain and reduced fat products are higher in
small, rural communities. USDA's School Lunch and Breakfast Cost Study
II (SLBCS) finds that the per-meal costs of producing school breakfasts
are higher in small districts than in large districts.\72\ But the
study finds no statistically significant difference by SFA size in the
cost of producing a school lunch.
---------------------------------------------------------------------------

\72\ U.S. Department of Agriculture, Food and Nutrition Service,
Office of Research, Nutrition and Analysis, School Lunch and
Breakfast Cost Study-II, Final Report, by Susan Bartlett, et al.,
2008, pp. 3-2--3-5. http://www.fns.usda.gov/ora/MENU/Published/CNP/FILES/MealCostStudy.pdf.
---------------------------------------------------------------------------

SLBCS finds that at least some of the higher cost incurred by small
districts to produce a school breakfast is due to the fixed costs of
operating a small program. The study does not, however, address how
much might be due to higher food prices. USDA's School Food Purchase
Study (SFPS) found that large districts do tend to pay less than small
districts for food on a per-unit basis.\73\ But the study also found
that ``the relationship [between small SFA size and higher food costs]
is weak for districts of less than 5,000 enrollment.'' Although SFPS
found that small districts tend to pay more for food, it also found
that small districts charge students the least for full-price school
meals.\74\
---------------------------------------------------------------------------

\73\ The study could not conclude whether the price advantage of
large districts was a result of ``an economy of scale based on the
volume of food they are purchasing, the use of highly centralized
procurement systems or formal procurement and pricing methods
typically found in large school districts, the accessibility to more
vendors leading to a more competitive marketplace, or a combination
of factors.'' U.S. Department of Agriculture, Food and Nutrition
Service, Office of Analysis and Evaluation, School Food Purchase
Study Final Report (Executive Summary), by Lynn Daft, et al., 1998
http://www.fns.usda.gov/ora/MENU/Published/CNP/FILES/SFPS-Execsum.pdf.
\74\ School Food Purchase Study Final Report, pp. III-14--III-
15.
---------------------------------------------------------------------------

Increased Cost of Administering School Meals Programs
USDA expects that SFAs will incur additional administrative costs
for staff training during implementation of the new standards. The
final rule replaces the Coordinated Review Effort (CRE) and School
Meals Initiative (SMI) with a combined State Agency administrative
review. The new review will be held once every 3 years, instead of once
every 5 years. The increased frequency of the combined review will
increase administrative costs for many SFAs. However, SFAs that
previously had separate CREs and SMIs may experience a decrease in
burden, because they will undergo just one CRE every three years,
rather than two reviews (one CRE and one SMI) every five years.
USDA estimates that the proposed rule will result in an average 8.2
hour net increase in the annual reporting and recordkeeping burden for
each of 7,000 SFAs. That increase appears to fall below the threshold
for recognition as a significant impact for RFA purposes.\75\
---------------------------------------------------------------------------

\75\ SBA's ``A Guide for Government Agencies'' identifies
several examples of significant impact: A rule that provides a
strong disincentive to seek capital; 175 staff hours per year for
recordkeeping; impacts greater than the $500 fine (in 1980 dollars)
imposed for noncompliance; new capital requirements beyond the reach
of the entity; and any impact less cost-efficient than another
reasonable regulatory alternative.
---------------------------------------------------------------------------

Increased Equipment Costs
SFAs may need to purchase new equipment to prepare and serve meals
that comply with the proposed standards. For example, some SFAs may
need to replace fryers with ovens or steamers. In FY 2009, FNS
solicited requests from SFAs for food service equipment grants,
awarding $100 million in 2009 American Recovery and Reinvestment Act
(ARRA) Equipment Grants and an additional $25 million in one-time funds
included in the FY 2010 Appropriations Act. In response to their
solicitations for these funds, State agencies received a total of
approximately $600 million in grant requests from SFAs. The strong
response to these grant programs indicates a substantial demand for
investment in kitchen equipment.
We do not have the data necessary to measure the remaining unmet
demand in smaller SFAs or in SFAs that did not receive grants. However,
much of that demand is driven by the routine need to replace equipment
that is nearing the end of its useful life--a cost that is
appropriately covered by USDA meal reimbursements and other sources of
food service revenue. For recipient SFAs, the grants temporarily freed
some of those revenue sources for other priorities. In the absence of
additional Congressional action, SFAs must again turn to those sources
to meet their ongoing equipment needs.
Data from the SLBCS confirm that small SFAs spend more, on average,
to produce a school breakfast than do large SFAs.\76\ SLBCS found that
higher per-meal breakfast costs in small SFAs are due, in part, to the
fixed costs of operating a breakfast program. For example, schools that
choose to offer breakfast must pay staff to serve meals, no matter how
few students participate. As schools serve more breakfasts, SLBCS data
show that the cost per unit decreases; this is the case for both small
and large SFAs.\77\
---------------------------------------------------------------------------

\76\ School Food Purchase Study Final Report, p. VII-1.
\77\ Ibid.
---------------------------------------------------------------------------

If the fixed costs of starting up a breakfast program were the only
factors responsible for higher average breakfast costs in small school
districts, then we would not expect the final rule to have a
disproportionate effect on those districts. The main costs of the rule
are variable rather than fixed: Schools must offer a greater variety
and additional quantities of certain foods to each student. Some
commenters point out, though, that the rule might require additional
investment in food preparation and storage equipment, and that this
imposes a special burden on smaller districts. But these costs are
variable too; larger districts will spend more than smaller districts
on similar types of equipment to handle a greater volume of food. Of
course, kitchen equipment is not variable in the same sense as food.
Small districts may have to purchase new equipment as a result of the
final rule that they may not use

[[Page 4142]]

as intensively as districts that prepare more meals. In that way,
expenditures on kitchen equipment may add more to per-meal costs in
small districts than in bigger districts.
USDA Response to Public Comments on the Cost of the Proposed Rule
USDA considered all comments submitted by the public on the
proposed rule. Comments from school district and school officials,
foodservice industry professionals, and others concerned with the cost
of the proposed rule were instrumental in guiding USDA's development of
a less costly final rule. The modifications offer schools short term
savings, relative to the proposed rule, by phasing in the rule's
breakfast fruit and grain requirements. As a result of elimination of
the proposed rule's breakfast meat requirement, the ongoing cost of the
final rule after full implementation is also reduced. Eliminating the
proposed limit on the amount of starchy vegetables that schools may
offer at lunch has little effect on the cost of the final rule relative
to the proposed rule. Significant savings are realized through a
reduction in the lunch pattern's grain requirement.
USDA estimated that the proposed rule would increase the costs of
preparing and serving school meals by $6.8 billion over 5 years. With
the changes discussed above, the 5-year cost of the rule is reduced to
$3.2 billion.\78\ The reduction in cost will benefit SFAs of any size
that might have had difficulty implementing the proposed rule
standards.
---------------------------------------------------------------------------

\78\ Part of the reduction in cost is due to a recent reduction
in food inflation. See the Regulatory Impact Analysis for additional
detail.
---------------------------------------------------------------------------

Options for Addressing Increased Costs
Although changes to the final rule significantly reduce the
implementation costs faced by SFAs, the rule still requires a
substantial investment by schools and school districts to improve the
nutritional quality of school meals.
The Healthy, Hunger-Free Kids Act of 2010 (HHFKA), which is one of
the 2 statutory directives behind this rulemaking, also contains
provisions intended to reform school meal financing. USDA estimates
that those provisions will increase SFA revenues enough to fully offset
the cost of this rule.
HHFKA's meal pattern and revenue raising provisions are linked
directly in the performance-based increase in Federal financing for
school lunches. Schools and SFAs that successfully implement the final
rule standards will receive an additional 6 cent reimbursement for each
lunch served. The Congressional Budget Office estimates that an
additional 6 cents per lunch would raise $1.5 billion for SFAs in the
first 5 years after implementation of the rule.\79\
---------------------------------------------------------------------------

\79\ See Table 2 in CBO's April 20, 2010 cost estimate for
HHFKA. http://www.cbo.gov/ftpdocs/114xx/doc11451/HealthyHungerFreeKidsAct.pdf. The total increase in budget authority
through FY 2016 includes $100 million for administrative expenses
($50 million in each of the first 2 years).
---------------------------------------------------------------------------

HHFKA contains two additional provisions to ensure that Federal
reimbursements are used as intended to provide quality meals to program
participants. The first requires SFAs to gradually raise the per-meal
revenue generated from paid lunches to an amount equal to the Federal
reimbursement for free lunches. That revenue could come from student
payments or State or local sources. The second requires that the
revenue generated from non-program foods as a percent of food costs
match the revenue to food cost ratio of program meals. USDA estimates
that these two provisions will raise a combined $7.5 billion in the 5
years following their July 1, 2011 effective date.\80\
---------------------------------------------------------------------------

\80\ See the interim final rule and regulatory impact analysis
for ``School Food Service Account Revenue Amendments Related to the
Healthy, Hunger-Free Kids Act of 2010'', Federal Register, Vol. 76,
No. 117, pp. 35301-35318.
---------------------------------------------------------------------------

SFAs will benefit differently from HHFKA's revenue provisions. SFAs
with relatively few students who pay full price for program meals stand
to gain little from HHFKA's paid lunch provision. Similarly, schools
that sell few [agrave] la carte items will realize little revenue from
an increase in [agrave] la carte prices. At the same time, schools that
serve mostly free and reduced-price students and sell little [agrave]
la carte can rely on significant Federal funding for each SFA dollar
spent to purchase and prepare school foods.
The experience of some schools suggests that substantial progress
toward implementation of the rule can even be achieved with existing
resources. USDA's HealthierUS Schools Challenge (HUSSC) recognizes
elementary schools that meet voluntary school meal and physical
activity standards. HUSSC school meal standards exceed NSLP
requirements on several levels, including requirements for a variety of
vegetables each week, including dark green and orange vegetables and
legumes; a variety of whole fruits, and limits on fruit juice; and
whole grain and low fat milk requirements. USDA has certified more than
1,600 HUSSC schools since 2004. HUSSC schools have demonstrated an
ability to operate cost-effective school meals programs that emphasize
many of the same foods required by the final rule. These schools
receive no financial assistance from USDA beyond the meal
reimbursements and USDA Foods available to other schools that
participate in the Federal school lunch and breakfast programs. Like
other service businesses, schools may need to consider changes to their
operations to increase efficiency and meet the requirements of the
rule. HUSSC schools have demonstrated an ability to operate cost-
effective school meals programs that meet many of the final rule's
requirements. These schools may offer models for others as
implementation moves forward.
We recognize that small SFAs, like others, will face substantial
costs and potential challenges in implementing the proposed rule. These
costs should not be significantly greater for small SFAs than for
larger ones, as implementation costs are driven primarily by factors
other than SFA size. Nevertheless, we do not discount the special
challenges that may face some smaller SFAs. As a group, small SFAs may
have less flexibility to adjust resources in response to immediate
budgetary needs. Phased implementation of the final rule's breakfast
provisions, which will reduce up-front costs of implementation, may be
particularly valuable to small SFAs.

Food Service Management Companies

FSMCs are potentially indirectly affected by the proposed rule.
FSMCs that provide school meals under contract to SFAs will need to
alter those products to conform to the proposed changes in meal
requirements. In addition, FSMCs may find new opportunities to work
with SFAs that currently do not contract for food service assistance.
Consistent with SBA guidance, which notes that ``[t]he courts have held
that the RFA requires an agency to perform a regulatory flexibility
analysis of small entity impacts only when a rule directly regulates
them'',\81\ we do not attempt to quantify the economic effect of the
proposed rule on FSMCs.
---------------------------------------------------------------------------

\81\ SBA, ``A Guide for Government Agencies'', p. 20.
---------------------------------------------------------------------------

Federal Rules That May Duplicate, Overlap or Conflict With the Final
Rule
FNS is unaware of any such Federal rules or laws.
Significant Alternatives
One alternative to the final rule is to retain the proposed rule
without change. The proposed rule closely

[[Page 4143]]

followed IOM's recommendations. IOM developed its recommendations to
encourage student consumption of foods recommended by the Dietary
Guidelines in quantities designed to provide necessary nutrients
without excess calories. The final rule still achieves that goal.
Students will still be presented with choices from the food groups and
vegetable subgroups recommended by the Dietary Guidelines. In that way,
the final rule, like the proposed rule, will help children recognize
and choose foods consistent with a healthy diet.
The most significant differences between the proposed and final
rules are in the breakfast meal patterns, and those differences are
largely a matter of timing. The final rule allows schools more time to
phase-in key IOM recommendations on fruit and grains at breakfast. Once
fully implemented, the most important difference between the final and
proposed rule breakfast meal patterns is the elimination of a separate
meat/meat alternate requirement. That change preserves current rules
that allow the substitution of meat for grains at breakfast. It also
responds to general public comments on cost, and on the need to
preserve schools' flexibility to serve breakfast outside of a
traditional cafeteria setting.
Even with these changes, and with the less significant changes to
the proposed lunch standards, the final rule remains consistent with
Dietary Guidelines recommendations. The added flexibility and reduced
cost of the final rule relative to the proposed rule should increase
schools' ability to comply with the new meal patterns. The final rule's
less costly breakfast patterns will make it easier for schools to
maintain or expand current breakfast programs, and may encourage other
schools to adopt a breakfast program.
Implementing the proposed rule, without changes, would increase the
cost to SFAs of implementing the new meal patterns, relative to the
final rule, by an estimated $2.9 billion over 5 years.

List of Subjects

7 CFR Part 210

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

7 CFR Part 220

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

Accordingly, 7 CFR parts 210 and 220 are amended as follows:

PART 210--NATIONAL SCHOOL LUNCH PROGRAM

0
1. The authority citation for 7 CFR part 210 continues to read as
follows:

Authority: 42 U.S.C. 1751-1760, 1779.

0
2. In Sec. 210.2:
0
a. Revise the definition of Food component;
0
b. Revise the definition of Food item;
0
c. Amend the definition of Lunch by removing the words ``applicable
nutrition standards and portion sizes'' and adding in their place the
words ``meal requirements'';
0
d. Remove the definition of Menu item;
0
e. Remove the definition of Nutrient Standard Menu Planning/Assisted
Nutrient Standard Menu Planning;
0
f. Revise the definition of School week; and
0
g. Add definitions of Tofu and Whole grains.
The revisions and additions read as follows:

Sec. 210.2 Definitions.

* * * * *
Food component means one of the five food groups which comprise
reimbursable meals. The five food components to be offered to students
in grades K-5 are: Meats/meat alternates, grains, vegetables, fruits,
and fluid milk. Meals offered to preschoolers must consist of four food
components: Meats/meat alternates, grains, vegetables/fruits, and fluid
milk.
Food item means a specific food offered within the five food
components: Meats/meat alternates, grains, vegetables, fruits, and
fluid milk.
* * * * *
School week means the period of time used to determine compliance
with the meal requirements in Sec. 210.10. The period shall be a
normal school week of five consecutive days; however, to accommodate
shortened weeks resulting from holidays and other scheduling needs, the
period shall be a minimum of three consecutive days and a maximum of
seven consecutive days. Weeks in which school lunches are offered less
than three times shall be combined with either the previous or the
coming week.
* * * * *
Tofu means a soybean-derived food, made by a process in which
soybeans are soaked, ground, mixed with water, heated, filtered,
coagulated, and formed into cakes. Basic ingredients are whole
soybeans, one or more food-grade coagulants (typically a salt or an
acid), and water. Tofu products must conform to FNS guidance to count
toward the meats/meat alternates component.
Whole grains means grains that consist of the intact, ground,
cracked, or flaked grain seed whose principal anatomical components--
the starchy endosperm, germ and bran--are present in the same relative
proportions as they exist in the intact grain seed. Whole grain-rich
products must conform to FNS guidance to count toward the grains
component.
* * * * *

0
3. Revise Sec. 210.10 to read as follows:

Sec. 210.10 Meal requirements for lunches and requirements for
afterschool snacks.

(a) General requirements. (1) General nutrition requirements.
Schools must offer nutritious, well-balanced, and age-appropriate meals
to all the children they serve to improve their diets and safeguard
their health.
(i) Requirements for lunch. School lunches offered to children age
5 or older must meet, at a minimum, the meal requirements in paragraph
(b) of this section. Schools must follow a food-based menu planning
approach and produce enough food to offer each child the quantities
specified in the meal pattern established in paragraph (c) of this
section for each age/grade group served in the school. In addition,
school lunches must meet the dietary specifications in paragraph (f) of
this section. Schools offering lunches to children ages 1 to 4 and
infants must meet the meal pattern requirements in paragraph (p) of
this section.
(ii) Requirements for afterschool snacks. Schools offering
afterschool snacks in afterschool care programs must meet the meal
pattern requirements in paragraph (o) of this section. Schools must
plan and produce enough food to offer each child the minimum quantities
under the meal pattern in paragraph (o) of this section. The component
requirements for meal supplements served under the Child and Adult Care
Food Program authorized under part 226 of this chapter also apply to
afterschool snacks served in accordance with paragraph (o) of this
section.
(2) Unit pricing. Schools must price each meal as a unit. Schools
need to consider participation trends in an effort to provide one
reimbursable lunch and, if applicable, one reimbursable afterschool
snack for each child every school day. If there are leftover meals,
schools may offer them to the students but cannot get Federal
reimbursement

[[Page 4144]]

for them. Schools must identify, near or at the beginning of the
serving line(s), the food items that constitute the unit-priced
reimbursable school meal(s). The price of a reimbursable lunch does not
change if the student does not take a food item or requests smaller
portions.
(3) Production and menu records. Schools or school food
authorities, as applicable, must keep production and menu records for
the meals they produce. These records must show how the meals offered
contribute to the required food components and food quantities for each
age/grade group every day. Labels or manufacturer specifications for
food products and ingredients used to prepare school meals must
indicate zero grams of trans fat per serving (less than 0.5 grams).
Schools or school food authorities must maintain records of the latest
nutritional analysis of the school menus conducted by the State agency.
Production and menu records must be maintained in accordance with FNS
guidance.
(b) Meal requirements for school lunches. School lunches for
children ages 5 and older must reflect food and nutrition requirements
specified by the Secretary. Compliance with these requirements is
measured as follows:
(1) On a daily basis: (i) Meals offered to each age/grade group
must include the food components and food quantities specified in the
meal pattern in paragraph (c) of this section;
(ii) Food products or ingredients used to prepare meals must
contain zero grams of trans fat per serving or a minimal amount of
naturally occurring trans fat; and
(iii) The meal selected by each student must have the number of
food components required for a reimbursable meal and include at least
one fruit or vegetable.
(2) Over a 5-day school week: (i) Average calorie content of meals
offered to each age/grade group must be within the minimum and maximum
calorie levels specified in paragraph (f) of this section;
(ii) Average saturated fat content of the meals offered to each
age/grade group must be less than 10 percent of total calories; and
(iii) Average sodium content of the meals offered to each age/grade
group must not exceed the maximum level specified in paragraph (f) of
this section.
(c) Meal pattern for school lunches. Schools must offer the food
components and quantities required in the lunch meal pattern
established in the following table:

----------------------------------------------------------------------------------------------------------------
Lunch meal pattern
Meal pattern -----------------------------------------------------
Grades K-5 Grades 6-8 Grades 9-12
----------------------------------------------------------------------------------------------------------------
Amount of food \a\ per week
(minimum per day)
----------------------------------------------------------------------------------------------------------------
Fruits (cups) \b\......................................... 2\1/2\ (\1/2\) 2\1/2\ (\1/2\) 5 (1)
Vegetables (cups) \b\..................................... 3\3/4\ (\3/4\) 3\3/4\ (\3/4\) 5 (1)
Dark green \c\........................................ \1/2\ \1/2\ \1/2\
Red/Orange \c\........................................ \3/4\ \3/4\ 1\1/4\
Beans and peas (legumes) \c\.......................... \1/2\ \1/2\ \1/2\
Starchy \c\........................................... \1/2\ \1/2\ \1/2\
Other c d................................................. \1/2\ \1/2\ \3/4\
Additional Veg to Reach Total \e\......................... 1 \e\ 1 \e\ 1\1/2\ \e\
Grains (oz eq) \f\........................................ 8-9 (1) 8-10 (1) 10-12 (2)
Meats/Meat Alternates (oz eq)............................. 8-10 (1) 9-10 (1) 10-12 (2)
Fluid milk (cups) \g\..................................... 5 (1) 5 (1) 5 (1)
----------------------------------------------------------------------------------------------------------------
Other Specifications: Daily Amount Based on the Average for a 5-Day Week
----------------------------------------------------------------------------------------------------------------
Min-max calories (kcal) \h\............................... 550-650 600-700 750-850
Saturated fat (% of total calories) \h\................... < 10 < 10 < 10
Sodium (mg) h i........................................... <= 640 <= 710 <= 740
-----------------------------------------------------
Trans fat \h\............................................. Nutrition label or manufacturer specifications must
indicate zero grams of trans fat per serving.
----------------------------------------------------------------------------------------------------------------
\a\ Food items included in each group and subgroup and amount equivalents. Minimum creditable serving is \1/8\
cup.
\b\ One quarter-cup of dried fruit counts as \1/2\ cup of fruit; 1 cup of leafy greens counts as \1/2\ cup of
vegetables. No more than half of the fruit or vegetable offerings may be in the form of juice. All juice must
be 100% full-strength.
\c\ Larger amounts of these vegetables may be served.
\d\ This category consists of ``Other vegetables'' as defined in Sec. 210.10(c)(2)(iii)(E). For the purposes
of the NSLP, the ``Other vegetables'' requirement may be met with any additional amounts from the dark green,
red/orange, and beans/peas (legumes) vegetable subgroups as defined in Sec. 210.10(c)(2)(iii).
\e\ Any vegetable subgroup may be offered to meet the total weekly vegetable requirement.
\f\ Beginning July 1, 2012 (SY 2012-2013), at least half of grains offered must be whole grain-rich. Beginning
July 1, 2014 (SY 2014-15), all grains must be whole grain-rich.
\g\ Beginning July 1, 2012 (SY 2012-2013), all fluid milk must be low-fat (1 percent or less, unflavored) or fat-
free (unflavored or flavored).
\h\ Discretionary sources of calories (solid fats and added sugars) may be added to the meal pattern if within
the specifications for calories, saturated fat, trans fat, and sodium. Foods of minimal nutritional value and
fluid milk with fat content greater than 1 percent are not allowed.
\i\ Final sodium targets must be met no later than July 1, 2022 (SY 2022-2023). The first intermediate target
must be met no later than SY 2014-2015 and the second intermediate target must be met no later than SY 2017-
2018. See required intermediate specifications in Sec. 210.10(f)(3).

(1) Age/grade groups. Schools must plan menus for students using
the following age/grade groups: Grades K-5 (ages 5-10), grades 6-8
(ages 11-13), and grades 9-12 (ages 14-18). If an unusual grade
configuration in a school prevents the use of these established age/
grade groups, students in grades K-5 and grades 6-8 may be offered the
same food quantities at lunch provided that the calorie and sodium
standards for each age/grade group are met. No customization of the
established age/grade groups is allowed.
(2) Food components. Schools must offer students in each age/grade
group the food components specified in paragraph (c) of this section.

[[Page 4145]]

(i) Meats/meat alternates component. Schools must offer meats/meat
alternates daily as part of the lunch meal pattern. The quantity of
meats/meat alternates must be the edible portion as served. This
component must be served in a main dish or in a main dish and only one
other food item. Schools without daily choices in this component should
not serve any one meat alternate or form of meat (for example, ground,
diced, pieces) more than three times in the same week. If a portion
size of this component does not meet the daily requirement for a
particular age/grade group, schools may supplement it with another
meats/meat alternates to meet the full requirement. Schools may adjust
the daily quantities of this component provided that a minimum of one
ounce is offered daily to students in grades K-8 and a minimum of two
ounces is offered daily to students in grades 9-12, and the total
weekly requirement is met over a five-day period.
(A) Enriched macaroni. Enriched macaroni with fortified protein as
defined in Appendix A to this part may be used to meet part of the
meats/meat alternates requirement when used as specified in Appendix A
to this part. An enriched macaroni product with fortified protein as
defined in Appendix A to this part may be used to meet part of the
meats/meat alternates component or the grains component but may not
meet both food components in the same lunch.
(B) Nuts and seeds. Nuts and seeds and their butters are allowed as
meat alternates in accordance with FNS guidance. Acorns, chestnuts, and
coconuts may not be used because of their low protein and iron content.
Nut and seed meals or flours may be used only if they meet the
requirements for Alternate Protein Products established in Appendix A
to this part. Nuts or seeds may be used to meet no more than one-half
(50 percent) of the meats/meat alternates component with another meats/
meat alternates to meet the full requirement.
(C) Yogurt. Yogurt may be used to meet all or part of the meats/
meat alternates component. Yogurt may be plain or flavored, unsweetened
or sweetened. Noncommercial and/or non-standardized yogurt products,
such as frozen yogurt, drinkable yogurt products, homemade yogurt,
yogurt flavored products, yogurt bars, yogurt covered fruits and/or
nuts or similar products are not creditable. Four ounces (weight) or
\1/2\ cup (volume) of yogurt equals one ounce of the meats/meat
alternates requirement.
(D) Tofu and soy products. Commercial tofu and soy products may be
used to meet all or part of the meats/meat alternates component in
accordance with FNS guidance. Noncommercial and/or non-standardized
tofu and soy products are not creditable.
(E) Beans and Peas (legumes). Cooked dry beans and peas (legumes)
may be used to meet all or part of the meats/meat alternates component.
Beans and peas (legumes) are identified in this section and include
foods such as black beans, garbanzo beans, lentils, kidney beans,
mature lima beans, navy beans, pinto beans, and split peas.
(F) Other Meat Alternates. Other meat alternates, such as cheese
and eggs, may be used to meet all or part of the meats/meat alternates
component in accordance with FNS guidance.
(ii) Fruits component. Schools must offer fruits daily as part of
the lunch menu. Fruits that are fresh; frozen without added sugar;
canned in light syrup, water or fruit juice; or dried may be offered to
meet the requirements of this paragraph. All fruits are credited based
on their volume as served, except that \1/4\ cup of dried fruit counts
as \1/2\ cup of fruit. Only pasteurized, full-strength fruit juice may
be used, and may be credited to meet no more than one-half of the
fruits component.
(iii) Vegetables component. Schools must offer vegetables daily as
part of the lunch menu. Fresh, frozen, or canned vegetables and dry
beans and peas (legumes) may be offered to meet this requirement. All
vegetables are credited based on their volume as served, except that 1
cup of leafy greens counts as \1/2\ cup of vegetables and tomato paste
and puree are credited based on calculated volume of the whole food
equivalency. Pasteurized, full-strength vegetable juice may be used to
meet no more than one-half of the vegetables component. Cooked dry
beans or peas (legumes) may be counted as either a vegetable or as a
meat alternate but not as both in the same meal. Vegetable offerings at
lunch over the course of the week must include the following vegetable
subgroups, as defined in this section in the quantities specified in
the meal pattern in paragraph (c) of this section:
(A) Dark green vegetables. This subgroup includes vegetables such
as bok choy, broccoli, collard greens, dark green leafy lettuce, kale,
mesclun, mustard greens, romaine lettuce, spinach, turnip greens, and
watercress;
(B) Red-orange vegetables. This subgroup includes vegetables such
as acorn squash, butternut squash, carrots, pumpkin, tomatoes, tomato
juice, and sweet potatoes;
(C) Beans and peas (legumes). This subgroup includes vegetables
such as black beans, black-eyed peas (mature, dry), garbanzo beans
(chickpeas), kidney beans, lentils, navy beans pinto beans, soy beans,
split peas, and white beans;
(D) Starchy vegetables. This subgroup includes vegetables such as
black-eyed peas (not dry), corn, cassava, green bananas, green peas,
green lima beans, plantains, taro, water chestnuts, and white potatoes;
and
(E) Other vegetables. This subgroup includes all other fresh,
frozen, and canned vegetables, cooked or raw, such as artichokes,
asparagus, avocado, bean sprouts, beets, Brussels sprouts, cabbage,
cauliflower, celery, cucumbers, eggplant, green beans, green peppers,
iceberg lettuce, mushrooms, okra, onions, parsnips, turnips, wax beans,
and zucchini.
(iv) Grains component. (A) Enriched and whole grains. All grains
must be made with enriched and whole grain meal or flour, in accordance
with the most recent grains FNS guidance. Whole grain-rich products
must contain at least 51 percent whole grains and the remaining grains
in the product must be enriched.
(B) Daily and weekly servings. The grains component is based on
minimum daily servings plus total servings over a five-day school week.
Beginning July 1, 2012 (SY 2012-2013), half of the grains offered
during the school week must meet the whole grain-rich criteria
specified in FNS guidance. Beginning July 1, 2014 (SY 2014-2015), all
grains must meet the whole grain-rich criteria specified in FNS
guidance. The whole grain-rich criteria provided in FNS guidance may be
updated to reflect additional information provided voluntarily by
industry on the food label or a whole grains definition by the Food and
Drug Administration. Schools serving lunch 6 or 7 days per week must
increase the weekly grains quantity by approximately 20 percent (1/5)
for each additional day. When schools operate less than 5 days per
week, they may decrease the weekly quantity by approximately 20 percent
(1/5) for each day less than five. The servings for biscuits, rolls,
muffins, and other grain/bread varieties are specified in FNS guidance.
(C) Desserts. Schools may count up to two grain-based desserts per
week towards meeting the grains requirement as specified in FNS
guidance.
(v) Fluid milk component. Fluid milk must be offered daily in
accordance with paragraph (d) of this section.
(3) Food components in outlying areas. Schools in American Samoa,
Puerto Rico and the Virgin Islands may

[[Page 4146]]

serve vegetables such as yams, plantains, or sweet potatoes to meet the
grains component.
(4) Adjustments to the school menus. Schools must adjust future
menu cycles to reflect production and how often the food items are
offered. Schools may need to change the foods offerings given students'
selections and may need to modify recipes and other specifications to
make sure that meal requirements are met.
(5) Standardized recipes. All schools must develop and follow
standardized recipes. A standardized recipe is a recipe that was tested
to provide an established yield and quantity using the same ingredients
for both measurement and preparation methods. Standardized recipes
developed by USDA/FNS are in the Child Nutrition Database. If a school
has its own recipes, they may seek assistance from the State agency or
school food authority to standardize the recipes. Schools must add any
local recipes to their local database as outlined in FNS guidance.
(6) Processed foods. The Child Nutrition Database includes a number
of processed foods. Schools may use purchased processed foods that are
not in the Child Nutrition Database. Schools or the State agency must
add any locally purchased processed foods to their local database as
outlined in FNS guidance. The State agencies must obtain the levels of
calories, saturated fat, and sodium in the processed foods.
(7) Menu substitutions. Schools should always try to substitute
nutritionally similar foods.
(d) Fluid milk requirement. (1) Types of fluid milk. (i) Schools
must offer students a variety (at least two different options) of fluid
milk. All milk must be fat-free or low-fat. Milk with higher fat
content is not allowed. Fat-free fluid milk may be flavored or
unflavored, and low-fat fluid milk must be unflavored. Low fat or fat-
free lactose-free and reduced-lactose fluid milk may also be offered.
(ii) All fluid milk served in the Program must be pasteurized fluid
milk which meets State and local standards for such milk. All fluid
milk must have vitamins A and D at levels specified by the Food and
Drug Administration and must be consistent with State and local
standards for such milk.
(2) Inadequate fluid milk supply. If a school cannot get a supply
of fluid milk, it can still participate in the Program under the
following conditions:
(i) If emergency conditions temporarily prevent a school that
normally has a supply of fluid milk from obtaining delivery of such
milk, the State agency may allow the school to serve meals during the
emergency period with an alternate form of fluid milk or without fluid
milk.
(ii) If a school is unable to obtain a supply of any type of fluid
milk on a continuing basis, the State agency may approve the service of
meals without fluid milk if the school uses an equivalent amount of
canned milk or dry milk in the preparation of the meals. In Alaska,
Hawaii, American Samoa, Guam, Puerto Rico, and the Virgin Islands, if a
sufficient supply of fluid milk cannot be obtained, ``fluid milk''
includes reconstituted or recombined fluid milk, or as otherwise
allowed by FNS through a written exception.
(3) Fluid milk substitutes. If a school chooses to offer one or
more substitutes for fluid milk for non-disabled students with medical
or special dietary needs, the nondairy beverage(s) must provide the
nutrients listed in the following table. Fluid milk substitutes must be
fortified in accordance with fortification guidelines issued by the
Food and Drug Administration. A school need only offer the nondairy
beverage(s) that it has identified as allowable fluid milk substitutes
according to the following chart.

------------------------------------------------------------------------
Nutrient Per cup (8 fl oz)
------------------------------------------------------------------------
Calcium..................................... 276 mg.
Protein..................................... 8 g.
Vitamin A................................... 500 IU.
Vitamin D................................... 100 IU.
Magnesium................................... 24 mg.
Phosphorus.................................. 222 mg.
Potassium................................... 349 mg.
Riboflavin.................................. 0.44 mg.
Vitamin B-12................................ 1.1 mcg.
------------------------------------------------------------------------

(4) Restrictions on the sale of fluid milk. A school participating
in the Program, or a person approved by a school participating in the
Program, must not directly or indirectly restrict the sale or marketing
of fluid milk (as identified in paragraph (d)(1) of this section) at
any time or in any place on school premises or at any school-sponsored
event.
(e) Offer versus serve. School lunches must offer daily the five
food components specified in the meal pattern in paragraph (c) of this
section. Under offer versus serve, students must be allowed to decline
two items at lunch, except that the students must select at least \1/2\
cup of either the fruit or vegetable component. Senior high schools (as
defined by the State educational agency) must participate in offer
versus serve. Schools below the senior high level may participate in
offer versus serve at the discretion of the school food authority.
(f) Dietary specifications. (1) Calories. School lunches offered to
each age/grade group must meet, on average over the school week, the
minimum and maximum calorie levels specified in the following table:

----------------------------------------------------------------------------------------------------------------
Calorie ranges for lunch
--------------------------------------------------------
Grades K-5 Grades 6-8 Grades 9-12
----------------------------------------------------------------------------------------------------------------
Min-max calories (kcal) \ab\........................... 550-650 600-700 750-850
----------------------------------------------------------------------------------------------------------------
\a\ The average daily amount for a 5-day school week must fall within the minimum and maximum levels.
\b\ Discretionary sources of calories (solid fats and added sugars) may be added to the meal pattern if within
the specifications for calories, saturated fat, trans fat, and sodium.

(2) Saturated fat. School lunches offered to all age/grade groups
must, on average over the school week, provide less than 10 percent of
total calories from saturated fat.
(3) Sodium. Schools lunches offered to each age/grade group must
meet, on average over the school week, the levels of sodium specified
in the following table within the established deadlines:

[[Page 4147]]

----------------------------------------------------------------------------------------------------------------
National school lunch program Sodium reduction: Timeline & amount
----------------------------------------------------------------------------------------------------------------
Baseline: Average
current sodium Target 1: July Target 2: July Final Target:
Age/grade group levels in meals as 1, 2014 (SY 2014- 1, 2017 (SY 2017- July 1, 2022 (SY
offered \1\ (mg) 2015) (mg) 2018) (mg) 2022-2023) (mg)
----------------------------------------------------------------------------------------------------------------
K-5.............................. 1,377 (elementary).. <= 1,230 <= 935 <= 640
6-8.............................. 1,520 (middle)...... <= 1,360 <= 1,035 <= 710
9-12............................. 1,588 (high)........ <= 1,420 <= 1,080 <= 740
----------------------------------------------------------------------------------------------------------------
\1\ SNDA-III.

(4) Trans fat. Food products and ingredients used to prepare school
meals must contain zero grams of trans fat (less than 0.5 grams) per
serving. Schools must add the trans fat specification and request the
required documentation (nutrition label or manufacturer specifications)
in their procurement contracts. Documentation for food products and
food ingredients must indicate zero grams of trans fat per serving.
Meats that contain a minimal amount of naturally-occurring trans fats
are allowed in the school meal programs.
(g) Compliance assistance. The State agency and school food
authority must provide technical assistance and training to assist
schools in planning lunches that meet the meal pattern in paragraph (c)
of this section and the calorie, saturated fat, sodium, and trans fat
specifications established in paragraph (f) of this section. Compliance
assistance may be offered during trainings, onsite visits, and/or
administrative reviews.
(h) State agency responsibilities for monitoring dietary
specifications. (1) Calories, saturated fat and sodium. As part of the
administrative review authorized under Sec. 210.18 of this chapter,
State agencies must conduct a weighted nutrient analysis for the
school(s) selected for review to evaluate the average levels of
calories, saturated fat, and sodium of the lunches offered to students
in grades K and above during one week of the review period. The
nutrient analysis must be conducted in accordance with the procedures
established in paragraph (i)(3) of this section. If the results of the
nutrient analysis indicate that the school lunches are not meeting the
specifications for calories, saturated fat, and sodium specified in
paragraph (f) of this section, the State agency or school food
authority must provide technical assistance and require the reviewed
school to take corrective action to meet the requirements.
(2) Trans fat. State agencies must review product labels or
manufacturer specifications to verify that the food products or
ingredients used by the reviewed school(s) contain zero grams of trans
fat (less than 0.5 grams) per serving.
(i) State agency's responsibilities for nutrient analyses. (1)
Conducting the nutrient analyses. State agencies must conduct a
weighted nutrient analysis of the reimbursable meals offered to
children in grades K and above by a school selected for administrative
review under Sec. 210.18 of this chapter. The nutrient analysis must
be conducted in accordance with the procedures established in paragraph
(i)(3) of this section. The purpose of the nutrient analysis is to
determine the average levels of calories, saturated fat, and sodium in
the meals offered over a school week within the review period. Unless
offered as part of a reimbursable meal, foods of minimal nutritional
value (see appendix B to part 210) are not included in the nutrient
analysis.
(2) Software elements. (i) The Child Nutrition Database. The
nutrient analysis is based on the USDA Child Nutrition Database. This
database is part of the software used to do a nutrient analysis.
Software companies or others developing systems for schools may contact
FNS for more information about the database.
(ii) Software evaluation. FNS or an FNS designee evaluates any
nutrient analysis software before it may be used in schools. FNS or its
designee determines if the software, as submitted, meets the minimum
requirements. The approval of software does not mean that FNS or USDA
endorses it. The software must be able to perform a weighted average
analysis after the basic data is entered. The combined analysis of the
lunch and breakfast programs is not allowed.
(3) Nutrient analysis procedures. (i) Weighted averages. State
agencies must include in the nutrient analysis all foods offered as
part of the reimbursable meals during one week within the review
period. Foods items are included based on the portion sizes and
projected serving amounts. They are also weighted based on their
proportionate contribution to the meals offered. This means that food
items offered more frequently are weighted more heavily than those not
offered as frequently. State agencies conduct the nutrient analysis and
calculate weighting as indicated by FNS guidance.
(ii) Analyzed nutrients. The analysis determines the average levels
of calories, saturated fat, and sodium in the meals offered over a
school week. It includes all food items offered by the reviewed school
over a one-week period.
(4) Comparing the results of the nutrient analysis. Once the
procedures in paragraph (i)(3) of this section are completed, State
agencies must compare the results of the analysis to the calorie,
saturated fat, and sodium levels established in Sec. 210.10 or Sec.
220.8, as appropriate, for each age/grade group to evaluate the
school's compliance with the dietary specifications.
(j) State agency's responsibilities for compliance monitoring.
Compliance with the meal requirements in paragraph (b) of this section,
including dietary specifications for calories, saturated fat, sodium
and trans fat, will be monitored by the State agency through
administrative reviews authorized in Sec. 210.18 of this chapter.
(k) Menu choices at lunch. (1) Availability of choices. Schools may
offer children a selection of nutritious foods within a reimbursable
lunch to encourage the consumption of a variety of foods. Children who
are eligible for free or reduced price lunches must be allowed to take
any reimbursable lunch or any choices offered as part of a reimbursable
lunch. Schools may establish different unit prices for each
reimbursable lunch offered provided that the benefits made available to
children eligible for free or reduced price lunches are not affected.
(2) Opportunity to select. Schools that choose to offer a variety
of reimbursable lunches, or provide multiple serving lines, must make
all required food components available to all students, on every lunch
line, in at least the minimum required amounts.
(l) Requirements for lunch periods. (1) Timing. Schools must offer
lunches meeting the requirements of this section during the period the
school has designated as the lunch period. Schools must offer lunches
between 10 a.m. and

[[Page 4148]]

2 p.m. Schools may request an exemption from these times from the State
agency.
(2) Adequate lunch periods. FNS encourages schools to provide
sufficient lunch periods that are long enough to give all students
adequate time to be served and to eat their lunches.
(m) Exceptions and variations allowed in reimbursable meals. (1)
Exceptions for disability reasons. Schools must make substitutions in
lunches and afterschool snacks for students who are considered to have
a disability under 7 CFR 15b.3 and whose disability restricts their
diet. Substitutions must be made on a case by case basis only when
supported by a written statement of the need for substitution(s) that
includes recommended alternate foods, unless otherwise exempted by FNS.
Such statement must be signed by a licensed physician.
(2) Exceptions for non-disability reasons. Schools may make
substitutions for students without disabilities who cannot consume the
regular lunch or afterschool snack because of medical or other special
dietary needs. Substitutions must be made on a case by case basis only
when supported by a written statement of the need for substitutions
that includes recommended alternate foods, unless otherwise exempted by
FNS. Except with respect to substitutions for fluid milk, such a
statement must be signed by a recognized medical authority.
(i) Fluid milk substitutions for non-disability reasons. Schools
may make substitutions for fluid milk for non-disabled students who
cannot consume fluid milk due to medical or special dietary needs. A
school that selects this option may offer the nondairy beverage(s) of
its choice, provided the beverage(s) meets the nutritional standards
established under paragraph (d) of this section. Expenses incurred when
providing substitutions for fluid milk that exceed program
reimbursements must be paid by the school food authority.
(ii) Requisites for fluid milk substitutions. (A) A school food
authority must inform the State agency if any of its schools choose to
offer fluid milk substitutes other than for students with disabilities;
and
(B) A medical authority or the student's parent or legal guardian
must submit a written request for a fluid milk substitute identifying
the medical or other special dietary need that restricts the student's
diet.
(iii) Substitution approval. The approval for fluid milk
substitution must remain in effect until the medical authority or the
student's parent or legal guardian revokes such request in writing, or
until such time as the school changes its substitution policy for non-
disabled students.
(3) Variations for ethnic, religious, or economic reasons. Schools
should consider ethnic and religious preferences when planning and
preparing meals. Variations on an experimental or continuing basis in
the food components for the meal pattern in paragraph (c) of this
section may be allowed by FNS. Any variations must be consistent with
the food and nutrition requirements specified under this section and
needed to meet ethnic, religious, or economic needs.
(4) Exceptions for natural disasters. If there is a natural
disaster or other catastrophe, FNS may temporarily allow schools to
serve meals for reimbursement that do not meet the requirements in this
section.
(n) Nutrition disclosure. To the extent that school food
authorities identify foods in a menu, or on the serving line or through
other communications with program participants, school food authorities
must identify products or dishes containing more than 30 parts fully
hydrated alternate protein products (as specified in appendix A of this
part) to less than 70 parts beef, pork, poultry or seafood on an
uncooked basis, in a manner which does not characterize the product or
dish solely as beef, pork, poultry or seafood. Additionally, FNS
encourages schools to inform the students, parents, and the public
about efforts they are making to meet the meal requirements for school
lunches.
(o) Afterschool snacks. Eligible schools operating afterschool care
programs may be reimbursed for one afterschool snack served to a child
(as defined in Sec. 210.2) per day.
(1) ``Eligible schools'' means schools that:
(i) Operate school lunch programs under the Richard B. Russell
National School Lunch Act; and
(ii) Sponsor afterschool care programs as defined in Sec. 210.2.
(2) Afterschool snacks shall contain two different components from
the following four:
(i) A serving of fluid milk as a beverage, or on cereal, or used in
part for each purpose;
(ii) A serving of meat or meat alternate. Nuts and seeds and their
butters listed in FNS guidance are nutritionally comparable to meat or
other meat alternates based on available nutritional data. Acorns,
chestnuts, and coconuts are excluded and shall not be used as meat
alternates due to their low protein content. Nut or seed meals or
flours shall not be used as a meat alternate except as allowed under
appendix A of this part;
(iii) A serving of vegetable(s) or fruit(s) or full-strength
vegetable or fruit juice, or an equivalent quantity of any combination
of these foods. Juice may not be served when fluid milk is served as
the only other component;
(iv) A serving of whole-grain or enriched bread; or an equivalent
serving of a bread product, such as cornbread, biscuits, rolls, or
muffins made with whole-grain or enriched meal or flour; or a serving
of cooked whole-grain or enriched pasta or noodle products such as
macaroni, or cereal grains such as enriched rice, bulgur, or enriched
corn grits; or an equivalent quantity of any combination of these
foods.
(3) Afterschool snacks served to infants ages birth through 11
months must meet the requirements in paragraph (o)(3)(iv) of this
section. Foods offered as meal supplements must be of a texture and a
consistency that are appropriate for the age of the infant being
served. The foods must be served during a span of time consistent with
the infant's eating habits. For those infants whose dietary needs are
more individualized, exceptions to the meal pattern must be made in
accordance with the requirements found in paragraph (m) of this
section.
(i) Breastmilk and iron-fortified formula. Either breastmilk or
iron-fortified infant formula, or portions of both, must be served for
the entire first year. Snacks containing breastmilk and snacks
containing iron-fortified infant formula served by the school are
eligible for reimbursement. However, infant formula provided by a
parent (or guardian) and breastmilk fed directly by the infant's
mother, during a visit to the school, contribute to a reimbursable
snack only when the school supplies at least one component of the
infant's snack.
(ii) Fruit juice. Juice should not be offered to infants until they
are 6 months of age and ready to drink from a cup. Fruit juice served
as part of the meal pattern for infants 8 through 11 months must be
full-strength and pasteurized.
(iii) Solid foods. Solid foods of an appropriate texture and
consistency are required only when the infant is developmentally ready
to accept them. The school should consult with the infant's parent (or
guardian) in making the decision to introduce solid foods. Solid foods
should be introduced one at a time, on a gradual basis, with the intent
of ensuring the infant's health and nutritional well-being.

[[Page 4149]]

(iv) Infant meal pattern. Meal supplements for infants must
include, at a minimum, breastmilk or iron-fortified infant formula, or
portions of both, in the appropriate amount indicated for the infant's
age. For some breastfed infants who regularly consume less than the
minimum amount of breastmilk per feeding, a serving of less than the
minimum amount of breastmilk may be offered. In these situations,
additional breastmilk must be offered if the infant is still hungry.
Some infants may be developmentally ready to accept an additional food
component. Meal supplements are reimbursable when schools provide all
of the components in the Supplements for Infants table that the infant
is developmentally ready to accept.
(4) The minimum amounts of food components to be served as meal
supplements follow. Select two different components from the four
listed in the Supplements for Infants table (Juice may not be served
when fluid milk is served as the only other component). A serving of
bread/bread alternate must be made from whole-grain or enriched meal or
flour. It is required only when the infant is developmentally ready to
accept it.

Supplements for Infants
----------------------------------------------------------------------------------------------------------------
Birth through 3 months 4 through 7 months 8 through 11 months
----------------------------------------------------------------------------------------------------------------
Supplement (snack)................... 4-6 fl. oz. breastmilk 4-6 fl. oz. breastmilk 2-4 fl. oz. breastmilk
1 2 or formula 3. 1 2 or formula 3. 1 2, formula 3, or
fruit juice 4;
0-1/2 bread 5 or
0-2 crackers 5.
----------------------------------------------------------------------------------------------------------------
1 It is recommended that breastmilk be served in place of formula from birth through 11 months.
2 For some breastfed infants who regularly consume less than the minimum amount of breastmilk per feeding, a
serving of less than the minimum amount of breastmilk may be offered with additional breast milk offered if
the infant is still hungry.
3 Infant formula must be iron-fortified.
4 Fruit juice must be full-strength and pasteurized.
5 Bread and bread alternates must be made from whole grain or enriched meal or flour. A serving of this
component must be optional.

(p) Lunches for preschoolers and infants. (1) Requirements for
preschooler's lunch pattern. (i) General. Until otherwise instructed by
the Secretary, lunches for children ages 1 to 4 must meet the nutrition
standards in paragraph (p)(2) of this section, the nutrient and calorie
levels in paragraph (p)(3) of this section, and meal pattern in
paragraph (p)(4) of this section.
(ii) Unit pricing. Schools must price each meal as a unit. Schools
need to consider participation trends in an effort to provide one
reimbursable lunch for each child every day. If there are leftover
meals, schools may offer them to the students but cannot receive
Federal reimbursement for them.
(iii) Production and menu records. Schools must keep production and
menu records for the meals they produce. These records must show how
the meals contribute to the required food components and quantities
every day. In addition, these records must show how the lunches
contribute to the nutrition standards in paragraph (p)(2) of this
section and the appropriate calorie and nutrient requirements for the
children served. Schools or school food authorities must maintain
records of the latest nutritional analysis of the school menus
conducted by the State agency.
(2) Nutrition standards for preschoolers' lunches. Children ages 1
to 4 must be offered lunches that meet the following nutrition
standards for their age group:
(i) Provision of one-third of the Recommended Dietary Allowances
(RDAs) for protein, calcium, iron, vitamin A, and vitamin C in the
appropriate levels for the ages/grades (see paragraph (p)(3) of this
section).
(ii) Provision of the lunchtime energy allowances (calories) in the
appropriate levels (see paragraph (p)(3) of this section);
(iii) The following dietary recommendations:
(A) Eat a variety of foods;
(B) Limit total fat to 30 percent of total calories;
(C) Limit saturated fat to less than 10 percent of total calories;
(D) Choose a diet low in cholesterol;
(E) Choose a diet with plenty of grain products, vegetables, and
fruits; and
(F) Choose a diet moderate in salt and sodium.
(iv) The following measures of compliance:
(A) Limit the percent of calories from total fat to 30 percent of
the actual number of calories offered;
(B) Limit the percent of calories from saturated fat to less than
10 percent of the actual number of calories offered;
(C) Reduce sodium and cholesterol levels; and
(D) Increase the level of dietary fiber.
(v) Compliance with the nutrition standards and the appropriate
nutrient and calorie levels is determined by the State agency in
accordance with the procedures in paragraph (p)(10) of this section.
(3) Nutrient and calorie levels. The minimum levels of nutrients
and calories that lunches for preschoolers must offer are specified in
the following table:

Minimum Nutrient and Calorie Levels for Lunches--Traditional Food-Based
Menu Planning Approach \1\
------------------------------------------------------------------------
Group II preschool ages
3-4
Nutrients and energy allowances ------------------------
School week averages
------------------------------------------------------------------------
Energy allowances (calories)................... 517
Total fat (as a percentage of actual total food (2)
energy).......................................
Saturated fat (as a percentage of actual total (2)
food energy)..................................
RDA for protein (g)............................ 7
RDA for calcium (mg)........................... 267
RDA for iron (mg).............................. 3.3
RDA for Vitamin A (RE)......................... 150

[[Page 4150]]

RDA for Vitamin C (mg)......................... 14
------------------------------------------------------------------------
\1\ Current regulations only specify minimum nutrient and calorie levels
for lunches for children ages 3-4.
\2\ The 1995 Dietary Guidelines recommend that after 2 years of age ``*
* * children should gradually adopt a diet that, by about 5 years of
age, contains no more than 30 percent of calories from fat.''

(4) Meal pattern for preschoolers' lunches. Schools must follow the
traditional food-based menu planning approach to plan lunches for
children ages 1-2 and ages 3-4.
(i) Food components and quantities. Lunches must offer the food
components and quantities specified in the following meal pattern:

Traditional Food-Based Menu Planning Approach--Meal Plan for Lunches
------------------------------------------------------------------------
Group I ages 1-2 Group II ages 3-4
preschool preschool
------------------------------------------------------------------------
Food components and food items Minimum quantities
------------------------------------------------------------------------
Fluid milk (as a beverage)...... 6 fluid ounces.... 6 fluid ounces.\1\
Meat or Meat Alternates:
Lean meat, poultry, or fish. 1 ounce........... 1 \1/2\ ounces.
Alternate Protein Products 1 ounce........... 1 \1/2\ ounces.
\2\.
Cheese.......................... 1 ounce........... 1 \1/2\ ounces.
Large egg....................... \1/2\............. \3/4\.
Cooked dry beans and peas....... \1/4\ cup......... \3/8\ cup.
Peanut butter or other nut or 2 tablespoons..... 3 tablespoons.
seed butters.
Yogurt, plain or flavored, 4 ounces or \1/2\ 6 ounces or \3/4\
unsweetened or sweetened. cup. cup.
The following may be used to
meet no more than 50% of the
requirement and must be used in
combination with any of the
above:
Peanuts, soy nuts, tree \1/2\ ounce = 50%. \3/4\ ounce = 50%.
nuts, or seeds, as listed
in program guidance, or an
equivalent quantity of any
combination of the above
meat/meat alternate (1
ounce of nuts/seeds = 1
ounce of cooked lean meat,
poultry or fish).
Vegetable or Fruit: 2 or more \1/2\ cup......... \1/2\ cup.
servings of vegetables, fruits
or both.
Grains/Breads (servings per 5 servings per 8 servings per
week): Must be enriched or week \3\--minimum week \3\--minimum
whole grain. A serving is a of \1/2\ serving of 1 serving per
slice of bread or an equivalent per day. day.
serving of biscuits, rolls,
etc., or \1/2\ cup of cooked
rice, macaroni, noodles, other
pasta products or cereal grains.
------------------------------------------------------------------------
\1\ Beginning July 1, 2012 (SY 2012-2013), fluid milk for children Ages
3-4 must be fat-free (unflavored or flavored) or low-fat (unflavored
only).
\2\ Must meet the requirements in Appendix A of this part.
\3\ For the purposes of this table, a week equals five days.

(ii) Meat/meat alternate component.--The quantity of the meat/meat
alternate component must be the edible portion as served. If the
portion size of a food item for this component is excessive, the school
must reduce that portion and supplement it with another meat/meat
alternate to meet the full requirement. This component must be served
in a main dish or in a main dish and only one other food item. Schools
without daily choices in this component should not serve any one meat
alternate or form of meat (for example, ground, diced, pieces) more
than three times in the same week. Schools may adjust the daily
quantities of this component provided that a minimum of one ounce is
offered daily and the total weekly requirement is met over a five-day
period.
(A) Enriched macaroni.--Enriched macaroni with fortified protein as
defined in appendix A to this part may be used to meet part of the
meat/meat alternate requirement when used as specified in appendix A to
this part. An enriched macaroni product with fortified protein as
defined in appendix A to this part may be used to meet part of the
meat/meat alternate component or the grains/breads component but not as
both food components in the same lunch.
(B) Nuts and seeds. Nuts and seeds and their butters are allowed as
meat alternates in accordance with FNS guidance. Acorns, chestnuts, and
coconuts must not be used because of their low protein and iron
content. Nut and seed meals or flours may be used only as allowed under
appendix A to this part. Nuts or seeds may be used to meet no more than
one-half of the meat/meat alternate component with another meat/meat
alternate to meet the full requirement.
(C) Yogurt. Yogurt may be used to meet all or part of the meat/meat
alternate requirement. Yogurt may be plain or flavored, and unsweetened
or sweetened. Noncommercial and/or non-standardized yogurt products,
such as frozen yogurt, homemade yogurt, yogurt flavored products,
yogurt bars, yogurt covered fruit and/or nuts or similar products are
not creditable. Four ounces (weight) or \1/2\ cup (volume) of yogurt
equals one ounce of the meat/meat alternate requirement.
(iii) Vegetable/fruit component. Full strength vegetable or fruit
juice may be used to meet no more than one-half of the vegetable/fruit
requirement. Cooked dry beans or peas may be counted as

[[Page 4151]]

either a vegetable or as a meat alternate but not as both in the same
meal.
(iv) Grains/breads component. (A) Enriched or whole grains. All
grains/breads must be enriched or whole grain or made with enriched or
whole grain meal or flour.
(B) Daily and weekly servings. The requirement for the grain/bread
component is based on minimum daily servings plus total servings over a
five day period. Schools serving lunch 6 or 7 days per week should
increase the weekly quantity by approximately 20 percent (1/5th) for
each additional day. When schools operate less than 5 days per week,
they may decrease the weekly quantity by approximately 20 percent (1/
5th) for each day less than five. The servings for biscuits, rolls,
muffins, and other grain/bread varieties are specified in FNS guidance.
(C) Minimums under the traditional food-based menu planning
approach. Schools must offer daily at least one-half serving of the
grain/bread component to children in Group I and at least one serving
to children in Group II. Schools which serve lunch at least 5 days a
week shall serve a total of at least five servings of grains/breads to
children in Group I and eight servings per week to children in Group
II.
(D) Offer versus serve. Schools must offer all five required food
items. At the school food authority's option, students in preschool may
decline one or two of the five food items. The price of a reimbursable
lunch does not change if the student does not take a food item or
requests smaller portions.
(E) Meal pattern exceptions for outlying areas. Schools in American
Samoa, Puerto Rico and the Virgin Islands may serve vegetables such as
yams, plantains, or sweet potatoes to meet the grain/bread requirement.
(5) Fluid milk requirement. Schools must offer students in age
group 1-2 fluid milk in a variety of fat contents, flavored or
unflavored. Schools may also offer this age group lactose-free or
reduced-lactose fluid milk. For students in age group 3-4, schools must
offer fat-free milk (unflavored or flavored) and low-fat milk
(unflavored only). Schools may also offer this age group lactose-free
and reduced-lactose milk that is fat-free or low-fat. Students in age
group 3-4 must be offered a variety (at least two different options) of
fluid milk. All fluid milk served must be pasteurized fluid milk which
meets State and local standards for such milk. All fluid milk must have
vitamins A and D at levels specified by the Food and Drug
Administration and must be consistent with State and local standards
for such milk. Schools must also comply with other applicable milk
requirements in Sec. 210.10(d)(2) through (4) of this part.
(6) Menu choices. FNS encourages schools to offer children a
selection of foods at lunch. Choices provide variety and encourage
consumption. Schools may offer choices of reimbursable lunches or foods
within a reimbursable lunch. Children who are eligible for free or
reduced price lunches must be allowed to take any reimbursable lunch or
any choices offered as part of a reimbursable lunch. Schools may
establish different unit prices for each lunch offered provided that
the benefits made available to children eligible for free or reduced
price lunches are not affected.
(7) Requirements for lunch periods. (i) Timing. Schools must offer
lunches meeting the requirements of this section during the period the
school has designated as the lunch period. Schools must offer lunches
between 10 a.m. and 2 p.m. Schools may request an exemption from these
times only from FNS.
(ii) Lunch periods for young children. With State agency approval,
schools are encouraged to serve children ages 1 through 4 over two
service periods. Schools may divide the quantities and/or the menu
items, foods, or food items offered each time any way they wish.
(iii) Adequate lunch periods. FNS encourages schools to provide
sufficient lunch periods that are long enough to give all students
enough time to be served and to eat their lunches.
(8) Exceptions and variations allowed in reimbursable meals.
Schools must comply with the requirements in Sec. 210.10(m) of this
part.
(9) Nutrition disclosure. If applicable, schools must follow the
provisions on disclosure of Alternate Protein Products in Sec.
210.10(n) of this part.
(10) State agency's responsibilities for monitoring lunches. As
part of the administrative review authorized under Sec. 210.18(g)(2)
of this part, State agencies must evaluate compliance with the meal
pattern requirements (food components and quantities) in paragraph (d)
of this section. If the meals for preschoolers do not meet the
requirements of this section, the State agency or school food authority
must provide technical assistance and require the reviewed school to
take corrective action. In addition, the State agency may take fiscal
action as authorized in Sec. Sec. 210.18(m) and 210.19(c) of this
part.
(11) Requirements for the infant lunch pattern. (i) Definitions.
(A) Infant cereal means any iron-fortified dry cereal, specially
formulated and generally recognized as cereal for infants, that is
routinely mixed with breastmilk or iron-fortified infant formula prior
to consumption.
(B) Infant formula means any iron-fortified formula intended for
dietary use solely as a food for normal, healthy infants. Formulas
specifically formulated for infants with inborn errors of metabolism or
digestive or absorptive problems are not included in this definition.
Infant formula, when served, must be in liquid state at recommended
dilution.
(ii) Feeding lunches to infants. Lunches served to infants ages
birth through 11 months must meet the requirements in paragraph (k)(5)
of this section. Foods included in the lunch must be of a texture and a
consistency that are appropriate for the age of the infant being
served. The foods must be served during a span of time consistent with
the infant's eating habits. For those infants whose dietary needs are
more individualized, exceptions to the meal pattern must be made in
accordance with the requirements found in Sec. 210.10(m) of this part.
(iii) Breastmilk and iron-fortified formula. Either breastmilk or
iron-fortified infant formula, or portions of both, must be served for
the entire first year. Meals containing breastmilk and meals containing
iron-fortified infant formula served by the school are eligible for
reimbursement. However, infant formula provided by a parent (or
guardian) and breastmilk fed directly by the infant's mother, during a
visit to the school, contribute to a reimbursable lunch only when the
school supplies at least one component of the infant's meal.
(iv) Solid foods. For infants ages 4 through 7 months, solid foods
of an appropriate texture and consistency are required only when the
infant is developmentally ready to accept them. The school should
consult with the infant's parent (or guardian) in making the decision
to introduce solid foods. Solid foods should be introduced one at a
time, on a gradual basis, with the intent of ensuring the infant's
health and nutritional well-being.
(v) Infant meal pattern. Infant lunches must include, at a minimum,
each of the food components indicated in Lunch Pattern for Infants
table in the amount that is appropriate for the infant's age. For some
breastfed infants who regularly consume less than the minimum amount of
breastmilk per feeding, a serving of less than the minimum amount of
breastmilk may be offered. In these situations, additional breastmilk
must be offered if the infant is still hungry. Lunches may include
portions of breastmilk and iron-fortified infant formula as long as the
total

[[Page 4152]]

number of ounces meets, or exceeds, the minimum amount required of this
food component. Similarly, to meet the component requirements for
vegetables and fruits, portions of both may be served. Infant lunches
are reimbursable when schools provide all of the components in the
Lunch Pattern for Infants table that the infant is developmentally
ready to accept.

Lunch Pattern for Infants
------------------------------------------------------------------------
Birth through 3 months 4 through 7 months 8 through 11 months
------------------------------------------------------------------------
4-6 fluid ounces of formula 4-8 fluid ounces of 6-8 fluid ounces of
\1\ or breastmilk 2 3. formula \1\ or formula \1\ or
breastmilk 2 3; and breastmilk 2 3; and
0-3 tablespoons of 2-4 tablespoons of
infant cereal 1 4; infant cereal \1\;
and. and/or
0-3 tablespoons of 1-4 tablespoons of
fruits or meat, fish,
vegetables or both poultry, egg yolk,
\4\. cooked dry beans or
peas; or
\1/2\-2 ounces of
cheese, or
1-4 ounces (volume)
of cottage cheese;
or
1-4 ounces (weight)
of cheese food or
cheese spread; and
1-4 tablespoons of
fruits or
vegetables or both.
------------------------------------------------------------------------
\1\ Infant formula and dry infant cereal must be iron-fortified.
\2\ Breastmilk or formula, or portions of both, may be served; however,
it is recommended that breastmilk be served from birth through 11
months.
\3\ For some breastfed infants who regularly consume less than the
minimum amount of breastmilk per feeding, a serving of less than the
minimum amount of breastmilk may be offered, with additional
breastmilk offered if the infant is still hungry.
\4\ A serving of this component is required only when the infant is
developmentally ready to accept it.

0
4. In Sec. 210.18:
0
a. Revise paragraphs (a), (b)(2)(ii), (c), (g)(2), (i)(3)(ii), and (m);
and
0
b. Remove paragraph (h)(2) and redesignate paragraph (h)(3) through (6)
as paragraphs (h)(2) through (5), respectively.
0
c. Amend paragraph (i)(4)(iv) by removing the words ``the School
Breakfast Program (7 CFR part 220) and/or''.
The revisions read as follows:

Sec. 210.18 Administrative reviews.

(a) General. Each State agency must follow the requirements of this
section to conduct administrative reviews of school food authorities
serving meals under parts 210 and 220 of this chapter.
(b) * * *
(2) * * *
(ii) Performance Standard 2--Meal Requirements. Reimbursable
lunches meet the meal requirements in Sec. 210.10 of this chapter, as
applicable to the age/grade group reviewed. Reimbursable breakfasts
meet the meal requirements in Sec. Sec. 220.8 and 220.23 of this
chapter, as applicable to the age/grade group reviewed.
* * * * *
(c) Timing of reviews. State agencies must conduct administrative
reviews of all school food authorities participating in the National
School Lunch Program and/or School Breakfast Program at least once
during a 3-year review cycle. For each State agency, the first 3-year
review cycle will start the school year that begins on July 1, 2013 and
ends on June 30, 2014. Administrative reviews and follow-up reviews
must be conducted as follows:
(1) Administrative reviews. At a minimum, State agencies must
conduct administrative reviews of all school food authorities at least
once during each 3-year review cycle, provided that each school food
authority is reviewed at least once every 4 years. The on-site portion
of the administrative review must be completed during the school year
in which the review was begun.
(2) Exceptions. FNS may, on an individual school food authority
basis, approve written requests for 1-year extensions to the 3-year
review cycle specified in paragraph (c)(1) of this section if FNS
determines this 3-year cycle requirement conflicts with efficient State
agency management of the Programs.
(3) Follow-up reviews. The State agency is encouraged to conduct
first follow-up reviews in the same school year as the administrative
review. The first follow-up review must be conducted no later than
December 31 of the school year following the administrative review.
Subsequent follow-up reviews must be scheduled in accordance with
paragraph (i)(5) of this section.
* * * * *
(g) * * *
(2) Performance Standard 2 (Reimbursable lunches meet the meal
requirements in Sec. 210.10 of this chapter, as applicable to the age/
grade group reviewed. Reimbursable breakfasts meet the meal
requirements in Sec. 220.8 and Sec. 220.23 of this chapter, as
applicable to the age/grade group reviewed. When reviewing meals, the
State agency must:
(i) For the day of the review, observe the serving line(s) to
determine whether all food components and food quantities required
under Sec. 210.10, as applicable, and Sec. 220.8 and Sec. 220.23, as
applicable, are offered.
(ii) For the day of the review, observe a significant number of the
Program meals counted at the point of service for each type of serving
line to determine whether the meals selected by the students contain
the food components and food quantities required for a reimbursable
meal under Sec. 210.10, as applicable, and Sec. Sec. 220.8 and
220.23, as applicable. If visual observation suggests that quantities
offered are insufficient or excessive, the State agency must require
the reviewed school(s) to provide documentation demonstrating that the
required amounts of each food component were available for service for
each day of the review period.
(iii) Review menu and production records for a minimum of five
operating days (specified by the State agency); such review must
determine whether all food components and food quantities required
under Sec. 210.10, as applicable, and Sec. Sec. 220.8 and 220.23, as
applicable, of this chapter have been offered.
(iv) Conduct a weighted nutrient analysis of the meals for students
in age/grade groups K and above to determine whether the meals offered
meet the calorie, sodium, and saturated fat requirements in Sec.
210.10 and Sec. Sec. 220.8 and 220.23 of this chapter, as applicable.
The State agency must conduct the nutrient analysis in accordance with
the procedures established in Sec. 210.10(i) of this part. Until
instructed by the Secretary, a nutrient analysis for the meals offered
to

[[Page 4153]]

preschoolers is not required. The State agency must also review
nutrition labeling or manufacturer specifications for products or
ingredients used to prepare school meals to verify they contain zero
grams (less than 0.5 grams) of trans fat per serving.
* * * * *
(i) * * *
(3) * * *
(ii) For Performance Standard 2--10 percent or more of the total
number of Program lunches or Program breakfasts observed in a school
food authority are missing one or more of the food components required
under parts 210 and 220.
* * * * *
(m) Fiscal action. Fiscal action for violations identified during
an administrative review or any follow-up reviews must be taken in
accordance with the provisions in Sec. 210.19(c) of this part.
(1) Performance Standard 1 violations. A State agency is required
to take fiscal action for all violations of Performance Standard 1. The
State agency may limit fiscal action from the point corrective action
occurs back through the beginning of the review period for errors
identified under paragraphs (g)(1)(i)(A) through (C) of this section,
provided corrective action occurs.
(2) Performance Standard 2 violations. A State agency is required
to take fiscal action for violations of Performance Standard 2 as
follows:
(i) For food component violations cited under paragraph (g)(2) of
this section, the State agency must take fiscal action and require the
school food authority and/or school reviewed to take corrective action
for the missing component. If a corrective action plan is in place, the
State agency may limit fiscal action from the point corrective action
occurs back through the beginning of the review period for errors
identified under paragraph (g)(2) of this section.
(ii) For repeated violations involving vegetable subgroups and milk
type cited under paragraph (g)(2) of this section, the State agency
must take fiscal action provided that:
(A) Technical assistance has been given by the State agency;
(B) Corrective action has been previously required and monitored by
the State agency; and
(C) The school food authority remains in noncompliance with the
meal requirements established in parts 210 and 220 of this chapter.
(iii) For violations involving food quantities and whole grain-rich
foods cited under paragraph (g)(2) of this section and for violations
of calorie, saturated fat, sodium, and trans fat requirements cited
under paragraph (g)(2)(iv) of this section, the State agency has
discretion to apply fiscal action provided that:
(A) Technical assistance has been given by the State agency;
(B) Corrective action has been previously required and monitored by
the State agency; and
(C) The school food authority remains in noncompliance with the
meal requirements established in parts 210 and 220 of this chapter.
* * * * *

0
5. In Sec. 210.19:
0
a. Remove paragraph (a)(1) and redesignate paragraphs (a)(2) through
(6) as paragraph (a)(1) through (5); and
0
b. Revise paragraphs (c) introductory text, (c)(1), and (c)(6) to read
as follows:

Sec. 210.19 Additional responsibilities.

* * * * *
(c) Fiscal action. State agencies are responsible for ensuring
Program integrity at the school food authority level. State agencies
must take fiscal action against school food authorities for Claims for
Reimbursement that are not properly payable, including, if warranted,
the disallowance of funds for failure to take corrective action to
comply with the meal requirements in Parts 210 and 220 of this chapter.
In taking fiscal action, State agencies must use their own procedures
within the constraints of this Part and must maintain all records
pertaining to action taken under this section. The State agency may
refer to FNS for assistance in making a claim determination under this
part.
(1) Definition. Fiscal action includes, but is not limited to, the
recovery of overpayment through direct assessment or offset of future
claims, disallowance of overclaims as reflected in unpaid Claims for
Reimbursement, submission of a revised Claim for Reimbursement, and
correction of records to ensure that unfiled Claims for Reimbursement
are corrected when filed. Fiscal action also includes disallowance of
funds for failure to take corrective action to meet the meal
requirements in Parts 210 and 220 of this chapter.
* * * * *
(6) Exceptions. The State agency need not disallow payment or
collect an overpayment when any review or audit reveals that a school
food authority is approving applications which indicate that the
households' incomes are within the Income Eligibility Guidelines issued
by the Department or the applications contain Supplemental Nutrition
Assistance Program or TANF case numbers or FDPIR case numbers or other
FDPIR identifiers but the applications are missing the information
specified in paragraph (1)(ii) of the definition of Documentation in
Sec. 245.2 of this chapter.
* * * * *

Sec. 210.21 [Amended]

0
6. In Sec. 210.21, amend paragraph (e) by removing the phrase
``paragraph (m)(1)(ii) of this section'' and adding in its place the
phrase ``Sec. 210.10(d)(4) of this chapter.''

0
7. Revise Sec. 210.30 to read as follows:

Sec. 210.30 State agency and Regional office addresses.

School food authorities and schools desiring information about the
Program should contact their State educational agency or the
appropriate FNS Regional Office at the address or telephone number
listed on the FNS Web site (www.fns.usda.gov/cnd).
0
8. In Appendix B to part 210:
0
a. Amend paragraph (b)(1) by removing from the fourth sentence the
words ``, and the public by notice in the Federal Register as indicated
below under paragraph (b)(3) of this section;''
0
b. Amend paragraph (b)(2) by removing the words ``as indicated under
paragraph (b)(3) of this section'' from the last sentence.
0
c. Remove paragraph (b)(3) and redesignate paragraph (b)(4) as
paragraph (b)(3); and
0
d. Revise the first sentence of newly redesignated paragraph (b)(3) to
read as follows:
* * * * *

Appendix B to Part 210--Categories of Foods of Minimal Nutritional
Value

* * * * *
(b) * * *
(3) Written petitions should be sent to the Chief, Nutrition
Promotion and Technical Assistance Branch, Child Nutrition Division,
FNS, USDA, 3101 Park Center Drive, Room 632, Alexandria, Virginia
22302. * * *
* * * * *

PART 220--SCHOOL BREAKFAST PROGRAM

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

Authority: 42 U.S.C. 1773, 1779.

0
10. In Sec. 220.2:
0
a. Amend the definition of Breakfast by removing the phrase
``nutritional requirements set out in Sec. 220.8'' and adding in its
place the phrase ``meal

[[Page 4154]]

requirements set out in Sec. Sec. 220.8 and 220.23'',
0
b. Amend the definition of Menu item by removing the citation ``Sec.
220.8'' and adding in its place the citation ``Sec. 220.23'',
0
c. Remove the definition of Milk;
0
d. Amend the definition of Nutrient Standard Menu Planning/Assisted
Nutrient Standard Menu Planning by removing the citations ``Sec.
220.8(e)(5)'' and ``Sec. 220.8(f)'' and adding in their place the
citations ``Sec. 220.23(e)(5)'' and ``Sec. 220.23(f)'', respectively;
0
e. Revise the definition of School week; and
0
f. Add definitions for Tofu and Whole grains.
The revisions and additions read as follows:

Sec. 220.2 Definitions.

* * * * *
School week means the period of time used to determine compliance
with the meal requirements in Sec. 220.8 and Sec. 220.23. The period
must be a normal school week of five consecutive days; however, to
accommodate shortened weeks resulting from holidays and other
scheduling needs, the period must be a minimum of three consecutive
days and a maximum of seven consecutive days. Weeks in which school
breakfasts are offered less than three times must be combined with
either the previous or the coming week.
* * * * *
Tofu means a soybean-derived food, made by a process in which
soybeans are soaked, ground, mixed with water, heated, filtered,
coagulated, and formed into cakes. Basic ingredients are whole
soybeans, one or more food-grade coagulants (typically a salt or an
acid), and water. Tofu products must conform to FNS guidance to count
toward the meats/meat alternates component.
Whole grains means grains that consist of the intact, ground,
cracked, or flaked grain seed whose principal anatomical components--
the starchy endosperm, germ and bran--are present in the same relative
proportions as they exist in the intact grain seed. Whole grain-rich
products must conform to FNS guidance to count toward the grains
component.
* * * * *

0
11. Revise Sec. 220.8 to read as follows:

Sec. 220.8 Meal requirements for breakfasts.

(a) General requirements. This section contains the meal
requirements applicable to school breakfasts for students in grades K
to 12. With the exception of the milk component, the meal requirements
must be implemented beginning July 1, 2013 or as otherwise specified.
School food authorities wishing to adopt the provisions of this section
prior to the required date of compliance may do so with the approval of
the State agency. In general, school food authorities must ensure that
participating schools provide nutritious, well-balanced, and age-
appropriate breakfasts to all the children they serve to improve their
diet and safeguard their health.
(1) General nutrition requirements. School breakfasts offered to
children age 5 and older must meet, at a minimum, the meal requirements
in paragraph (b) of this section. Schools must follow a food-based menu
planning approach and produce enough food to offer each child the
quantities specified in the meal pattern established in paragraph (c)
of this section for each age/grade group served in the school. In
addition, school breakfasts must meet the dietary specifications in
paragraph (f) of this section. Schools offering breakfasts to children
ages 1 to 4 and infants must meet the meal pattern requirements in
paragraph (o) of this section.
(2) Unit pricing. Schools must price each meal as a unit. The price
of a reimbursable lunch does not change if the student does not take a
food item or requests smaller portions. Schools must identify, near or
at the beginning of the serving line(s), the food items that constitute
the unit-priced reimbursable school meal(s).
(3) Production and menu records. Schools or school food
authorities, as applicable, must keep production and menu records for
the meals they produce. These records must show how the meals offered
contribute to the required food components and food quantities for each
age/grade group every day. Labels or manufacturer specifications for
food products and ingredients used to prepare school meals must
indicate zero grams of trans fat per serving (less than 0.5 grams).
Schools or school food authorities must maintain records of the latest
nutritional analysis of the school menus conducted by the State agency.
Production and menu records must be maintained in accordance with FNS
guidance.
(b) Meal requirements for school breakfasts. School breakfasts for
children ages 5 and older must reflect food and nutrition requirements
specified by the Secretary. Compliance with these requirements, once
fully implemented as specified in paragraphs (c), (d), (e), (f), (h),
(i), and (j) of this section, is measured as follows:
(1) On a daily basis:
(i) Meals offered to each age/grade group must include the food
components and food quantities specified in the meal pattern in
paragraph (c) of this section;
(ii) Food products or ingredients used to prepare meals must
contain zero grams of trans fat per serving or a minimal amount of
naturally occurring trans fat as specified in paragraph (f) of this
section; and
(iii) Meal selected by each student must have the number of food
components required for a reimbursable meal and include at least one
fruit or vegetable.
(2) Over a 5-day school week:
(i) Average calorie content of the meals offered to each age/grade
group must be within the minimum and maximum calorie levels specified
in paragraph (f) of this section;
(ii) Average saturated fat content of the meals offered to each
age/grade group must be less than 10 percent of total calories as
specified in paragraph (f) of this section;
(iii) Average sodium content of the meals offered to each age/grade
group must not exceed the maximum level specified in paragraph (f) of
this section;
(c) Meal pattern for school breakfasts. A school must offer the
food components and quantities required in the breakfast meal pattern
established in the following table:

----------------------------------------------------------------------------------------------------------------
Breakfast meal pattern
-----------------------------------------------------
Grades K-5 Grades 6-8 Grades 9-12
----------------------------------------------------------------------------------------------------------------
Meal pattern Amount of food a per week
(Minimum per day)
----------------------------------------------------------------------------------------------------------------
Fruits (cups) b c......................................... 5 (1) 5 (1) 5 (1)
Vegetables (cups) b c..................................... 0 0 0
Dark green............................................ 0 0 0
Red/Orange............................................ 0 0 0

[[Page 4155]]

Beans and peas (legumes).............................. 0 0 0
Starchy............................................... 0 0 0
Other................................................. 0 0 0
Grains (oz eq) d.......................................... 7-10 (1) 8-10 (1) 9-10 (1)
Meats/Meat Alternates (oz eq) e........................... 0 0 0
Fluid milk f (cups)....................................... 5 (1) 5 (1) 5 (1)
----------------------------------------------------------------------------------------------------------------
Other Specifications: Daily Amount Based on the Average for a 5-Day Week
----------------------------------------------------------------------------------------------------------------
Min-max calories (kcal) g h............................... 350-500 400-550 450-600
Saturated fat (% of total calories) h..................... < 10 < 10 < 10
Sodium (mg) h i........................................... <= 430 <= 470 <= 500
-----------------------------------------------------
Trans fat h j............................................. Nutrition label or manufacturer specifications must
indicate zero grams of trans fat per serving.
----------------------------------------------------------------------------------------------------------------
a Food items included in each group and subgroup and amount equivalents. Minimum creditable serving is \1/8\
cup.
b One quarter cup of dried fruit counts as \1/2\ cup of fruit; 1 cup of leafy greens counts as \1/2\ cup of
vegetables. No more than half of the fruit or vegetable offerings may be in the form of juice. All juice must
be 100% full-strength.
c Beginning July 1, 2014 (SY 2014-2015) schools must offer 1 cup of fruit daily and 5 cups of fruit weekly.
Vegetables may be substituted for fruits, but the first two cups per week of any such substitution must be
from the dark green, red/orange, beans and peas (legumes) or ``Other vegetables'' subgroups, as defined in
210.10(c)(2)(iii).
d Beginning July 1, 2013 (SY 2013-2014), at least half of grains offered must be whole-grain-rich and schools
must meet the grain ranges. Schools may substitute 1 oz. eq. of meat/meat alternate for 1 oz. eq. of grains
after the minimum daily grains requirement is met. By July 1, 2014 (SY 2014-15) all grains must be whole-grain-
rich.
e There is no meat/meat alternate requirement.
f Beginning July 1, 2012 (SY 2012-2013) all fluid milk must be low-fat (1 percent milk fat or less, unflavored)
or fat-free (unflavored or flavored).
g Beginning July 1, 2013 (SY 2013-2014), the average daily calories for a 5-day school week must be within the
range (at least the minimum and no more than the maximum values).
h Discretionary sources of calories (solid fats and added sugars) may be added to the meal pattern if within
the specifications for calories, saturated fat, trans fat, and sodium. Foods of minimal nutritional value and
fluid milk with fat content greater than 1 percent milk fat are not allowed.
i Final sodium targets must be met no later than July 1, 2022 (SY 2022-2023). The first intermediate targets
must be met no later than July 1, 2014 (SY 2014-2015) and the second intermediate targets must be met no later
than July 1, 2017 (SY 2017-2018).
j Trans fat restrictions must be implemented on July 1, 2013 (SY 2013-14).

(1) Age/grade groups. Effective July 1, 2013 (SY 2013-2014),
schools must plan menus for students using the following age/grade
groups: Grades K-5 (ages 5-10), grades 6-8 (ages 11-13), and grades 9-
12 (ages 14-18). If an unusual grade configuration in a school prevents
the use of the established age/grade groups, students in grades K-5 and
grades 6-8 may be offered the same food quantities at breakfast
provided that the calorie and sodium standards for each age/grade group
are met. No customization of the established age/grade groups is
allowed.
(2) Food components. Schools must offer students in each age/grade
group the food components specified in meal pattern in paragraph (c).
Food component descriptions in Sec. 210.10 of this chapter apply to
this Program.
(i) Meats/meat alternates component. Schools are not required to
offer meats/meat alternates as part of the breakfast menu. Effective
July 1, 2013 (SY 2013-2014), schools may substitute meats/meat
alternates for grains, after the daily grains requirement is met, to
meet the weekly grains requirement. One ounce equivalent of meat/meat
alternate is equivalent to one ounce equivalent of grains.
(A) Enriched macaroni. Enriched macaroni with fortified protein as
defined in Appendix A to Part 210 may be used to meet part of the
meats/meat alternates requirement when used as specified in Appendix A
to Part 210. An enriched macaroni product with fortified protein as
defined in Appendix A to Part 210 may be used to meet part of the
meats/meat alternates component or the grains component but may not
meet both food components in the same lunch.
(B) Nuts and seeds. Nuts and seeds and their butters are allowed as
meat alternates in accordance with program guidance. Acorns, chestnuts,
and coconuts may not be used because of their low protein and iron
content. Nut and seed meals or flours may be used only if they meet the
requirements for Alternate Protein Products established in Appendix A
to Part 220. Nuts or seeds may be used to meet no more than one-half
(50 percent) of the meats/meat alternates component with another meats/
meat alternates to meet the full requirement.
(C) Yogurt. Yogurt may be used to meet all or part of the meats/
meat alternates component. Yogurt may be plain or flavored, unsweetened
or sweetened. Noncommercial and/or non-standardized yogurt products,
such as frozen yogurt, drinkable yogurt products, homemade yogurt,
yogurt flavored products, yogurt bars, yogurt covered fruits and/or
nuts or similar products are not creditable. Four ounces (weight) or
\1/2\ cup (volume) of yogurt equals one ounce of the meats/meat
alternates requirement.
(D) Tofu and soy products. Commercial tofu and soy products may be
used to meet all or part of the meats/meat alternates component in
accordance with FNS guidance. Noncommercial and/or non-standardized
tofu and products are not creditable.
(E) Beans and peas (legumes). Cooked dry beans and peas (legumes)
may be used to meet all or part of the meats/meat alternates component.
Beans and peas (legumes) are identified in this section and include
foods such as black beans, garbanzo beans, lentils, kidney beans,
mature lima beans, navy beans, pinto beans, and split peas.
(F) Other meat alternates. Other meat alternates, such as cheese
and eggs, may be used to meet all or part of the meats/meat alternates
component in accordance with FNS guidance.
(ii) Fruits component. Effective July 1, 2014 (SY 2014-2015),
schools must

[[Page 4156]]

offer daily the fruit quantities specified in the breakfast meal
pattern in paragraph (c) of this section. Fruits that are fresh; frozen
without added sugar; canned in light syrup, water or fruit juice; or
dried may be offered to meet the fruits component requirements.
Vegetables may be offered in place of all or part of the required
fruits at breakfast, but the first two cups per week of any such
substitution must be from the dark green, red/orange, beans and peas
(legumes) or other vegetable subgroups, as defined in this section. All
fruits are credited based on their volume as served, except that \1/4\
cup of dried fruit counts as \1/2\ cup of fruit. Only pasteurized,
full-strength fruit juice may be used, and may be credited to meet no
more than one-half of the fruit component.
(iii) Vegetables component. Schools are not required to offer
vegetables as part of the breakfast menu but may, effective July 1,
2014 (SY 2014-2015), offer vegetables to meet part or all of the fruit
requirement. Fresh, frozen, or canned vegetables and dry beans and peas
(legumes) may be offered to meet the fruit requirement. All vegetables
are credited based on their volume as served, except that 1 cup of
leafy greens counts as \1/2\ cup of vegetables and tomato paste and
tomato puree are credited based on calculated volume of the whole food
equivalency. Pasteurized, full-strength vegetable juice may be used to
meet no more than one-half of the vegetable component. Cooked dry beans
or peas (legumes) may be counted as either a vegetable or as a meat
alternate but not as both in the same meal.
(iv) Grains component. (A) Enriched and whole grains. All grains
must be made with enriched and whole grain meal or flour, in accordance
with the most recent FNS guidance on grains. Whole grain-rich products
must contain at least 50 percent whole grains and the remaining grains
in the product must be enriched. Effective July 1, 2013 (SY 2013-2014),
schools may substitute meats/meat alternates for grains, after the
daily grains requirement is met, to meet the weekly grains requirement.
One ounce equivalent of meat/meat alternate is equivalent to one ounce
equivalent of grains.
(B) Daily and weekly servings. Effective July 1, 2013 (SY 2013-
2014), the grains component is based on minimum daily servings plus
total servings over a five-day school week. Beginning July 1, 2013 (SY
2013-2014), half of the grains offered during the school week must meet
the whole grain-rich criteria specified in FNS guidance. Beginning July
1, 2014 (SY 2014-2015), all grains must meet the whole grain-rich
criteria specified in FNS guidance. The whole grain-rich criteria
provided in FNS guidance may be updated to reflect additional
information provided voluntarily by industry on the food label or a
whole grains definition by the Food and Drug Administration. Schools
serving breakfast 6 or 7 days per week must increase the weekly grains
quantity by approximately 20 percent (\1/5\) for each additional day.
When schools operate less than 5 days per week, they may decrease the
weekly quantity by approximately 20 percent (\1/5\) for each day less
than five. The servings for biscuits, rolls, muffins, and other grain/
bread varieties are specified in FNS guidance.
(3) Food components in outlying areas. Schools in American Samoa,
Puerto Rico and the Virgin Islands may serve a vegetable such as yams,
plantains, or sweet potatoes to meet the grains component.
(d) Fluid milk requirement. A serving of fluid milk as a beverage
or on cereal or used in part for each purpose must be offered for
breakfasts. Schools must offer students a variety (at least two
different options) of fluid milk. Effective July 1, 2012 (SY 2012-
2013), all milk must be fat-free or low-fat. Milk with higher fat
content is not allowed. Fat-free fluid milk may be flavored or
unflavored, and low-fat fluid milk must be unflavored. Low fat or fat-
free lactose-free and reduced-lactose fluid milk may also be offered.
Schools must also comply with other applicable fluid milk requirements
in Sec. 210.10(d)(1) through (4) of this chapter.
(e) Offer versus serve. School breakfast must offer daily at least
the three food components required in the meal pattern in paragraph (c)
of this section. To exercise the offer versus serve option at
breakfast, a school food authority or school must offer a minimum of
four food items daily as part of the required components. Under offer
versus serve, students are allowed to decline one of the four food
items, provided that students select at least \1/2\ cup of the fruit
component for a reimbursable meal beginning July 1, 2014 (SY 2014-
2015). If only three food items are offered at breakfast, school food
authorities or schools may not exercise the offer versus serve option.
(f) Dietary specifications. (1) Calories. Effective July 1, 2013
(SY 2013-2014), school breakfasts offered to each age/grade group must
meet, on average over the school week, the minimum and maximum calorie
levels specified in the following table:

Calorie Ranges for Breakfast--Effective SY 2013-2014
----------------------------------------------------------------------------------------------------------------
Grades K-5 Grades 6-8 Grades 9-12
----------------------------------------------------------------------------------------------------------------
Minimum-maximum calories (kcal) a b.................... 350-500 400-550 450-600
----------------------------------------------------------------------------------------------------------------
\a\ The average daily amount for a 5-day school must fall within the minimum and maximum levels.
\b\ Discretionary sources of calories (solid fats and added sugars) may be added to the meal pattern if within
the specifications for calories, saturated fat, trans fat, and sodium.

(2) Saturated fat. Effective July 1, 2012 (SY 2012-2013), school
breakfasts offered to all age/grade groups must, on average over the
school week, provide less than 10 percent of total calories from
saturated fat.
(3) Sodium. School breakfasts offered to each age/grade group must
meet, on average over the school week, the levels of sodium specified
in the following table within the specified deadlines:

[[Page 4157]]

Sodium Reduction: Timeline & Amount
----------------------------------------------------------------------------------------------------------------
Baseline: average Target 1: July Target 2: July Final Target:
Age/grade group current sodium levels 1, 2014 SY 2014- 1, 2017 SY 2017- July 1, 2022 SY
as offered \1\ (mg) 2015 (mg) 2018 (mg) 2022-2023 (mg)
----------------------------------------------------------------------------------------------------------------
School Breakfast Program
----------------------------------------------------------------------------------------------------------------
K-5................................ 573 (elementary)..... <= 540 <= 485 <= 430
6-8................................ 629 (middle)......... <= 600 <= 535 <= 470
9-12............................... 686 (high)........... <= 640 <= 570 <= 500
----------------------------------------------------------------------------------------------------------------
\1\ SNDA-III.

(4) Trans fat. Effective July 1, 2013 (SY 2013-2014), food products
and ingredients used to prepare school meals must contain zero grams of
trans fat (less than 0.5 grams) per serving. Schools must add the trans
fat specification and request the required documentation (nutrition
label or manufacturer specifications) in their procurement contracts.
Documentation for food products and food ingredients must indicate zero
grams of trans fat per serving. Meats that contain a minimal amount of
naturally-occurring trans fats are allowed in the school meal programs.
(g) Compliance assistance. The State agency and school food
authority must provide technical assistance and training to assist
schools in planning breakfasts that meet the meal pattern in paragraph
(c) of this section and the dietary specifications for calorie,
saturated fat, sodium, and trans fat established in paragraph (f) of
this section. Compliance assistance may be offered during training,
onsite visits, and/or administrative reviews.
(h) State agency responsibilities for monitoring dietary
specifications. (1) Calories, saturated fat, and sodium. Effective July
1, 2013 (SY 2013-2014), as part of the administrative review authorized
under Sec. 210.18 of this chapter, State agencies must conduct a
weighted nutrient analysis for the school(s) selected for review to
evaluate the average levels of calories, saturated fat, and sodium of
the breakfasts offered during one week within the review period. The
nutrient analysis must be conducted in accordance with the procedures
established in Sec. 210.10(i) of this chapter. If the results of the
review indicate that the school breakfasts are not meeting the
standards for calories, saturated fat, or sodium specified in paragraph
(f) of this section, the State agency or school food authority must
provide technical assistance and require the reviewed school to take
corrective action to meet the requirements.
(2) Trans fat. Effective SY 2013-2014, State agencies conducting an
administrative review must review product labels of manufacturer
specifications to verify that the food products or ingredients used by
the reviewed school(s) contain zero grams of trans fat (less than 0.5
grams) per serving.
(i) State agency responsibilities for nutrient analysis. State
agencies must conduct a weighted nutrient analysis of all foods offered
in a reimbursable breakfast by a school selected for administrative
review to determine the average levels of calories, saturated fat, and
sodium in the meals offered over a school week within the review
period. The analysis must be conducted in accordance with the
procedures established in Sec. 210.10(i) of this chapter.
(j) State agency's responsibilities for compliance monitoring.
Effective SY 2013-2014, compliance with the applicable meal
requirements in paragraph (b) will be monitored by the State agency
through administrative reviews authorized in Sec. 210.18 of this
chapter.
(k) Menu choices at breakfast. The requirements in Sec. 210.10(k)
of this chapter also apply to this Program.
(l) Requirements for breakfast period. (1) Timing. Schools must
offer breakfasts meeting the requirements of this section at or near
the beginning of the school day.
(2) [Reserved].
(m) Exceptions and variations allowed in reimbursable meals. The
requirements in Sec. 210.10(m) of this chapter also apply to this
Program.
(n) Nutrition disclosure. The requirements in Sec. 210.10(n) of
this chapter also apply to this Program.
(o) Breakfasts for preschoolers and infants. (1) Nutrition
standards for breakfasts for children age 1 to 4. Until otherwise
instructed by the Secretary, breakfasts for preschoolers, when averaged
over a school week, must meet the nutrition standards and the
appropriate nutrient and calorie levels in this section. The nutrition
standards are:
(i) Provision of one-fourth of the Recommended Dietary Allowances
(RDA) for protein, calcium, iron, vitamin A and vitamin C in the
appropriate levels (see paragraph (o)(2) of this section);
(ii) Provision of the breakfast energy allowances (calories) for
children in the appropriate levels (see paragraph (o)(2) of this
section);
(iii) The following dietary recommendations:
(A) Eat a variety of foods;
(B) Limit total fat to 30 percent of total calories;
(C) Limit saturated fat to less than 10 percent of total calories;
(D) Choose a diet low in cholesterol;
(E) Choose a diet with plenty of grain products, vegetables, and
fruits; and
(F) Choose a diet moderate in salt and sodium.
(iv) The following measures of compliance:
(A) Limit the percent of calories from total fat to 30 percent of
the actual number of calories offered;
(B) Limit the percent of calories from saturated fat to less than
10 percent of the actual number of calories offered;
(C) Reduce sodium and cholesterol levels; and
(D) Increase the level of dietary fiber.
(v) School food authorities must follow the traditional food-based
menu planning approach to plan breakfasts for preschoolers and provide
daily the food components and quantities specified in paragraph (o)(3)
of this section.
(vi) Schools must keep production and menu records for the
breakfasts they produce. These records must show how the breakfasts
contribute to the required food components and food quantities every
school day. In addition, these records must show how the breakfasts
contribute to the nutrition standards in paragraph (o)(1) of this
section and the appropriate calorie and nutrient levels in paragraph
(o)(2) of this section over the school week. Schools or school food
authorities must maintain records of the latest nutritional analysis of
the school menus conducted by the State agency.
(2) Nutrient and calorie levels for breakfasts for preschoolers.
Under the traditional food-based menu planning approach, the required
levels are:

[[Page 4158]]

Minimum Nutrient and Calorie Levels for School Breakfasts
[Traditional Food-Based Menu Planning Approach]
------------------------------------------------------------------------
Age 2 \1\ Ages 3-4
------------------------------------------------------------------------
Nutrients and energy allowances School week averages
------------------------------------------------------------------------
Energy allowances (calories)........ 325 388
Total fat (as a percentage of actual (2) (2)
total food energy).................
Saturated fat (as a percentage of (2) (2)
actual total food energy)..........
RDA for protein (g)................. 4 5
RDA for calcium (mg)................ 200 200
RDA for iron (mg)................... 2.5 2.5
RDA for Vitamin A (RE).............. 100 113
RDA for Vitamin C (mg).............. 10 11
------------------------------------------------------------------------
\1\ Nutrient and calorie levels start at age 2 because the ``Dietary
Guidelines for Americans'' apply to ages 2 and older.
\2\ The 1995 ``Dietary Guidelines for Americans'' recommend that after 2
years of age ``children should gradually adopt a diet that, by about 5
years of age, contains no more than 30 percent of calories from fat.''

(3) Meal pattern for preschoolers. (i) Food items. Schools must
offer these food items in at least the portions required for each age
group:
(A) A serving of fluid milk as a beverage or on cereal or used
partly for both;
(B) A serving of fruit or vegetable or both, or full-strength fruit
or vegetable juice; and
(C) Two servings from one of the following components or one
serving from each component:
(1) Grains/breads; and/or
(2) Meat/meat alternate.
(ii) Quantities for the traditional food-based menu planning
approach. At a minimum, schools must offer the food items in the
quantities specified for the appropriate age/grade group in the
following table:

Traditional Food-Based Menu Planning Approach Meal Plan for Breakfasts
------------------------------------------------------------------------
Ages 1-2 Ages 3-4
------------------------------------------------------------------------
Food components and food items School week averages
------------------------------------------------------------------------
Fluid milk (as a beverage, on 4 fluid ounces.... 6 fluid ounces\1\.
cereal, or both).
Juice/Fruit/Vegetable: Fruit and/ \1/4\ cup......... \1/2\ cup.
or vegetable; or full-strength
fruit or vegetable juice.
------------------------------------------------------------------------
Select one serving from each of the following components, two from one
component, or an equivalent combination:
------------------------------------------------------------------------
Grains/Breads:
Whole grain or enriched bread... \1/2\ slice....... \1/2\ slice.
Whole grain or enriched \1/2\ serving..... \1/2\ serving.
bread product, such as
biscuit, roll, muffin.
Whole grain, enriched or \1/4\ cup or \1/3\ \1/3\ cup or \1/2\
fortified cereal. ounce. ounce.
Meat or Meat Alternates:
Meat/poultry or fish........ \1/2\ ounce....... \1/2\ ounce.
Alternate protein products \1/2\ ounce....... \1/2\ ounce
\2\.
Cheese...................... \1/2\ ounce....... \1/2\ ounce.
Large egg................... \1/2\............. \1/2\
Peanut butter or other nut 1 tablespoon...... 1 tablespoon.
or seed butters.
Cooked dry beans and peas... 2 tablespoons..... 2 tablespoons.
Nuts and/or seeds (as listed \1/2\ ounce....... \1/2\ ounce.
in program guidance) \3\.
Yogurt, plain or flavored, 2 ounces or \1/4\ 2 ounces or \1/4\
unsweetened or sweetened. cup. cup.
------------------------------------------------------------------------
\1\ Fluild milk for children ages 3-4 must be fat-free (unflavored or
flavored) or low-fat (unflavored only)
\2\ Must meet the requirements in appendix A of this part.
\3\ No more than 1 ounce of nuts and/or seeds may be served in any one
breakfast.

(iii) Offer versus serve. Schools must offer all four required food
items. At the school food authority's option, students in preschool may
decline one of the four food items. The price of a reimbursable
breakfast does not change if the student does not take a menu item or
requests smaller portions.
(iv) Exceptions and variations allowed in reimbursable breakfasts.
Schools must follow the requirements in Sec. 210.10(m) of this
chapter.
(4) Fluid milk requirement. A serving of fluid milk as a beverage
or on cereal or used in part for each purpose must be offered for
breakfasts. Schools must offer students in age group 1-2 fluid milk in
a variety of fat contents, flavored or unflavored. Schools may also
offer this age group lactose-free or reduced-lactose fluid milk. For
students in age group 3-4, schools must offer fat-free milk (unflavored
or flavored) and low-fat milk (unflavored only). Schools may also offer
this age group lactose-free and reduced-lactose milk that is fat-free
or low-fat. Students in age group 3-4 must be offered a variety (at
least two different options) of fluid milk. All milk served in the
Program must be pasteurized fluid milk which meets State and local
standards for such milk. All fluid milk must have vitamins A and D at
levels specified by the Food and Drug Administration and must be
consistent with State and local standards for such milk. Schools must
also comply with other applicable milk

[[Page 4159]]

requirements in Sec. 210.10(d)(2), Sec. 210.10(d)(3), and Sec.
210.10(d)(4) of this chapter.
(5) Additional foods. Schools may offer additional foods with
breakfasts to children over one year of age.
(6) Menu choices at breakfast. Schools must follow the requirements
in Sec. 210.10(l) of this chapter.
(7) Exceptions and variations allowed in reimbursable meals.
Schools must follow the requirements in Sec. 210.10(m) of this
chapter.
(8) Nutrition disclosure. Schools must follow the requirements in
Sec. 210.10(n) of this chapter.
(9) State agency's responsibilities for monitoring breakfasts. As
part of the administrative review authorized under Sec. 210.18(g)(2)
of this chapter, State agencies must evaluate compliance with the meal
pattern requirements (food components and quantities) in paragraph
(o)(3) of this section. If the meals do not meet the requirements of
this section, the State agency or school food authority must provide
technical assistance and require the reviewed school to take corrective
action. In addition, the State agency must take fiscal action as
authorized in Sec. 210.18(m) and 210.19(c) of this chapter.
(10) Requirements for the infant breakfast pattern. (i) Feeding
breakfasts to infants. Breakfasts served to infants ages birth through
11 months must meet the requirements described in paragraph (o)(11)(iv)
of this section. Foods included in the breakfast must be of a texture
and a consistency that are appropriate for the age of the infant being
served. The foods must be served during a span of time consistent with
the infant's eating habits. For those infants whose dietary needs are
more individualized, exceptions to the meal pattern must be made in
accordance with the requirements found in Sec. 210.10(m) of this
chapter.
(ii) Breastmilk and iron-fortified formula. Either breastmilk or
iron-fortified infant formula, or portions of both, must be served for
the entire first year. Meals containing breastmilk and meals containing
iron-fortified infant formula supplied by the school are eligible for
reimbursement. However, infant formula provided by a parent (or
guardian) and breastmilk fed directly by the infant's mother, during a
visit to the school, contribute to a reimbursable breakfast only when
the school supplies at least one component of the infant's meal.
(iii) Solid foods. For infants ages 4 through 7 months, solid foods
of an appropriate texture and consistency are required only when the
infant is developmentally ready to accept them. The school should
consult with the infant's parent (or guardian) in making the decision
to introduce solid foods. Solid foods should be introduced one at a
time, on a gradual basis, with the intent of ensuring the infant's
health and nutritional well-being.
(iv) Infant meal pattern. Infant breakfasts must have, at a
minimum, each of the food components indicated, in the amount that is
appropriate for the infant's age. For some breastfed infants who
regularly consume less than the minimum amount of breastmilk per
feeding, a serving of less than the minimum amount of breastmilk may be
offered. In these situations, additional breastmilk must be offered if
the infant is still hungry. Breakfasts may include portions of
breastmilk and iron-fortified infant formula as long as the total
number of ounces meets, or exceeds, the minimum amount required of this
food component. Similarly, to meet the component requirement for
vegetables and fruit, portions of both may be served.
(A) Birth through 3 months. 4 to 6 fluid ounces of breastmilk or
iron-fortified infant formula--only breastmilk or iron-fortified
formula is required to meet the infant's nutritional needs.
(B) 4 through 7 months. Breastmilk or iron-fortified formula is
required. Some infants may be developmentally ready for solid foods of
an appropriate texture and consistency. Breakfasts are reimbursable
when schools provide all of the components in the meal pattern that the
infant is developmentally ready to accept.
(1) 4 to 8 fluid ounces of breastmilk or iron-fortified infant
formula; and
(2) 0 to 3 tablespoons of iron-fortified dry infant cereal.
(C) 8 through 11 months. Breastmilk or iron-fortified formula and
solid foods of an appropriate texture and consistency are required.
(1) 6 to 8 fluid ounces of breastmilk or iron-fortified infant
formula; and
(2) 2 to 4 tablespoons of iron-fortified dry infant cereal; and
(3) 1 to 4 tablespoons of fruit or vegetable.
(v) Infant meal pattern table. The minimum amounts of food
components to serve to infants, as described in paragraph (o)(11)(iv)
of this section, are:

Breakfast Pattern for Infants
----------------------------------------------------------------------------------------------------------------
Birth through 3 months 4 through 7 months 8 through 11 months
----------------------------------------------------------------------------------------------------------------
4-6 fluid ounces of formula \1\ or 4-8 fluid ounces of formula\1\ or 6-8 fluid ounces of formula \1\ or
breastmilk 2 3 breastmilk;2 3 and breastmilk;2 3 and
0-3 tablespoons of infant cereal 1 4 2-4 tablespoons of infant cereal;\1\
and
1-4 tablespoons of fruit or
vegetable or both.
----------------------------------------------------------------------------------------------------------------
\1\ Infant formula and dry infant cereal must be iron-fortified.
\2\ Breastmilk or formula, or portions of both, may be served; however, it is recommended that breastmilk be
served from birth through 11 months.
\3\ For some breastfed infants who regularly consume less than the minimum amount of breastmilk per feeding, a
serving of less than the minimum amount of breastmilk may be offered, with additional breastmilk offered if
the infant is still hungry.
\4\ A serving of this component is required only when the infant is developmentally ready to accept it.

0
12. Paragraph 220.13(f) is amended as follows:
0
a. Amend paragraph (f)(2) by removing the words ``Sec. 210.30(d)''
wherever it appears and adding in its place the words ``Sec. 210.29'';
and
0
b. Revise paragraph (f)(3) to read as follows:

Sec. 220.13 Special responsibilities of State agencies.

(f) * * *
(3) For the purposes of compliance with the meal requirements in
Sec. 220.8 and Sec. 220.23, the State agency must follow the
provisions specified in Sec. 210.18(g)(2) of this chapter, as
applicable.
* * * * *

0
13. Add Sec. 220.23 to read as follows:

Sec. 220.23 Nutrition standards and menu planning approaches for
breakfasts.

(a) What are the nutrition standards for breakfasts for children
age 2 and

[[Page 4160]]

over? This section contains the requirements applicable to school
breakfasts for children age 2 and over in school years 2012-2013
through 2013-14. All of the requirements of this section will be
superseded by the requirements in Sec. 220.8 beginning July 1, 2013
(school year 2013-14), with the exceptions noted in paragraph (n) of
this section. School food authorities must ensure that participating
schools provide nutritious and well-balanced breakfasts. For children
age 2 and over, breakfasts, when averaged over a school week, must meet
the nutrition standards and the appropriate nutrient and calorie levels
in this section. The nutrition standards are:
(1) Provision of one-fourth of the Recommended Dietary Allowances
(RDA) for protein, calcium, iron, vitamin A and vitamin C in the
appropriate levels (see paragraphs (b), (c), (e)(1), or (h) of this
section);
(2) Provision of the breakfast energy allowances (calories) for
children in the appropriate levels (see paragraphs (b), (c), (e)(1), or
(h) of this section);
(3) These applicable recommendations of the 1995 Dietary Guidelines
for Americans:
(i) Eat a variety of foods;
(ii) Limit total fat to 30 percent of total calories;
(iii) Limit saturated fat to less than 10 percent of total
calories;
(iv) Choose a diet low in cholesterol;
(v) Choose a diet with plenty of grain products, vegetables, and
fruits; and
(vi) Choose a diet moderate in salt and sodium.
(4) These measures of compliance with the applicable
recommendations of the 1995 Dietary Guidelines for Americans:
(i) Limit the percent of calories from total fat to 30 percent of
the actual number of calories offered;
(ii) Limit the percent of calories from saturated fat to less than
10 percent of the actual number of calories offered;
(iii) Reduce sodium and cholesterol levels; and
(iv) Increase the level of dietary fiber.
(5) School food authorities have several ways to plan menus. The
minimum levels of nutrients and calories that breakfasts must offer
depends on the menu planning approach used and the age/grades served.
The menu planning approaches are:
(i) Nutrient standard menu planning (see paragraphs (b) and (e) of
this section);
(ii) Assisted nutrient standard menu planning (see paragraphs (b)
and (f) of this section);
(iii) Traditional food-based menu planning (see paragraphs (c) and
(g)(1) of this section);
(iv) Enhanced food-based menu planning (see paragraphs (c) and
(g)(2) of this section); or
(v) Alternate menu planning as provided for in paragraph (h) of
this section.
(6) Schools must keep production and menu records for the
breakfasts they produce. These records must show how the breakfasts
contribute to the required food components, food items or menu items
every day. In addition, these records must show how the breakfasts
contribute to the nutrition standards in paragraph (a) of this section
and the appropriate calorie and nutrient levels (see paragraphs (c),
(d), or (h) of this section, depending on the menu planning approach
used) over the school week. If applicable, schools or school food
authorities must maintain nutritional analysis records to demonstrate
that breakfasts, when averaged over each school week, meet:
(i) The nutrition standards provided in paragraph (a) of this
section; and
(ii) The nutrient and calorie levels for children for each age or
grade group in accordance with paragraphs (b) and (e)(1) of this
section or developed under paragraph (h) of this section.
(b) What are the levels for nutrients and calories for breakfasts
planned under the nutrient standard or assisted nutrient standard menu
planning approaches? (1) The required levels are:

Minimum Nutrient and Calorie Levels for School Breakfasts Nutrient Standard Meal Planning Approaches (School
Week Averages)
----------------------------------------------------------------------------------------------------------------
Minimum requirements Optional
Nutrients and energy allowances -----------------------------------------------
Preschool Grades K-12 Grades 7-12
----------------------------------------------------------------------------------------------------------------
Calories (kcal)................................................. 388 554 618
Total fat (as % of total kcals)................................. (1) (1, 2) (2)
Saturated fat (as % of total kcals)............................. (1) (1, 3) (3)
RDA for protein (g)............................................. 5 10 12
RDA for calcium (mg)............................................ 200 257 300
RDA for iron (mg)............................................... 2.5 3 3.4
RDA for Vitamin A (RE).......................................... 113 197 225
RDA for Vitamin C (mg).......................................... 11 13 14
----------------------------------------------------------------------------------------------------------------
\1\ The Dietary Guidelines recommend that after 2 years of age `` * * * children should gradually adopt a diet
that, by about 5 years of age, contains no more than 30 percent of calories from fat.''
\2\ Not to exceed 30 percent over a school week.
\3\ Less than 10 percent over a school week.

(2) Optional levels are:

Optional Minimum Nutrient and Calorie Levels for School Breakfasts Nutrient Standard Meal Planning Approaches
(School Week Averages)
----------------------------------------------------------------------------------------------------------------
Ages 14 and
Nutrients and energy allowances Ages 3-6 Ages 7-10 Ages 11-13 above
----------------------------------------------------------------------------------------------------------------
Calories (kcal)................................. 419 500 588 625
Total fat (as % of total kcals)................. (1, 2) (2) (2) (2)
Saturated fat (as % of total kcals)............. (1, 3) (3) (3) (3)
RDA for protein (g)............................. 5.5 7 11.25 12.5
RDA for calcium (mg)............................ 200 200 300 300

[[Page 4161]]

RDA for iron (mg)............................... 2.5 2.5 3.4 3.4
RDA for Vitamin A (RE).......................... 119 175 225 225
RDA for Vitamin C (mg).......................... 11.00 11.25 12.5 14.4
----------------------------------------------------------------------------------------------------------------
\1\ The Dietary Guidelines recommend that after 2 years of age `` * * * children should gradually adopt a diet
that, by about 5 years of age, contains no more than 30 percent of calories from fat.''
\2\ Not to exceed 30 percent over a school week.
\3\ Less than 10 percent over a school week.

(3) Schools may also develop a set of nutrient and calorie levels
for a school week. These levels are customized for the age groups of
the children in the particular school.
(c) What are the nutrient and calorie levels for breakfasts planned
under the food-based menu planning approaches?--(1) Traditional
approach. For the traditional food-based menu planning approach, the
required levels are:

Minimum Nutrient and Calorie Levels for School Breakfasts Traditional Food-Based Menu Planning Approach (School
Week Averages)
----------------------------------------------------------------------------------------------------------------
Nutrients and energy allowances Age 2 Ages 3, 4, 5 Grades K-12
----------------------------------------------------------------------------------------------------------------
Calories (kcal)................................................. 325 388 554
Total fat (as % of total kcals)................................. (1) (1) (1, 2)
Saturated fat (as % of total kcals)............................. (1) (1) (1, 3)
RDA for protein (g)............................................. 4 5 10
RDA for calcium (mg)............................................ 200 200 257
RDA for iron (mg)............................................... 2.5 2.5 3
RDA for Vitamin A (RE).......................................... 100 113 197
RDA for Vitamin C (mg).......................................... 10 11 13
----------------------------------------------------------------------------------------------------------------
\1\ The Dietary Guidelines recommend that after 2 years of age `` * * * children should gradually adopt a diet
that, by about 5 years of age, contains no more than 30 percent of calories from fat.''
\2\ Not to exceed 30 percent over a school week.
\3\ Less than 10 percent over a school week.

(2) Enhanced approach. For the enhanced food-based menu planning
approach, the required levels are:

Minimum Nutrient and Calorie Levels for School Breakfasts Enhanced Food-Based Menu Planning Approach (School
Week Averages)
----------------------------------------------------------------------------------------------------------------
Required for Option for
Nutrients and energy allowances -----------------------------------------------
Preschool Grades K-12 Grades 7-12
----------------------------------------------------------------------------------------------------------------
Calories (kcal)................................................. 388 554 618
Total fat (as % of total kcals)................................. (1) (1, 2) (2)
Saturated fat (as % of total kcals)............................. (1) (1, 3) (3)
RDA for protein (g)............................................. 5 10 12
RDA for calcium (mg)............................................ 200 257 300
RDA for iron (mg)............................................... 2.5 3 3.4
RDA for Vitamin A (RE).......................................... 113 197 225
RDA for Vitamin C (mg).......................................... 11 13 14
----------------------------------------------------------------------------------------------------------------
\1\ The Dietary Guidelines recommend that after 2 years of age `` * * * children should gradually adopt a diet
that, by about 5 years of age, contains no more than 30 percent of calories from fat.''
\2\ Not to exceed 30 percent over a school week.
\3\ Less than 10 percent over a school week.

(d) Exceptions and variations allowed in reimbursable breakfasts.
(1) Exceptions for disability reasons. Schools must make substitutions
in breakfasts for students who are considered to have a disability
under 7 CFR part 15b.3 and whose disability restricts their diet.
Substitutions must be made on a case by case basis only when supported
by a written statement of the need for substitutions that includes
recommended alternate foods, unless otherwise exempted by FNS. Such
statement must be signed by a licensed physician.
(2) Exceptions for non-disability reasons. Schools may make
substitutions for students without disabilities who cannot consume the
breakfast because of medical or other

[[Page 4162]]

special dietary needs. Substitutions must be made on a case by case
basis only when supported by a written statement of the need for
substitutions that includes recommended alternate foods, unless
otherwise exempted by FNS. Except with respect to substitutions for
fluid milk, such statement must be signed by a recognized medical
authority.
(i) Milk substitutions for non-disability reasons. Schools may make
substitutions for fluid milk for non-disabled students who cannot
consume fluid milk due to medical or special dietary needs. A school
that selects this option may offer the nondairy beverage(s) of its
choice, provided the beverage(s) meet the nutritional standards
established in paragraph (i)(3) of this section. Expenses incurred in
providing substitutions for fluid milk that exceed program
reimbursements must be paid by the school food authority.
(ii) Requisites for milk substitutions. (A) A school food authority
must inform the State agency if any of its schools choose to offer
fluid milk substitutes other than for students with disabilities; and
(B) A medical authority or the student's parent or legal guardian
must submit a written request for a fluid milk substitute, identifying
the medical or other special dietary need that restricts the student's
diet.
(iii) Substitution approval. The approval for fluid milk
substitution must remain in effect until the medical authority or the
student's parent or legal guardian revokes such request in writing, or
until such time as the school changes its substitution policy for non-
disabled students.
(3) Variations for ethnic, religious, or economic reasons. Schools
should consider ethnic and religious preferences when planning and
preparing breakfasts. Variations on an experimental or continuing basis
in the food components for the food-based menu planning approaches in
paragraph (g) of this section may be allowed by FNS. Any variations
must be nutritionally sound and needed to meet ethnic, religious, or
economic needs.
(4) Exceptions for natural disasters. If there is a natural
disaster or other catastrophe, FNS may temporarily allow schools to
serve breakfasts for reimbursement that do not meet the requirements in
this section.
(e) What are the requirements for the nutrient standard menu
planning approach? (1) Nutrient levels--(i) Adjusting nutrient levels
for young children. Schools with children who are age 2 must at least
meet the nutrition standards in paragraph (a) of this section and the
preschool nutrient and calorie levels in paragraph (b)(1) of this
section over a school week. Schools may also use the preschool nutrient
and calorie levels in paragraph (b)(2) of this section or may calculate
nutrient and calorie levels for two year olds. FNS has a method for
calculating these levels in menu planning guidance materials.
(ii) Minimum levels for nutrients. Breakfasts must at least offer
the nutrient and calorie levels for the required grade groups in the
table in paragraph (b)(1) of this section. Schools may also offer
breakfasts meeting the nutrient and calorie levels for the age groups
in paragraph (b)(2) of this section. If only one grade or age group is
outside the established levels, schools may follow the levels for the
majority of the children. Schools may also customize the nutrient and
calorie levels for the children they serve. FNS has a method for
calculating these levels in guidance materials for menu planning.
(2) Reimbursable breakfasts--(i) Contents of a reimbursable
breakfast. A reimbursable breakfast must include at least three menu
items. All menu items or foods offered in a reimbursable breakfast
contribute to the nutrition standards in paragraph (a) of this section
and to the levels of nutrients and calories that must be met in
paragraphs (c) or (e)(1) of this section. Unless offered as part of a
menu item in a reimbursable breakfast, foods of minimal nutritional
value (see appendix B to part 220) are not included in the nutrient
analysis. Reimbursable breakfasts planned under the nutrient standard
menu planning approach must meet the nutrition standards in paragraph
(a) of this section and the appropriate nutrient and calorie levels in
paragraph (b) or (e)(1) of this section.
(ii) Offer versus serve. Schools must offer at least three menu
items. At their option, school food authorities may allow students to
select only two menu items and to decline a maximum of one menu item.
The price of a reimbursable breakfast does not change if the student
does not take a menu item or requests smaller portions.
(3) Doing the analysis. Schools using nutrient standard menu
planning must conduct the analysis on all menu items and foods offered
in a reimbursable breakfast. The analysis is conducted over a school
week within the review period. Unless offered as part of a menu item in
a reimbursable breakfast, foods of minimal nutritional value (see
appendix B to part 220) are not included in the nutrient analysis.
(4) Software elements--(i) The Child Nutrition Database. The
nutrient analysis is based on the Child Nutrition Database. This
database is part of the software used to do a nutrient analysis.
Software companies or others developing systems for schools may contact
FNS for more information about the database.
(ii) Software evaluation. FNS or an FNS designee evaluates any
nutrient analysis software before it may be used in schools. FNS or its
designee determines if the software, as submitted, meets the minimum
requirements. The approval of software does not mean that FNS or USDA
endorses it. The software must be able to do all functions after the
basic data is entered. The required functions include weighted averages
and the optional combined analysis of the lunch and breakfast programs.
(5) Nutrient analysis procedures--(i) Weighted averages. Schools
must include all menu items and foods offered in reimbursable
breakfasts in the nutrient analysis. Menu items and foods are included
based on the portion sizes and projected serving amounts. They are also
weighted based on their proportionate contribution to the breakfasts
offered. This means that menu items or foods more frequently offered
are weighted more heavily than those not offered as frequently. Schools
calculate weighting as indicated by FNS guidance and by the guidance
provided by the software.
(ii) Analyzed nutrients. The analysis includes all menu items and
foods offered over a school week. The analysis must determine the
levels of: Calories, protein, vitamin A, vitamin C, iron, calcium,
total fat, saturated fat, sodium, cholesterol and dietary fiber.
(6) Comparing the results of the nutrient analysis. Once the
procedures in paragraph (i)(5) of this section are completed, schools
must compare the results of the analysis to the appropriate nutrient
and calorie levels, by age/grade groups, in paragraph (b) of this
section or those developed under paragraph (e)(1) of this section. This
comparison determines the school week's average. Schools must also make
comparisons to the nutrition standards in paragraph (a) of this section
to determine how well they are meeting the nutrition standards over a
school week.
(7) Adjustments to the menus. Once schools know the results of the
nutrient analysis based on the procedures in paragraphs (e)(5) and (6)
of this section, they must adjust future menu cycles to reflect
production and how often the menu items and foods are offered. Schools
may need to reanalyze menus when the students' selections and,

[[Page 4163]]

consequently, production levels change. Schools may need to change the
menu items and foods offered given the students' selections and may
need to modify the recipes and other specifications to make sure that
the nutrition standards in paragraph (a) and either paragraph (b) or
(e)(1) of this section are met.
(8) Standardized recipes. If a school follows the nutrient standard
menu planning approach, it must develop and follow standardized
recipes. A standardized recipe is a recipe that was tested to provide
an established yield and quantity using the same ingredients for both
measurement and preparation methods. Any standardized recipes developed
by USDA/FNS are in the Child Nutrition Database. If a school has its
own recipes, they must be standardized and analyzed to determine the
levels of calories, nutrients, and dietary components listed in
paragraph (e)(5)(ii) of this section. Schools must add any local
recipes to their local database as outlined in FNS guidance.
(9) Processed foods. The Child Nutrition Database includes a number
of processed foods. Schools may use purchased processed foods and menu
items that are not in the Child Nutrition Database. Schools or the
State agency must add any locally purchased processed foods and menu
items to their local database as outlined in FNS guidance. Schools or
State agencies must obtain the levels of calories, nutrients, and
dietary components listed in paragraph (e)(5)(ii) of this section.
(10) Menu substitutions. Schools may need to substitute foods or
menu items in a menu that was already analyzed. If the substitution(s)
occurs more than two weeks before the planned menu is served, the
school must reanalyze the revised menu. If the substitution(s) occurs
two weeks or less before the planned menu is served, the school does
not need to do a reanalysis. However, schools should always try to
substitute similar foods.
(11) Meeting the nutrition standards. The school's analysis shows
whether their menus are meeting the nutrition standards in paragraph
(a) of this section and the appropriate levels of nutrients and
calories in paragraph (b) of this section or customized levels
developed under paragraph (e)(1) of this section. If the analysis shows
that the menu(s) are not meeting these standards, the school needs to
take action to make sure that the breakfasts meet the nutrition
standards and the calorie, nutrient, and dietary component levels.
Actions may include technical assistance and training and may be taken
by the State agency, the school food authority or by the school as
needed.
(12) Other Child Nutrition Programs and nutrient standard analysis
menu planning. School food authorities that operate the Summer Food
Service Program (part 225 of this chapter) and/or the Child and Adult
Care Food Program (part 226 of this chapter) may, with State agency
approval, prepare breakfasts for these programs using the nutrient
standard menu planning approach for children age two and over. FNS has
program guidance on the levels of nutrient and calories for adult
breakfasts offered under the Child and Adult Care Food Program.
(f) What are the requirements for the assisted nutrient standard
menu planning approach?--(1) Definition of assisted nutrient standard
menu planning. Some school food authorities may not be able to do all
of the procedures necessary for nutrient standard menu planning. The
assisted nutrient standard menu planning approach provides schools with
menu cycles developed and analyzed by other sources. These sources
include the State agency, other schools, consultants, or food service
management companies.
(2) Elements of assisted nutrient standard menu planning. School
food authorities using menu cycles developed under assisted nutrient
standard menu planning must follow the procedures in paragraphs (e)(1)
through (10) of this section. The menu cycles must also incorporate
local food preferences and accommodate local food service operations.
The menu cycles must meet the nutrition standards in paragraph (a) of
this section and meet the applicable nutrient and calorie levels for
nutrient standard menu planning in paragraphs (b) or (e)(1) of this
section. The supplier of the assisted nutrient standard menu planning
approach must also develop and provide recipes, food product
specifications, and preparation techniques. All of these components
support the nutrient analysis results of the menu cycles used by the
receiving school food authorities.
(3) State agency approval. Prior to its use, the State agency must
approve the initial menu cycle, recipes and other specifications of the
assisted nutrient standard menu planning approach. The State agency
needs to make sure all the steps required for nutrient analysis were
followed. School food authorities may also ask the State agency for
assistance with implementation of their assisted nutrient standard menu
planning approach.
(4) Required adjustments. After the initial service of the menu
cycle developed under the assisted nutrient standard menu planning
approach, the nutrient analysis must be reassessed and appropriate
adjustments made as discussed in paragraph (e)(7) of this section.
(5) Final responsibility for meeting the nutrition standards. The
school food authority using the assisted nutrient standard menu
planning approach retains final responsibility for meeting the
nutrition standards in paragraph (a) of this section and the applicable
calorie and nutrient levels in paragraphs (b) or (e)(1) of this
section.
(6) Adjustments to the menus. If the nutrient analysis shows that
the breakfasts offered are not meeting the nutrition standards in
paragraph (a) of this section and the applicable calorie and nutrient
levels in paragraphs (b) or (e)(1) of this section, the State agency,
school food authority or school must take action to make sure the
breakfasts offered meet these requirements. Actions needed include
technical assistance and training.
(7) Other Child Nutrition Programs and assisted nutrient analysis
menu planning. School food authorities that operate the Summer Food
Service Program (part 225 of this chapter) and/or the Child and Adult
Care Food Program (part 226 of this chapter) may, with State agency
approval, prepare breakfasts for these programs using the assisted
nutrient standard menu planning approach for children age two and over.
FNS has guidance on the levels of nutrients and calories for adult
breakfasts offered under the Child and Adult Care Food Program.
(g) What are the requirements for the food-based menu planning
approaches?--(1) Food items. There are two menu planning approaches
based on meal patterns, not nutrient analysis. These approaches are the
traditional food-based menu planning approach and the enhanced food-
based menu planning approach. Schools using one of these approaches
must offer these food items in at least the portions required for
various age/grade groups:
(i) A serving of fluid milk as a beverage or on cereal or used
partly for both;
(ii) A serving of fruit or vegetable or both, or full-strength
fruit or vegetable juice; and
(iii) Two servings from one of the following components or one
serving from each component:
(A) Grains/breads; and/or
(B) Meat/meat alternate.
(2) Quantities for the traditional food-based menu planning
approach. At a minimum, schools must offer the food items in the
quantities specified for the

[[Page 4164]]

appropriate age/grade group in the following table:

Traditional Food-Based Menu Planning Approach--Meal Pattern for Breakfasts
----------------------------------------------------------------------------------------------------------------
Food components and food items 1-2 Ages 3, 4 and 5 Grades K-12
----------------------------------------------------------------------------------------------------------------
MILK (fluid) (as a beverage, on 4 fluid ounces........... 6 fluid ounces.......... 8 fluid ounces.
cereal, or both).
JUICE/FRUIT/VEGETABLE: Fruit and/ \1/4\ cup................ \1/2\ cup............... \1/2\ cup.
or vegetable; or full-strength
fruit juice or vegetable juice.
SELECT ONE SERVING FROM EACH OF
THE FOLLOWING COMPONENTS, TWO
FROM ONE COMPONENT, OR AN
EQUIVALENT COMBINATION:

GRAINS/BREADS:
Whole-grain or enriched bread \1/2\ slice.............. \1/2\ slice............. 1 slice.
Whole-grain or enriched \1/2\ serving............ \1/2\ serving........... 1 serving.
biscuit, roll, muffin, etc.
Whole-grain, enriched or \1/4\ cup or \1/3\ ounce. \1/3\ cup or\1/2\ ounce. \3/4\ cup or 1 ounce.
fortified cereal.
MEAT OR MEAT ALTERNATIVES:
Meat/poultry or fish......... \1/2\ ounce.............. \1/2\................... 1 ounce.
Alternate protein products\1\ \1/2\ ounce.............. \1/2\ ounce............. 1 ounce.
Cheese....................... \1/2\ ounce.............. \1/2\ ounce............. 1 ounce.
Large egg.................... \1/2\.................... \1/2\................... \1/2\.
Peanut butter or other nut or 1 tablespoon............. 1 tablespoon............ 2 tablespoons.
seed butters.
Cooked dry beans and peas.... 2 tablespoons............ 2 tablespoons........... 4 tablespoons.
Nuts and/or seeds (as listed \1/2\ ounce.............. \1/2\ ounce............. 1 ounce.
in program guidance) \2\.
Yogurt, plain or flavored, 2 ounces or \1/4\ cup.... 2 ounces or \1/4\ cup... 4 ounces or \1/2\ cup.
unsweetened or sweetened.
----------------------------------------------------------------------------------------------------------------
\1\ Must meet the requirements in appendix A of this part.
\2\ No more than 1 ounce of nuts and/or seeds may be served in any one breakfast.

(3) Quantities for the enhanced food-based menu planning approach.
At a minimum, schools must offer the food items in the quantities
specified for the appropriate age/grade group in the following table:

Enhanced Food-Based Menu Planning Approach-Meal Pattern for Breakfasts
----------------------------------------------------------------------------------------------------------------
Required for Option for
Food components and food items -------------------------------------------------------------------------------
Ages 1-2 Preschool Grades K-12 Grades 7-12
----------------------------------------------------------------------------------------------------------------
MILK (fluid) (as a beverage, on 4 fluid ounces.... 6 fluid ounces.... 8 fluid ounces.... 8 fluid ounces.
cereal, or both).
JUICE/FRUIT/VEGETABLE: Fruit and/ \1/4\ cup......... \1/2\ cup......... \1/2\ cup......... \1/2\ cup.
or vegetable; or full-strength
fruit juice or vegetable juice.
SELECT ONE SERVING FROM EACH OF
THE FOLLOWING COMPONENTS, TWO
FROM ONE COMPONENT, OR AN
EQUIVALENT COMBINATION:

GRAINS/BREADS:
Whole-grain or enriched \1/2\ slice....... \1/2\ slice....... 1 slice........... 1 slice.
bread.
Whole-grain or enriched \1/2\ serving..... \1/2\ serving..... 1 serving......... 1 serving.
biscuit, roll, muffin, etc..
Whole-grain, enriched or \1/4\ cup or 1/3 \1/3\ cup or \1/2\ \3/4\ cup or 1 \3/4\ cup or 1
fortified cereal. ounce. ounce. ounce. ounce plus an
additional
serving of one of
the Grains/Breads
above.
MEAT OR MEAT ALTERNATIVES:
Meat/poultry or fish........ \1/2\ ounce....... \1/2\ ounce....... 1 ounce........... 1 ounce.
Alternate protein products \1/2\ ounce....... \1/2\ ounce....... 1 ounce........... 1 ounce.
\1\.
Cheese...................... \1/2\ ounce....... \1/2\ ounce....... 1 ounce........... 1 ounce.
Large egg................... \1/2\............. \1/2\............. \1/2\............. \1/2\.
Peanut butter or other nut 1 tablespoon...... 1 tablespoon...... 2 tablespoons..... 2 tablespoons.
or seed butters.
Cooked dry beans and peas... 2 tablespoons..... 2 tablespoons..... 4 tablespoons..... 4 tablespoons.
Nuts and/or seeds (as listed \1/2\ ounce....... \1/2\ ounce....... 1 ounce........... 1 ounce.
in program guidance) \2\.
Yogurt, plain or flavored, 2 ounces or \1/4\ 2 ounces or \1/4\ 4 ounces or \1/2\ 4 ounces or
unsweetened or sweetened. cup. cup. cup. \1/2\ cup.
----------------------------------------------------------------------------------------------------------------
\1\ Must meet the requirements in appendix A of this part.
\2\ No more than 1 ounce of nuts and/or seeds may be served in any one breakfast.

[[Page 4165]]

(4) Offer versus serve. Each school must offer all four required
food items listed in paragraph (g)(1) of this section. At the option of
the school food authority, each school may allow students to refuse one
food item from any component. The refused food item may be any of the
four items offered to the student. A student's decision to accept all
four food items or to decline one of the four food items must not
affect the charge for a reimbursable breakfast.
(5) Meal pattern exceptions for outlying areas. Schools in American
Samoa, Puerto Rico and the Virgin Islands may serve a starchy vegetable
such as yams, plantains, or sweet potatoes to meet the grain/bread
requirement.
(h) What are the requirements for alternate menu planning
approaches?--(1) Definition. Alternate menu planning approaches are
those adopted or developed by school food authorities or State agencies
that differ from the standard approaches established in paragraphs (e)
through (g) of this section.
(2) Use and approval of major changes or new alternate approaches.
Within the guidelines established for developing alternate menu
planning approaches, school food authorities or State agencies may
modify one of the established menu planning approaches in paragraphs
(e) through (g) of this section or may develop their own menu planning
approach. The alternate menu planning approach must be available in
writing for review and monitoring purposes. No formal plan is required;
guidance material, a handbook or protocol is sufficient. As
appropriate, the material must address how the guidelines in paragraph
(h)(3) of this section are met. A State agency that develops an
alternate approach that is exempt from FNS approval under paragraph
(h)(2)(iii) of this section must notify FNS in writing when
implementing the alternate approach.
(i) Approval of local level plans. Any school food authority-
developed menu planning approach must have prior State agency review
and approval.
(ii) Approval of State agency plans. Unless exempt under paragraph
(h)(2)(iii) of this section, any State agency-developed menu planning
approach must have prior FNS approval.
(iii) State agency plans not subject to approval. A State agency-
developed menu planning approach does not need FNS approval if:
(A) Five or more school food authorities in the State use it; and
(B) The State agency maintains on-going oversight of the operation
and evaluation of the approach and makes any needed adjustments to its
policies and procedures to ensure that the appropriate guidelines in
paragraph (h)(3) of this section are met.
(3) Elements for major changes or new approaches. Any alternate
menu planning approach must:
(i) Offer fluid milk, as provided in paragraph (i) of this section;
(ii) Include the procedures for offer versus serve if the school
food authority chooses to implement the offer versus serve option.
Alternate approaches should follow the offer versus serve procedures in
paragraphs (e)(2)(ii) and (g)(4) of this section, as appropriate. If
these requirements are not followed, the approach must indicate:
(A) The affected age/grade groups;
(B) The number and type of items (and, if applicable, the
quantities for the items) that constitute a reimbursable breakfast
under offer versus serve;
(C) How such procedures will reduce plate waste; and
(D) How a reasonable level of calories and nutrients for the
breakfast as taken is provided.
(iii) Meet the Recommended Dietary Allowances and breakfast energy
allowances (nutrient levels) and indicate the age/grade groups served
and how the nutrient levels are met for those age/grade groups;
(iv) Follow the requirements for competitive foods in the
definition of Foods of minimal nutritional value in Sec. 220.2, in
Sec. 220.12, and in appendix B of this part;
(v) Follow the requirements for counting food items and products
towards meeting the meal patterns. These requirements are found in
paragraphs (g) and (i) of this section, in appendices A through C to
this part, and in instructions and guidance issued by FNS. This only
applies if the alternate approach is a food-based menu planning
approach.
(vi) Identify a reimbursable breakfast at the point of service.
(A) To the extent possible, the procedures provided in paragraph
(e)(2)(i) of this section for nutrient standard or assisted nutrient
standard menu planning approaches or for food-based menu planning
approaches provided in paragraph (g) of this section must be followed.
Any instructions or guidance issued by FNS that further defines the
elements of a reimbursable breakfast must be followed when using the
existing regulatory provisions.
(B) Any alternate approach that deviates from the provisions in
paragraph (e)(2)(i) or paragraph (g) of this section must indicate what
constitutes a reimbursable breakfast, including the number and type of
items (and, if applicable, the quantities for the items) which comprise
the breakfast, and how a reimbursable breakfast is to be identified at
the point of service.
(vii) Explain how the alternate menu planning approach can be
monitored under the applicable provisions of Sec. 210.18 of this
chapter, including a description of the records that will be maintained
to document compliance with the program's administrative and
nutritional requirements. However, if the procedures under Sec. 210.18
of this chapter cannot be used to monitor the alternate approach, a
description of review procedures which will enable the State agency to
assess compliance with the nutrition standards in paragraphs (a)(1)
through (4) of this section must be included; and
(viii) Follow the requirements for weighted analysis and for
approved software for nutrient standard menu planning as required by
paragraphs (e)(4) and (5) of this section unless a State agency-
developed approach meets the criteria in paragraph (h)(2)(iii) of this
section.
(i) What are the requirements for offering milk?--(1) Serving milk.
A serving of fluid milk as a beverage or on cereal or used in part for
each purpose must be offered for breakfasts. Schools must offer
students a variety (at least two different options) of fluid milk
daily. All milk must be fat-free or low-fat. Milk with higher fat
content is not allowed. Fat-free fluid milk may be flavored or
unflavored, and low-fat fluid milk must be unflavored. Low fat or fat-
free lactose-free and reduced-lactose fluid milk may also be offered.
Schools must also comply with other applicable fluid milk requirements
in Sec. 210.10(d)(1) through (4) of this chapter.
(2) Inadequate milk supply. If a school cannot get a supply of
milk, it can still participate in the Program under the following
conditions:
(i) If emergency conditions temporarily prevent a school that
normally has a supply of fluid milk from obtaining delivery of such
milk, the State agency may allow the school to serve breakfasts during
the emergency period with an alternate form of milk or without milk.
(ii) If a school is unable to obtain a supply of any type of fluid
milk on a continuing basis, the State agency may allow schools to
substitute canned or dry milk in the required quantities in the
preparation of breakfasts. In Alaska, Hawaii, American Samoa, Guam,
Puerto Rico, and the Virgin Islands, if a

[[Page 4166]]

sufficient supply of fluid milk cannot be obtained, ``milk'' includes
reconstituted or recombined milk, or otherwise as allowed by FNS
through a written exception.
(3) Milk substitutes. If a school chooses to offer one or more
substitutes for fluid milk for non-disabled students with medical or
special dietary needs, the nondairy beverage(s) must provide the
nutrients listed in the following table. Milk substitutes must be
fortified in accordance with fortification guidelines issued by the
Food and Drug Administration. A school need only offer the nondairy
beverage(s) that it has identified as allowable fluid milk substitutes
according to this paragraph (i)(3).

------------------------------------------------------------------------
Nutrient Per cup
------------------------------------------------------------------------
Calcium.................................... 276 mg.
Protein.................................... 8 g.
Vitamin A.................................. 500 IU.
Vitamin D.................................. 100 IU.
Magnesium.................................. 24 mg.
Phosphorus................................. 222 mg.
Potassium.................................. 349 mg.
Riboflavin................................. 0.44 mg.
Vitamin B-12............................... 1.1 mcg.
------------------------------------------------------------------------

(j) What are the requirements for the infant breakfast pattern?
(1) Feeding breakfasts to infants. Breakfasts served to infants ages
birth through 11 months must meet the requirements described in
paragraph (j)(4) of this section. Foods included in the breakfast must
be of a texture and a consistency that are appropriate for the age of
the infant being served. The foods must be served during a span of time
consistent with the infant's eating habits. For those infants whose
dietary needs are more individualized, exceptions to the meal pattern
must be made in accordance with the requirements found in paragraph
(d)(1) of this section.
(2) Breastmilk and iron-fortified formula. Either breastmilk or
iron-fortified infant formula, or portions of both, must be served for
the entire first year. Meals containing breastmilk and meals containing
iron-fortified infant formula supplied by the school are eligible for
reimbursement. However, infant formula provided by a parent (or
guardian) and breastmilk fed directly by the infant's mother, during a
visit to the school, contribute to a reimbursable breakfast only when
the school supplies at least one component of the infant's meal.
(3) Solid foods. For infants ages 4 through 7 months, solid foods
of an appropriate texture and consistency are required only when the
infant is developmentally ready to accept them. The school should
consult with the infant's parent (or guardian) in making the decision
to introduce solid foods. Solid foods should be introduced one at a
time, on a gradual basis, with the intent of ensuring the infant's
health and nutritional well-being.
(4) Infant meal pattern. Infant breakfasts must have, at a minimum,
each of the food components indicated, in the amount that is
appropriate for the infant's age. For some breastfed infants who
regularly consume less than the minimum amount of breastmilk per
feeding, a serving of less than the minimum amount of breastmilk may be
offered. In these situations, additional breastmilk must be offered if
the infant is still hungry. Breakfasts may include portions of
breastmilk and iron-fortified infant formula as long as the total
number of ounces meets, or exceeds, the minimum amount required of this
food component. Similarly, to meet the component requirement for
vegetables and fruit, portions of both may be served.
(i) Birth through 3 months. 4 to 6 fluid ounces of breastmilk or
iron-fortified infant formula--only breastmilk or iron-fortified
formula is required to meet the infant's nutritional needs.
(ii) Four through 7 months. Breastmilk or iron-fortified formula is
required. Some infants may be developmentally ready for solid foods of
an appropriate texture and consistency. Breakfasts are reimbursable
when schools provide all of the components in the meal pattern that the
infant is developmentally ready to accept.
(A) Four to 8 fluid ounces of breastmilk or iron-fortified infant
formula; and
(B) 0 to 3 tablespoons of iron-fortified dry infant cereal.
(iii) Eight through 11 months. Breastmilk or iron-fortified formula
and solid foods of an appropriate texture and consistency are required.
(A) Six to 8 fluid ounces of breastmilk or iron-fortified infant
formula; and
(B) Two to 4 tablespoons of iron-fortified dry infant cereal; and
(C) One to 4 tablespoons of fruit or vegetable.
(5) Infant meal pattern table. The minimum amounts of food
components to serve to infants, as described in paragraph (j)(4) of
this section, are:

Breakfast Pattern for Infants
----------------------------------------------------------------------------------------------------------------
Birth through 3 months 4 through 7 months 8 through 11 months
----------------------------------------------------------------------------------------------------------------
4-6 fluid ounces of formula[sup1] or 4-8 fluid ounces of formula \1\ or 6-8 fluid ounces of formula \1\ or
breastmilk \2\ \3\ breastmilk \2\ \3\; and breastmilk \2\ \3\; and
0-3 tablespoons of infant cereal \1\ 2-4 tablespoons of infant cereal
\4\ \1\; and
1-4 tablespoons of fruit or
vegetable or both
----------------------------------------------------------------------------------------------------------------
\1\ Infant formula and dry infant cereal must be iron-fortified.
\2\ Breastmilk or formula, or portions of both, may be served; however, it is recommended that breastmilk be
served in place of formula from birth through 11 months.
\3\ For some breastfed infants who regularly consume less than the minimum amount of breastmilk per feeding, a
serving of less than the minimum amount of breastmilk may be offered, with additional breastmilk offered if
the infant is still hungry.
\4\ A serving of this component is required only when the infant is developmentally ready to accept it.

(k) What about serving additional foods? Schools may offer
additional foods with breakfasts to children over one year of age.
(l) Must schools offer choices at breakfast? FNS encourages schools
to offer children a selection of foods and menu items at breakfast.
Choices provide variety and encourage consumption. Schools may offer
choices of reimbursable breakfasts or foods within a reimbursable
breakfast. When a school offers a selection of more than one type of
breakfast or when it offers a variety of food components, menu items or
foods and milk for choice as a reimbursable breakfast, the school must
offer all children the same selection(s) regardless of whether the
child is eligible for free or reduced price breakfasts or must pay the
designated full price. The school may establish different unit prices
for each type of breakfast offered provided that the benefits made
available to children eligible for free or reduced price breakfasts are
not affected.
(m) What must schools do about nutrition disclosure? To the extent
that school food authorities identify foods in

[[Page 4167]]

a menu, or on the serving line or through other available means of
communicating with program participants, school food authorities must
identify products or dishes containing more than 30 parts fully
hydrated alternate protein products (as specified in appendix A of this
part) to less than 70 parts beef, pork, poultry or seafood on an
uncooked basis, in a manner which does not characterize the product or
dish solely as beef, pork, poultry or seafood. Additionally, FNS
encourages schools to inform the students, parents, and the public
about efforts they are making to meet the nutrition standards (see
paragraph (a) of this section) for school breakfasts.
(n) Implementation timeframes. All the requirements in this section
will be superseded by the requirements in Sec. 220.8 beginning July 1,
2013 (SY 2013-2014) with the following exceptions:
(1) Fruits and vegetables component. The fruits and vegetables
requirements in paragraphs (g)(1) through (3) will be superseded July
1, 2014; and
(2) Sodium specification. The sodium requirements in (a)(3)(vi)
will be superseded July 1, 2014.

Appendix A to Part 220 [Amended]

0
14. Amend Appendix A to part 220 by removing section I. Formulated
Grain-Fruit Products in its entirety, and by removing the Roman numeral
``II.'' from the words ``II. Alternate Protein Products''.

Kevin Concannon,
Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 2012-1010 Filed 1-25-12; 8:45 am]
BILLING CODE 3410-30-P