[Federal Register Volume 81, Number 146 (Friday, July 29, 2016)]
[Rules and Regulations]
[Pages 50132-50151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17227]



[[Page 50131]]

Vol. 81

Friday,

No. 146

July 29, 2016

Part III





Department of Agriculture





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Food and Nutrition Service





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7 CFR Parts 210, 215, 220, et al.





 National School Lunch Program and School Breakfast Program: Nutrition 
Standards for All Foods Sold in School as Required by the Healthy, 
Hunger-Free Kids Act of 2010; Final Rule

  Federal Register / Vol. 81 , No. 146 / Friday, July 29, 2016 / Rules 
and Regulations  

[[Page 50132]]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 210 and 220

[FNS-2011-0019]
RIN 0584-AE09


National School Lunch Program and School Breakfast Program: 
Nutrition Standards for All Foods Sold in School as Required by the 
Healthy, Hunger-Free Kids Act of 2010

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule and interim final rule.

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SUMMARY: This rule adopts as final, with some modifications, the 
National School Lunch Program and School Breakfast Program regulations 
set forth in the interim final rule published in the Federal Register 
on June 28, 2013. The requirements addressed in this rule conform to 
the provisions in the Healthy, Hunger-Free Kids Act of 2010 regarding 
nutrition standards for all foods sold in schools, other than food sold 
under the lunch and breakfast programs. Most provisions of this final 
rule were implemented on July 1, 2014, a full year subsequent to 
publication of the interim final rule. This was in compliance with 
section 208 of the Healthy, Hunger-Free Kids Act of 2010, which 
required that State and local educational agencies have at least one 
full school year from the date of publication of the interim final rule 
to implement the competitive food provisions.
    Based on comments received on the interim final rule and 
implementation experience, this final rule makes a few modifications to 
the nutrition standards for all foods sold in schools implemented on 
July 1, 2014. In addition, this final rule codifies specific policy 
guidance issued after publication of the interim rule. Finally, this 
rule retains the provision related to the standard for total fat as 
interim and requests further comment on this single standard.

DATES: Effective date: This final rule is effective September 27, 2016.
    Comment date: Comments on the interim final rule total fat standard 
must be submitted by September 27, 2016.
    Compliance dates: Except as noted in this final rule, compliance 
with the nutrition standards and other provisions of the interim final 
rule began on July 1, 2014. The potable water provision was effective 
on October 1, 2010, and compliance with that provision was required no 
later than August 27, 2013.

ADDRESSES: To be considered, written comments must be submitted by one 
of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov, select ``Food and Nutrition Service'' from the 
agency drop-down menu, and click ``Submit''. In the Docket ID column of 
the search results select ``FNS-2011-0019'' to submit or view public 
comments and to view supporting and related materials available 
electronically. Information on using Regulations.gov, including 
instructions for accessing documents, submitting comments, and viewing 
the docket after the close of the comment period is available through 
the site's ``User Tips'' link.
     By Mail: Send comments to Tina Namian, Branch Chief, 
School Meals Branch, Policy and Program Development Division, Child 
Nutrition Programs, Food and Nutrition Service, 3101 Park Center Drive, 
Alexandria, Virginia 22302. Mailed comments must be postmarked on or 
before the comment deadline identified in the DATES section of this 
preamble to be assured of consideration.
    All submissions received in response to the interim final provision 
on total fat will be included in the record and will be available to 
the public. Please be advised that the substance of the comments and 
the identity of the individuals or entities submitting comments will be 
subject to public disclosure. FNS also will make the comments publicly 
available by posting a copy of all comments on http://regulations.gov.

FOR FURTHER INFORMATION CONTACT: Tina Namian, Branch Chief, School 
Meals Branch, Policy and Program Development Division, Child Nutrition 
Programs, Food and Nutrition Service, 3101 Park Center Drive, 
Alexandria, Virginia 22302, or by telephone at (703) 305-2590.

SUPPLEMENTARY INFORMATION:

I. Overview

    This rule affirms, with some modifications, the interim final rule 
(IFR) that implemented amendments made by sections 203 and 208 of 
Public Law 111-296, the Healthy, Hunger-Free Kids Act of 2010 (HHFKA), 
to the Child Nutrition Act of 1966 (CNA) and the Richard B. Russell 
National School Lunch Act (NSLA) for schools that participate in the 
School Breakfast Program (SBP) and the National School Lunch Program 
(NSLP). The final rule addresses public comments submitted in response 
to the IFR and makes some adjustments that improve clarity of the 
provisions set forth in the IFR. In response to comments and 
implementation experience as shared by operators, the final rule also 
incorporates and codifies some policy guidance to allow additional 
foods and combinations to meet the nutrition standards. Specifically, 
the regulation finalizes the IFR, with the following changes:
    Modifies definitions as follows:
     Adds the term ``main dish'' to the definition of 
``Entr[eacute]e'' for clarification;
     Adds the term ``grain-only'' breakfast entr[eacute]es to 
the definition of ``Entr[eacute]e'' to codify policy guidance issued 
during implementation; and
     Adds a definition of ``Paired exempt foods'' to codify 
policy guidance issued during implementation.
    Expands exemptions as follows:
     Adds a specific exemption to the total fat and saturated 
fat standard for eggs; and
     Modifies the exemption to the General Standards for canned 
vegetables to exempt low sodium and no-salt added vegetables with no 
added fat to more closely align with USDA Foods standards and industry 
production standards.
    Retains as interim with a request for comment:
     The nutrient standard for total fat.
    Makes a technical change as follows:
     In Sec.  210.11(i) and Sec.  210.11(j), a revision is made 
to clarify that the calorie and sodium limits apply to all competitive 
food items available on school campus and not just to those sold a la 
carte during the meal service.

Impact of the 2015-2020 Dietary Guidelines for Americans

    The original development of the standards contained in this 
regulation was informed by the 2010 Dietary Guidelines for Americans 
(DGA), which were published in December 2010. Based on a thorough 
review of the recently published 2015-2020 DGA, USDA has determined 
that the standards contained in this regulation are also consistent 
with the new DGA. Key recommendations from the 2010 DGA are maintained 
in the 2015-2020 DGA, and so continue to be in line with the standards 
included in this rule. The 2015-2020 DGA contain a specific additional 
recommendation on limiting added sugar. A discussion of this 
recommendation and its relationship to the standards included in this 
rule is contained in this preamble in the discussion of the standard 
for sugar.

II. Background

    The NSLP served an average of 30.4 million children per day in 
Fiscal Year

[[Page 50133]]

(FY) 2014. In that same FY, the SBP served an average of 13.6 million 
children daily.
    The NSLA (42 U.S.C. 1751 et seq.) and the CNA (42 U.S.C. 1771 et 
seq.) require the Secretary to establish nutrition standards for meals 
served under the NSLP and SBP, respectively. Prior to the enactment of 
the HHFKA, section 10 of the CNA limited the Secretary's authority to 
regulate competitive foods, i.e., foods sold in competition with the 
school lunch and breakfast programs, to those foods sold in the food 
service area during meal periods. The Secretary did not have authority 
to establish regulatory requirements for food sold in other areas of 
the school campus or at other times in the school day.
    The HHFKA, enacted December 13, 2010, directed the Secretary to 
promulgate regulations to establish science-based nutrition standards 
for foods sold in schools other than those foods provided under the 
NSLP and SBP. Section 208 of the HHFKA amended section 10 of the CNA 
(42 U.S.C. 1779) to require that such nutrition standards apply to all 
foods sold:
     Outside the school meal programs;
     On the school campus; and
     At any time during the school day.
    Section 208 requires that such standards be consistent with the 
most recent DGA and that the Secretary consider authoritative 
scientific recommendations for nutrition standards; existing school 
nutrition standards, including voluntary standards for beverages and 
snack foods; current State and local standards; the practical 
application of the nutrition standards; and special exemptions for 
infrequent school-sponsored fundraisers.
    In addition, the amendments made by section 203 of the HHFKA 
amended section 9(a) of the NSLA (42 U.S.C. 1758(a)) to require that 
schools participating in the NSLP make potable water available to 
children at no charge in the place where meals are served during the 
meal service. This is a nondiscretionary requirement of the HHFKA that 
became effective October 1, 2010, and was required to be implemented by 
August 27, 2013.
    The Department published a proposed rule in the Federal Register on 
February 8, 2013 (78 FR 9530), titled National School Lunch Program and 
School Breakfast Program: Nutrition Standards for All Foods Sold in 
School as Required by the Healthy, Hunger-Free Kids Act of 2010. This 
rule proposed nutrition standards for foods offered for sale to 
students outside of the NSLP and SBP, including foods sold [agrave] la 
carte and in school stores and vending machines. The standards were 
designed to complement recent improvements in school meals, and to help 
promote diets that contribute to students' long term health and well-
being. The proposed rule also would have required schools participating 
in the NSLP and afterschool snack service under NSLP to make water 
available to children at no charge during the lunch and afterschool 
snack service. USDA received a total of 247,871 public comments to the 
proposed rule during the 60-day comment period from February 8, 2013 
through April 9, 2013. This total included several single comment 
letters with thousands of identical comments. Approximately 245,665 of 
these were form letters, nearly all of which were related to 104 
different mass mail campaigns. The remaining comments--over 2,200--were 
unique comments rather than form letters. Comments represented a 
diversity of interests, including advocacy organizations, industry and 
trade associations, farm and other industry groups, schools, school 
boards and school nutrition and education associations, State 
departments of education, consumer groups and others. USDA appreciated 
the public interest in the proposed rule and carefully considered all 
comments in drafting the IFR.
    As referenced earlier in this preamble, the Department published an 
IFR in the Federal Register on June 28, 2013, (78 FR 39068) titled 
National School Lunch and School Breakfast Program: Nutrition Standards 
for All Foods Sold in School as Required by the Healthy, Hunger-Free 
Kids Act of 2010, and all provisions were required to be implemented on 
July 1, 2014, a full year subsequent to publication of the IFR 
standards. This was in compliance with section 208 of the HHFKA 
requirement that State and local educational agencies have at least one 
full school year from the date of publication of the IFR to implement 
the competitive food provisions.

III. General Summary of Comments Received on the Interim Rule

    A total of 520 public comments on the IFR were received during the 
120-day comment period that ended on October 28, 2013. Fifty-three of 
these comments were copies of form letters related to nine different 
mass mail campaigns. The remaining comments included 460 letters with 
unique content rather than form letters. A total of 386 of these 
comments were substantive. Comments represented a diversity of 
interests, including advocacy organizations; health care organizations; 
industry and trade associations; farm and industry groups; schools, 
school boards and school nutrition and education associations; State 
departments of education; consumer groups; and others. A relatively 
modest number of comments were received on the IFR, many of which 
reiterated previous comments received during the proposed rule comment 
period and which had been taken into consideration as the IFR was 
drafted. This final rule, therefore, incorporates relatively minor 
modifications to the provisions of the IFR.
    In general, there was support for the IFR. Stakeholders were very 
supportive of the IFR, and some had specific comments and suggestions 
on several provisions included in the rule. Of the 520 comments, 103 
were in full support of the rule. Fifty commenters objected to 
implementation of this rule, indicating that no standards for 
competitive food should be implemented in schools. The remaining 
commenters included suggested revisions to various aspects of the rule 
and its implementation.
    Commenters recommended expanding exemptions to several of the 
standards for specific food items, such as side items served in the 
NSLP and the SBP, while others recommended continuing the initial 
sodium standard for snack foods. Several commenters recommended that 
the General Standard which allowed foods meeting the 10 percent Daily 
Value for nutrients of public health concern be made permanent rather 
than eliminated on July 1, 2016, as was included in the IFR. More 
detailed discussions of these specific issues are included in this 
preamble.
    Twenty-five comments expressed general support for the IFR, many 
citing concerns for childhood obesity and stating that competitive food 
standards will reinforce healthy eating habits in school and outside of 
school. In addition to their overall support of the rule, an advocacy 
organization and an individual commenter stated that lower income 
students may not have the opportunity to experience healthier food 
items outside of the school. These commenters asserted that this rule 
will introduce these students to healthier foods and possibly influence 
home food consumption patterns and protect the nutritional needs of 
children. One trade association applauded the Department's 
encouragement of dairy foods consumption throughout the rule and urged 
that these changes be retained. One individual commenter remarked that 
the inclusion of recordkeeping and compliance requirements, 
consideration of special situations, and

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implementation information makes this rule even more complete.
    Although in support of the IFR in general, two commenters asserted 
that there are other factors that cause obesity in our society besides 
foods available in schools. For example, these commenters suggested 
that reducing physical education class in school has led to increased 
sedentary lifestyles of children. Commenters also noted the importance 
of supplementing nutrition requirements for foods available in schools 
with nutrition and health education in schools.
    Some of those commenters concerned about the competitive food 
standards established in the IFR asserted that foods sold in schools 
are not the cause of childhood obesity and that the rule will result in 
significant revenue losses for school food service, citing financial 
strain on schools caused by the recently revised NSLP standards. Most 
of these comments were opposed to the rule in its entirety and did not 
comment on specific provisions of the IFR.
    The Department acknowledges that there are many factors 
contributing to childhood obesity and supports the idea that developing 
a healthy nutrition environment in school plays an important role in 
combatting childhood obesity, as well. This rule reinforces the 
development of a healthy school environment. In addition, the 
Department recognizes that nutrition and health education as well as 
physical activity are important to the development of a healthy 
lifestyle and encourages schools to develop local school wellness 
standards that incorporate these items into the school day.
    In addition to public comments submitted during the formal comment 
period, USDA continued to respond to feedback and questions from 
program operators and other impacted parties throughout the 
implementation year in order to provide clarification, develop policy 
guidance, and inform us as the final rule was being developed.
    The description and analysis of comments in this preamble focus on 
general comment themes, most frequent comments, and those that 
influenced revisions to this final rule. Provisions not addressed in 
the preamble to this final rule did not receive significant or 
substantial public comments and remain unchanged. The reasons 
supporting the provisions of the proposed and interim regulations were 
carefully examined in light of the comments received to determine the 
continued applicability of the justifications. Those reasons, 
enunciated in the proposed and interim regulations, should be regarded 
as the basis for this final rule unless otherwise stated, or unless 
inconsistent with this final rule or this preamble. A thorough 
understanding of the rationale for various provisions of this final 
rule may require reference to the preamble of both the proposed rule 
published on February 8, 2013 (78 FR 9530) and the interim final rule 
published on June 28, 2013 (78 FR 39068).
    To view all public comments on the IFR, go to www.regulations.gov 
and search for public submissions under document number FNS-2011-0019-
4716. Once the search results populate, click on the blue text titled, 
``Open Docket Folder.'' USDA appreciates the public comments and shared 
operator experiences as they have been essential in developing a final 
rule that is expected to improve the quality of all foods sold outside 
of the NSLP and SBP.

IV. Summary of the Final Rule Competitive Food Standards

    The competitive foods and beverages standards included in the June 
28, 2013, IFR were implemented on July 1, 2014, and are retained in 
this final rule with some modifications, as noted in the following 
chart in bold letters. The modifications or changes made in this final 
rule are discussed next in the preamble.

            Summary of Final Rule Competitive Food Standards
------------------------------------------------------------------------
                                                      Exemptions to the
        Food/nutrient               Standard              standard
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General Standard for          To be allowable, a     Fresh and
 Competitive Food.             competitive FOOD      frozen fruits and
                               item must:            vegetables with no
                              (1) Meet all of the    added ingredients
                               proposed              except water are
                               competitive food      exempt from all
                               nutrient standards;   nutrient standards.
                               and.                  Canned
                              (2) Be a grain         fruits with no
                               product that          added ingredients
                               contains 50% or       except water, which
                               more whole grains     are packed in 100%
                               by weight or have     juice, extra light
                               whole grains as the   syrup, or light
                               first ingredient;     syrup are exempt
                               or.                   from all nutrient
                              (3) Have as the        standards.
                               first ingredient      Low sodium/
                               one of the non-       No salt added
                               grain main food       canned vegetables
                               groups: fruits,       with no added fats
                               vegetables, dairy,    are exempt from all
                               or protein foods      nutrient standards.
                               (meat, beans,
                               poultry, seafood,
                               eggs, nuts, seeds,
                               etc.); or.
                              (4) Be a combination
                               food that contains
                               at least \1/4\ cup
                               fruit and/or
                               vegetable..
                              (5) If water is the
                               first ingredient,
                               the second
                               ingredient must be
                               one of the above..
NSLP/SBP Entr[eacute]e Items  Any entr[eacute]e
 Sold [agrave] la Carte.       item offered as
                               part of the lunch
                               program or the
                               breakfast program
                               is exempt from all
                               competitive food
                               standards if it is
                               served as a
                               competitive food on
                               the day of service
                               or the day after
                               service in the
                               lunch or breakfast
                               program.
Grain Items.................  Acceptable grain
                               items must include
                               50% or more whole
                               grains by weight,
                               or have whole
                               grains as the first
                               ingredient.
Total Fats \1\..............  Acceptable food        Reduced fat
                               items must have       cheese (including
                               <=35% calories from   part-skim
                               total fat as served.  mozzarella) is
                                                     exempt from the
                                                     total fat standard.
                                                     Nuts and
                                                     seeds and nut/seed
                                                     butters are exempt
                                                     from the total fat
                                                     standard.
                                                     Products
                                                     consisting of only
                                                     dried fruit with
                                                     nuts and/or seeds
                                                     with no added
                                                     nutritive
                                                     sweeteners or fats
                                                     are exempt from the
                                                     total fat standard.
                                                     Seafood
                                                     with no added fat
                                                     is exempt from the
                                                     total fat standard.

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                                                     Whole eggs
                                                     with no added fat
                                                     are exempt from the
                                                     total fat standard.
                                                    Combination products
                                                     other than paired
                                                     exempt foods are
                                                     not exempt and must
                                                     meet all the
                                                     nutrient standards.
Saturated Fats..............  Acceptable food        Reduced fat
                               items must have       cheese (including
                               <10% calories from    part-skim
                               saturated fat as      mozzarella) is
                               served.               exempt from the
                                                     saturated fat
                                                     standard.
                                                     Nuts and
                                                     seeds and nut/seed
                                                     butters are exempt
                                                     from the saturated
                                                     fat standard.
                                                     Products
                                                     consisting of only
                                                     dried fruit with
                                                     nuts and/or seeds
                                                     with no added
                                                     nutritive
                                                     sweeteners or fats
                                                     are exempt from the
                                                     saturated fat
                                                     standard.
                                                     Whole eggs
                                                     with no added fat
                                                     are exempt from the
                                                     saturated fat
                                                     standard.
                                                    Combination products
                                                     other than paired
                                                     exempt foods are
                                                     not exempt and must
                                                     meet all the
                                                     nutrient standards.
Trans Fats..................  Zero grams of trans
                               fat as served
                               (<=0.5 g per
                               portion).
Sugar.......................  Acceptable food        Dried whole
                               items must have       fruits or
                               <=35% of weight       vegetables; dried
                               from total sugar as   whole fruit or
                               served.               vegetable pieces;
                                                     and dehydrated
                                                     fruits or
                                                     vegetables with no
                                                     added nutritive
                                                     sweeteners are
                                                     exempt from the
                                                     sugar standard.
                                                     Dried whole
                                                     fruits, or pieces,
                                                     with nutritive
                                                     sweeteners that are
                                                     required for
                                                     processing and/or
                                                     palatability
                                                     purposes (i.e.,
                                                     cranberries, tart
                                                     cherries, or
                                                     blueberries) are
                                                     exempt from the
                                                     sugar standard.
                                                     Products
                                                     consisting of only
                                                     dried fruit with
                                                     nuts and/or seeds
                                                     with no added
                                                     nutritive
                                                     sweeteners or fats
                                                     are exempt from the
                                                     sugar standard.
Sodium......................  Snack items and side
                               dishes: <=200 mg
                               sodium per item as
                               served, including
                               any added
                               accompaniments.
                              Entr[eacute]e items:
                               <=480 mg sodium per
                               item as served,
                               including any added
                               accompaniments.
Calories....................  Snack items and side
                               dishes: <=200
                               calories per item
                               as served,
                               including any added
                               accompaniments.
                              Entr[eacute]e items:
                               <=350 calories per
                               item as served
                               including any added
                               accompaniments.
Accompaniments..............  Use of
                               accompaniments is
                               limited when
                               competitive food is
                               sold to students in
                               school. The
                               accompaniment must
                               be included in the
                               nutrient profile as
                               part of the food
                               item served and
                               meet all proposed
                               standards.
Caffeine....................  Elementary and
                               Middle School:
                               foods and beverages
                               must be caffeine-
                               free with the
                               exception of trace
                               amounts of
                               naturally occurring
                               caffeine substances.
                              High School: foods
                               and beverages may
                               contain caffeine.
Beverages...................  Elementary School
                               Plain water
                               or plain carbonated
                               water (no size
                               limit);
                               Low fat
                               milk, unflavored
                               (<=8 fl oz);
                               Non-fat
                               milk, flavored or
                               unflavored (<=8 fl
                               oz), including
                               nutritionally
                               equivalent milk
                               alternatives as
                               permitted by the
                               school meal
                               requirements;
                               100% fruit/
                               vegetable juice
                               (<=8 fl oz); and.
                               100% fruit/
                               vegetable juice
                               diluted with water
                               (with or without
                               carbonation), and
                               no added sweeteners
                               (<=8 fl oz).
                              Middle School
                               Plain water
                               or plain carbonated
                               water (no size
                               limit);
                               Low-fat
                               milk, unflavored
                               (<=12 fl oz);
                               Non-fat
                               milk, flavored or
                               unflavored (<=12 fl
                               oz), including
                               nutritionally
                               equivalent milk
                               alternatives as
                               permitted by the
                               school meal
                               requirements;
                               100% fruit/
                               vegetable juice
                               (<=12 fl oz); and
                               100% fruit/
                               vegetable juice
                               diluted with water
                               (with or without
                               carbonation), and
                               no added sweeteners
                               (<=12 fl oz).
                              High School
                               Plain water
                               or plain carbonated
                               water (no size
                               limit);
                               Low-fat
                               milk, unflavored
                               (<=12 fl oz);

[[Page 50136]]

 
                               Non-fat
                               milk, flavored or
                               unflavored (<=12 fl
                               oz), including
                               nutritionally
                               equivalent milk
                               alternatives as
                               permitted by the
                               school meal
                               requirements;
                               100% fruit/
                               vegetable juice
                               (<=12 fl oz);
                               100% fruit/
                               vegetable juice
                               diluted with water
                               (with or without
                               carbonation), and
                               no added sweeteners
                               (<=12 fl oz);
                               Other
                               flavored and/or
                               carbonated
                               beverages (<=20 fl
                               oz) that are
                               labeled to contain
                               <5 calories per 8
                               fl oz, or <=10
                               calories per 20 fl
                               oz; and
                               Other
                               flavored and/or
                               carbonated
                               beverages (<=12 fl
                               oz) that are
                               labeled to contain
                               <=40 calories per 8
                               fl oz, or <=60
                               calories per 12 fl
                               oz.
Sugar-free Chewing Gum......  Sugar-free chewing
                               gum is exempt from
                               all of the
                               competitive food
                               standards and may
                               be sold to students
                               at the discretion
                               of the local
                               educational agency.
------------------------------------------------------------------------

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

    \1\ Please note that the Total Fat nutrient standard is being 
maintained as an interim final standard. The Department is 
requesting additional comments on this standard in this rulemaking. 
Please see further discussion in Part V of this preamble.
---------------------------------------------------------------------------

V. Discussion of Comments and Changes to the Final Rule

Definitions

    The amendments made by the HHFKA stipulate that the nutrition 
standards for competitive food apply to all foods and beverages sold: 
(a) Outside the school meals programs; (b) on the school campus; and 
(c) at any time during the school day. The IFR at Sec.  210.11(a) 
included definitions of Competitive food, School day, and School 
campus.
    Competitive food means all food and beverages other than meals 
reimbursed under programs authorized by the NSLA and the CNA available 
for sale to students on the School campus during the School day. 
Fifteen comments were received on this definition. Several commenters, 
including advocacy organizations and professional associations, 
generally agreed with the definition for ``competitive food.'' More 
specifically, these commenters supported that the competitive food 
standards will apply to all foods and beverages sold across the school 
campus and throughout the school day (until at least 30 minutes after 
school ends). An advocacy organization and an individual commenter 
suggested that FNS substitute the word ``served'' for the term 
``available for sale'' in the definition of ``competitive food'' 
because doing so would send a more consistent message to students and 
families by assuring that all foods brought into the school were 
subject to the same standards. The Department wishes to point out that 
the amendments made by the HHFKA do not provide the Secretary with 
jurisdiction over foods brought from outside of the school. Therefore, 
the definition for ``competitive food'' is unchanged in this rule.
    School day means, for the purpose of competitive food standards 
implementation, the period from the midnight before, to 30 minutes 
after the end of the official school day. Thirty comments were received 
on this definition. Nine of those comments mentioned the applicability 
of the IFR to non-school hours.
    Some commenters, including a trade association, a food 
manufacturer, and a school district, expressed support for the IFR 
definition for ``school day.'' However, more commenters disagreed with 
the IFR definition of ``school day'' primarily requesting that the 
definition should be expanded to include all times during which 
students are on campus and engaged in school-sponsored activities or 
all after-school hours in order to achieve the objective of promoting 
healthy food choices for children. Some commented that imposing 
competitive food standards during the school day but eliminating them 
after school sends a mixed message with regard to the need to eat 
healthy foods at all times.
    In contrast, a trade association and a food manufacturer suggested 
that USDA should more narrowly define ``school day'' to exclude foods 
sold at school programs and activities that occur before the start of 
the instructional school day to achieve consistency with the treatment 
of afterschool activities. Other individual commenters suggested that 
the school day should start at the beginning of school and end at the 
dismissal bell in order to allow morning and after school sales of 
noncompliant competitive foods.
    The Department wishes to reiterate that section 208 of the HHFKA 
amended the CNA to require that the competitive food standards apply to 
foods sold at any time during the school day, which does not include 
afterschool programs, events and activities. In addition, as a 
reminder, these standards are minimum standards. If an LEA wishes to 
expand the application of the standards to afterschool activities, they 
may do so. The definition of ``school day'' is, therefore, unchanged in 
this final rule. In addition, in order to clarify the applicability of 
the competitive foods nutrition standards, if a school operates a 
before or after-school program through the Child and Adult Care Food 
Program or the NSLP, the meal pattern requirements of the appropriate 
program shall be followed.

Paired Exempt Foods

    The competitive food standards provide exemptions for certain foods 
that are nutrient dense, even if they may not meet all of the specific 
nutrient requirements. For example, all fresh, frozen and most canned 
fruits as specified in Sec.  210.11(d)(1) are exempt from all of the 
nutrient standards because we want to encourage students to consume 
more of these foods. Similarly, peanut butter and other nut butters are 
exempt from the total fat and saturated fat standards, since these 
foods are also nutrient dense and primarily consist of healthier fats.
    A combination food is defined as a product that contains two or 
more foods representing two or more of the food groups: Fruit, 
vegetable, dairy, protein or grains. When foods are combined, they no 
longer retain their individual exemptions and must meet the nutrient 
standards that apply to a single item.

[[Page 50137]]

    However, the regulation did not specifically address the treatment 
of foods that are exempt from the regulatory requirements when they are 
simply paired and packaged with other products (without added 
ingredients) that are also exempt from one or more of the standards. 
Many of these ``paired exemptions'' are nutrient dense and contain 
foods that meet the intent of the competitive foods requirements. In 
response to concerns raised by operators in the first year of 
implementation, FNS issued policy guidance clarifying that ``paired 
exempt foods'' retain their individually designated exemption for total 
fat, saturated fat, and/or sugar when packaged together and sold. 
Paired exempt foods are required to meet the designated calorie and 
sodium standards specified in paragraphs Sec.  210.11(i) and (j) at all 
times. Some examples of paired exemptions include:
     Peanut Butter and celery. Peanut butter is exempt from the 
total fat and saturated fat requirements. When it is paired with a 
vegetable or fruit, such as celery, the paired snack retains the total 
fat and saturated fat exemptions and may be served as long as the 
calorie and sodium limits are met.
     Celery paired with peanut butter and unsweetened raisins. 
As noted above, celery and peanut butter both have exemptions. 
Similarly, dried fruit, such as unsweetened raisins, are exempt from 
the sugar limit. However, calorie and sodium limits still apply to the 
snack as a whole.
     Reduced fat cheese served with apples. Reduced fat cheese 
is exempt from the total fat and saturated fat limits. When it is 
paired with a vegetable or fruit, such as apples, the paired snack is 
only required to meet the calorie and sodium limits.
     Peanuts and apples. Peanuts are exempt from the total fat 
and saturated fat limits. When peanuts are paired with a vegetable or 
fruit, such as apples, the paired snack is only required to meet 
calorie and sodium limits.
    Operator implementation using the policy guidance was positive. 
Therefore, FNS is formalizing this policy clarification through this 
final rule by adding a definition of Paired exempt foods at Sec.  
210.11(a)(6).

Definition of Entr[eacute]e Item

    Entr[eacute]e item was defined in Sec.  210.11(a)(3) as an item 
that includes only the following three categories of main dish food 
items:
     A combination food of meat or meat alternate and whole 
grain rich food;
     A combination food of vegetable or fruit and meat or meat 
alternate; or
     A meat or meat alternate alone, with the exception of 
yogurt, low-fat or reduced fat cheese, nuts, seeds and nut or seed 
butters.
    During the course of implementation, some questions were received 
with regard to packaging and selling two snack items together, such as 
a cheese stick and a pickle or a whole grain-rich cookie and yogurt, 
and considering that item to be an entr[eacute]e in order to sell 
products with the higher entr[eacute]e calorie and sodium limits. The 
proposed rule clearly expressed the Department's intent that an 
entr[eacute]e be the main dish in the meal. Therefore, in order to 
clarify the definition of ``Entr[eacute]e item'', the phrase ``intended 
as the main dish'' is being added to the regulatory definition.
    Some commenters, including trade associations and food 
manufacturers, urged FNS to expand the definition of entr[eacute]e to 
include a grain only, whole-grain rich entr[eacute]e, on the basis that 
such foods are commonly served entr[eacute]e items in the SBP (e.g., 
pancakes, cereal, or waffles). A trade association and a food 
manufacturer commented that if a breakfast item does not qualify for 
the definition of entr[eacute]e item, it will be restricted to the 200-
calorie limit for snack items, which falls well below the minimum 
calorie requirements for breakfast under the SBP.
    An individual commenter recommended creating a separate definition 
of ``breakfast entr[eacute]e'' to allow grain/bread items as an option. 
A professional association and a food manufacturer requested that 
typical breakfast foods, such as a bagel and its accompaniments be 
considered an entr[eacute]e rather than a snack/side item at breakfast 
time or at lunch time. However, a State department of education, a 
community organization, and some individual commenters recommended that 
FNS not allow a grain-only entr[eacute]e to qualify as a breakfast 
entr[eacute]e item. The community organization argued that these items 
are of minimal nutritional value and typically involve the addition of 
high-sugar syrups. The State department of education commented that 
allowing grain-only entr[eacute]e items under the competitive food 
regulations would allow schools to sell SBP entr[eacute]e items such as 
muffins, waffles, and pancakes that would not otherwise meet the 
competitive food standards.
    In view of the comments as well as input received on grain-only 
entr[eacute]es during implementation of the IFR, the Department 
published Policy Memorandum SP 35-2014 to clarify that, although grain-
only items were not included in the IFR as entr[eacute]es, an SFA is 
permitted to determine which item(s) are the entr[eacute]e items for 
breakfasts offered as part of the SBP. The policy flexibility was well 
received and, therefore, this final rule amends the definition of 
``Entr[eacute]e item'' to include reference to whole grain rich, grain-
only breakfast items served in the SBP, making them allowable breakfast 
entr[eacute]es subject to the entr[eacute]e exemptions allowed in the 
rule on the day of and the day after service in the SBP. Such 
entr[eacute]e items also may be served at lunch in the NSLP on the day 
of or the day after service in the SBP.
    In summary, this final rule makes no changes to the IFR definitions 
of Competitive food, Combination foods, School day, and School campus 
at Sec.  210.11(a). This rule adds a definition of Paired exempt foods 
to allow paired exemption items to be sold in schools, and amends the 
definition of Entr[eacute]e item to include: (1) A specific reference 
to grain only breakfast entr[eacute]es served in the SBP, and (2) to 
incorporate the term ``intended as the main dish'' into the definition 
to further clarify the requirements for entr[eacute]es as well as 
entr[eacute]e exemptions.

State and Local Educational Agency Standards

    Under Sec.  210.11(b)(1) of the IFR, State and/or LEAs have the 
discretion to establish more rigorous restrictions on competitive food, 
as long as they are consistent with the provisions set forth in program 
regulations.
    Thirty-five comments addressed this discretion and numerous 
commenters expressly supported the provision. Several commenters, 
including a school professional association, and individual commenters, 
urged FNS to not allow additional standards for competitive foods 
beyond the Federal standards because a national standard will allow 
manufacturers to produce food items at a lower cost. A trade 
association recognized that the IFR may not be preemptive, but 
requested that USDA not encourage States to create additional criteria 
for competitive foods. This commenter expressed concerns that 
inconsistent State policies for competitive foods will limit 
reformulation opportunities.
    However, 12 advocacy organizations and an individual commenter 
expressed the need for a national framework for competitive foods and 
also expressed support for allowing States and localities to implement 
locally-tailored, standards that are not inconsistent with the Federal 
requirements. Similarly, some school professional associations and 
individual commenters supported allowing States the flexibility to 
create

[[Page 50138]]

their own restrictions on competitive foods, as needed.
    The ability of State agencies and LEAs to establish additional 
standards that do not conflict with the Federal competitive food 
requirements is consistent with the intent of section 208 of the HHFKA, 
and with the operation of the Federal school meal programs in general. 
That discretion also provides an appropriate level of flexibility to 
States and LEAs to set or maintain additional requirements that reflect 
their particular circumstances consistent with the development of their 
local school wellness policies. Any additional restrictions on 
competitive food established by school districts must be consistent 
with both the Federal requirements as well as any State requirements.
    This final rule makes no change to the provision allowing States 
and LEAs to establish additional competitive food standards that are 
not inconsistent with the Federal requirements. This provision may be 
found at Sec.  210.11(b)(1).

Suggestions To Prohibit Foods With Artificial Colors, Flavors and/or 
Preservatives

    Four individual commenters expressed concerns about continuing to 
allow the sale of foods that contain genetically modified organisms 
(GMO) and foods containing artificial ingredients, colors, and flavors. 
Just over 30 comments were received on other issues relating to food 
requirements. These comments included suggestions such as eliminating 
or putting limitations on high fructose corn syrup, sugar, fiber, and 
GMO foods. One individual commenter urged that all foods sold in 
schools should be organic.
    The Food and Drug Administration (FDA) makes determinations 
regarding the safety of particular food additives and USDA defers to 
FDA on such determinations. As discussed previously, these standards 
are minimal standards that must be met regarding competitive foods sold 
in schools. This final rule continues to provide the flexibility to 
implement additional standards at the State and/or local level.

General Competitive Foods Standards

    The rationale for many comments received on the IFR was consistency 
with the HUSSC and Alliance for a Healthier Generation standards. The 
Department wishes to point out that while those standards were 
considered in the development of the proposed rule, both of those 
standards have conformed to the USDA competitive foods standards 
subsequent to publication of the IFR.

Combination Foods

    The general nutrition standard in the rule at Sec.  
210.11(c)(2)(iv) specifies that combination foods must contain \1/4\ 
cup of fruit or vegetables. The Department received 45 comments on this 
provision of the IFR, the majority of which urged us to reduce the 
fruit or vegetable components to \1/8\ cup to be consistent with NSLP/
SBP standards, which allow schools to credit \1/8\ cup of fruit or 
vegetable toward the total quantity required for school meals. As 
indicated in the preamble to the IFR rule, maintaining the higher \1/4\ 
cup quantity requirement for fruits/vegetables in combination foods 
generally supports the availability of more nutritious competitive food 
products and is consistent with the Institute of Medicine (IOM) 
recommendations and the DGA. Competitive foods are evaluated on the 
basis of the qualities of the individual product being sold as opposed 
to the quantity of the ingredients of the product being credited toward 
the meal pattern requirement in the NSLP or SBP. Moreover, it is 
important to note that combination foods with less than \1/4\ cup of a 
fruit or vegetable may indeed qualify under the other food requirements 
specified in the rule, such as the whole grain rich or food group 
criteria, depending on the composition of the food item. It is only for 
those foods that qualify solely on the basis of being a competitive 
food product that contains a fruit or vegetable that this \1/4\ cup 
specification is required. This food standard as specified in Sec.  
210.11(c)(2)(iv) is, therefore, retained in the final rule.

Whole Grains

    One of the general standards for competitive foods included in 
Sec.  210.11(c)(2)(ii) and (e) requires that grain products be whole-
grain rich, meaning that they must contain 50 percent or more whole 
grains by weight or have whole grains as the first ingredient.
    About 60 comments addressed this IFR requirement. Many commenters, 
including a State department of education, urged USDA to make the 
competitive food whole grain standard consistent with the NSLP/SBP 
whole grain standard. Several commenters, including a school 
professional association and individual commenters, supported the 
``whole grain rich'' requirement. In particular, food manufacturers, 
trade associations, and a school district emphasized the importance of 
including the criteria that the whole grains per serving should be 
greater than or equal to 8 grams in the whole grain-rich identifying 
criteria. Three individual commenters generally opposed the whole 
grain-rich requirement.
    As indicated in the preamble to the proposed rule, this standard is 
consistent with the DGA recommendations, the whole grain-rich 
requirements for school meals and the prior HUSSC whole grain-rich 
requirement (HUSSC has subsequently updated the standards to conform to 
these competitive food standards). The Department wishes to point out 
that the whole grain criteria for competitive foods is used as a 
criterion for determining the allowability of an individual item to be 
sold as a competitive food, while school meals' whole grain-rich 
criteria determine the crediting of the menu items toward the grain 
component of the meal. Allowing the additional measures for grain 
suggested by some commenters such as >=8 grams of whole grain would not 
ensure that grain products in competitive food contain at least 50 
percent whole grains and would require additional information from the 
manufacturer. Therefore, the whole grain-rich standard established in 
the interim final rule is affirmed in this final rule.
    The food industry has made a significant effort to reformulate 
products to meet this standard and to reinforce the importance of whole 
grains to the general public as well. These efforts have resulted in 
the availability of numerous whole grain-rich products in the general 
public marketplace as well as in the foods available for service and 
purchase in schools. Maintaining this standard ensures that students 
have the flexibility to make choices among the numerous whole grain-
rich products that are now available to them in school.
    Since this competitive food standard is consistent with the DGA 
recommendations, the whole grain-rich requirements for school meals, 
and HUSSC standards, this final rule affirms the requirement as 
established by interim final rule.

DGA Nutrients of Public Health Concern

    In recognition of the marketplace and implementation limitations, 
but also mindful of important national nutrition goals, the IFR 
implemented a phased-in approach to identifying allowable competitive 
foods under the general standard. For the initial implementation period 
in School Year 2014-15 through June 30, 2016 (School Year 2015-16), the 
general food standard included a criterion that if a competitive food 
met

[[Page 50139]]

none of the other General Standards, that food may be considered 
allowable if it contained 10 percent of the Daily Value of a nutrient 
of public health concern (i.e., calcium, potassium, vitamin D, or 
dietary fiber). Effective July 1, 2016, this criterion was removed as a 
general criterion.
    Eight commenters, including some food manufacturers, opposed the 
phase out of this criterion as a General Standard for allowable foods. 
However, information available to the Department indicates that 
industry has made major strides over the past three years and many 
manufacturers have come into compliance with the competitive food 
standards by reformulating their products in recognition of the fact 
that the 10-percent DV General Standard would become obsolete as of 
July 1, 2016. Prior to July 1, 2016, fewer than 21 products that 
depended solely on the 10-percent DV General Standard appeared on the 
Alliance for a Healthier Generation (AHG) Food Navigator as Smart 
Snacks compliant foods. There are currently about 2,500 Smart Snacks 
compliant products listed in the AHG product database. This means that 
items that had qualified based solely upon the 10-percent DV General 
Standard represented less than 1 percent (0.84 percent) of the products 
that had been captured in the Alliance Navigator.
    Therefore, this final rule makes no changes to the General 
Standards for competitive foods established by the IFR and the 10-
percent DV standard has expired as scheduled. Eliminating the 10-
percent DV criterion more closely aligns the competitive food standards 
with the DGA, as required by the HHFKA.
    Elimination of this standard aligns the competitive foods rule with 
the DGA which states that ``nutrients should come primarily from 
foods'' as well as the IOM recommendations which indicate that this 
approach ``reinforces the importance of improving the overall quality 
of food intake rather than nutrient-specific strategies such as 
fortification and supplementation.''

Specific Nutrient Standards Sec.  210.11(d)-(k)

    In addition to the General Standards, the rule includes nutrient 
standards for specific nutrients contained in allowable foods. These 
include standards for total fat, saturated fat, trans fat, total 
sugars, calories and sodium. These standards apply to competitive foods 
as packaged or served to ensure that the competitive food standards 
apply to the item sold to the student.
    Twenty commenters expressed general support for the IFR nutrient 
standards for competitive foods without discussing a specific element 
of the nutrient standards. Several advocacy organizations and 
professional associations agreed with requiring that all foods sold in 
schools meet the nutrient standards and with limiting calories, fats, 
sugars, and sodium in snack foods and beverages. A health care 
association expressed support for the nutrition standards adopted in 
the IFR suggesting that any changes made should strengthen the 
standards and not weaken them. Another health care association 
expressed the belief that the established limits will inherently 
preclude the sale of candy and other confections and products with 
added sugars that promote tooth decay. An individual commented that the 
nutrient standards will eliminate many seemingly healthy foods that are 
surprisingly laden with sugar, calories, fat, or salt. A trade 
association supported the use of a nutrition criteria-based system for 
competitive food standards, as opposed to a structure that allows and 
disallows specific foods, because manufacturers will have the 
opportunity to reformulate and innovate to meet the rule's provisions.
    Seven commenters expressed general opposition to the IFR nutrient 
standards for competitive foods without discussing a specific element 
of the nutrient standards. A few individual commenters expressed 
concerns that the IFR nutrient standards will encourage chemically 
processed low-fat foods and sugar substitutes at the expense of whole 
foods and natural sugars. A food manufacturer urged USDA to simplify 
the criteria for competitive foods by using only the calorie limit and 
eliminating the total fat, saturated fat, and sugar limits, arguing 
that the combined calorie limit and food group standards would be less 
burdensome to implement and would inherently limit fats and sugars.
    The overwhelming majority of comments received on the proposed rule 
supported the nutrient standards and those standards were incorporated 
into the IFR with some minor changes. The IFR comments received on this 
issue were minimal and primarily supported the established standards. 
Therefore, this rule finalizes the nutrient standards as included in 
the IFR with the addition of several modifications being made to items 
exempt from those nutrient standards as discussed below.

Fruits and Vegetables

    Generally consistent with both the IOM and the DGA, the IFR 
included an exemption to the nutrient standards for fresh, frozen and 
canned fruits and vegetables with no added ingredients except water or, 
in the case of fruit, packed in 100 percent fruit juice, extra light 
syrup or light syrup; and for canned vegetables that contain a small 
amount of sugar for processing purposes in order to maintain the 
quality and structure of the vegetable.
    Ten comments expressed support for the IFR exemption from the 
nutrient standards for fresh, frozen, or canned fruits and vegetables. 
In particular, a school professional association and some individual 
commenters agreed with the decision to include ``light syrup'' in the 
exemption. A food manufacturer supported the inclusion of all forms of 
fruit, and products made with fruit, without added nutritive 
sweeteners, as competitive foods.
    Three commenters recommended that the exemption for fruits and 
vegetables be more stringent. These commenters suggested that any added 
syrup contributes added unneeded sugars. Two trade associations 
supported the IFR provision that fruit packed in light syrup is exempt 
from the nutrition standards.
    However, a few comments were received addressing the exemption 
parameters for canned vegetables--allowing an exemption only for those 
canned vegetables containing water and a small amount of sugar for 
processing. A trade association and a food manufacturer stated that 
they were not aware of any canned vegetables that contain only water 
and sugar for processing purposes. They indicated that sodium, citric 
acid, and other ingredients are commonly used in the processing of 
canned vegetables. They also pointed out that those processing aids are 
allowed to be used in the low sodium vegetables packed for the USDA 
Foods Program.
    The Department wishes to point out that, although some sodium is 
used in processing canned vegetables, most canned vegetables would 
still meet the nutrient standards for sodium without being given a 
specific exemption. However, in light of the important nutrients 
provided by vegetables, for ease of operator implementation and in 
recognition of common processing procedures, the Department agrees that 
low sodium/no salt added canned vegetables should also benefit from the 
fruit and vegetable exemption. This final rule, therefore, revises the 
canned vegetable exemption to allow low

[[Page 50140]]

sodium/no salt added canned vegetables with no added fat to be exempt 
from each of the competitive food nutrient standards.

Total Fat, Saturated Fat and Trans Fat

    To qualify as an allowable competitive food, the IFR at Sec.  
210.11(f) requires that no more than 35 percent of the total calories 
per item as packaged or served be derived from total fat and requires 
that the saturated fat content of a competitive food be less than 10 
percent of total calories per item as packaged or served. In addition, 
as specified in Sec.  210.11(g), a competitive food must contain zero 
grams of trans fat per portion as packaged or served (not more than 0.5 
grams per portion).
    While there are no exemptions from the trans fat standard, there 
are a number of exemptions from the total fat and the saturated fat 
standards. Seafood with no added fat is exempt from the total fat 
standard but is still subject to the saturated fat, trans fat, sugar, 
calorie and sodium standards. Exemptions included in the IFR to both 
the total fat and saturated fat standards include reduced fat cheese 
and part skim mozzarella cheese not included in a combination food 
item, nuts and seeds and nut/seed butters not included in a combination 
food item and products that consist of only dried fruit with nuts and/
or seeds with no added nutritive sweeteners or fat. Such exempt 
products are still subject to other competitive food nutrient standards 
such as the trans fat, sugar, calorie and sodium standards.

Total Fat

    Fifteen commenters, including a school professional association and 
several individuals, expressed support for the IFR competitive food 
restriction on total fat. No comments were received to make this 
standard more stringent. However, about 30 comments opposed the IFR 
restriction on total fat, arguing in favor of either making the 
restriction less stringent or eliminating the standard entirely. Two 
trade associations asserted that the total fat limit is inconsistent 
with the NSLP/SBP standards, which limit saturated fat and trans fat 
but not total fat. These commenters suggested that limitations on 
calories, saturated fat, and trans fat in competitive food standards 
will ensure that the foods are low in total fat. Similarly, a school 
district also recommended removing the total fat limit, asserting that 
such a limit is inconsistent with the NSLP/SBP requirements and will 
place an undue burden on menu planners.
    Fifty-five comments addressed the IFR exemptions from the total fat 
limit. Three trade associations and a food manufacturer expressed 
support for the exemption for part-skim mozzarella. Two individual 
commenters, however, opposed the exemption for reduced-fat cheese and 
part-skim mozzarella, asserting that whole foods may be healthier than 
low-fat alternatives. Three trade associations and a school district 
favored extending the exemption for reduced-fat cheese to all cheese 
that meets the calorie limits.
    Some commenters suggested various other modifications to the 
standards for individual foods, such as eggs, yogurt, and full fat 
cheese. A couple of comments dealt with various combinations of food 
items that are effectively dealt with in this final rule with the 
addition of a definition of Paired exempt foods discussed previously in 
this preamble.
    One commenter mistakenly noted that alternative milk products 
allowed in the reimbursable meals programs may not meet these 
requirements. We wish to clarify that total fat, saturated fat and 
trans fat standards do not apply to beverages.
    The Department recognizes that there may be foods that are commonly 
enjoyed by students and are generally healthy, but do not currently 
meet the competitive food standards due to the total fat content. 
Specifically, we are aware that some legume-based spreads/dips may 
offer significant nutritional benefits, but may not be able to meet 
total fat standards due to the inherent fat content of key ingredients 
in traditional legume based spreads or dips, such as hummus. Another 
common and generally healthy snack food is guacamole. Although avocado 
is currently exempt from the total fat standard because it is a fruit, 
when other non-fruit or vegetable ingredients are added to make a dip, 
the exemption is lost and the total fat standard is exceeded. Other 
common and generally healthy foods that may benefit from removal of the 
total fat standard include snack bars and salads with dressing.
    Because the DGAs are based on the latest scientific research and do 
not have a key recommendation for total fat and to address commenter 
requests for consistency between standards for competitive foods sold 
in schools and the NSLP/SBP, the Department has determined that further 
comment should be accepted on the total fat standard. In particular, 
comments are requested on whether the standard for total fat should be 
eliminated given that there will continue to be standards in place for 
calories, sodium, saturated fat, and trans fats which will limit 
unhealthy fats. Comments are also sought on whether the total fat 
standard should be maintained but should exempt certain food items. 
While the total fat standard as currently implemented will continue to 
be in place, this single, individual standard remains an interim final 
standard. The Department, as previously noted, will accept public 
comments on this standard only. The Department is interested in 
comments related to the impact revising or eliminating the total fat 
standard may have. This could include allowing more items to be sold 
that are lower in unhealthy, saturated fats but that might be higher in 
healthy, unsaturated fats and simplifying implementation for local 
operators. Commenters also should consider whether there could be 
unintended consequences to revising or eliminating the total fat 
standard. As noted above, commenters should keep in mind that the 
standards for calories, sodium, saturated fat, and trans fat remain in 
place and will continue to limit the types of foods that may be sold in 
schools.

Saturated Fat (<10% of Calories)

    Twenty comments expressed support for the IFR competitive food 
restriction on saturated fat. A school district recommended consistency 
with NSLP/SBP by only calculating saturated fat and total calories.
    Twenty-five commenters were opposed to the IFR restriction on 
saturated fat, arguing in favor of either making the restriction less 
stringent or eliminating the standard entirely. A school professional 
association and individual commenters argued that the standard is too 
restrictive and will exclude grilled cheese, chicken tenders, hot dogs, 
pizza, and healthy option entr[eacute]es.
    Forty-five comments addressed the IFR exemptions from the saturated 
fat limit. Most of the comments requested saturated fat exemptions for 
the same products for which they requested total fat exemptions 
discussed above. Three trade associations and a school district favored 
extending the saturated fat exemption to all cheese that meets the 
calorie limits.
    Additional comments specifically addressed exemptions from the 
saturated fat limit. A professional association and several individual 
commenters suggested that the saturated fat standard should exclude 
eggs or cheese packaged for individual sale and for non-fried 
vegetables and legumes.
    Seven comment letters included other comments relating to the IFR 
saturated

[[Page 50141]]

fat limit. Two trade associations and a food manufacturer requested 
that FNS clarify a conflict in the IFR. These commenters stated that 
the ``Summary of Major Provisions'' in the preamble states that 
competitive foods must contain ``no more than 10 percent'' of total 
calories from saturated fat, but Sec.  210.11(f)(1)(ii) states that the 
saturated fat content of a competitive food must be ``less than 10 
percent'' of total calories. The Department wishes to clarify that the 
requirement as included in the regulatory provision at Sec.  
210.11(f)(1)(ii) that the saturated fat content of a competitive food 
must be less than 10 percent of total calories is correct.
    The Department does not agree that all cheese should be exempt from 
the total fat and saturated fat standards because the total fat 
standard included in the IFR is identical to the recommended IOM 
standard for total fat, and the saturated fat standard is consistent 
with the DGA recommendations.

Trans Fat (0g as Stated on the Label)

    Twenty comments addressed the IFR trans fat restriction. Several 
commenters, including a school professional association and some 
individual commenters who supported the total fat and saturated fat 
limits, also expressed support for the IFR trans fat limit. A school 
district also expressed support for the IFR limitation of zero grams of 
trans fat in competitive foods. To reduce confusion among school food 
service workers and State auditors, a trade association and a food 
manufacturer recommended that the phrasing of the trans-fat provision 
for competitive foods should be consistent with the provision in the 
NSLP/SBP requirements, which does not apply to naturally occurring 
trans fats present in meat and dairy products. While trans fat content 
is normally indicated on the label, the Department will provide 
additional guidance as necessary on this issue through technical 
assistance resources.

Exemption for Eggs With No Added Fat

    The competitive food standards in the IFR provided that, in order 
to qualify as an allowable competitive food, no more than 35 percent of 
calories may be contributed by total fat, and less than 10 percent of a 
food's calories may come from saturated fat. Eggs do exceed these fat 
standards. However, similar to nut butters, reduced-fat cheese, and 
seafood, eggs exceed the competitive foods fat standards and are 
nutrient dense. Eggs are high in protein and contain essential 
nutrients including, B vitamins, Vitamin E, Vitamin D, iron, zinc, and 
magnesium. While eggs are high in fat, the DGA recommends increased 
consumption of nutrient dense foods and includes eggs in a healthy 
eating pattern. Evidence suggests that one egg a day does not increase 
a person's risk for high cholesterol or cardiovascular diseases. In 
addition, some previous State agency standards as well as the previous 
standards implemented by the Alliance for a Healthier Generation did 
allow eggs for the reasons cited above.
    Therefore, in response to comments, the nutrient profile of eggs 
mentioned above and operator requests to allow this nutrient dense and 
low cost option, this final rule is amended to add an exemption from 
the total fat and saturated fat standards for whole eggs with no added 
fat. This exemption appears in Sec.  210.11(f)(iv).

Calorie and Sodium Standards for Competitive Foods

Calories
    Some commenters supported the IFR competitive food calorie limits. 
In particular, a health care association urged USDA not to grant 
requests to increase the IFR calorie limits because doing so would 
increase the likelihood that students would choose and consume more 
than the recommended number of calories, which this commenter asserted 
would undermine USDA's efforts to address the childhood obesity 
epidemic. A food manufacturer urged replacing the sugar and fats 
nutrition standards with only the calorie limit.
    Many commenters expressed opposition to the calorie limits for 
competitive foods. Commenters said the proposed limits were too 
stringent and would limit student access to many food products, 
particularly a la carte foods sold during the meal service. Some 
commenters provided specific suggestions for alternative calorie limits 
for snacks, ranging from 240 to 300 calories, and for entr[eacute]es, 
ranging from 400 to 500 calories.
    Fifteen commenters addressed age and grade groupings, several 
suggesting separate calorie limits by grade, similar to the structure 
of the school meal patterns, reasoning that children have different 
calorie needs as they grow.
    This final rule retains the calorie limits for snacks/side dishes 
(200 calories per item as packaged or served), and entr[eacute]e items 
(350 calories per item as packaged or served), which are consistent 
with IOM recommendations and some voluntary standards. The Department 
does not agree that higher limits are appropriate, as suggested by some 
commenters, particularly since it is not possible to limit the number 
of competitive food items that may be purchased. We appreciate that 
separate calorie limits by grade levels for snacks would align with 
existing voluntary standards that many schools have adopted, and would 
be more tailored to the nutritional needs of children of different 
ages. However, separate calorie limits for different grade levels would 
also add complexity for local program operators with schools of varying 
grade levels. State agencies or school districts could choose to 
implement varying calorie limits based on grades, provided the maximum 
level does not exceed the limit in this final rule. Please note that 
the calorie limit for entr[eacute]e items would apply to all 
entr[eacute]es that do not meet the exemption for NSLP/SBP 
entr[eacute]e items.
    The Department wishes to point out that great strides have been 
made in the availability of competitive foods that meet the standards. 
Numerous products have been reformulated and/or repackaged to ensure 
that the products meet the competitive foods standards and those 
products have been made available to schools for sale to students. In 
addition, many changes have been made to the a la carte offerings 
available in the cafeteria and these changes are contributing greatly 
to the overall healthy environment that is so important in our schools.
Sodium
    Under the IFR at Sec.  210.11(i), snack items and side dishes sold 
[agrave] la carte could contain no more than 200 calories and 230 mg of 
sodium per portion as served, including the calories and sodium in any 
accompaniments, and must meet all other nutrient standards for non-
entr[eacute]e items. The IFR stipulated that as of July 1, 2016, snack 
items and side dishes must have not more than 200 calories and 200 mg 
of sodium per item as packaged or served. Under the IFR at Sec.  
210.11(j), entr[eacute]e items sold [agrave] la carte could contain no 
more than 350 calories and 480 mg sodium per portion as served, 
including any accompaniments, and meet all other nutrient standards.
    Several comments, including one from a health care association and 
two from individuals, agreed with the IFR sodium provisions. The health 
care association argued that although some commenters urge USDA to 
create ``consistent'' sodium standards for the NSLP/SBP and competitive 
foods standards, the sodium limits for the school meals program apply 
to an entire meal, while the sodium limits for competitive foods only 
apply to one component of a meal--a single entr[eacute]e,

[[Page 50142]]

side dish, or snack. Therefore, this commenter reasoned that the sodium 
limits for competitive food items should be lower than those for a 
reimbursable meal. An individual commenter acknowledged that sodium 
limits will alter the tastes of many foods, but suggested that there 
are many other spices, herbs, and other ways to enhance the flavors of 
foods without increasing the risk of hypertension.
    Several commenters recommended that the sodium reductions should 
continue to be phased in gradually to allow taste preferences and 
manufacturers additional time to adjust. Some commenters provided 
suggestions for higher sodium limits, ranging from 230 mg to 360 mg for 
snacks and 550 mg to 650 mg for entr[eacute]es. One commenter, a 
manufacturer, wanted USDA to add an exemption to the sodium limit for 
natural reduced fat cheese and reduced fat, reduced sodium pasteurized 
processed cheese.
    The Department's standards for sodium were based on the IOM 
recommendations. The proposed ``per portion as served'' standards for 
competitive food were considered in the context of the DGAs and of the 
overall sodium limits for school meals, the first of which took effect 
in School Year 2014-15, the same school year these competitive food 
standards were implemented. USDA acknowledges that sodium reduction is 
an issue that impacts the broader marketplace, not just schools, and 
understands that sodium reduction is a process that will take time.
    In recognition of the fact that there were existing voluntary 
standards for competitive food that had the higher sodium limit of 230 
mg for snacks/side dishes, which meant there were existing products 
that had been formulated to meet the higher standard available to 
schools, the IFR set the initial limit for sodium for snacks and side 
dishes at 230 mg per item as packaged or served, for the first two 
years of implementation of these standards. The IFR provided that, as 
of July 1, 2016, the sodium limit for snacks and side dishes shall be 
reduced to 200 mg per item as packaged or served.
    It is evident that many manufacturers have developed new products 
or reformulated existing products to meet the July 1, 2016, 200 mg 
standard. The Department believes that the phased in approach taken in 
the IFR did work to ensure product availability for schools for initial 
implementation and provided ample time for manufacturers to adjust to 
meet the lower limit. Therefore, this final rule does not change the 
sodium requirement for snacks and side dishes. The sodium standard of 
230 mg for snacks and side dishes expired as scheduled and the 200 mg 
standard is implemented as of July 1, 2016. In addition, the 
entr[eacute]e limit of 480 mg per item as packaged and served will 
remain in place. The Department wishes to point out that any 
entr[eacute]es served in school meals will be covered under the NSLP/
SBP entr[eacute]e item exemption in Sec.  210.11(c)(3)(i).

Total Sugars in Competitive Foods

    The IFR at Sec.  210.11(h)(1) provided that not more than 35 
percent of the weight per item as packaged and served could be derived 
from total sugars. In addition, Sec.  210.11(h)(2) provided the 
following exemptions to the total sugar standard:
     Dried whole fruits or vegetables; dried whole fruit or 
vegetable pieces; and dehydrated fruits or vegetables with no added 
nutritive sweeteners;
     Products that consist of only dried fruit with nuts and/or 
seeds with no added nutritive sweeteners or fat; and
     Dried fruit with nutritive sweeteners required for 
processing and/or palatability purposes. (At this time, this applies to 
dried cranberries, tart cherries and dried blueberries only.)
    Most commenters generally supported the application of the total 
sugars by weight standard. Many commenters stated that this standard 
provides flexibility and would allow the sale of more products that are 
favorites among students.
    A trade association expressed the opinion that a restriction on 
sugar is not a necessary component of the competitive food standards 
because calorie limits will prevent excess sugar consumption. A State 
department of education and an individual suggested expressing the 
sugar limit in grams rather than percentages. Several commenters 
indicated that sugar limits would force manufacturers to produce foods 
which are actually less healthy in order to meet that standard. Another 
food manufacturer expressed support for a sugar restriction based on 
percent calories by weight, although stating that it did not believe a 
total sugar limit is warranted. A trade association and a food 
manufacturer asserted that the sugar criterion of 35 percent by weight 
is in line with the Alliance for a Healthier Generation guidelines, 
which was the basis of many products specially formulated for schools. 
The trade association added that for foods that naturally contain fat 
and sugar, such as dairy products, making lower fat versions of these 
products reduces the percentage of calories from fat, which increases 
the percentage of calories from sugar, so a sugar limit based on weight 
is preferable.
    Two comments, one received from an advocacy organization and 
another from an individual commenter, favored a sugar limit as a 
percent of calories arguing that such an alternative would be more 
protective. The individual asserted that there are many foods that 
would be disallowed were the standard 35 percent sugar by calories, but 
will be allowed because the sugar limit is a percentage of calories by 
weight.
    The Department acknowledges that this standard allows more products 
to qualify to be sold as a competitive food in schools but wishes to 
point out that the portion sizes of these and all foods would be 
limited by the calorie and fat standards. State agencies and school 
districts could choose to implement a sugar standard based on calories, 
provided that it is at least as restrictive as the regulatory standard 
(i.e., no allowable product under the calorie measure could exceed 35 
percent sugar by weight).
    Most commenters supported the exemptions to the total sugar 
requirement as well as the provision allowing an exemption for dried 
fruit with nutritive sweeteners required for processing and/or 
palatability purposes. (At this time, this applies to dried 
cranberries, tart cherries and blueberries only.) A school district 
requested guidance listing specific dried fruits that require nutritive 
sweeteners and urged that this list be maintained as guidance rather 
than as part of the rule so that USDA has flexibility to modify the 
list as warranted without requiring rulemaking. A trade association 
commended USDA for agreeing to issue future guidance on determining 
which dried fruits with added nutritive sweeteners qualify for the 
exemption. The portion sizes of these dried fruits would be limited by 
the calorie standards.
    A few commenters requested that processed fruit and vegetable 
snacks (e.g., fruit strips, fruit leathers or fruit drops) be included 
under the exemption for dried fruit, as many are processed with 
concentrated fruit puree. The Department, however, does not agree that 
processed fruit and vegetable snacks should be included under either 
dried fruit/vegetable exemption. These snack type products are not 
whole dried fruit pieces and the concentrated fruit puree or juice 
concentrate used to make these products is often the primary 
ingredient. These products could still qualify without the exemption as 
a competitive food if they meet all of the standards, including having 
a fruit or vegetable as the first ingredient.

[[Page 50143]]

    The 2015-2020 DGA contain specific recommendations on limiting 
added sugar. This recommendation specifies that no more than 10 percent 
of calories should come from added sugars. The competitive food 
standards address sugar content in the context of the percentage of 
sugar by weight of the product sold. The standards do not include a 
focus on added sugars, or added sugars representing a particular 
percentage value compared to calories. The rationale for limiting sugar 
by weight in the IFR was that a sugar by weight standard was included 
in a number of voluntary standards reviewed during the development of 
the proposed rule, and, generally, this standard was supported by 
commenters as providing the most flexibility for program operators. The 
Department acknowledged in both the proposed rule and IFR that a sugar 
standard based on added sugars is preferable but that such a standard 
would be very difficult for local program operators to implement and 
for State agencies to monitor, because the current Nutrition Facts 
label does not differentiate between naturally occurring and added 
sugars. The Department has consistently indicated that the sugar 
standard included in this rule will be reconsidered if the Nutrition 
Label is updated to reflect added sugars. On May 27, 2016, the FDA 
published a final regulation which included a requirement that added 
sugars in foods be included on the Nutrition Facts Label (81 FR 
34000).The new labeling requirements will be fully implemented by 
summer 2019. Because of the implementation period of the labeling rule, 
FNS is maintaining in this final rule the sugar standard that was put 
forth in the interim final rule. The Department will monitor 
implementation of the new labeling requirements and, in the future, 
anticipates updates to program regulations and guidance regarding the 
sugar standard, particularly considering how to set standards for added 
sugars in competitive foods sold to students on the school campus 
during the school day.
    Therefore, this final rule continues to require in Sec.  
210.11(h)(1), that the total sugar content of a competitive food must 
be not more than 35 percent of weight per item as packaged or served 
and retains the exemption included in Sec.  210.11(h)(2) to the total 
sugar content standards for dried fruit with added nutritive sweeteners 
that are required for processing and/or palatability purposes 
(currently dried cranberries, tart cherries and blueberries). USDA will 
issue any necessary future guidance when a determination is made to 
include any additional dried fruits with added nutritive sweeteners for 
processing and/or palatability to qualify for this exemption.

Exemptions for Some or All of the Nutrition Standards for Menu Items 
Provided as Part of the NSLP/SBP

    The IFR exempts NSLP/SBP entr[eacute]e items from the competitive 
food standards when served as a competitive food on the day of service 
or the day after service in the reimbursable lunch or breakfast 
program. Six commenters expressed support for this approach regarding 
NSLP/SBP menu items sold as competitive foods. Most of these 
commenters, including advocacy organizations and a health care 
association, urged USDA not to grant requests to expand the exemption 
for NSLP/SBP items sold a la carte to, for example, include side 
dishes. Some of these commenters stated that expanding the exemption 
would undermine or weaken the competitive food standards. One advocacy 
organization expressed support that the IFR will require NSLP/SBP side 
dishes sold a la carte to meet the competitive food standards. Another 
advocacy organization stated that the approach taken in the IFR will 
allow for reasonable flexibility for the school food service while also 
addressing concerns regarding the frequency with which particular food 
items are available.
    Fifteen comments recommended that NSLP/SBP entr[eacute]es should 
not receive an exemption from the competitive food standards at any 
time. Some commenters argued that reimbursable meals are designed to 
provide a variety of foods and beverages that, over the course of a 
week, create a balance of all nutrients, while limiting calories, fats 
and sodium, and this balance can be disrupted when individual foods may 
be chosen at the expense of the whole meal. Specifically, a health care 
association commented that because schools are allowed to balance the 
nutrition components of reimbursable meals over a week, foods that may 
exceed the limits for fat, sodium, and calories can be included in a 
reimbursable meal when balanced over the week with healthier sides. For 
this reason, an advocacy organization stated that the exemption for a 
la carte NSLP/SBP entr[eacute]es from the competitive food standards 
will allow children to continue to purchase less healthy entr[eacute]e 
items a la carte instead of nutritious snack foods or more balanced 
reimbursable meals.
    Several advocacy organizations and a professional association 
argued that allowing the sale of any foods that are inconsistent with 
the competitive food standards will undermine the IFR and efforts of 
parents to provide healthy food options to children. This commenter 
asserted that although the exemption for a la carte NLSP/SBP 
entr[eacute]e items only exists on the day and day after it is served 
as part of a reimbursable meal, many schools--particularly high schools 
that offer multiple meals each day--may offer popular items like pizza, 
breaded chicken nuggets, and burgers every day or nearly every day.
    One advocacy organization recognized the importance of consistency 
between foods served in meals and a la carte and argued that there can 
be consistency without exempting a significant number of a la carte 
items from competitive food standards. This commenter stated that if 
individual items meet the competitive food standards, they should have 
no problem fitting into healthful NSLP/SBP menus, which would allow for 
consistency and flexibility, while also safeguarding children's health.
    One hundred commenters suggested that the competitive food 
standards should exempt NSLP/SBP entr[eacute]e items sold a la carte 
regardless of the day on which they are served as part of the 
reimbursable meal. Many of those commenters argued that once an item is 
served that meets reimbursable meal pattern guidelines, it should be 
allowed to be sold as a competitive food without frequency 
restrictions. Some stated that such an exemption would ease menu 
planning and operational issues as well as reduce confusion. These 
comments were primarily made by trade associations and food industry 
commenters as well as some school food service organizations.
    Closely associated with the issue of exempting NSLP and SBP 
entr[eacute]es on the day served and the day after served in the 
reimbursable meal is the lack of an exemption for side dishes served in 
the reimbursable meals. Commenters were also split on whether or not 
such food items should enjoy an exemption from the competitive food 
standards. Eighty commenters urged that NSLP/SBP side items sold a la 
carte should be exempt from competitive food standards. Many of the 
arguments made to support this view were the same as those discussed 
above related to the suggestion that all NSLP/SBP entr[eacute]e items 
should be exempt from all competitive food standards regardless of day 
served. Other commenters indicated that side items should not be exempt 
from the competitive food standards.
    USDA understands the concerns of commenters on both sides of this 
issue.

[[Page 50144]]

Given the circumstances surrounding NSLP and SBP meal planning as well 
as the increase in healthful entr[eacute]es being served, it is 
important to maintain some flexibility when it comes to NSLP and SBP 
entr[eacute]es. However, there is a distinction to be made between the 
meal patterns for reimbursable meals and the competitive food 
standards. The NSLP and SBP offer meals over the course of the school 
week and less nutritious selections may be balanced out with healthier 
items over the course of the week. Competitive food standards are based 
on the nutrients that are provided by individual food items that are 
sold to students on the school campus during the school day. In 
addition, it is important to note that it appears that many schools 
have successfully adapted to this requirement, some by expanding the 
number of entr[eacute]es available to students on a daily basis and 
others by incorporating side items that meet the competitive foods 
requirements into their reimbursable meal menus.
    Therefore, the exemption for NSLP/SBP entr[eacute]e items only is 
retained. Side dishes sold [agrave] la carte would be required to meet 
all applicable competitive food standards. The exemption for the 
entr[eacute]e items is available on the day the entr[eacute]e item is 
served in NSLP/SBP, and the following school day. Entr[eacute]e items 
are provided an exemption, but side dishes are not, in an attempt to 
balance commenter opposition to any exemptions for NSLP/SBP menu items 
and needed menu planning flexibilities. The approach adopted in this 
rule supports the concept of school meals as being healthful, and 
provides flexibility to program operators in planning [agrave] la carte 
sales and handling leftovers. We anticipate that this approach, along 
with the recent changes to school meal standards will continue to 
result in healthier menu items in meals than in the past, including 
entr[eacute]es. Exempt entr[eacute]es that are sold as competitive food 
must be offered in the same or smaller portion sizes as the NSLP and 
SBP.

Guidance on Competitive Foods

    Several commenters requested information on a variety of other 
issues specific to individual foods. Many of these questions have been 
clarified in the extensive guidance issued by the Department in policy 
memoranda and other materials that are available on our Web site at 
http://www.fns.usda.gov/healthierschoolday/tools-schools-focusing-smart-snacks. We encourage interested parties to review these materials 
since they are updated frequently. In addition, the Alliance for a 
Healthier Generation, in partnership with FNS, has developed extensive 
resources including guidance materials and the Competitive Foods 
Calculator and Navigator, which provide a way to evaluate individual 
foods and beverages as well as a listing of Smart Snacks allowable 
foods and beverages, respectively. These items are available at 
www.healthiergeneration.org.
Accompaniments
    The IFR at Sec.  210.11(n) limited the use of accompaniments to 
competitive food, such as cream cheese, jelly, butter, salad dressing, 
etc., by requiring that all accompaniments be included in the nutrient 
profile as part of the food item served. Two commenters supported 
requiring accompaniments to be included in the nutrient profile as part 
of the food item served. A State department of education commented that 
the requirement to include the nutrient content of accompaniments in 
the nutrient profile of the product is appropriate and reasonable 
because condiments can contribute significant calories, sugar, fat and/
or sodium. A school district expressed support for the IFR requirements 
relating to accompaniments not requiring pre-portioning, but requiring 
that they be included in the nutrient profile of competitive foods. 
Forty-five commenters opposed the requirement by suggesting that a 
weekly calorie range should be applied or that there should be no 
consideration of accompaniments.
    The Department maintains that it is important to account for the 
dietary contribution of accompaniments in determining whether a food 
item may be served as a competitive food. Accompaniments can provide 
substantial sodium, sugar and/or calories to food items sold. 
Therefore, the requirement that accompaniments be included in the 
nutrient profile of foods is retained. As provided in the IFR, schools 
may determine the average serving size of the accompaniments at the 
site of service (e.g., school district). This is similar to the 
approach schools have used in conducting nutrient analysis of school 
meals in the past. Schools have successfully implemented this 
requirement and have not had difficulty in determining the average 
serving size of accompaniments that are used in schools, but the 
Department will provide further guidance if necessary.

Nutrition Standards for Beverages

    The IFR at Sec.  210.11(m) established standards for allowable 
beverage types for elementary, middle and high school students. At all 
grade levels, water, low fat and nonfat milk, and 100 percent juice and 
100 percent juice diluted with water with no added sweeteners are 
allowed in specified maximum container sizes, which varied by grade 
level. The rule also allows additional beverages for high school 
students in recognition of the wide range of beverages available to 
high school students in the broader marketplace and the increased 
independence such students have, relative to younger students, in 
making consumer choices.
General Comments on Beverage Requirements
    Ten commenters expressed general support for the beverage standards 
included in the IFR. Sixty-five commenters generally opposed the ICR 
beverage standards and cited a variety of reasons, from wanting to 
allow all grade levels to have no-calorie/low calorie beverages to 
opposing allowing high school students to have no-calorie/low calorie 
beverages available to them in school. A few commenters asserted that 
milk is produced in 8 ounce and 16 ounce containers and that requiring 
a limit of 12 ounce size milk for middle school and high school 
students may be problematic. While some commenters recommended larger 
portion sizes for all beverages, others recommended smaller portion 
sizes, particularly related to juice products. Still other commenters 
wished to restrict food colorings and other ingredients in 100 percent 
juice. Several commenters indicated that no-calorie/low calorie 
beverages should not be allowed in high school due to the inclusion of 
non-nutritive sweeteners in such beverages. While about 40 commenters 
supported the removal of the time and place restriction on the sale of 
other beverages in high school lunchrooms during the meal service, 
several commenters objected to the elimination of the restriction and a 
few indicated that such beverages should not be sold in any location at 
any time in high schools.
    A few commenters suggested that USDA use only two grade groups for 
the beverage standards--elementary and secondary--to ease 
implementation. Some commenters stated that it would be difficult and/
or costly to administer the beverage requirements in combined grade 
campuses, such as 7-12 or K-12. In response, USDA appreciates that 
implementation could be more difficult in schools with overlapping 
grade groups, but considers it important to maintain in the final rule 
the three grade groupings included in the IFR. These groupings reflect 
the IOM recommendations and appropriately provide additional choices to 
high school students, based on their increased level of independence. 
USDA

[[Page 50145]]

has provided guidance on this issue and will continue to provide 
technical assistance and facilitate the sharing of best practices as 
appropriate.
Other Beverages for High School
    Most of the comments received on the IFR beverage requirements 
dealt with the standards for other beverages allowed in high school. A 
number of commenters wanted no-calorie and low-calorie beverages to be 
available in elementary and middle schools as well as high schools, 
while others opposed these beverages at any grade level. Several 
commenters stated that although schools may impose more stringent 
standards, schools may choose to sell diet beverages because the sale 
of such drinks are profit making. Other commenters indicated that if 
schools are not allowed to sell no-calorie/low calorie beverages in 
high school students will purchase them elsewhere and bring them to 
school.
    USDA appreciates the input provided by commenters. The Department 
maintains that, given the beverages available in the broader 
marketplace and the independence that high school students enjoy, low 
calorie/no-calorie beverages may be sold in high schools. However, we 
do not agree that such beverages should be available to elementary and 
middle school students in school. No changes are made to this standard.
Caffeine
    The IFR at Sec.  210.11(l) required that foods and beverages 
available in elementary and middle schools to be caffeine free, with 
the exception of trace amounts of naturally occurring caffeine 
substances. This is consistent with IOM recommendations. The IFR did, 
however, permit caffeine for high school students.
    Four commenters agreed with the IFR caffeine provisions. A food 
industry commenter expressed support for limited beverage choices for 
young children but allowing a broader range of products, including 
those containing typical amounts of caffeine, in high schools, given 
the increased independence of high school students. A trade association 
agreed that high school students should have access to beverages that 
contain caffeine and asserted that in 1987 FDA found no evidence to 
show that the use of caffeine in carbonated beverages would render such 
beverages injurious to health. This commenter asserted that its members 
provide a wide array of low- and no-calorie beverages to high schools, 
some of which contain modest amounts of caffeine, but member companies 
have voluntarily instituted policies against the sale of caffeinated 
beverages marketed as energy drinks to schools. Two school districts 
supported caffeinated beverages for high school students.
    Forty-five commenters opposed the IFR caffeine provisions, 
generally because it will allow foods and beverages in high school to 
contain caffeine. Those commenters were primarily concerned about the 
use of caffeinated low-calorie energy drinks that contain unregulated 
amounts of caffeine and other additives.
    An advocacy organization cited warnings from the American Academy 
of Pediatrics and added that aggressive marketing of caffeinated 
products is designed to appeal to youth and there is a lack of 
information on caffeine content on food labels. Several commenters 
opposed allowing the sale of caffeinated drinks in high schools, 
particularly drinks with high levels of caffeine and no nutritive 
value.
    USDA is concerned, as are some commenters, that some foods and 
beverages with very high levels of caffeine may not be appropriate to 
be sold in schools, even at the high school level. The FDA has not set 
a daily caffeine limit for children, but the American Academy of 
Pediatrics discourages the consumption of caffeine and other stimulants 
by children and adolescents. However, the health effects of caffeine 
are currently being considered by the FDA and the IOM. FDA did announce 
that it will investigate the safety of caffeine in food products, 
particularly its effects on children and adolescents. The FDA 
announcement cited a proliferation of products with caffeine that are 
being aggressively marketed to children, including ``energy drinks.'' 
FDA, working with the IOM, convened a public workshop on August 5-6, 
2013, to review existing science on safe levels of caffeine consumption 
and the potential consequences to children of caffeinated products in 
the food supply. The workshop did not result in any recommendations but 
a report was produced and may be found at http://iom.nationalacademies.org/Reports/2014/Caffeine-in-Food-and-Dietary-Supplements-Examining-Safety.aspx). USDA will continue to monitor 
efforts by FDA to identify standards regarding the consumption of 
caffeine by high school aged children.
    Therefore, given the lack of authoritative recommendations at this 
time, this rule will not prohibit caffeine for high school students. 
However, USDA acknowledges commenters' concerns and encourages schools 
to be mindful of the level of caffeine in food and beverages when 
selecting products for sale in schools, especially when considering the 
sale of high caffeine products such as energy drinks. It is also 
important to note that local jurisdictions have the discretion to 
further restrict the availability of caffeinated beverages should they 
wish to do so.
    The caffeine provisions as included in the IFR at Sec.  210.11(k) 
are not changed.
Non-Nutritive Sweeteners
    The IFR did not explicitly address the issue of non-nutritive 
sweeteners; however, the rule allowed calorie-free and low-calorie 
beverages in high schools, which would implicitly allow beverages 
including non-nutritive sweeteners.
    Ten commenters addressed the use of non-nutritive sweeteners in 
food products. Some commenters opposed allowing artificially sweetened 
beverages. For example, some commenters opposed the sale of diet sodas, 
whereas others stated that there is little evidence regarding the 
advisability of intake of sugar-sweetened beverages versus intake of 
non-nutritive sweeteners in beverages. In contrast, some commenters 
supported the use of non-nutritive sweeteners. USDA appreciates 
commenter input but is not explicitly addressing the use of non-
nutritive sweeteners in the regulatory text of this final rule. Local 
program operators can decide whether to offer food and/or beverage 
items for sale that include non-nutritive sweeteners.

Other Requirements

Fundraisers
    The IFR at Sec.  210.11(b)(4) requires that food and beverage items 
sold during the school day meet the nutrition standards for competitive 
food but allows for special exemptions for the purpose of conducting 
infrequent school-sponsored fundraisers, as specified in the HHFKA. The 
provision included in the IFR was that exempt fundraiser frequency 
would be determined by the State agency during such periods that 
schools are in session. The IFR also required that no specially 
exempted fundraiser foods or beverages may be sold in competition with 
school meals in the food service area during the meal service.
    Ten commenters indicated that USDA should establish the number and 
type of fundraisers that are exempt from the competitive food standards 
to ensure consistency among States. Other commenters recommended that 
the Department set parameters for the minimum and maximum numbers of

[[Page 50146]]

exempt fundraisers based on the size of schools. Thirty comments 
suggested that all food fundraisers taking place in schools be required 
to adhere to the competitive food standards at all times. Some 
commenters indicated that allowing exempt fundraisers will create 
confusion among parents, students and staff. A number of commenters 
noted that the approval of exempt fundraisers should be governed by the 
school wellness policies. Thirty commenters indicated that time and 
place restrictions on exempt fundraisers should apply not only to the 
food service area during the meal service but to all locations in the 
school during the meal service and some suggested placing timeframes on 
when such fundraisers may be held (for example: one hour after the 
school lunch service is completed).
    The final rule retains the requirements regarding the 
responsibility of the State agency to determine the frequency of exempt 
fundraisers in schools. In addition, the rule continues to stipulate 
that there are no limits on the sale of food items that meet the 
competitive food requirements (as well as the sale of non-food items) 
at school fundraisers. In addition, the Department wishes to remind the 
public that the fundraiser standards do not apply to food sold during 
non-school hours, weekends and off-campus fundraising events such as 
concessions during after-school sporting events.
    USDA is confident that State agencies possess the necessary 
knowledge, understanding and resources to make decisions about what an 
appropriate number of exempt fundraisers in schools should be and that 
the most appropriate approach to specifying the standards for exempt 
fundraisers is to allow State agencies to set the allowed frequency of 
such fundraisers. If a State agency does not specify the exemption 
frequency, no fundraiser exemptions may be granted. It is not USDA's 
intent that the competitive food standards apply to fundraisers in 
which the food sold is clearly not for consumption on the school campus 
during the school day. It is also important to note that LEAs may 
implement more restrictive competitive food standards, including those 
related to the frequency with which exempt fundraisers may be held in 
their schools, and may impose further restrictions on the areas of the 
schools and the times during which exempt fundraisers may occur in the 
schools during the school day.
    In addition, USDA has provided guidance on fundraisers in response 
to a variety of specific questions received during implementation and 
this guidance may be found in Policy Memo SP 23-2014(V.3) available on 
our Web site at http://www.fns.usda.gov/nslp/policy.
    In summary, the exempt fundraiser provisions contained in Sec.  
210.11(b)(4) of the IFR are unchanged and the final rule continues to 
specify that competitive food and beverage items sold during the school 
day must meet the nutrition standards for competitive food, and that a 
special exemption is allowed for the sale of food and/or beverages that 
do not meet the competitive food standards for the purpose of 
conducting an infrequent school-sponsored fundraiser. Such specially 
exempted fundraisers must not take place more than the frequency 
specified by the State agency during such periods that schools are in 
session. Finally, no specially exempted fundraiser foods or beverages 
may be sold in competition with school meals in the food service area 
during the meal service.
Availability of Water During the Meal Service
    The IFR codified a provision of the HHFKA that requires schools 
participating in the NSLP to make free, potable water available to 
children in the place lunches are served during the meal service. Just 
over 40 comments addressed the part of the IFR that requires schools 
participating in the NSLP to make free, potable water available to 
children in the place lunches are served during the meal service and in 
the cafeteria during breakfast meal service.
    Many of these commenters, including advocacy organizations, 
professional associations and individual commenters, expressed support 
for the potable water requirement. Two advocacy organizations commented 
that water has zero calories and is a healthy alternative to sugary 
drinks. These commenters stated that making the water free and easily 
accessible may help combat obesity and promote good health. Similarly, 
one individual commenter stated that the free, potable water 
requirement will help reduce the purchase of other drinks that are high 
in added sugars. A few individual commenters remarked that low-income 
students do not have the luxury of bringing or buying water bottles or 
even have access to clean running water outside of school, and free 
potable water is imperative to these students. Two individual 
commenters recommended that free potable water be available during 
breakfast, lunch, and all break and recess times regardless of where 
food is being served.
    Section 210.10(a)(1) of the final rule continues to require that 
schools make potable water available and accessible without restriction 
to children at no charge in the place where lunches are served during 
the meal service. In addition, Sec.  220.8(a)(1) requires that when 
breakfast is served in the cafeteria, schools must make potable water 
available and accessible without restriction to children at no charge. 
The Department continues to encourage schools to make potable water 
available without restriction at all meal and snack services when 
possible.
Recordkeeping
    The IFR at Sec.  210.11(b)(2), outlined the recordkeeping 
requirements associated with competitive foods. Local educational 
agencies and school food authorities would be required to maintain 
records documenting compliance with the requirements. Local educational 
agencies would be responsible for maintaining records documenting 
compliance with the competitive food nutrition standards for food sold 
in areas that are outside of the control of the school food service 
operation. Local educational agencies also would be responsible for 
ensuring any organization designated as responsible for food service at 
the various venues in the school (other than the school food service) 
maintains records documenting compliance with the competitive food 
nutrition standards. The school food authority would be responsible for 
maintaining records documenting compliance with the competitive food 
nutrition standards for foods sold in meal service areas during meal 
service periods. Required records would include, at a minimum, 
receipts, nutrition labels and/or product specifications for the items 
available for sale.
    About 120 commenters expressed concerns about recordkeeping, 
monitoring and compliance. Twenty commenters specifically addressed 
recordkeeping. Some of those commenters suggested that recordkeeping is 
costly, unrealistic and/or not necessary. Yet others recommended 
minimizing the recordkeeping on non-school groups. A number of 
commenters representing school food service were concerned that the 
local educational agency would require school food service to be 
responsible for recordkeeping on behalf of school food service as well 
as other entities/organizations within the local educational agency. 
Additionally, they were concerned that school food service could not 
affect the requirements throughout the local educational agency

[[Page 50147]]

since they have no authority over other school organizations.
    The Department appreciates that this regulation may have created 
some new challenges initially, as schools implemented the IFR and took 
steps to improve the school nutrition environment. Such challenges may 
be ongoing for some schools. However, maintaining a record that 
substantiates that the food items available for sale in the schools 
meet the standards is essential to the integrity of the competitive 
food standards. To determine whether a food item is an allowable 
competitive food, the local educational agency designee(s) must assess 
the nutritional profile of the food item. This may be accomplished by 
evaluating the product Nutrition Facts Label and/or using the Alliance 
for a Healthier Generation Calculator to do so and retaining a copy of 
that evaluation in the files, retaining receipts for the food items 
ordered or purchased for secondary sale at the various venues at the 
schools, etc. Absent an evaluation of the nutritional profile of the 
competitive foods available for sale at the schools, the local 
educational agency has no way of knowing whether a food item meets the 
nutrition standards set forth in this rule. The recordkeeping 
requirement simply requires the local educational agency to retain the 
reviewed documentation (e.g., the nutrition labels, receipts, and/or 
product specifications) in their files.
    Commenters also expressed concern about the designation of 
responsibility for this activity. As stated in the IFR, the Department 
does not expect the responsibility to rest solely with the nonprofit 
school food service. School food service personnel are expected to have 
a clear understanding of the nutrition profile of foods purchased using 
nonprofit school food service funds for reimbursable meals, a la carte 
offerings, etc. Their authority and responsibilities are typically 
limited to the nonprofit school food service. Local educational 
agencies are responsible for ensuring that all entities involved in 
food sales within a school understand that the local educational agency 
as a whole must comply with these requirements.
    As stated in the IFR, the Department continues to recommend that 
cooperative duties associated with the sale of competitive foods be 
coordinated and facilitated by the local school wellness policy 
designee(s). Section 204 of the HHFKA amended the NSLA by adding 
section 9A (42 U.S.C. 1758b) which requires each local educational 
agency to: (a) Establish a local school wellness policy which includes 
nutrition standards for all foods available on each school campus, and 
(b) designate one or more local educational agency officials or school 
officials, to ensure that each school complies with the local school 
wellness policy. State agencies were advised of the section 204 
requirements in FNS Memorandum, Child Nutrition Reauthorization 2010: 
Local School Wellness Policies, issued July 8, 2011 (SP 42-2011). In 
addition, the Department published a proposed rule titled Local School 
Wellness Policy Implementation Under the Healthy, Hunger Free Kids Act 
of 2010 on February 26, 2014 at 79 FR 10693. Comments were submitted by 
the public and those comments are being analyzed for the development of 
an upcoming final rule.
    The Department believes, and the experience of many operators 
confirms, that if the LEA local school wellness designee(s), school 
food service, and other entities and groups involved with the sale of 
food on the school campus during the school day work together to share 
information on allowable foods and coordinate recordkeeping 
responsibilities, the result is the successful implementation and 
maintenance of a healthy school environment. As always, State agencies 
and the Department will provide technical assistance to facilitate 
ongoing implementation of the competitive food nutrition standards.
    Therefore, there are no changes to the recordkeeping requirements 
and Sec.  210.11(b)(2) of the IFR is affirmed.
Compliance and Monitoring
    Section 210.18(h)(6) requires State agencies to ensure that local 
educational agencies comply with the nutrition standards for 
competitive food and retain documentation demonstrating compliance with 
the competitive food service and standards.
    As indicated above, about 120 commenters submitted comments related 
to recordkeeping, monitoring and compliance. A number of commenters, 
largely school food service personnel, expressed concerns about how 
monitoring would occur for foods sold by groups outside of the school 
food service. Some commenters believed technical assistance would be 
insufficient and raised questions about means to effect compliance. 
Other commenters expressed concerns about the need to train and educate 
non-school food service personnel as to how to comply with the 
regulations. Several State agencies, school districts and individuals 
requested that the SFA not be held accountable for compliance issues 
outside of the control of the SFA.
    The Department agrees that training will be needed to ensure 
compliance with the nutrition standards. As mentioned under the 
discussion of Recordkeeping above, the Department envisions local 
educational agency designees, potentially the local school wellness 
coordinator(s), taking the lead in developing performance or compliance 
standards and training for all local educational personnel tasked with 
selling competitive food on the school campus during the school day. 
The Department and State agencies will also offer training to ensure 
local educational agencies are able to comply in the most efficient 
manner possible.
    The Department published a proposed rule titled Administrative 
Reviews in the School Nutrition Programs on May 11, 2015 (80 FR 26846) 
addressing an updated administrative review process that includes these 
new monitoring responsibilities. This rule, together with 
administrative review guidance, provides information regarding the 
proposed conduct and scope of reviews, and the monitoring and records 
review that will be conducted with regard to competitive foods. 
Currently, USDA is reviewing the comments received from the public on 
the proposed rule in preparation for the development of an implementing 
rule.
    The Department would like to assure commenters that we see 
technical assistance and training as the first approach to non-
compliance; however, we recognize that egregious, repeated cases of 
non-compliance may require a more aggressive approach. In this regard, 
section 303 of the HHFKA amended section 22 of the NSLA (42 U.S.C. 
1769c) to provide the Department with the authority to impose fines 
against any school or school food authority repeatedly failing to 
comply with program regulations. This authority will be addressed in a 
proposed rule dealing with a number of integrity issues related to 
local educational agencies administering the Child Nutrition Programs 
which is currently under development. Interested parties will have an 
opportunity to comment on the proposed integrity rule.
Special Situations/Applicability
    This rule continues to require that all local educational agencies 
and schools participating in the NSLP and SBP meet the nutrition 
standards for competitive foods sold to students on the school campus 
during the school day. Several questions have been received regarding 
the applicability of these standards to after school programs operated 
in

[[Page 50148]]

schools that participate in NSLP/Child and Adult Care Food Program 
(CACFP). The Department wishes to clarify that such programs are 
required to comply with their specified meal patterns. Only if food is 
sold to their program participants outside of their meal pattern would 
the competitive foods standards be applicable for 30 minutes after the 
end of the official school day, consistent with the definition of 
School day specified in Sec.  210.11(a)(5).
    Forty comments addressed impacts of the IFR on culinary training 
programs. These commenters urged for complete exemption from the 
competitive food standards for foods prepared and sold as part of 
culinary education programs. In contrast, a school district, school 
food service staff, and other individual commenters urged USDA to apply 
the competitive food standards to foods sold to students during the 
school day by culinary arts programs.
    The Department addressed the applicability of the competitive foods 
regulation on culinary arts programs in Policy Memo SP 40-2014, 
published on April 22, 2014. That memo recognized that culinary 
education programs providing students with technical career training 
operate in some schools nationwide. Some of those culinary education 
programs operate food service outlets that sell foods to students, 
faculty, or others in the community, with a minority of programs doing 
so during the school day. The memo also clarified that the competitive 
foods nutrition standards have no impact on the culinary education 
programs' curriculum in schools, nor do they have any impact on foods 
sold to adults at any time or to students outside of the school day. 
However, to the extent that such programs are selling food to students 
on campus during the school day, the statutory applicability of the 
Smart Snacks nutrition standards to all foods sold outside of the 
School meals programs is clear. Section 12(l)(4)(J) of the NSLA (42 
U.S.C. 1760(l)(4)(J), prohibits the Secretary from granting a waiver 
that relates to the requirements of the NSLA, the CNA, or any 
regulation issued under either statute with regard to the sale of foods 
sold outside of the school meal programs. The nutrition standards 
included in the final rule continue to apply to all foods sold to 
students on the school campus during the school day, including food 
prepared and/or sold by culinary education programs.

Related Information

Implementation

    The competitive food provisions contained in the IFR were 
implemented by State agencies and local educational agencies on July 1, 
2014. Changes made in this final rule may be implemented as specified 
in the DATES section of this preamble. While the total fat standard 
remains in place, additional comments on the interim final total fat 
standard are being accepted and must be received as specified in the 
DATES section of this preamble. The saturated fat and trans fat 
standards are finalized in this rule. This final rule removes Sec.  
210.11a and its corresponding Appendix B, which references the sale of 
foods of minimal nutritional value, since those standards were 
eliminated as of July 1, 2014, the date that competitive food standards 
were implemented in their place. Similar changes are made to the 
breakfast program regulations at 7 CFR part 220.

Procedural Matters

Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 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 Final 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 Analysis

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 (5 U.S.C.601-612). The rule directly 
regulates the 54 State education agencies and 3 State Departments of 
Agriculture that operate the NSLP pursuant to agreements with USDA's 
Food and Nutrition Service. While State agencies are not considered 
small entities 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.
    The requirements established by this final rule will apply to 
school districts, which meet the definitions of ``small governmental 
jurisdiction'' and other establishments that meet the definition of 
``small entity'' in the Regulatory Flexibility Act. The Regulatory 
Flexibility Act analysis is published as part of the docket (FNS-2011-
0019) on www.regulations.gov.

Regulatory Impact Analysis Summary

    As required for all rules that have been designated as significant 
by the Office of Management and Budget, a Regulatory Impact Analysis 
(RIA) was developed for this final rule A summary is presented below. 
The full RIA is published as part of the docket (FNS-2011-0019) on 
www.regulations.gov.

Need for Action

    The final rule responds to two provisions of the Healthy, Hunger-
Free Kids Act of 2010. Section 208 of HHFKA amended Section 10 of the 
Child Nutrition Act of 1966 to require the Secretary to establish 
science-based nutrition standards for all foods sold in schools during 
the school day. In addition, the amendments made by section 203 of the 
HHFKA amended section 9(a) of the NSLA (42 U.S.C. 1758(a)) to require 
that schools participating in the NSLP make potable water available to 
children at no charge in the place where meals are served during the 
meal service. This is a nondiscretionary requirement of the HHFKA that 
became effective October 1, 2010, and was required to be implemented by 
August 27, 2013.

Response to Comments

    The full Regulatory Impact Analysis includes a brief discussion of 
comments submitted by school officials, public health organizations, 
industry representatives, parents, students, and other interested 
parties on the costs and benefits of the final rule submitted. The 
analysis also contains a discussion of how USDA modified the final rule 
in response, and the effect of those modifications on the costs and 
benefits of the rule.

Benefits

    The primary purpose of the rule is to ensure that nutrition 
standards for competitive foods are consistent with those used for the 
NSLP and SBP, holding competitive foods to standards similar to the 
rest of foods available to students during the school day. These 
standards, combined with recent improvements in school meals, will help 
promote diets that contribute to students' long-term health and well-

[[Page 50149]]

being. In addition, these standards continue to support a healthy 
school environment and the efforts of parents to promote healthy 
choices for children at home and at school.
    Obesity has become a major public health concern in the U.S., with 
one-third of U.S. children and adolescents now considered overweight or 
obese (Beydoun and Wang 2011\2\), with current childhood obesity rates 
four times higher in children ages six to 11 than they were in the 
early 1960s (19 vs. 4 percent), and three times higher (17 vs. 5 
percent) for adolescents ages 12 to 19.\3\ Research focused 
specifically on the effects of obesity in children indicates that obese 
children feel they are less capable, both socially and athletically, 
less attractive, and less worthwhile than their non-obese 
counterparts.\4\ Further, there are direct economic costs due to 
childhood obesity: $237.6 million (in 2005 dollars) in inpatient costs 
\5\ and annual prescription drug, emergency room, and outpatient costs 
of $14.1 billion.\6\
---------------------------------------------------------------------------

    \2\ Beydoun, M.A. and Y. Wang. 2011. Socio-demographic 
disparities in distribution shifts over time in various adiposity 
measures among American children and adolescents: What changes in 
prevalence rates could not reveal. International Journal of 
Pediatric Obesity, 6:21-35. As cited in Food Labeling: Calorie 
Labeling of Articles of Food in Vending Machines NPRM. 2011. 
Preliminary Regulatory Impact Analysis, Docket No. FDA-2011-F-0171.
    \3\ Ogden et al. Prevalence of Obesity Among Children and 
Adolescents: United States, Trends 1963-1965 Through 2007-2008. CDC-
NHCS, NCHS Health E-Stat, June 2010. On the web at http://www.cdc.gov/nchs/data/hestat/obesity_child_07_08/obesity_child_07_08.htm.
    \4\ Riazi, A., S. Shakoor, I. Dundas, C. Eiser, and S.A. 
McKenzie. 2010. Health-related quality of life in a clinical sample 
of obese children and adolescents. Health and Quality of Life 
Outcomes, 8:134-139.Samuels & Associates. 2006. Competitive Foods. 
Policy Brief prepared by Samuels & Associates for The California 
Endowment and Robert Wood Johnson Foundation. Available at: http://www.healthyeatingactivecommunities.org/downloads/
    \5\ Trasande, L., Y. Liu, G. Fryer, and M. Weitzman. 2009. 
Trends: Effects of Childhood Obesity on Hospital Care and Costs, 
1999-2005. Health Affairs, 28:w751-w760.
    \6\ Cawley, J. 2010. The Economics of Childhood Obesity. Health 
Affairs, 29:364-371. As cited in Food Labeling: Calorie Labeling of 
Articles of Food in Vending Machines NPRM. 2011. Preliminary 
Regulatory Impact Analysis, Docket No. FDA-2011-F-0171.
---------------------------------------------------------------------------

    Because the factors that contribute both to overall food 
consumption and to obesity are so complex, it is not possible to define 
a level of disease or cost reduction expected to result from 
implementation of the rule. There is some evidence, however, that 
competitive food standards can improve children's dietary quality.
     Taber, Chriqui, and Chaloupka (2012 \7\) concluded that 
California high school students consumed fewer calories, less fat, and 
less sugar at school than students in other States. Their analysis 
``suggested that California students did not compensate for consuming 
less within school by consuming more elsewhere'' (p. 455).
---------------------------------------------------------------------------

    \7\ Taber, D.R., J.F. Chriqui, and F. J. Chaloupka. 2012. 
Differences in Nutrient Intake Associated With State Laws Regarding 
Fat, Sugar, and Caloric Content of Competitive Foods. Archives of 
Pediatric & Adolescent Medicine, 166:452-458.
---------------------------------------------------------------------------

     In an assessment of the reach and effectiveness of 
childhood obesity strategies, Gortmaker et al. \8\ project that 
implementing nutrition standards for all foods and beverages sold in 
schools outside of reimbursable school meals will prevent an estimated 
345,000 cases of childhood obesity in 2025 (p. 1937).
---------------------------------------------------------------------------

    \8\ Gortmaker SL, Claire Wang Y, Long MW, Giles CM, Ward ZJ, 
Barrett JL, Kenney EL, Sonneville KR, Afzal AS, Resch SC, Cradock 
AL., Health Affairs, 34, no. 11 (2015).
---------------------------------------------------------------------------

     Schwartz, Novak, and Fiore, (2009 \9\) determined that 
healthier competitive food standards decreased student consumption of 
low nutrition items with no compensating increase at home.
---------------------------------------------------------------------------

    \9\ Schwartz, M.B., S.A. Novak, and S.S. Fiore. 2009. The Impact 
of Removing Snacks of Low Nutritional Value from Middle Schools. 
Health Education & Behavior, 36:999-1011.
---------------------------------------------------------------------------

     Researchers at Healthy Eating Research and Bridging the 
Gap found that ``[t]he best evidence available indicates that policies 
on snack foods and beverages sold in school impact children's diets and 
their risk for obesity. Strong policies that prohibit or restrict the 
sale of unhealthy competitive foods and drinks in schools are 
associated with lower proportions of overweight or obese students, or 
lower rates of increase in student BMI'' (Healthy Eating Research and 
Bridging the Gap, 2012, p. 3 \10\).
---------------------------------------------------------------------------

    \10\ Healthy Eating Research and Bridging the Gap. 2012. 
Influence of Competitive Food and Beverage Policies on Children's 
Diets and Childhood Obesity. Available at http://www.healthyeatingresearch.org/images/stories/her_research_briefs/Competitive_Foods_Issue_Brief_HER_BTG_7-2012.pdf
---------------------------------------------------------------------------

    A comprehensive assessment of the evidence on the importance of 
competitive food standards conducted by the Pew Health Group concluded 
that a national competitive foods policy would increase student 
exposure to healthier foods, decrease exposure to less healthy foods, 
and would also likely improve the mix of foods that students purchase 
and consume at school. Researchers concluded that these kinds of 
changes in food exposure and consumption at school are important 
influences on the overall quality of children's diets.
    Although nutrition standards for foods sold at school alone may not 
be a determining factor in children's overall diets, they are critical 
to providing children with healthy food options throughout the entire 
school day. Thus, these standards will help to ensure that the school 
nutrition environment does all that it can to promote healthy choices, 
and help to prevent diet-related health problems. Ancillary benefits 
could derive from the fact that improving the nutritional value of 
competitive foods may 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.\11\
---------------------------------------------------------------------------

    \11\ Pew Health Group and Robert Wood Johnson Foundation. 2012. 
Heath Impact Assessment: National Nutrition Standards for Snack and 
a la Carte Foods and Beverages Sold in Schools. Available online: 
http://www.pewhealth.org/uploadedFiles/PHG/Content_Level_Pages/Reports/KS%20HIA_FULL%20Report%20062212_WEB%20FINAL-v2.pdf.
---------------------------------------------------------------------------

Costs

    While there have been numerous success stories, best practices, and 
innovative practices, it is too early to definitively ascertain the 
overall impact to school revenue. The changes and technical 
clarifications in the final rule do not change the methodology of the 
cost benefit analysis from the methodology used in the interim final 
regulatory impact analysis, however the estimates are updated using the 
most recent data available to assess the impacts to revenue and to 
account for the potential variation in implementation and 
sustainability experiences across SFAs and schools.
    The limited information available indicates that many schools have 
successfully introduced competitive food reforms with little or no loss 
of revenue and in a few cases, revenues from competitive foods 
increased after introducing healthier foods. In some of the schools 
that showed declines in competitive food revenues, losses from reduced 
sales were fully offset by increases in reimbursable meal revenue. In 
other schools, students responded favorably to the healthier options 
and competitive food revenue declined little or not at all.
    But not all schools that adopted or piloted competitive food 
standards fared as well. Some of the same studies and reports that 
highlight school success stories note that other schools sustained some 
loss after implementing similar standards. While in some cases these 
were short-term losses, even in the long-

[[Page 50150]]

term the competitive food revenue lost by those schools was not offset 
(at least not fully) by revenue gains from the reimbursable meal 
programs.
    Our analysis examines the possible effects of the rule on school 
revenues from competitive foods and the administrative costs of 
complying with the rule's competitive foods provisions. The analysis 
uses available data to construct model-based scenarios that different 
schools may experience in implementing the rule. While these vary in 
their impact on overall school food revenue, each scenario's estimated 
impact is relatively small (+0.5 percent to -1.3 percent). That said, 
the data behind the scenarios are insufficient to assess the frequency 
or probability of schools experiencing the impacts shown in each.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and Tribal 
governments and the private sector. Under section 202 of the UMRA, the 
Department generally must prepare a written statement, including a 
cost/benefit analysis, for proposed and final rules with Federal 
mandates that may result in expenditures by State, local, or Tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires the Department to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, more cost-effective or least burdensome 
alternative that achieves the objectives of the rule. Because data is 
not available to meaningfully estimate the quantitative impacts of this 
rule on school food authority revenues, we are not certain that this 
rule is subject to the requirements of sections 202 and 205 of the 
UMRA. That said, it is possible that the rule's requirements could 
impose costs on State, local, or Tribal governments or to the private 
sector of $100 million or more in any one year. FNS therefore conducted 
a regulatory impact analysis that includes a cost/benefit analysis 
substantially meeting the requirements of sections 202 and 205 of the 
UMRA.

Executive Order 12372

    The NSLP is listed in the Catalog of Federal Domestic Assistance 
under No. 10.555. The SBP is listed in the Catalog of Federal Domestic 
Assistance under No. 10.553. For the reasons set forth in the final 
rule in 7 CFR part 3015, subpart V and related notice (48 FR 29115, 
June 24, 1983), these programs are included in the scope of Executive 
Order 12372, which requires intergovernmental consultation with State 
and local officials.

Executive Order 13132

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's considerations in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132. USDA 
has considered the impact of this rule on State and local governments 
and has determined that this rule does not have federalism 
implications. This rule does not impose substantial or direct 
compliance costs on State and local governments. Therefore, under 
Section 6(b) of the Executive Order, a federalism summary impact 
statement is not required.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This 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 
implementation. This rule is not intended to have retroactive effect 
unless specified in the DATES section of the final rule. Prior to any 
judicial challenge to the provisions of this rule or the application of 
its provisions, all applicable administrative procedures must be 
exhausted.

Civil Rights Impact Analysis

    FNS has reviewed this rule in accordance with Departmental 
Regulations 4300-4, ``Civil Rights Impact Analysis,'' and 1512-1, 
``Regulatory Decision Making Requirements.'' After a careful review of 
the rule's intent and provisions, FNS has determined that this rule is 
not intended to limit or reduce in any way the ability of protected 
classes of individuals to receive benefits on the basis of their race, 
color, national origin, sex, age or disability nor is it intended to 
have a differential impact on minority owned or operated business 
establishments and woman-owned or operated business establishments that 
participate in the Child Nutrition Programs.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), this final rule does not contain substantive changes to 
information collection requirements that require additional approval by 
OMB. The paperwork requirements for this final rule were previously 
approved by the Office of Management and Budget (OMB) for the interim 
final rule under OMB control #0584-0576 and merged into #0584-0006.

E-Government Act Compliance

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

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

    Executive Order 13175 requires Federal agencies to consult and 
coordinate with Tribes on a government-to-government basis on policies 
that have Tribal implications, including regulations, legislative 
comments or proposed legislation, and other policy statements or 
actions that have substantial direct effects on one or more Indian 
Tribes, on the relationship between the Federal Government and Indian 
Tribes, or on the distribution of power and responsibilities between 
the federal government and Indian Tribes. In the spring of 2011, FNS 
offered opportunities for consultation with Tribal officials or their 
designees to discuss the impact of the Healthy, Hunger-Free Kids Act of 
2010 on tribes or Indian Tribal governments. The consultation sessions 
were coordinated by FNS and held on the following dates and locations:

1. HHFKA Webinar & Conference Call--April 12, 2011
2. Mountain Plains--HHFKA Consultation, Rapid City, SD--March 23, 2011
3. HHFKA Webinar & Conference Call--June, 22, 2011
4. Tribal Self-Governance Annual Conference in Palm Springs, CA--May 2, 
2011
5. National Congress of American Indians Mid-Year Conference, 
Milwaukee, WI--June 14, 2011

    The five consultation sessions in total provided the opportunity to 
address Tribal concerns related to school meals. There were no comments 
about this regulation during any of the

[[Page 50151]]

aforementioned Tribal consultation sessions.
    Currently, FNS provides regularly scheduled quarterly consultation 
sessions as a venue for collaborative conversations with Tribal 
officials or their designees. The most recent specific discussion of 
the Nutrition Standards for All Foods Sold in Schools rule was included 
in the consultation conducted on August 19, 2015. No questions or 
comments were raised specific to this rulemaking at that time.
    Reports from these consultations are part of the USDA annual 
reporting on Tribal consultation and collaboration. FNS will respond in 
a timely and meaningful manner to Tribal government requests for 
consultation concerning this rule.

List of Subjects

7 CFR Part 210

    Grant programs-education; Grant programs-health; Infants and 
children; Nutrition; 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, for the reasons set forth in the preamble, 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.


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2. In Sec.  210.11:
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a. Revise paragraph (a)(3);
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b. Add paragraph (a)(6);
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c. Remove paragraph (c)(2)(v);
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d. Paragraph (c)(2)(vi) is redesignated as (c)(2)(v);
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e. Revise paragraph (d);
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f. Add paragraph (f)(3)(iv);
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g. Revise the heading and the first sentence of paragraph (i); and
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h. Revise paragraph (j);
    The revisions and additions read as follows:


Sec.  210.11  Competitive food service and standards.

    (a) * * *
    (3) Entr[eacute]e item means an item that is intended as the main 
dish and is either:
    (i) A combination food of meat or meat alternate and whole grain 
rich food; or
    (ii) A combination food of vegetable or fruit and meat or meat 
alternate; or
    (iii) A meat or meat alternate alone with the exception of yogurt, 
low-fat or reduced fat cheese, nuts, seeds and nut or seed butters, and 
meat snacks (such as dried beef jerky); or
    (iv) A grain only, whole-grain rich entr[eacute]e that is served as 
the main dish of the School Breakfast Program reimbursable meal.
* * * * *
    (6) Paired exempt foods mean food items that have been designated 
as exempt from one or more of the nutrient requirements individually 
which are packaged together without any additional ingredients. Such 
``paired exempt foods'' retain their individually designated exemption 
for total fat, saturated fat, and/or sugar when packaged together and 
sold but are required to meet the designated calorie and sodium 
standards specified in Sec. Sec.  210.11(i) and (j) at all times.
* * * * *
    (d) Fruits and vegetables. (1) Fresh, frozen and canned fruits with 
no added ingredients except water or packed in 100 percent fruit juice 
or light syrup or extra light syrup are exempt from the nutrient 
standards included in this section.
    (2) Fresh and frozen vegetables with no added ingredients except 
water and canned vegetables that are low sodium or no salt added that 
contain no added fat are exempt from the nutrient standards included in 
this section.
* * * * *
    (f) * * *
    (3) * * *
    (iv) Whole eggs with no added fat are exempt from the total fat and 
saturated fat standards but are subject to the trans fat, calorie and 
sodium standards.
* * * * *
    (i) Calorie and sodium content for snack items and side dishes sold 
as competitive foods. Snack items and side dishes sold as competitive 
foods must have not more than 200 calories and 200 mg of sodium per 
item as packaged or served, including the calories and sodium contained 
in any added accompaniments such as butter, cream cheese, salad 
dressing, etc., and must meet all of the other nutrient standards in 
this section. * * *
    (j) Calorie and sodium content for entr[eacute]e items sold as 
competitive foods. Entr[eacute]e items sold as competitive foods, other 
than those exempt from the competitive food nutrition standards in 
paragraph (c)(3)(i) of this section, must have not more than 350 
calories and 480 mg of sodium per item as packaged or served, including 
the calories and sodium contained in any added accompaniments such as 
butter, cream cheese, salad dressing, etc., and must meet all of the 
other nutrient standards in this section.
* * * * *


Sec.  210.11a  [Removed]

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3. Section 210.11a is removed.

Appendix B to Part 210 [Removed]

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4. Appendix B to part 210 is removed.

PART 220--SCHOOL BREAKFAST PROGRAM

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

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


Sec.  220.12a  [Removed]

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6. Remove Sec.  220.12a.

Appendix B to Part 220 [Removed and Reserved]

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7. Remove and reserve Appendix B to part 220.

    Dated: June 21, 2016.
Kevin W. Concannon,
Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 2016-17227 Filed 7-28-16; 8:45 am]
 BILLING CODE 3410-30-P