[Federal Register Volume 81, Number 151 (Friday, August 5, 2016)]
[Notices]
[Pages 51842-51845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18650]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service


National School Lunch, Special Milk, and School Breakfast 
Programs, National Average Payments/Maximum Reimbursement Rates

AGENCY: Food and Nutrition Service, USDA.

ACTION: Notice.

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SUMMARY: This Notice announces the annual adjustments to the ``national 
average payments,'' the amount of money the Federal Government provides 
States for lunches, afterschool snacks and breakfasts served to 
children participating in the National School Lunch and School 
Breakfast Programs; to the ``maximum reimbursement rates,'' the maximum 
per lunch rate from Federal funds that a State can provide a school 
food authority for lunches served to children participating in the 
National School Lunch Program; and to the rate of reimbursement for a 
half-pint of milk served to non-needy children in a school or 
institution which participates in the Special Milk Program for 
Children. The payments and rates are prescribed on an annual basis each 
July. The annual payments and rates adjustments for the National School 
Lunch and School Breakfast Programs reflect changes in the Food Away 
From Home series of the Consumer Price Index for All Urban Consumers. 
Food and Nutrition Service has approved a 17-percent increase in school 
meal reimbursement rates for Puerto Rico to reflect their higher cost 
of providing school meals. The rate adjustment will take effect 
beginning July 1, 2016, for school year 2016-2017. This increase is 
based on data indicating that the cost of producing school lunches, 
breakfasts, and snacks are higher than those in the continental United 
States, as well as other factors impacting Puerto Rico's school meal 
program. The annual rate adjustment for the Special Milk Program 
reflects changes in the Producer Price Index for Fluid Milk Products.

DATES: These rates are effective from July 1, 2016 through June 30, 
2017

FOR FURTHER INFORMATION CONTACT: Jessica Saracino, Branch Chief, 
Program Monitoring and Operational Support Division, Child Nutrition 
Programs, Food and Nutrition Service, U.S. Department of Agriculture, 
3101 Park Center Drive, Room 640, Alexandria, Virginia 22302-1594; 
phone 703-457-7743.

SUPPLEMENTARY INFORMATION:

Background

    Special Milk Program for Children--Pursuant to section 3 of the 
Child Nutrition Act of 1966, as amended (42 U.S.C. 1772), the 
Department announces the rate of reimbursement for a half-pint of milk 
served to non-needy children in a school or institution that 
participates in the Special Milk Program for Children. This rate is 
adjusted annually to reflect changes in the Producer Price Index for 
Fluid Milk Products, published by the Bureau of Labor Statistics of the 
Department of Labor.
    For the period July 1, 2016 through June 30, 2017, the rate of 
reimbursement for a half-pint of milk served to a non-needy child in a 
school or institution which participates in the Special Milk Program is 
19.75 cents. This reflects a decrease of .25 cents from the School Year 
(SY) 2015-16 level, based on the 1.32 percent decrease in the Producer 
Price Index for Fluid Milk Products from May 2015 to May 2016 (from a 
level of 219.0 in May 2015, as previously published in the Federal 
Register, to 216.1 in May 2016).
    As a reminder, schools or institutions with pricing programs that 
elect to serve milk free to eligible children continue to receive the 
average cost of a half-pint of milk (the total cost of all milk 
purchased during the claim period divided by the total number of 
purchased half-pints) for each half-pint served to an eligible child.
    National School Lunch and School Breakfast Programs--Pursuant to 
sections 11 and 17A of the Richard B. Russell National School Lunch 
Act, (42 U.S.C. 1759a and 1766a), and section 4 of the Child Nutrition 
Act of 1966 (42 U.S.C. 1773), the Department annually announces the 
adjustments to the National Average Payment Factors and to the maximum 
Federal reimbursement rates for lunches and afterschool snacks served 
to children participating in the National School Lunch Program and 
breakfasts served to children participating in the School Breakfast 
Program. Adjustments are prescribed each July 1, based on changes in 
the Food Away From Home series of the Consumer Price Index for All 
Urban Consumers, published by the Bureau of Labor Statistics of the 
Department of Labor. The changes in the national average payment rates 
for schools and residential child care institutions for the period July 
1, 2016 through June 30, 2017 reflect a 2.64 percent increase in the 
Consumer Price Index for All Urban Consumers during the 12-month period 
May 2015 to May 2016 (from a level of 255.322 in May 2015, as 
previously published in the Federal Register, to

[[Page 51843]]

262.074 in May 2016). Adjustments to the national average payment rates 
for all lunches served under the National School Lunch Program, 
breakfasts served under the School Breakfast Program, and afterschool 
snacks served under the National School Lunch Program are rounded down 
to the nearest whole cent.
    Lunch Payment Levels--Section 4 of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1753) provides general cash for food 
assistance payments to States to assist schools in purchasing food. The 
Richard B. Russell National School Lunch Act provides two different 
section 4 payment levels for lunches served under the National School 
Lunch Program. The lower payment level applies to lunches served by 
school food authorities in which less than 60 percent of the lunches 
served in the school lunch program during the second preceding school 
year were served free or at a reduced price. The higher payment level 
applies to lunches served by school food authorities in which 60 
percent or more of the lunches served during the second preceding 
school year were served free or at a reduced price.
    To supplement these section 4 payments, section 11 of the Richard 
B. Russell National School Lunch Act (42 U.S.C. 1759a) provides special 
cash assistance payments to aid schools in providing free and reduced 
price lunches. The section 11 National Average Payment Factor for each 
reduced price lunch served is set at 40 cents less than the factor for 
each free lunch.
    As authorized under sections 8 and 11 of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1757 and 1759a), maximum 
reimbursement rates for each type of lunch are prescribed by the 
Department in this Notice. These maximum rates are to ensure equitable 
disbursement of Federal funds to school food authorities.
    Section 201 of the Healthy, Hunger-Free Kids Act of 2010--Section 
201 of the Healthy, Hunger-Free Kids Act of 2010 made significant 
changes to the Richard B. Russell National School Lunch Act. On January 
3, 2014, the final rule entitled, ``Certification of Compliance With 
Meal Requirements for the National School Lunch Program Under the 
Healthy, Hunger-Free Kids Act of 2010'' (79 FR 325), was published and 
provides eligible school food authorities with performance-based cash 
reimbursement in addition to the general and special cash assistance 
described above. The final rule requires that school food authorities 
be certified by the State agency as being in compliance with the 
updated meal pattern and nutrition standard requirements set forth in 
amendments to 7 CFR parts 210 and 220 on January 26, 2012, in the final 
rule entitled ``Nutrition Standards in the National School Lunch and 
School Breakfast Programs'' (77 FR 4088). Certified school food 
authorities are eligible to receive performance-based cash assistance 
for each reimbursable lunch served (an additional six cents per lunch 
available beginning October 1, 2012, and adjusted annually thereafter).
    Afterschool Snack Payments in Afterschool Care Programs--Section 
17A of the Richard B. Russell National School Lunch Act (42 U.S.C. 
1766a) establishes National Average Payments for free, reduced price 
and paid afterschool snacks as part of the National School Lunch 
Program.
    Breakfast Payment Factors--Section 4 of the Child Nutrition Act of 
1966 (42 U.S.C. 1773) establishes National Average Payment Factors for 
free, reduced price and paid breakfasts served under the School 
Breakfast Program and additional payments for free and reduced price 
breakfasts served in schools determined to be in ``severe need'' 
because they serve a high percentage of needy children.

Revised Payments

    The following specific section 4, section 11 and section 17A 
National Average Payment Factors and maximum reimbursement rates for 
lunch, the afterschool snack rates, and the breakfast rates are in 
effect from July 1, 2016 through June 30, 2017. Beginning July 1, 2016, 
Puerto Rico will receive a 17-percent increase adjustment to these 
rates due to the higher cost of producing a meal in Puerto Rico. In 
addition, the average payments and maximum reimbursements for Alaska 
and Hawaii are higher due to the higher cost of living in these States. 
The District of Columbia, Virgin Islands, and Guam use the figures 
specified for the contiguous States.

National School Lunch Program Payments

    Section 4 National Average Payment Factors--In school food 
authorities which served less than 60 percent free and reduced price 
lunches in School Year (SY) 2014-2015, the payments for meals served 
are: Contiguous States--paid rate--30 cents (1 cent increase from the 
SY 2015-2016 level), free and reduced price rate--30 cents (1 cent 
increase), maximum rate--38 cents (1 cent increase); Alaska--paid 
rate--49 cents (1 cent increase), free and reduced price rate--49 cents 
(1 cent increase), maximum rate--60 cents (2 cent increase); Hawaii and 
Puerto Rico--paid rate--35 cents (1 cent increase), free and reduced 
price rate--35 cents (1 cent increase), maximum rate--44 cents (2 cent 
increase).
    In school food authorities which served 60 percent or more free and 
reduced price lunches in School Year 2014-2015, payments are: 
Contiguous States--paid rate--32 cents (1 cent increase from the SY 
2015-2016 level), free and reduced price rate--32 cents (1 cent 
increase), maximum rate--38 cents (1 cent increase); Alaska--paid 
rate--51 cents (1 cent increase), free and reduced price rate--51 cents 
(1 cents increase), maximum rate--60 cents (2 cent increase); Hawaii 
and Puerto Rico--paid rate--37 cents (1 cent increase), free and 
reduced price rate--37 cents (1 cent increase), maximum rate--44 cents 
(2 cent increase).
    School food authorities certified to receive the performance-based 
cash assistance will receive an additional 6 cents (adjusted annually) 
added to the above amounts as part of their section 4 payments.
    Section 11 National Average Payment Factors--Contiguous States--
free lunch--286 cents (8 cent increase from the SY 2015-2016 level), 
reduced price lunch--246 cents (8 cent increase); Alaska--free lunch--
463 cents (12 cent increase), reduced price lunch--423 cents (12 cent 
increase); Hawaii and Puerto Rico--free lunch--334 cents (8 cent 
increase), reduced price lunch--294 cents (8 cent increase).
    Afterschool Snacks in Afterschool Care Programs--The payments are: 
Contiguous States--free snack--86 cents (2 cent increase from the SY 
2015-2016 level), reduced price snack--43 cents (1 cent increase), paid 
snack--07 cents (no change); Alaska--free snack--140 cents (3 cent 
increase), reduced price snack--70 cents (2 cent increase), paid 
snack--12 cents (no change); Hawaii and Puerto Rico--free snack--101 
cents (2 cent increase), reduced price snack--50 cents (1 cent 
increase), paid snack--09 cents (no change).

School Breakfast Program Payments

    For schools ``not in severe need'' the payments are: Contiguous 
States--free breakfast--171 cents (5 cent increase from the SY 2015-
2016 level), reduced price breakfast--141 cents (5 cent increase), paid 
breakfast--29 cents (no change); Alaska--free breakfast--273 cents (7 
cent increase), reduced price breakfast--243 cents (7 cent increase), 
paid breakfast--44 cents (1 cent increase); Hawaii and Puerto Rico--
free breakfast--199 cents (5 cent increase), reduced price breakfast--
169 cents (5

[[Page 51844]]

cent increase), paid breakfast--33 cents (no change).
    For schools in ``severe need'' the payments are: Contiguous 
States--free breakfast--204 cents (5 cent increase from the SY 2015-
2016 level), reduced price breakfast--174 cents (5 cent increase), paid 
breakfast--29 cents (no change); Alaska--free breakfast--327 cents (8 
cent increase), reduced price breakfast--297 cents (8 cent increase), 
paid breakfast--44 cents (1 cent increase); Hawaii and Puerto Rico--
free breakfast--238 cents (6 cent increase), reduced price breakfast--
208 cents (6 cent increase), paid breakfast--33 cents (no change).

Payment Chart

    The following chart illustrates the lunch National Average Payment 
Factors with the sections 4 and 11 already combined to indicate the per 
lunch amount; the maximum lunch reimbursement rates; the reimbursement 
rates for afterschool snacks served in afterschool care programs; the 
breakfast National Average Payment Factors including ``severe need'' 
schools; and the milk reimbursement rate. All amounts are expressed in 
dollars or fractions thereof. The payment factors and reimbursement 
rates used for the District of Columbia, Virgin Islands, and Guam are 
those specified for the contiguous States.

             School Programs--Meal, Snack and Milk Payments to States and School Food Authorities--Expressed in Dollars or Fractions Thereof
                                                      [Effective from: July 1, 2016-June 30, 2017]
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                                                                           Less than 60%                   60% or more +                  Maximum rate +
            National School Lunch Program \1\              Less than 60%   + 6 cents \2\    60% or more     6 cents \2\    Maximum rate     6 cents \2\
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Contiguous States:
    Paid................................................            0.30            0.36            0.32            0.38            0.38            0.44
    Reduced price.......................................            2.76            2.82            2.78            2.84            2.93            2.99
    Free................................................            3.16            3.22            3.18            3.24            3.33            3.39
Alaska:
    Paid................................................            0.49            0.55            0.51            0.57            0.60            0.66
    Reduced price.......................................            4.72            4.78            4.74            4.80            4.98            5.04
    Free................................................            5.12            5.18            5.14            5.20            5.38            5.44
Hawaii:
    Paid................................................            0.35            0.41            0.37            0.43            0.44            0.50
    Reduced price.......................................            3.29            3.35            3.31            3.37            3.49            3.55
    Free................................................            3.69            3.75            3.71            3.77            3.89            3.95
Puerto Rico: \3\
    Paid................................................            0.35            0.41            0.37            0.43            0.44            0.50
    Reduced Price.......................................            3.29            3.35            3.31            3.37            3.49            3.55
    Free................................................            3.69            3.75            3.71            3.77            3.89            3.95
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                                            Non-severe
        School breakfast program               need         Severe need
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Contiguous States:
    Paid................................            0.29            0.29
    Reduced price.......................            1.41            1.74
    Free................................            1.71            2.04
Alaska:
    Paid................................            0.44            0.44
    Reduced price.......................            2.43            2.97
    Free................................            2.73            3.27
Hawaii:
    Paid................................            0.33            0.33
    Reduced price.......................            1.69            2.08
    Free................................            1.99            2.38
Puerto Rico: \3\
    Paid................................            0.33            0.33
    Reduced price.......................            1.69            2.08
    Free................................            1.99            2.38
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             Special milk program                  All milk        Paid milk                Free milk
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Pricing Programs without Free Option..........          0.1975             N/A  N/A.
Pricing Programs with Free Option.............             N/A          0.1975  Average Cost Per 1/2 Pint of
                                                                                 Milk.
Nonpricing Programs...........................          0.1975             N/A  N/A.
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         Afterschool Snacks Served in Afterschool Care Programs
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Contiguous States:
    Paid................................................            0.07
    Reduced price.......................................            0.43
    Free................................................            0.86
Alaska:
    Paid................................................            0.12
    Reduced price.......................................            0.70
    Free................................................            1.40
Hawaii:
    Paid................................................            0.09
    Reduced price.......................................            0.50
    Free................................................            1.01
Puerto Rico: \3\
    Paid................................................            0.09
    Reduced price.......................................            0.50
    Free................................................            1.01
------------------------------------------------------------------------
\1\ Payment listed for Free and Reduced Price Lunches include both
  section 4 and section 11 funds.
\2\ Performance-based cash reimbursement (adjusted annually for
  inflation).

[[Page 51845]]

 
\3\ Beginning July 1, 2016, FNS approved Puerto Rico to receive a 17-
  percent increase in school meal reimbursement rates.

    This action is not a rule as defined by the Regulatory Flexibility 
Act (5 U.S.C. 601-612) and thus is exempt from the provisions of that 
Act.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507), no new recordkeeping or reporting requirements have been 
included that are subject to approval from the Office of Management and 
Budget.
    This notice has been determined to be not significant and was 
reviewed by the Office of Management and Budget in conformance with 
Executive Order 12866.
    National School Lunch, School Breakfast and Special Milk Programs 
are listed in the Catalog of Federal Domestic Assistance under No. 
10.555, No. 10.553 and No. 10.556, respectively, and are subject to the 
provisions of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials. (See 2 CFR 415.3-415.6).

    Authority: Sections 4, 8, 11 and 17A of the Richard B. Russell 
National School Lunch Act, as amended, (42 U.S.C. 1753, 1757, 1759a, 
1766a) and sections 3 and 4(b) of the Child Nutrition Act, as 
amended, (42 U.S.C. 1772 and 42 U.S.C. 1773(b)).

    Dated: August 2, 2016.
Yvette S. Jackson,
Acting Administrator, Food and Nutrition Service.
[FR Doc. 2016-18650 Filed 8-4-16; 8:45 am]
 BILLING CODE 3410-30-P