Attachment Z Federal Register Notice - CACFP: Amendments Related to the Healthy, Hunger-Free Kids Act of 2010 Proposed Rule

21018

Proposed Rules

Federal Register
Vol. 77, No. 68
Monday, April 9, 2012

This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.

DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 226
RIN 0584–AE12

Child and Adult Care Food Program:
Amendments Related to the Healthy,
Hunger-Free Kids Act of 2010
Food and Nutrition Service,
USDA.
ACTION: Proposed rule.
AGENCY:

This rule proposes to codify
several provisions of the Healthy,
Hunger-Free Kids Act of 2010 affecting
the management of the Child and Adult
Care Food Program (CACFP). The
Department is proposing to require
institutions to submit an initial CACFP
application to the State agency and, in
subsequent years, periodically update
the information in lieu of submitting a
new application; require sponsoring
organizations to vary the timing of
reviews of sponsored facilities; require
State agencies to develop and provide
for the use of a standard permanent
agreement between sponsoring
organizations and day care centers;
allow tier II day care homes to collect
household income information and
transmit it to the sponsoring
organization; modify the method of
determining administrative payments to
sponsoring organizations of day care
homes by basing payments on a
formula; and allow sponsoring
organizations of day care homes to carry
over up to 10 percent of their
administrative funding from the
previous fiscal year into the next fiscal
year. This rule also proposes to
incorporate several changes to the
application and renewal process which
are expected to improve the
management of CACFP and to make a
number of miscellaneous technical
changes.

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

SUMMARY:

To be assured of consideration,
comments must be received on or before
June 8, 2012.

DATES:

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

The Food and Nutrition
Service, USDA, invites interested
persons to submit comments on this
proposed rule. Comments may be
submitted through one of the following
methods:
• Preferred method: Federal
eRulemaking Portal at http://
www.regulations.gov. Follow the online
instructions for submitting comments.
• Mail: Comments should be
addressed to Julie Brewer, Chief, Policy
and Program Development Branch,
Child Nutrition Division, Food and
Nutrition Service, Department of
Agriculture, 3101 Park Center Drive,
Room 640, Alexandria, Virginia 22302–
1594.
• Hand Delivery or Courier: Deliver
comments to the Food and Nutrition
Service, Child Nutrition Division, 3101
Park Center Drive, Room 640,
Alexandria, Virginia 22302–1594,
during normal business hours of 8:30
a.m.–5 p.m.
Comments submitted in response to
this proposed rule will be included in
the record and will be made available to
the public. Please be advised that the
substance of the comments and the
identity of the individuals or entities
submitting the comments will be subject
to public disclosure. The Department
will make the comments publicly
available on the Internet via http://
www.regulations.gov.

ADDRESSES:

FOR FURTHER INFORMATION CONTACT:

Julie

Brewer at the above address or
telephone (703) 305–2590.
SUPPLEMENTARY INFORMATION:
I. Public Comment Procedures
II. Executive Summary
III. Background and Discussion of the
Proposed Rule
IV. Procedural Matters

I. Public Comment Procedures
Your written comments on the
proposed rule should be specific,
should be confined to issues pertinent
to the proposed rule, and should
explain the reason(s) for any change you
recommend or proposal(s) you oppose.
Where possible, you should reference
the specific section or paragraph of the
proposal you are addressing. Comments
received after the close of the comment
period (refer to DATES) will not be
considered or included in the
Administrative Record for the final rule.
Executive Order 12866 requires each
agency to write regulations that are

PO 00000

Frm 00001

Fmt 4702

Sfmt 4702

simple and easy to understand. We
invite your comments on how to make
these proposed regulations easier to
understand, including answers to
questions such as the following:
(1) Are the requirements in the
proposed regulations clearly stated?
(2) Does the rule contain technical
language or jargon that interferes with
its clarity?
(3) Does the format of the rule (e.g.,
grouping and order of sections, use of
headings, and paragraphing) make it
clearer or less clear?
(4) Would the rule be easier to
understand if it was divided into more
(but shorter) sections?
(5) Is the description of the rule in the
preamble section entitled ‘‘Background
and Discussion of the Proposed Rule’’
helpful in understanding the rule? How
could this description be more helpful
in making the rule easier to understand?
II. Executive Summary
Purpose of the Regulatory Action
The Department is proposing to
amend the regulations for CACFP at 7
CFR part 226 to codify several of the
provisions of the Healthy, Hunger-Free
Kids Act of 2010 (HHFKA). This
proposed rule would affect the
management and administration of
CACFP for State agencies, new and
renewing institutions, sponsoring
organizations, and sponsored facilities.
This rule also proposes to incorporate
several changes to the application and
renewal process which are expected to
improve the management of CACFP and
to make a number of miscellaneous
technical changes to the organization of
7 CFR part 226.
Summary of the Major Provisions of the
Regulatory Action
CACFP Initial Application Submission
and Renewal Requirements
Current regulations require
institutions to submit an initial
application for CACFP participation and
then to reapply to the CACFP on a
schedule determined by the State
agency, but not less than every one to
three years. Section 331(b) of the Act
amended section 17(d) of the Richard B.
Russell National School Lunch Act
(NSLA) (42 U.S.C. 1766(d)) to require, in
lieu of submitting a renewal application,
that renewing institutions need only
annually confirm that the institution is
in compliance with the licensing

E:\FR\FM\09APP1.SGM

09APP1

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules
requirements of subsection 17(a)(5) of
the NSLA (42 U.S.C. 1766(a)(5)) and
submit to the State agency any
additional necessary information, as
specified by the Department.
This proposal would eliminate a
renewal application for renewing
institutions; however, such institutions
would be required to annually certify
that they still meet the program
requirements for continued
participation and to provide an update
of the information provided on the
initial application if the State agency
has not already been notified of the
changes. The exception to this is the
budget submission for sponsoring
organizations, which as in current
regulations, must be submitted annually
rather than through the certification
process.
Varied Timing of Reviews Conducted by
Sponsoring Organizations
Section 331(b) of the Act amended
section 17(d)(2) of the NSLA (42 U.S.C.
1766(d)(2)) to require that sponsoring
organizations vary the timing of
unannounced reviews so they are
unpredictable to sponsored facilities.
We anticipate unannounced reviews
will be more effective in detecting
CACFP integrity issues. This proposed
rule would require sponsoring
organizations to ensure that the timing
of unannounced reviews is varied in a
way that would ensure they are
unpredictable to the facility under
review.

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

Permanent Agreements Between
Sponsoring Organizations and
Sponsored Centers
Section 331(c) of the Act amended
section 17(j)(1) of the NSLA (42 U.S.C.
1766(j)(1)) to require State agencies to
develop and provide for the use of a
standard permanent operating
agreement between sponsoring
organizations of centers and their
sponsored centers. This rule proposes to
require State agencies to develop
standard permanent agreements that
sponsors of child care centers, adult day
care centers, emergency shelters, at-risk
afterschool care centers, or outside
school hours care centers will enter into
with their unaffiliated sponsored
centers.
Transmission of Income Information by
Sponsored Day Care Homes
Current regulations require a
sponsoring organization, upon the
request of a tier II day care home
provider, to collect income eligibility
applications from households (7 CFR
226.18(b)(12)). Section 333 of the Act
amended section 17(f)(3)(A)(iii)(III) of

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

the NSLA (42 U.S.C.
1766(f)(3)(A)(iii)(III)) to require
sponsoring organizations to allow
providers of tier II day care homes to
assist in the transmission of household
income information with the written
consent of the parents or guardians of
children in their care. This rule
proposes to allow the tier II day care
home to assist in collecting income
eligibility applications from households
and transmitting the applications to the
sponsoring organization. The addition
would limit the provider’s assistance to
collecting applications and transmitting
them to the sponsoring organization,
and prohibits tier II day care home
providers from reviewing the
applications.
Administrative Payment Rates to
Sponsoring Organizations for Day Care
Homes
Current regulations found at 7 CFR
226.12(a) require that administrative
cost payments to a sponsoring
organization of day care homes may not
exceed the lesser of: (1) Actual
expenditures for the costs of
administering the CACFP less income to
the CACFP, or (2) the amount of
administrative costs approved by the
State agency in the sponsoring
organization’s budget, or (3) the sum of
the products obtained by multiplying
each month the sponsoring
organization’s number of participating
homes by the current administrative
payment rate for day care home
sponsors. In addition, current
regulations specify that administrative
payments to a sponsoring organization
may not exceed 30 percent of the total
amount of administrative payments and
food service payments for day care
home operations.
Section 334 of the HHFKA amended
section 17(f)(3) of the NSLA (42 U.S.C.
1766(f)(3)) to eliminate the ‘‘lesser of’’
cost and budget comparisons for
calculating administrative payments to
day care home sponsoring
organizations. Instead, effective October
1, 2010, administrative reimbursements
are determined only by multiplying the
number of day care homes under the
oversight of each sponsoring
organization by the appropriate
annually adjusted administrative
reimbursement rate(s). This rule
proposes to modify the method of
determining administrative payments to
sponsoring organizations of day care
homes by basing payments on the
formula specified in Section 17 of the
NSLA.

PO 00000

Frm 00002

Fmt 4702

Sfmt 4702

21019

Carryover of Family or Group Day Care
Home Sponsoring Organization
Administrative Payments
Section 334 of the HHFKA amended
section 17(f)(3) of the NSLA (42 U.S.C.
1766(f)(3)) to permit day care home
sponsors to carry over and obligate a
maximum of 10 percent of
administrative payments into the
succeeding fiscal year. Under this
proposal, the Department would require
the State agency to ensure that
sponsoring organizations of day care
homes seeking to carryover
administrative funds include, in their
annual budget submission for State
agency review and approval, estimates
of the amount of administrative funds
that will be carried over and a
description of the proposed purpose(s)
for which those funds will be used.
Miscellaneous Changes
This proposal would make a number
of changes that complement the
requirements of the NSLA as amended
by the HHFKA. Chief amongst these
changes is a proposed re-organization of
§ 226.6, State agency administrative
responsibilities. The re-organization is
expected to improve the clarity of the
regulations and to provide more
uniformity to application and renewal
requirements. The proposal moves the
existing initial application requirements
and the proposed renewal requirements
to new §§ 226.6a and 226.6b,
respectively.
Costs and Benefits
While CACFP institutions and State
agencies administering CACFP will be
affected by this rulemaking, the
economic effect will not be significant.
III. Background and Discussion of the
Proposed Rule
The Department is proposing to
amend the regulations for CACFP at 7
CFR part 226. These changes are
intended to implement several of the
provisions of the HHFKA affecting the
management and administration of
CACFP for State agencies, new and
renewing institutions, sponsoring
organizations, and sponsored facilities.
The Department is proposing to
require institutions to submit an initial
CACFP application to the State agency
and, in subsequent years, periodically
update the information in lieu of
submitting a new application; require
sponsoring organizations to vary the
timing of reviews of sponsored facilities;
require State agencies to develop and
provide for the use of a standard
permanent agreement between
sponsoring organizations and day care
centers; allow tier II day care homes to

E:\FR\FM\09APP1.SGM

09APP1

21020

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

collect household income information
and transmit it to the sponsoring
organization; modify the method of
determining administrative payments to
sponsoring organizations of day care
homes by basing payments on a
formula; and, allow sponsoring
organizations of day care homes to carry
over up to 10 percent of their
administrative funding from the
previous fiscal year into the next fiscal
year. This rule also proposes to
incorporate several changes to the
application and renewal process which
are expected to improve the
management of CACFP and to make a
number of miscellaneous technical
changes. The proposed amendments are
discussed in more detail below.
CACFP Initial Application Submission
and Renewal Requirements
Current regulations require
institutions to submit an initial
application for CACFP participation
then reapply to the Program on a
schedule determined by the State
agency, but not less than every one to
three years. As a result, the State agency
must periodically re-determine if an
institution is eligible to participate in
the CACFP based on a renewal
application process. Most of the
requirements for the initial application
process are currently found at
§§ 226.6(b)(1) and 226.6(f) and most of
the requirements for the renewal
application process are found at
§§ 226.6(b)(2) and 226.6(f).
Section 331(b) of the HHFKA amends
section 17(d) of the NSLA (42 U.S.C.
1766(d)) to require, in lieu of submitting
a renewal application, that renewing
institutions need only annually confirm
that the institution is in compliance
with the licensing requirements of
subsection 17(a)(5) of the NSLA (42
U.S.C. 1766(a)(5)) and submit to the
State agency any additional necessary
information, as specified by the
Department. State agencies were
advised of these requirements in a
memorandum issued April 8, 2011,
Child Nutrition Reauthorization 2010:
Child and Adult Care Food Program
Applications (CACFP 19–2011).
This provision enables the
Department to determine the new
renewal process and the information
that annually must be submitted to the
State agency. Reflecting the intent of the
HHFKA, this provision to eliminate the
renewal application, this proposal
would require participating institutions
to annually certify that they still meet
the CACFP requirements for continued
participation and to provide an update
of the information provided on the
initial application, if the State agency

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

has not already been notified of the
changes. Thus, even though
management plans would be annually
certified, the plans must be updated as
necessary to ensure they provide a
current reflection of CACFP operations.
The exception to this is the budget
submission for sponsoring
organizations, which must still be
submitted annually rather than through
the certification process. These changes
are expected to reduce current
application process burden, because
renewing institutions will no longer
need to submit documentation
demonstrating they meet CACFP
requirements, but simply provide
certification that they are still in
compliance instead.
This proposed rule outlines the
complete list of information that
institutions would need to certify as
unchanged or indicate that it has
already updated with the State agency.
All institutions would be required to
annually certify that they are not on the
National disqualified list; they are not
ineligible for other publicly funded
programs; the institution’s principals
have not been convicted of a crime in
the past seven years indicating a lack of
business integrity; they are still
compliant with performance standards;
and, they are licensed or approved or,
if a sponsoring organization, that all of
their facilities are licensed or otherwise
approved. Sponsoring organizations
would continue to submit an annual
budget and would also certify that: their
management plan is up-to-date; their
outside employment policy is current;
and their training has been provided for
all facilities. In addition this rule
proposes to require renewing
institutions to certify that they have no
unreported less-than-arms-length
transactions or other potential conflicts
of interest have occurred in the past
year and that any anticipated less-thanarms-length transactions or other
potential conflicts of interest in the
upcoming year have been disclosed to
the State agency—both of which would
be new requirements. If the institution
cannot certify that all of this required
information is unchanged or has already
been updated, the institution would be
required to submit any information
necessary to notify the State agency of
the change at that time.
As noted above, two changes to the
application and renewal process are
being added to this proposed rule in
order to improve CACFP management.
In accordance with the Food and
Nutrition Service (FNS) Instruction
796–2 Financial Management—Child
and Adult Care Food Program,
sponsoring organizations must disclose

PO 00000

Frm 00003

Fmt 4702

Sfmt 4702

less-than-arms-length transactions and
potential conflicts of interest.
Nevertheless, the Department has found
that this existing requirement has not
adequately addressed the continued
problems associated with these types of
transactions. The Department’s
monitoring activities continue to find a
number of sponsoring organizations that
have not properly disclosed less-thanarms-length transactions and potential
conflicts of interest, and that have not
received the required prior approval
from their State agencies. As a result, in
many cases, CACFP funds have been
used improperly, resulting in large
overclaims against sponsoring
organizations.
To better address this issue, this rule
proposes to specifically require the
disclosure of anticipated less-than-armslength transactions and potential
conflicts of interest in both the initial
application submitted by a new
sponsoring organization and, for
renewing sponsors, in the annual
information submission process.
Accordingly, §§ 226.2, new 226.6a and
226.6b would incorporate this addition.
The second addition would require
that institutions provide State agencies
with the full legal names and any other
names previously used, for all
principals in the initial application and
whenever the institution adds new
principals. This change would also
require a sponsoring organization to
provide the full legal names, and any
other names previously used, for all day
care home providers and by the
principals of its sponsored centers. The
proposal adds this change to the
regulations in every instance where
institutions were previously required to
report the full names of their principals,
and the principals of their sponsored
facilities, to the State agency. Thus, the
proposed language would require ‘‘full
legal names and any other names
previously used’’ where it currently
requires ‘‘full names.’’ This will ensure
better identification of any individuals
who may be later placed on the National
disqualified list. Accordingly, §§ 226.2,
226.6a and 226.6b would incorporate
this addition.
Another provision necessitated by
these changes to the application process
is the addition of a serious deficiency
dealing with institutions that fail to
submit acceptable or complete renewal
information. The amendments made to
NSLA by the HHFKA significantly
modifying the current renewal
application process means that
renewing institutions would continue to
be considered ‘‘participating
institutions.’’ Under § 226.6(c)(2) of this
proposal, an institution’s failure to

E:\FR\FM\09APP1.SGM

09APP1

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules
properly submit renewal information
would be considered a serious
deficiency and the State agency would
be required to follow the normal serious
deficiency process for participating
institutions. The corrective action in
this case would be for the institution to
submit the proper or corrected renewal
information to the State agency in
accordance with established procedures.
As is true under the current renewal
application process, State agencies
would continue to have discretion in
declaring renewing institutions
seriously deficient, based on the type
and magnitude of the missing
information and the institution’s
willingness to quickly submit any
missing information.
While reviewing the current
regulations relating to application
requirements, it became evident that the
application and reapplication
requirements for institutions are found
in various places throughout 7 CFR part
226. To clearly articulate the new
renewal process and distinguish it from
the initial application process, the
Department undertook a re-organization
of the application and renewal
requirements throughout 7 CFR part
226. Because the Department has
received complaints about the length of
§ 226.6, the section in which the current
application and reapplication
requirements are found, the proposal
moves the existing initial application
requirements and the proposed renewal
requirements to new §§ 226.6a and
226.6b, respectively. New § 226.6a is
proposed to be titled ‘‘State agency
application requirements for new
institutions’’ and § 226.6b is proposed to
be titled ‘‘State agency annual
information submission requirements
for renewing institutions.’’ This means
that though §§ 226.6a and 226.6b do not
look identical to current §§ 226.6(b)(1)
and (b)(2), respectively, no requirements
have been changed except for those
outlined in this preamble.
With this new re-organization, the
proposal would move the application or
renewal requirements from the other
sections in which they are currently
located (namely §§ 226.6(b), 226.6(f),
226.16(b) and 226.17a(e)) to the relevant
new sections. All application
requirements contained in these
sections would be deleted and, where
necessary, would instead contain only
cross references to §§ 226.6a and 226.6b.
To assist the reader, distribution and
derivation tables are posted on
www.regs.gov and accompany this
proposed rule. The distribution table
identifies each existing section and
where it would appear in the proposed
amendatory language. The derivation

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

table identifies each proposed new
section and where it appears in the
existing regulations.
Two additional proposed changes are
included to provide a more uniform
application process for day care homes
and other facilities. Proposed
§§ 226.6a(c)(5) and § 226.6b(d)(3) would
require the State agency to collect from
each sponsoring organization a list of all
applicant day care homes, child care
centers, outside-school-hours-care
centers, at-risk afterschool care centers,
and adult day care centers. Previously,
this requirement appeared only in
§ 226.17a, although it is standard
operating practice. Proposed
§ 226.6a(c)(9) would include
requirements for facility applications for
new institutions, these requirements are
not new requirements but are proposed
to be codified so that all application
requirements are available in one place.
Currently, facility application
requirements are found at § 226.16(b).
Additionally, CACFP 01–2008, Facility
Applications and Agreements in the
Child and Adult Care Food Program
(CACFP), published November 15, 2007
discusses CACFP application
requirements. These two proposed
changes seek to provide a more uniform
application process.
Finally, this rule proposes a change
outside of the CACFP application
process. In the proposed re-organization
of § 226.6, paragraph (f)(4) restates
existing regulations found at
§ 226.6(f)(1)(viii) that require State
agencies to obtain from the State agency
that administers the NSLP, a list of
‘‘elementary’’ schools in the State in
which at least one-half of the children
enrolled are certified to receive free or
reduced-price meals. The State agency
must provide the list of ‘‘elementary’’
schools to sponsoring organizations of
day care homes. However, section 121
of the HHFKA amended section
17(f)(3)(A)(ii)(I)(bb) of the NSLA, to
remove the word ‘‘elementary’’ from the
definition of tier I day care homes. Since
the proposed re-organization at
§ 226.6(f)(4) includes this provision, the
Department is proposing to remove the
term ‘‘elementary’’ from the regulatory
text. The Department intends to issue a
final rule that will make this change
permanent in the near future.
We encourage commenters to limit
their comments to the new changes
proposed in this rule and to the
proposed re-organization of §§ 226.6,
226.6a, and 226.6b. We are interested in
whether the re-organization improves
the clarity of the regulations.

PO 00000

Frm 00004

Fmt 4702

Sfmt 4702

21021

Varied Timing of Reviews Conducted by
Sponsoring Organizations
Current regulations require
sponsoring organizations to conduct
three reviews per year per sponsored
facility, two of which must be
unannounced. One of the unannounced
reviews must include observation of a
meal service. No more than six months
may elapse between reviews (7 CFR
226.16(d)(4)(iii)).
Unannounced reviews are an effective
tool in ensuring CACFP integrity. An
unannounced review gives sponsoring
organizations the opportunity to
document how the facility operates on
any given day and to offer technical
assistance. In addition, unannounced
reviews offer a first-hand opportunity to
detect and identify areas of
mismanagement (such as inaccurate
meal counts, problems with
recordkeeping, and menu and
enrollment discrepancies) and allow
sponsoring organizations to initiate
immediate corrective action, up to and
including declaring a facility seriously
deficient.
However, unannounced reviews that
follow a consistent pattern are
predictable and, therefore, undermine
the intent of the CACFP’s unannounced
review requirements. Examples of
consistent patterns are unannounced
reviews that always occur during the
third week of January, the third week of
May, and the third week of September;
reviews that never occur during the first
week of the month when claims are
being processed; meal service
observations that always occur during
the lunch meal service or never occur
on weekends or evenings. Such patterns
hinder the sponsoring organization’s
ability to uncover management
deficiencies and CACFP abuse by
enabling facilities to predict when the
sponsor review will occur.
Section 331(b) of the HHFKA
amended section 17(d)(2) of the NSLA
(42 U.S.C. 1766(d)(2)) to require that
sponsoring organizations vary the
timing of unannounced reviews so they
are unpredictable to sponsored
facilities. The expectation is that
unannounced reviews would be more
effective in detecting CACFP integrity
issues. State agencies were advised of
this requirement in a memorandum
issued April 7, 2011, Child Nutrition
Reauthorization 2010: Varied Timing of
Unannounced Reviews in the Child and
Adult Care Food Program (CACFP 16–
2011).
The Department appreciates that it
may be difficult for a sponsoring
organization to create separate review
schedules for each facility. However, as

E:\FR\FM\09APP1.SGM

09APP1

21022

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

required by the HHFKA amendments,
sponsoring organizations can and
should vary the scheduling of reviews
within each month and each year and
frequently change the intervals between
reviews (e.g., 90, 105, 120, 135 days
between reviews of facilities). Similarly,
sponsoring organizations should
alternate reviews of the breakfast, lunch,
and supper meal service in facilities
being reviewed.
To effect these changes, the proposal
would revise § 226.16, Sponsoring
organization provisions, by expanding
the requirements relating to the
frequency and type of required facility
reviews in paragraph (d)(4)(iii) of that
section. The additions would require
sponsoring organizations to ensure that
the timing of unannounced reviews is
varied in a way that would ensure they
are unpredictable to the facility. The
proposed language also makes it clear
that always reviewing the same meal
service would be considered predictable
and would be inconsistent with the
CACFP requirements.
In addition, § 226.6, State agency
administrative responsibilities, would
be amended at paragraph (m)(3) of that
section to expand the scope of the State
agency review of sponsoring
organizations’ monitoring of facilities.
Under the proposal, State agencies
would be required to assess whether the
timing of the sponsoring organization’s
facility reviews are varied and
unpredictable, as required by
§ 226.16(d)(4)(iii). This addition ensures
that State agencies, as part of their
reviews of sponsoring organizations,
would evaluate the timing and pattern
of the facility reviews conducted by the
sponsor to ensure that they are not
predictable, and are in compliance with
this requirement. As is currently the
case, a sponsor’s failure to comply with
all of the requirements of § 226.16(d)
could lead to a determination of a
serious deficiency.
Permanent Agreements Between
Sponsoring Organizations and
Sponsored Centers
Current regulations require State
agencies to develop and provide for the
use of permanent agreements between
sponsoring organizations and day care
homes, but do not require such
agreements for sponsoring organizations
of centers and their sponsored centers.
Section 331(c) of the HHFKA
amended section 17(j)(1) of the NSLA
(42 U.S.C. 1766(j)(1)) to require State
agencies to develop and provide for the
use of permanent operating agreements
between sponsoring organizations of
centers and their sponsored centers and
day care homes. To effect these changes,

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

§ 226.2, Definitions, would be amended
by adding a definition of sponsored
center. The definition would distinguish
between affiliated and unaffiliated
centers. Differentiating between
affiliated and unaffiliated centers is
necessary because only unaffiliated
centers would be required to have an
agreement with their sponsoring
organization.
Unlike affiliated sponsored day care
centers, unaffiliated sponsored day care
centers are legally distinct from their
sponsoring organization. For this
reason, an agreement between the
sponsoring organization and unaffiliated
sponsored centers is essential to a clear
understanding of responsibilities for
participation in the CACFP. Because
affiliated centers are not legally distinct
from their sponsoring organization, the
Department deems a requirement for an
agreement unnecessary for affiliated
centers. However, sponsoring
organizations may, at their discretion,
require an agreement with their
affiliated centers.
Section 226.6, State agency
administrative responsibilities, is
proposed to be amended to include the
requirement for State agencies to
develop and provide for the use of a
standard agreement between sponsoring
organizations and unaffiliated child care
centers. It also allows State agencies to
approve an agreement developed by the
sponsoring organization.
Section 226.16, Sponsoring
organization provisions, is proposed to
be amended to include the requirement
for sponsors of child care centers, adult
day care centers, emergency shelters, atrisk afterschool care centers, or outside
school hours care centers to enter into
a permanent agreement with their
unaffiliated sponsored centers. At a
minimum, the agreement would
embody the requirements and the rights
and responsibilities of both parties as
currently set forth in § 226.17, Child
care center provisions, § 226.17a, At-risk
afterschool care center provisions,
§ 226.19, Outside-school-hours care
center provisions and § 226.19a, Adult
day care center provisions, as
applicable. Corresponding changes were
also made to update and align the
requirements and responsibilities set
forth in §§ 226.17, 226.17a, 226.19, and
226.19a. These include: (a) Requiring
centers to permit visits by sponsoring
organizations or State agencies to the
center to review meal service and
records and inform sponsoring
organizations about changes in licensing
status; (b) requiring sponsored child
care centers to promptly inform the
sponsoring organization about any
change in its licensing or approval

PO 00000

Frm 00005

Fmt 4702

Sfmt 4702

status; (c) establishing the right of
centers to receive in a timely manner
reimbursement from the sponsoring
organizations for meals served; (d)
requiring child care centers to meet any
State agency approved time limit for
submission of meal records; and (e)
requiring sponsored child care centers
to distribute to parents a copy of the
sponsoring organization’s notice to
parents if directed to do so by the
sponsoring organization.
Transmission of Income Information by
Sponsored Day Care Homes
Current regulations require
sponsoring organizations, upon the
request of a tier II day care home
provider, to collect income eligibility
applications from households (7 CFR
§ 226.18(b)(12)). To eliminate any
concerns households may have about
sharing their income information with
their provider, the current regulations
prohibit providers from collecting the
applications directly from households.
Section 333 of the HHFKA amended
section 17(f)(3)(A)(iii)(III) of the NSLA
(42 U.S.C. 1766(f)(3)(A)(iii)(III)) to
require sponsoring organizations to
allow providers of tier II day care homes
to assist in the transmission of
household income information with the
written consent of the parents or
guardians of children in their care. State
agencies were advised of this
requirement in a memorandum issued
April 7, 2011, Child Nutrition
Reauthorization 2010: Transmission of
Household Income Information by Tier
II Family Day Care Homes in the Child
and Adult Care Food Program (CACFP
17–2011).
To effect these changes, the
Department proposes to amend § 226.18,
Day care home provisions, by revising
paragraph (b)(12) of that section to allow
the tier II day care home to assist in
collecting completed income eligibility
applications from households and
transmitting the applications to the
sponsoring organization. As proposed,
the addition would limit the provider’s
assistance to collecting applications and
transmitting them to the sponsoring
organization, and would prohibit tier II
day care home providers from reviewing
the completed applications.
In addition, § 226.23, Free and
reduced-price meals, paragraph (e)(2) is
proposed to be amended to specify the
steps a tier II day care home must take
when assisting in the collection and
transmission of applications.
Sponsoring organizations would be
required to explain in the letter to the
household, that the household can
return the application to either the
sponsoring organization or the day care

E:\FR\FM\09APP1.SGM

09APP1

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

home provider. Under the proposal, the
household would give written consent
for the provider to collect and transmit
the household’s application to the
sponsoring organization by signing the
letter sent by the sponsoring
organization and returning it, along with
the application, to the tier II day care
home. To ensure that tier II day care
home providers would not be able to
view the applications, the Department
suggests that the sponsoring
organization’s letter to the household
encourage households to place their
applications in a sealed envelope prior
to giving it to their provider.
Administrative Payment Rates to
Sponsoring Organizations for Day Care
Homes
Current regulations found at 7 CFR
226.12(a) require that administrative
cost payments to a sponsoring
organization of day care homes may not
exceed the lesser of: (1) Actual
expenditures for the costs of
administering the CACFP less income to
the CACFP, or (2) the amount of
administrative costs approved by the
State agency in the sponsoring
organization’s budget, or (3) the sum of
the products obtained by multiplying
each month the sponsoring
organization’s number of participating
homes by the current administrative
payment rate for day care home
sponsors. In addition, current
regulations specify that administrative
payments to a sponsoring organization
may not exceed 30 percent of the total
amount of administrative payments and
food service payments for day care
home operations.
Section 334 of the HHFKA amended
section 17(f)(3) of the NSLA (42 U.S.C.
1766(f)(3)) to eliminate the ‘‘lesser of’’
cost and budget comparisons for
calculating administrative payments to
day care home sponsoring
organizations. Instead, effective October
1, 2010, administrative reimbursements
are determined only by multiplying the
number of day care homes under the
oversight of each sponsoring
organization by the appropriate
annually adjusted administrative
reimbursement rate(s). As a result of this
change, the expenditures for cost, the
amount of costs approved in the
administrative budget, or the 30 percent
restriction no longer apply.
State agencies were advised of this
change in a memorandum issued
December 22, 2010, Child Nutrition
Reauthorization 2010: Administrative
Payments to Family Day Care Home
Sponsoring Organizations (CACFP 06–
2011). While this new provision will
help streamline administrative

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

payments to day care home sponsoring
organizations and reduce reporting
requirements, State agencies and
sponsoring organizations are reminded
that sponsoring organizations must
continue to submit annual budgets that
must be approved by the State agency.
Further, sponsoring organizations
remain responsible for correctly
accounting for costs and for maintaining
records and sufficient supporting
documentation to demonstrate that costs
charged to the Program: have actually
been incurred; are allowable and
allocable to the Program; and comply
with applicable Program regulations and
policies. State agencies must continue to
recover reimbursements received for
unallowable costs.
To effect this provision, paragraph (a)
of § 226.12, Administrative payments to
sponsoring organizations for day care
homes, would be proposed to be revised
to reflect the new formula. The proposal
would also make technical changes to
the administrative payment rates
formula to reflect annual adjustments.
These changes are intended only to
clarify the base administrative payment
rates without making any substantive
changes to the adjustment process. In
accordance with NSLA, the base
reimbursement rates, which were
published in the Federal Register on
January 26, 1982 at 47 FR 3539, are the
sum of the products obtained by
multiplying each month the sponsoring
organization’s: Initial 50 day care homes
by 42 dollars; Next 150 day care homes
by 32 dollars; Next 800 day care homes
by 25 dollars; and Additional day care
homes by 22 dollars. The administrative
payment rates will continue to be
adjusted annually to reflect changes in
the series for all items of the Consumer
Price Index for All Urban Consumers,
published by the Department of Labor.
Carryover of Family or Group Day Care
Home Sponsoring Organization
Administrative Payments
Section 334 of the HHFKA amends
section 17(f)(3) of the NSLA (42 U.S.C.
1766(f)(3)) to permit day care home
sponsors to carry over a maximum of 10
percent of administrative payments into
the succeeding fiscal year. In
accordance with the HHFKA, the 10
percent maximum on the amount of
administrative funds that may be carried
over must be based on the
administrative payments received by the
day care home sponsoring organization
for the fiscal year. Administrative funds
remaining at the end of the fiscal year
that exceed 10 percent of that fiscal
year’s administrative payments must be
returned to the State agency. If any
remaining carryover funds are not

PO 00000

Frm 00006

Fmt 4702

Sfmt 4702

21023

obligated or expended by the sponsoring
organization in the succeeding fiscal
year, the sponsor is required to return
the remaining funds to the State agency.
State agencies were advised of this
new authority in a memorandum issued
April 8, 2011, Child Nutrition
Reauthorization 2010: Carry Over of
Unused Child and Adult Care Food
Program Administrative Payments
(CACFP 18–2011). In that
memorandum, State agencies were
reminded that day care home
sponsoring organizations continue to
remain responsible for annual budget
submissions, budget amendments,
correctly accounting for costs, and
maintaining records and sufficient
supporting documentation to
demonstrate that costs charged to the
CACFP have actually been incurred, are
allowable and allocable, and comply
with all applicable CACFP regulations
and policies.
Under this proposal, § 226.6b(c)
proposes to require the State agency to
ensure that sponsoring organizations of
day care homes seeking to carryover
administrative funds include, in their
annual budget submission for State
agency review and approval, estimates
of the amount of administrative funds
that will be carried over and a
description of the proposed purpose(s)
for which those funds will be used.
Because the final administrative claims
will often not be known when the
annual budget is submitted to the State
agency, the sponsor should use its best
estimate of the carryover amount when
preparing the annual budget. Thus,
when the budget is being prepared and
submitted, the carryover estimate would
be based on a comparison of the
administrative payments the sponsoring
organization expects to receive under
the homes-times-rates formula with the
amount of anticipated allowable
administrative costs incurred in the
current fiscal year.
Much of the current regulatory budget
approval process remains the same.
However, this proposed rule would
provide that as soon as possible after
fiscal year closeout, the sponsoring
organization would be required to
submit an amended budget to the State
agency for review and approval. The
amended budget would identify the
amount of administrative funds actually
carried over and a description of the
purpose(s) for which those funds have
been or will be used. The sponsoring
organization would be required to
maintain documentation of obligations
and expenditures associated with
approved administrative carryover
funds for review by the State agency.
Consistent with current regulations, it is

E:\FR\FM\09APP1.SGM

09APP1

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

21024

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

still necessary for sponsoring
organizations to use accrual accounting
for the final claim of each fiscal year so
that the end-of-year reconciliation and
close-out can be performed.
Under proposed amendments to
§ 226.7, State agency responsibilities for
financial management, paragraphs (g)
and (j) of that section, State agencies
would require the annual budget
submission to include an estimate of the
requested administrative fund carryover
amounts and a description of the
proposed purpose(s) for which those
funds would be obligated or expended.
In approving a sponsoring
organization’s carryover request, a State
agency would be required to take into
consideration whether the day care
home sponsoring organization has a
financial management system that meets
all CACFP requirements and whether
the State agency is satisfied that the
system is capable of controlling the
custody, documentation and
disbursement of carryover funds. The
State agency would require a sponsoring
organization carrying over
administrative funds to submit an
amended budget for State agency review
and approval as soon as possible after
fiscal year close-out. The amended
budget would identify the amount of
administrative funds actually carried
over and describe the purpose(s) for
which the carryover funds have been or
will be used.
In addition, this rule proposes to
require each State agency to establish
procedures to recover administrative
funds from sponsoring organizations of
day care homes which are in excess of
the 10 percent maximum carryover
amount at the end of each fiscal year.
Additionally, each State agency would
also be required to establish procedures
to recover any carryover amount not
expended or obligated by the end of the
fiscal year following the fiscal year in
which the administrative funds were
earned. As a result, State agencies
would include a review of the
documentation supporting carryover
requests, obligations and expenditures
when conducting a review of a
sponsoring organization’s
administrative costs as currently
required under § 226.6(m)(3)(iii). In
addition, in implementing this proposed
provision, State agencies would
maintain a system that monitors the
sponsoring organization’s
documentation of nonprofit status, and
ensures that CACFP administrative
funds are used principally for the
benefit of participants. The
accumulation of excessive balances in
the sponsor’s nonprofit food service
account remains inconsistent with

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

CACFP requirements, as described in
FNS Instruction 796–2, Rev. 3, Section
VI.
Finally, State agencies and sponsoring
organizations are reminded that day
care home sponsoring organizations are
not required to carry over administrative
funds. Any unexpended funds
remaining at the end of the fiscal year,
which could be carried over into the
succeeding fiscal year, may be returned
to the State agency at the sponsoring
organization’s option. In addition,
nothing in this provision in any way
limits or changes the requirements that
a State agency: determine that all
institutions are financially viable;
establish an overclaim if the sponsor has
used CACFP administrative funds
improperly; or declare an institution
seriously deficient on the basis of its
improper use of CACFP administrative
funds.
IV. Procedural Matters
A. 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 rule has been determined to be
not significant and was not reviewed by
the Office Management and Budget
(OMB) in conformance with Executive
Order 12866.

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.
This rule contains no Federal
mandates (under the regulatory
provisions of Title II of the UMRA) that
impose on State, local and Tribal
governments or the private sector of
$100 million or more in any one year.
This rule is, therefore, not subject to the
requirements of sections 202 and 205 of
the UMRA.
D. Executive Order 12372
The Program addressed in this action
is listed in the Catalog of Federal
Domestic Assistance under No. 10.558.
For the reasons set forth in the final rule
in 7 CFR part 3015, Subpart V, and
related Notice published at 48 FR
29115, June 24, 1983, this is included in
the scope of Executive Order 12372,
which requires intergovernmental
consultation with State and local
officials.

C. Unfunded Mandates Reform Act

E. 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.

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,

F. Executive Order 12988
This proposed rule has been reviewed
under Executive Order 12988, ‘‘Civil
Justice Reform.’’ Although the
provisions of this rule are not expected

B. Regulatory Flexibility Act
This proposed rule has been reviewed
with regard to the requirements of the
Regulatory Flexibility Act of 1980 (5
U.S.C. 601–612). It has been certified
that this rule will not have a significant
impact on a substantial number of small
entities. While CACFP institutions and
State agencies administering CACFP
will be affected by this rulemaking, the
economic effect will not be significant.
This rule is expected to reduce
administrative burdens and provide
additional flexibility.

PO 00000

Frm 00007

Fmt 4702

Sfmt 4702

E:\FR\FM\09APP1.SGM

09APP1

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules
to conflict with any State or local law,
regulations, or policies, the rule is
intended to have preemptive effect with
respect to any State or local laws,
regulations, or policies that conflict
with its provisions or that would
otherwise impede its full
implementation. This rule is not
intended to have retroactive effect. Prior
to any judicial challenge to the
provisions of this rule or the
applications of its provisions, all
applicable administrative procedures
must be exhausted.
G. Civil Rights Impact Analysis
This proposed rule has been reviewed
in accordance with Department
Regulation 4300–4, ‘‘Civil Rights Impact
Analysis,’’ to identify any major civil
rights impacts this rule might have on
children on the basis of age, race, color,
national origin, sex, or disability. A
careful review of the rule revealed that
the rule’s intent does not affect the
participation of protected individuals in
CACFP.
H. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. Chap. 35; see 5 CFR 1320),
requires that OMB approve all
collections of information by a Federal
agency from the public before they can
be implemented. Respondents are not
required to respond to any collection of
information unless it displays a current,
valid OMB control number. This is a
new collection. The new provisions in
this rule, which decreases current
burden hours, by 595 will be merged
into CACFP, OMB Control Number
#0584–0055, expiration date 8/31/2013.
The current collection burden inventory
for CACFP is 7,006,434. These changes
are contingent upon OMB approval
under the Paperwork Reduction Act of
1995. When the information collection
requirements have been approved, the
Department will publish a separate

action in the Federal Register
announcing OMB’s approval.
Comments on the information
collection in this proposed rule must be
received by June 8, 2012. Send
comments to the Office of Information
and Regulatory Affairs, OMB, Attention:
Desk Officer for FNS, Washington, DC
20503. Please also send a copy of your
comments to Lynn Rodgers-Kuperman,
Program Analysis and Monitoring
Branch, Child Nutrition Division, 3101
Park Center Drive, Alexandria, VA
22302. For further information, or for
copies of the information collection
requirements, please contact Lynn
Rodgers-Kuperman at the address
indicated above. Comments are invited
on: (1) Whether the proposed collection
of information is necessary for the
proper performance of the Agency’s
functions, including whether the
information will have practical utility;
(2) the accuracy of the Agency’s
estimate of the proposed information
collection burden, including the validity
of the methodology and assumptions
used; (3) ways to enhance the quality,
utility and clarity of the information to
be collected; and (4) ways to minimize
the burden of the collection of
information on those who are to
respond, including use of appropriate
automated, electronic, mechanical, or
other technological collection
techniques or other forms of information
technology.
All responses to this request for
comments will be summarized and
included in the request for OMB
approval. All comments will also
become a matter of public record.
Title: Child and Adult Care Food
Program: Amendments Related to the
Healthy Hunger-Free Kids Act of 2010.
OMB Number: 0584–New.
Expiration Date: Not Yet Determined.
Type of Request: New Collection.
Abstract: This rule proposes to codify
several provisions of the Healthy,
Hunger-Free Kids Act of 2010 (HHFKA)
affecting the management of CACFP.

21025

The Department is proposing to: require
institutions to submit an initial CACFP
application to the State agency and, in
subsequent years, periodically update
the information in lieu of submitting a
new application; require sponsoring
organizations to vary the timing of
reviews of sponsored facilities; require
State agencies to develop and provide
for the use of a standard permanent
agreement between sponsoring
organizations and day care centers;
allow tier II day care homes to collect
household income information and
transmit it to the sponsoring
organization; modify the method of
determining administrative payments to
sponsoring organizations of day care
homes by basing payments on a
formula; and allow sponsoring
organizations of day care homes to carry
over up to 10 percent of their
administrative funding from the
previous fiscal year into the next fiscal
year. These changes were effective
October 1, 2010. This rule also proposes
to incorporate several changes to the
application and renewal process which
are expected to improve the
management of CACFP and to make a
number of miscellaneous technical
changes.
The average burden per response and
the annual burden hours are explained
below and summarized in the charts
which follow.
Respondents for this Proposed Rule:
(Business’ for and not-for-profit)
Institutions.
Estimated Number of Respondents for
this Proposed Rule: 250.
Estimated Number of Responses per
Respondent for this Proposed Rule: (1).
Estimated Total Annual Responses:
250.
Estimated Total Annual Burden on
Respondents for this Proposed Rule:
(595)*.
*This represents an overall decrease
from the existing burden for institutions.

ESTIMATED ANNUAL BURDEN FOR 0584—NEW, CHILD AND ADULT CARE FOOD PROGRAM 7 CFR 226
Reporting
Estimated
number of
respondents

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

Section
Each new institution must
submit to the State
agency with its application all information required for its approval.
Renewing institutions
must certify that they
are capable of operating the Program.

VerDate Mar<15>2010

7 CFR 226.15(b)

14:50 Apr 06, 2012

Jkt 226001

PO 00000

Frequency of
response

250

Frm 00008

1

Fmt 4702

Sfmt 4702

Average
annual
responses

Average
burden per
response

250

E:\FR\FM\09APP1.SGM

Annual burden hours
8

09APP1

2000
*Approved in OMB# 0584–
0055, remains unchanged

21026

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

ESTIMATED ANNUAL BURDEN FOR 0584—NEW, CHILD AND ADULT CARE FOOD PROGRAM 7 CFR 226—Continued
Reporting
Estimated
number of
respondents

Section

Total Reporting for Proposed Rule.
Total Existing Reporting
Burden for 0584–0055,
Part 226.
Total Reporting Burden
Decrease with Proposed Rule.
Total Reporting Burden
for 0584–0055, Part
226 with Proposed Rule.

Frequency of
response

Average
annual
responses

Average
burden per
response

Annual burden hours

(119)

(1)

(119)

(5)

...........................

(119)

1

(119)

(5)

...........................

........................

........................

........................

........................

6,274,964

...........................

........................

........................

........................

........................

¥595

...........................

........................

........................

........................

........................

6,274,369

Prior to the issuance of this Rule
entitled ‘‘Child and Adult Care Food
Program: Amendments Related to the
Healthy Hunger-Free Kids Act of 2010,’’
7 CFR 226.15(b) required that, all
institutions submit to the State agency
with its application all information
required for its approval as set forth in
226.6(b) and 226.6(f). This rule

(595)
**decrease of 595 from existing burden as a result
of eliminating burden associated with renewing
institutions.)
(595)

annual application has been removed as
a result of this Rule. A program
adjustment will be made to the 7 CFR
Part 226 Child and Adult Care Food
Program information collection package
(OMB control number 0584–0055) prior
to its renewal date of August 31, 2013.

eliminates the requirement for renewing
institutions to submit an annual
application for renewal; however, these
institutions must demonstrate that they
are capable of operating the Program in
accordance with this part as set forth in
§ 226.6b(b).
Therefore, the burden associated with
the renewing institutions to submit an

RECORDKEEPING
Estimated
number of
respondents

Section
Sponsoring organizations maintain
agreements with unaffiliated sponsored centers.
Total Recordkeeping for Proposed
Rule.
Total Existing Recordkeeping Burden
for 0584–0055, Part 226.
Total Recordkeeping Burden for
0584–0055, Part 226 with Proposed Rule.

Average
annual
responses

Frequency of
response

Average
burden per
response

Annual burden
hours

7 CFR
226.16(h)(1).

200

1

200

*0

*0

..............................

200

1

200

*0

*0

..............................

........................

........................

........................

........................

731,470

..............................

........................

........................

........................

........................

731,470

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

* The amount of additional burden is negligible.

7 CFR 226.6, 226.15 and 226.16
require that, in order to participate in
CACFP, State agencies and institutions
must maintain records to demonstrate
compliance with Program requirements.
The regulations further require that
State agencies and institutions maintain
records for a period of three years.

SUMMARY OF BURDEN (OMB #0584–
NEW)
Total number of respondents .....
Average number of responses
per respondent ........................
Total annual responses ..............

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

250

SUMMARY OF BURDEN (OMB #0584–
NEW)—Continued
Average hours per response ......
Total burden hours for part 226
with proposed rule ..................
Current OMB inventory for part
226 ..........................................
Difference (new burden decrease requested with proposed rule) ..............................

The Department is committed to
complying with the E-Government Act
2002 to promote the use of the Internet
7,005,839 and other information technologies to
provide increased opportunities for
7,006,434 citizen access to Government
information and services, and for other
purposes.
8

*(595)

* Burden is decreased from existing burden
(595) due to the elimination of burden associated with renewing institutions.

(1)
250

PO 00000

Frm 00009

Fmt 4702

Sfmt 4702

I. E-Government Act Compliance

J. Executive Order 13175
Executive Order 13175 requires
Federal agencies to consult and
coordinate with Tribes on a
government-to-government basis on
policies that have Tribal implications,

E:\FR\FM\09APP1.SGM

09APP1

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules
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 HHFKA on
tribes or Indian Tribal governments. The
consultation sessions were coordinated
by FNS and held on the following dates
and locations:
1. HHFKA Consultation Webinar &
Conference Call—April 12, 2011
2. HHFKA Consultation In-Person—Rapid
City, SD—March 23, 2011
3. HHFKA Consultation Webinar &
Conference Call—June, 22, 2011
4. Tribal Self-Governance Annual Conference
In-Person Consultation in Palm Springs,
CA—May 2, 2011
5. National Congress of American Indians
Mid-Year Conference In-Person
Consultation, Milwaukee, WI—June 14,
2011

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

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
aforementioned Tribal Consultation
sessions. 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.
Currently, FNS provides regularly
scheduled quarterly consultation
sessions through the end of FY2012 as
a venue for collaborative conversations
with Tribal officials or their designees.
List of Subjects in 7 CFR Part 226
Accounting, Aged, Day care, Food
assistance programs, Grant programs,
Grant programs—health, American
Indians, Individuals with disabilities,
Infants and children, Intergovernmental
relations, Loan programs, Reporting and
recordkeeping requirements, Surplus
agricultural commodities.
Accordingly, 7 CFR part 226 is
proposed to be amended as follows:
PART 226—CHILD AND ADULT CARE
FOOD PROGRAM
1. The authority citation for 7 CFR
Part 226 continues to read as follows:
Authority: Secs. 9, 11, 14, 16, and 17,
Richard B. Russell National School Lunch
Act, as amended (42 U.S.C. 1758, 1759a,
1762a, 1765 and 1766).

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

2. In § 226.2,
a. Revise definitions of ‘‘For-profit
center’’, ‘‘New institution’’, ‘‘Renewing
institution’’, and ‘‘State agency list’’;
and
b. Add new definitions ‘‘Less-thanarms-length transaction’’, ‘‘Participating
institution’’, and ‘‘Sponsored center’’.
The additions and revisions read as
follows:
§ 226.2

Definitions.

*

*
*
*
*
For-profit center means a child care
center, outside-school-hours care center,
or adult day care center providing
nonresidential care to adults or children
that does not qualify for tax-exempt
status under the Internal Revenue Code
of 1986. For-profit centers serving adults
must meet the criteria described in
paragraph (a) of this definition. Forprofit centers serving children must
meet the criteria described in
paragraphs (b)(1) or (b)(2) of this
definition, except that children who
only participate in the at-risk
afterschool snack and/or meal
component of the Program must not be
considered in determining the
percentages under paragraphs (b)(1) or
(b)(2) of this definition.
(a) A for-profit center serving adults
must meet the definition of Adult day
care center as defined in this section
and, during the calendar month
preceding initial application and during
any month that it claims
reimbursement, the center receives
compensation from amounts granted to
the States under title XIX or title XX and
twenty-five percent of the adults
enrolled in care are beneficiaries of title
XIX, title XX, or a combination of titles
XIX and XX of the Social Security Act.
(b) A for-profit center serving children
must meet the definition of Child care
center or Outside-school-hours care
center as defined in this section and one
of the following conditions during the
calendar month preceding initial
application and during any month that
it claims reimbursement:
(1) Twenty-five percent of the
children in care (enrolled or licensed
capacity, whichever is less) are eligible
for free or reduced-price meals; or
(2) Twenty-five percent of the
children in care (enrolled or licensed
capacity, whichever is less) receive
benefits from title XX of the Social
Security Act and the center receives
compensation from amounts granted to
the States under title XX.
*
*
*
*
*
Less-than-arms-length transaction
means a transaction under which one
party to the transaction is able to control
or substantially influence the actions of

PO 00000

Frm 00010

Fmt 4702

Sfmt 4702

21027

the other(s), as defined in FNS
Instruction 796–2 (‘‘Financial
Management—Child and Adult Care
Food Program’’).
*
*
*
*
*
New institution means an institution
making an initial application to
participate in the Program or an
institution applying to participate in the
Program after a lapse in participation.
*
*
*
*
*
Participating institution means an
institution that holds a current Program
agreement with the State agency to
operate the Program. This includes
renewing institutions.
*
*
*
*
*
Renewing institution means an
institution that is participating in the
Program at the time it submits renewal
information.
*
*
*
*
*
Sponsored center means a child care
center, at-risk afterschool care center,
adult day care center, emergency
shelter, or outside-school-hours care
center that operates the Program under
the auspices of a sponsoring
organization. The two types of
sponsored centers are as follows:
(a) An affiliated center is a part of the
same legal entity as CACFP sponsoring
organization; or
(b) An unaffiliated center is legally
distinct from the sponsoring
organization.
*
*
*
*
*
State agency list means an actual
paper or electronic list, or the
retrievable paper records, maintained by
the State agency, that includes a
synopsis of information concerning
seriously deficient institutions and
providers terminated for cause in that
State. The list must be made available
to FNS upon request, and must include
the following information:
(a) Institutions determined to be
seriously deficient by the State agency,
including the names and mailing
addresses of the institutions, the basis
for each serious deficiency
determination, and the status of the
institutions as they move through the
possible subsequent stages of corrective
action, proposed termination,
suspension, agreement termination,
and/or disqualification, as applicable;
(b) Responsible principals and
responsible individuals who have been
disqualified from participation by the
State agency, including their full legal
names and any other names previously
used, mailing addresses, and dates of
birth; and
(c) Day care home providers whose
agreements have been terminated for
cause by a sponsoring organization in

E:\FR\FM\09APP1.SGM

09APP1

21028

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

the State, including their full legal
names and any other names previously
used, mailing addresses, and dates of
birth.
*
*
*
*
*

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

§ 226.4

[Amended]

3. In § 226.4, amend paragraph (f) by
revising the citation ‘‘§ 226.12(a)(3)’’ to
read ‘‘§ 226.12(a)’’.
4. In § 226.6:
a. Remove paragraph (b) introductory
text and revise paragraphs (b)(1) through
(3) and (b)(4)(i);
b1. Amend paragraph (b)(4)(ii)
introductory text by removing the words
‘‘,except that:’’ and adding a period in
their place; and by adding a third
sentence.
b2. Remove paragraphs (b)(4)(ii)(A)
through (C);
c. Amend paragraph (c)(1)(i) by
removing the words ‘‘paragraph (b) of
this section and in §§ 226.15(b) and
226.16(b)’’ in the first sentence and
adding the citation ‘‘§ 226.6a’’ in its
place;
d. Amend paragraph (c)(1)(ii)
introductory text by revising the first
sentence;
e. Amend paragraph (c)(1)(iii)(A)(8)
by adding the words ‘‘full legal names
and any other names previously used
and’’ both after the phrase ‘‘possess the’’
and after the word ‘‘person’s’’;
f. Amend paragraph (c)(1)(iii)(B)(1)(i)
by removing the word ‘‘defer’’ and
adding the word ‘‘deferred’’ in its place;
g. Amend paragraphs (c)(1)(iii)(C)
introductory text and (c)(1)(iii)(C)(1) by
removing the words ‘‘the institution’s’’
each time they appear and adding the
words ‘‘the new institution’s’’ in their
place ;
h. Amend paragraph (c)(1)(iii)(E) in
the last sentence by adding the words
‘‘full legal names and any other names
previously used,’’ before the word
‘‘mailing’’.
i. Revise paragraph (c)(2);
j. Revise paragraphs (c)(3)(ii)
introductory text and (c)(3)(ii)(A);
k. Redesignate paragraphs (c)(3)(ii)(B)
through (c)(3)(ii)(U) as paragraphs
(c)(3)(ii)(C) through (c)(3)(ii)(V) and add
new paragraph (c)(3)(ii)(B);
l. Amend newly redesignated
paragraph (c)(3)(ii)(D) by removing the
words ‘‘paragraphs (b)(1)(xviii) and
(b)(2)(vii) of this section’’ and adding
the citation ‘‘§ 226.6a(b)(6)’’ in its place;
m. Amend newly redesignated
paragraph (c)(3)(ii)(U) by removing the
period at the end of the first sentence
and adding ‘‘, as defined in paragraph
(c)(1)(ii)(A) of this section; or’’ in its
place; and by removing the second
sentence;
n. Amend paragraph (c)(3)(iii)(A)(7)
by adding the words ‘‘full legal names

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

and any other names previously used
and the’’ before the word ‘‘date’’ each
time it appears in the paragraph;
o. Revise paragraph (c)(3)(iii)(B);
p. Amend paragraph (c)(3)(iii)(C)(4)
by removing the words ‘‘application
denial’’ and adding the words
‘‘proposed termination’’ in its place;
q. Amend paragraph (c)(3)(iii)(D)
introductory text by removing the
phrase ‘‘institution must renew its
application, or its’’ and adding the word
‘‘institution’s’’ in its place;
r. Revise paragraph (c)(3)(iii)(D)(2);
s. Amend paragraph (c)(3)(iii)(D)(3) by
removing the semicolon at the end of
the sentence and adding a period in its
place;
t. Amend paragraph (c)(3)(iii)(E)(3) by
adding the words ‘‘full legal names and
any other names previously used,’’
before the word ‘‘mailing’’;
u. Amend paragraph (c)(5)(i)(C)(3) by
adding the words ‘‘full legal names and
any other names previously used,’’
before the word ‘‘mailing’’;
v. Amend the second sentence of
paragraph (c)(7)(ii) by removing the
phrase ‘‘paragraphs (b)(1)(xii) and
(b)(2)(ii) of this section’’ and adding the
citation ‘‘§ 226.6a(b)(2)’’ in its place;
removing the word ‘‘must’’ the first time
it appears; and removing the words ‘‘or
renewing’’ between the words ‘‘new’’
and ‘‘institution’’;
w. Revise the second sentence of
paragraph (c)(7)(iii);
x. Amend the first sentence of
paragraph (c)(7)(iv)(A) by removing the
phrase ‘‘paragraphs (b)(1)(xii) and
(b)(2)(ii) of this section’’ and adding the
citation ‘‘§ 226.6a(b)(2)’’in its place; by
removing the word ‘‘must’’ the first time
it appears; by removing the words ‘‘or
renewing’’ between the words ‘‘new’’
and ‘‘institution’’; and by removing the
citation ‘‘(c)(3)(ii)(B)’’ and adding the
citation ‘‘(c)(3)(ii)(C)’’ in its place;
y. Amend paragraph (c)(7)(iv)(B) by
removing the phrase ‘‘§ 226.16(b) and
paragraphs (b)(1)(xii) and (b)(2)(ii) of
this section’’ and adding the citation
‘‘§ 226.6a(b)(2)’’ in its place;
z. Amend paragraph (c)(7)(C) by
removing the phrase ‘‘§ 226.16(b) and
paragraphs (b)(1)(xii) and (b)(2)(ii) of
this section’’ and adding the citation
‘‘§ 226.6a(b)(2)’’ in its place;
aa. Amend paragraph (c)(8)(i)(B) by
removing the word ‘‘names’’ and adding
the words ‘‘full legal names and any
other names previously used’’ in its
place;
bb. Amend paragraph (c)(8)(i)(C) by
removing the word ‘‘names’’ and adding
the words ‘‘full legal names and any
other names previously used’’ in its
place;

PO 00000

Frm 00011

Fmt 4702

Sfmt 4702

cc. Amend paragraph (c)(8)(ii) by
removing the word ‘‘name’’ and adding
the words ‘‘full legal names and any
other names previously used’’ in its
place;
dd. Revise paragraph (f);
ee. Revise paragraph (k)(2)(i);
ff. Amend paragraph (k)(2)(iii) by
removing the citation ‘‘(c)(2)(iii)(C),’’
and removing the words ‘‘renewing
institutions,’’;
gg. Amend paragraph (k)(2)(iv) by
removing the citation ‘‘(c)(2)(iii)(C),’’
and ‘‘, renewing,’’;
hh. Amend paragraph (k)(3)(ii) by
removing the citation ‘‘(c)(2)(iii)(A),’’;
removing ‘‘, renewing,’’; and removing
the word ‘‘participating’’ the last time it
appears;
ii. Amend paragraph (k)(3)(iv) by
removing the citation ‘‘(c)(2)(iii)(E),’’
and removing ‘‘, renewing,’’;
jj. Revise paragraph (k)(9);
kk. Amend paragraph (k)(10)(iii) by
removing the words ‘‘denial of a
renewing institution’s application,’’ and
removing the citation ‘‘(c)(2)(iii)(D),’’;
ll. Amend paragraph (m)(3), by
redesignating paragraphs (m)(3)(vii)
through (xii) as paragraphs (viii)
through (xiii), respectively;
mm. Add new paragraph (m)(3)(vii);
nn. Amend newly redesignated
paragraph (m)(3)(ix) by removing the
semicolon and adding at the end, the
words ‘‘, including whether the timing
of its facility reviews was varied and
unpredictable, as required by
§ 226.16(d)(4)(iii);’’; and
oo. Revise paragraph (p).
The revisions and additions read as
follows:
§ 226.6 State agency administrative
responsibilities.

*

*
*
*
*
(b) Program applications and
agreements. (1) Application
requirements for new institutions. Each
State agency must establish application
review procedures, as described in
§ 226.6a, to determine the eligibility of
new institutions and facilities for which
applications are submitted by
sponsoring organizations. The State
agency must enter into written
agreements with institutions in
accordance with paragraph (b)(4) of this
section.
(2) Information submission
requirements for renewing institutions.
Each State agency must establish
renewal information review procedures,
as described in § 226.6b, to determine
the continued eligibility of renewing
institutions.
(3) State agency notification
requirements. (i) Any new institution
applying for participation in the

E:\FR\FM\09APP1.SGM

09APP1

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules
Program must be notified in writing of
approval or disapproval by the State
agency, within 30 calendar days of the
State agency’s receipt of a complete
application. Whenever possible, State
agencies should provide assistance to
institutions that have submitted an
incomplete application. Any
disapproved applicant institution or day
care home must be notified of the
reasons for its disapproval and its right
to appeal under paragraph (k) or (l),
respectively, of this section.
(ii) Any renewing institution must be
provided written notification indicating
whether it has completely and
sufficiently met all renewal information
requirements within 30 days of the
submission of renewal information.
(4) * * *
(i) The State agency must require each
institution that has been approved for
participation in the Program to enter
into an agreement governing the rights
and responsibilities of each party. The
State agency may allow a renewing
institution to amend its existing
Program agreement in lieu of executing
a new agreement. The existence of a
valid agreement, however, does not
eliminate the need for a renewing
institution to comply with the
information submission requirements
and related provisions of § 226.6b.
(ii) * * * The State agency and an
institution that is a school food
authority must enter into a single
permanent agreement for all child
nutrition programs administered by the
school food authority and the State
agency.
*
*
*
*
*
(c) * * *
(1) * * *
(ii) * * * The list of serious
deficiencies is not identical for each
category of institution (new or
participating) because the type of
information likely to be available to the
State agency is different for new and
participating institutions.* * *
*
*
*
*
*
(2) Insufficient renewal information
submissions. If an institution submits
renewal information that is incomplete,
deficient, unapprovable or contains
false information, this is considered a
serious deficiency, and the State agency
should follow the procedures for serious
deficiencies committed by participating
institutions outlined in paragraph
(c)(3)(iii) of this section.
(3) * * *
(ii) List of serious deficiencies for
participating institutions. The list of
serious deficiencies is not identical for
each category of institution (new or
participating) because the type of

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

information likely to be available to the
State agency is different for new and
participating institutions. Serious
deficiencies for participating
institutions are:
(A) Submission of false information
on the institution’s application or in its
annual renewal submission, including
but not limited to a determination that
the institution has concealed a
conviction for any activity that occurred
during the past seven years and that
indicates a lack of business integrity, as
defined in paragraph (c)(1)(ii)(A) of this
section.
(B) Failure to provide complete,
adequate, or approvable information as
part of the information submission
process for renewing institutions;
*
*
*
*
*
(iii) * * *
(B) Successful corrective action. (1) If
corrective action has been taken to fully
and permanently correct the serious
deficiency(ies) within the allotted time
and to the State agency’s satisfaction,
the State agency must notify the
institution’s executive director and
chairman of the board of directors, and
the responsible principals and
responsible individuals, that the State
agency has temporarily deferred its
serious deficiency determination.
(2) If corrective action is complete for
the institution but not for all of the
responsible principals and responsible
individuals (or vice versa), the State
agency must:
(i) Continue with the actions (as set
forth in paragraph (c)(3)(iii)(C) of this
section) against the remaining parties;
and
(ii) At the same time the notice is
issued, the State agency must also
update the State agency list to indicate
that the serious deficiency(ies) has(ve)
been corrected and provide a copy of
the notice to the appropriate FNSRO.
(3) If the State agency initially
determines that the institution’s
corrective action is complete, but later
determines that the serious
deficiency(ies) has recurred, the State
agency must move immediately to issue
a notice of intent to terminate and
disqualify the institution, in accordance
with paragraph (c)(2)(iii)(C) of this
section.
*
*
*
*
*
(D) * * *
(2) During this period, the State
agency must base administrative
payments on the formula set forth in
§ 226.12(a); and
*
*
*
*
*
(7) * * *
(iii) * * * As noted in § 226.6a(b)(2),
a State agency is prohibited from

PO 00000

Frm 00012

Fmt 4702

Sfmt 4702

21029

approving an application submitted by
a sponsoring organization on behalf of a
sponsored facility, and either the facility
or any of its principals is on the
National disqualified list.
*
*
*
*
*
(f) Miscellaneous responsibilities.
State agencies must require institutions
to comply with the applicable
provisions of this part and must provide
or collect the information specified in
this paragraph. Each State agency must:
(1) Annually inform institutions that
are pricing programs of their
responsibility to ensure that free and
reduced-price meals are served to
participants unable to pay the full price;
(2) Annually provide to all
institutions a copy of the income
standards to be used by institutions for
determining the eligibility of
participants for free and reduced-price
meals under the Program;
(3) Annually require each institution
to issue a media release, unless the State
agency has issued a Statewide media
release on behalf of all its institutions;
(4) Comply with the following
requirements for tiering of day care
homes:
(i) Coordinate with the State agency
that administers the National School
Lunch Program (the NSLP State agency)
to ensure the receipt of a list of schools
in the State in which at least one-half of
the children enrolled are certified
eligible to receive free or reduced-price
meals. The State agency must provide
the list of schools to sponsoring
organizations of day care homes by
February 15th each year unless the
NSLP State agency has elected to base
data for the list on a month other than
October. In that case, the State agency
must provide the list to sponsoring
organizations of day care homes within
15 calendar days of its receipt from the
NSLP State agency.
(ii) For tiering determinations of day
care homes that are based on school or
census data, the State agency must
ensure that sponsoring organizations of
day care homes use the most recent
available data, as described in
§ 226.15(f).
(iii) For tiering determinations of day
care homes that are based on the
provider’s household income, the State
agency must ensure that sponsoring
organizations annually determine the
eligibility of each day care home, as
described in § 226.15(f).
(iv) The State agency must provide all
sponsoring organizations of day care
homes in the State with a listing of
State-funded programs, participation in
which by a parent or child will qualify
a meal served to a child in a tier II home
for the tier I rate of reimbursement.

E:\FR\FM\09APP1.SGM

09APP1

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

21030

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

(v) The State agency must require
each sponsoring organization of day
care homes to submit to the State agency
a list of day care home providers
receiving tier I benefits on the basis of
their participation in the SNAP. Within
30 days of receiving this list, the State
agency will provide this list to the State
agency responsible for the
administration of the SNAP.
(vi) As described in § 226.15(f), tiering
determinations are valid for five years if
based on school data. The State agency
must ensure that the most recent
available data are used if the
determination of a day care home’s
eligibility as a tier I day care home is
made using school data. The State
agency must not routinely require
annual redeterminations of the tiering
status of tier I day care homes based on
updated school data. However, a
sponsoring organization, the State
agency, or FNS may change the
determination if information becomes
available indicating that a day care
home is no longer in a qualified area.
(5) Comply with the following
requirements for determining the
eligibility of at-risk afterschool care
centers:
(i) Coordinate with the NSLP State
agency to ensure the receipt of a list of
elementary, middle, and high schools in
the State in which at least one-half of
the children enrolled are certified
eligible to receive free or reduced-price
meals. The State agency must provide
the list of elementary, middle, and high
schools to independent at-risk
afterschool care centers and sponsoring
organizations of at-risk afterschool care
centers upon request. The list must
represent data from the preceding
October, unless the NSLP State agency
has elected to base data for the list on
a month other than October. If the NSLP
State agency chooses a month other than
October, it must do so for the entire
State.
(ii) The State agency must determine
the area eligibility for each independent
at-risk afterschool care center and each
sponsored at-risk afterschool center
based on the documentation submitted
by the sponsoring organization in
accordance with § 226.15(g). The State
agency must use the most recent data
available, as described in paragraph
(f)(5)(i) of this section. The State agency
must use attendance area information
that it has obtained, or verified with the
appropriate school officials to be
current, within the last school year.
Area eligibility determinations are valid
for five years for at-risk afterschool care
centers that are already participating in
the Program. The State agency may
determine the date in the fifth year

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

when the next five-year cycle of area
eligibility will begin. The State agency
must not routinely require annual
redeterminations of area eligibility
based on updated school data during the
five-year period. However, a sponsoring
organization, the State agency, or FNS
may change the determination if
information becomes available
indicating that an at-risk afterschool
care center is no longer area eligible.
(iii) The State agency must determine
whether the afterschool care programs
of at-risk afterschool care centers meet
the at-risk eligibility requirements of
§ 226.17a(b) before the centers begin
participating in the Program.
(iv) The State agency must determine
whether institutions already
participating as at-risk afterschool care
centers continue to meet the eligibility
requirements, described in § 226.17a(b).
(6) Upon receipt of census data from
FNS (on a decennial basis), the State
agency must provide each sponsoring
organization of day care homes with
census data showing areas in the State
in which at least 50 percent of the
children are from households meeting
the income standards for free or
reduced-price meals.
(7) At intervals and in a manner
specified by the State agency, but not
more frequently than annually, the State
agency may:
(i) Require independent centers to
submit a budget with sufficiently
detailed information and documentation
to enable the State agency to make an
assessment of the independent center’s
qualifications to manage Program funds.
Such budget must demonstrate that the
independent center will expend and
account for funds in accordance with
regulatory requirements, FNS
Instruction 796–2 (‘‘Financial
Management—Child and Adult Care
Food Program’’), and parts 3015, 3016,
and 3019 of this title and applicable
Office of Management and Budget
circulars;
(ii) Request institutions to report their
commodity preference;
(iii) Require a private nonprofit
institution to submit evidence of tax
exempt status in accordance with
§ 226.15(a);
(iv) Require for-profit institutions to
submit documentation on behalf of their
centers of:
(A) Eligibility of at least 25 percent of
children in care (enrolled or licensed
capacity, whichever is less) for free or
reduced-price meals; or
(B) Compensation received under title
XX of the Social Security Act of
nonresidential day care services and
certification that at least 25 percent of
children in care (enrolled or licensed

PO 00000

Frm 00013

Fmt 4702

Sfmt 4702

capacity, whichever is less) were title
XX beneficiaries during the most recent
calendar month.
(v) Require for-profit adult care
centers to submit documentation that
they are currently providing
nonresidential day care services for
which they receive compensation under
title XIX or title XX of the Social
Security Act, and certification that not
less than 25 percent of enrolled
participants in each such center during
the most recent calendar month were
title XIX or title XX beneficiaries;
(vi) Request each institution to
indicate its choice to receive all, part or
none of advance payments, if the State
agency chooses to make advance
payments available; and
(vii) Perform verification in
accordance with § 226.23(h) and
paragraph (m)(4) of this section. State
agencies verifying the information on
free and reduced-price applications
must ensure that verification activities
are conducted without regard to the
participant’s race, color, national origin,
sex, age, or disability.
*
*
*
*
*
(k) * * *
(2) * * *
(i) Application denial. Denial of a new
institution’s application for
participation (see § 226.6a, for State
agency review of an institution’s
application, and paragraph (c)(1) of this
section, for State agency denial of a new
institution’s application);
*
*
*
*
*
(9) Abbreviated administrative review.
The State agency must limit the
administrative review to a review of
written submissions concerning the
accuracy of the State agency’s
determination if the application was
denied or the State agency proposes to
terminate the institution’s agreement
because:
(i) The information submitted on the
application was false (refer to
paragraphs (c)(1)(ii)(A) and (c)(3)(ii)(A)
of this section);
(ii) The institution, one of its
sponsored facilities, or one of the
principals of the institution or its
facilities is on the National disqualified
list (refer to § 226.6a(b)(2));
(iii) The institution, one of its
sponsored facilities, or one of the
principals of the institution or its
facilities is ineligible to participate in
any other publicly funded program by
reason of violation of the requirements
of the program (refer to paragraph
(c)(3)(ii)(T) of this section and
§ 226.6a(b)(3)); or
(iv) The institution, one of its
sponsored facilities, or one of the

E:\FR\FM\09APP1.SGM

09APP1

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules
principals of the institution or its
facilities has been convicted for any
activity that indicates a lack of business
integrity (refer to paragraph (c)(3)(ii)(U)
of this section and § 226.6a(b)(4)).
*
*
*
*
*
(m) * * *
(3) * * *
(vii) Compliance with the
requirements for submitting and
ensuring the accuracy of the annual
renewal information;
*
*
*
*
*
(p) Sponsoring organization
agreement. (1) Each State agency shall
develop and provide for the use of a
standard form of written permanent
agreement between each sponsoring
organization and the day care homes or
unaffiliated child care centers
participating in the Program under such
organization. The agreement shall
specify the rights and responsibilities of
both parties. The State agency may, at
the request of the sponsor, approve an
agreement developed by the sponsor.
Nothing in this paragraph shall be
construed to limit the ability of the
sponsoring organization to suspend or
terminate the permanent agreement in
accordance with § 226.16(l).
(2) The State agency must also
include in this agreement its policy to
restrict transfers of day care homes
between sponsoring organizations. The
policy must restrict the transfers to no
more frequently than once per year,
except under extenuating
circumstances, such as termination of
the sponsoring organization’s agreement
or other circumstances defined by the
State agency.
*
*
*
*
*
5. Add §§ 226.6a and 226.6b to read
as follows:

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

§ 226.6a State agency application
requirements for new institutions.

(a) Application procedures for new
institutions. Each State agency must
establish application procedures to
determine the eligibility of new
institutions under this part. For new
private nonprofit and for-profit child
care institutions, such procedures must
also include a pre-approval visit by the
State agency to confirm the information
in the institution’s application and to
further assess the institution’s ability to
manage the Program. In addition, the
State agency’s application review
procedures must ensure that the
institution complies with the provisions
in this section.
(b) Institution application
requirements. The State agency’s
application review procedures must
ensure that the following information is

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

included in a new institution’s
application:
(1) Budget. The State agency must
review and approve each institution’s
budget. The budget must demonstrate
the institution’s ability to manage
Program funds in accordance with
§ 226.7, FNS Instruction 796–2,
(‘‘Financial Management—Child and
Adult Care Food Program’’), parts 3015,
3016, and 3019 of this title, and
applicable Office of Management and
Budget circulars. If the institution does
not intend to use non-CACFP funds to
support any required CACFP functions,
the institution’s budget must identify a
source of non-Program funds that could
be used to pay overclaims or other
unallowable costs. If the institution
intends to use any non-Program
resources to meet CACFP requirements,
these non-Program funds should be
accounted for in the institution’s
budget, and the institution’s budget
must identify a source of non-Program
funds that could be used to pay
overclaims or other unallowable costs.
Other information that must be in the
budget includes:
(i) For sponsors, projected CACFP
administrative earnings and expenses.
(ii) For sponsoring organizations of
centers, all administrative costs,
whether incurred by the sponsoring
organization or its sponsored centers. If
at any point a sponsoring organization
determines that the meal
reimbursements estimated to be earned
during the budget year will be lower
than that estimated in its administrative
budget, the sponsoring organization
must amend its administrative budget to
stay within 15 percent of meal
reimbursements estimated or actually
earned during the budget year, unless
the State agency grants a waiver in
accordance with § 226.7(g)(1). Failure to
do so will result in appropriate fiscal
action in accordance with § 226.14(a).
(2) Presence on the National
disqualified list. If an institution or one
of its principals is on the National
disqualified list and submits an
application, the State agency may not
approve the application. If a sponsoring
organization submits an application on
behalf of a facility, and either the
facility or any of its principals is on the
National disqualified list, the State
agency may not approve the application.
In accordance with § 226.6(k)(3)(vii), in
this circumstance, the State agency’s
refusal to consider the application is not
subject to administrative review.
(3) Ineligibility for other publicly
funded programs. (i) General. A State
agency is prohibited from approving an
institution’s application if, during the
past seven years, the institution or any

PO 00000

Frm 00014

Fmt 4702

Sfmt 4702

21031

of its principals have been declared
ineligible for any other publicly funded
program by reason of violating that
program’s requirements. However, this
prohibition does not apply if the
institution or the principal has been
fully reinstated in, or determined
eligible for, that program, including the
payment of any debts owed.
(ii) State agencies must collect from
institutions:
(A) A statement listing the publicly
funded programs in which the
institution and its principals have
participated in the past seven years; and
(B) A certification that, during the
past seven years, neither the institution
nor any of its principals have been
declared ineligible to participate in any
other publicly funded program by
reason of violating that program’s
requirements; or
(C) In lieu of the certification,
documentation that the institution or
the principal previously declared
ineligible was later fully reinstated in,
or determined eligible for, the program,
including the payment of any debts
owed.
(iii) Follow-up. If the State agency has
reason to believe that the institution or
its principals were determined
ineligible to participate in another
publicly funded program by reason of
violating that program’s requirements,
the State agency must follow up with
the entity administering the publicly
funded program to gather sufficient
evidence to determine whether the
institution or its principals were, in fact,
determined ineligible.
(4) Information on criminal
convictions. (i) A State agency is
prohibited from approving an
institution’s application if any of the
institution’s principals have been
convicted of any activity during the past
seven years that indicated a lack of
business integrity, as defined in
§ 226.6(c)(1)(ii)(A); and
(ii) State agencies must collect from
institutions a certification that neither
the institution nor any of its principals
have been convicted of any activity
during the past seven years that
indicated a lack of business integrity, as
defined in § 226.6(c)(1)(ii)(A);
(5) Certification of truth of
applications and submission of names
and addresses. State agencies must
collect from institutions a certification
that all information on the application
is true and correct, along with the full
legal names and any other names
previously used, mailing address, and
date of birth of the institution’s
executive director and chairman of the
board of directors or, in the case of a forprofit center that does not have an

E:\FR\FM\09APP1.SGM

09APP1

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

21032

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

executive director or is not required to
have a board of directors, the owner of
the for-profit center;
(6) Compliance with performance
standards. State agencies must collect
from each new institution, information
sufficient to document that it is
financially viable, is administratively
capable of operating the Program in
accordance with this part, and has
internal controls in effect to ensure
accountability. To document this, any
new institution must demonstrate in its
application that it is capable of
operating in conformance with the
following performance standards. The
State agency must only approve the
applications of those new institutions
that meet these performance standards,
and must deny the applications of those
new institutions that do not meet the
standards. In ensuring compliance with
these performance standards, the State
agency should use its discretion in
determining whether the institution’s
application, in conjunction with its past
performance in CACFP, establishes to
the State agency’s satisfaction that the
institution meets the following
performance standards.
(i) Performance Standard 1—
Financial viability and financial
management. The new institution must
be financially viable. Program funds
must be expended and accounted for in
accordance with the requirements of
this part, FNS Instruction 796–2
(‘‘Financial Management—Child and
Adult Care Food Program’’), and parts
3015, 3016, and 3019 of this title. To
demonstrate financial viability, the new
institution must document that it meets
the following criteria:
(A) Description of need and
recruitment. A new sponsoring
organization must demonstrate in its
management plan that its participation
will help ensure the delivery of Program
benefits to otherwise unserved facilities
or participants, in accordance with
criteria developed by the State agency
pursuant to paragraph (c)(6) of this
section. A new sponsoring organization
must demonstrate that it will use
appropriate practices for recruiting
facilities, consistent with § 226.6(p) and
any State agency requirements;
(B) Fiscal resources and financial
history. A new institution must
demonstrate that it has adequate
financial resources to operate CACFP on
a daily basis, has adequate sources of
funds to continue to pay employees and
suppliers during periods of temporary
interruptions in Program payments and/
or to pay debts when fiscal claims have
been assessed against the institution,
and can document financial viability

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

(for example, through audits, financial
statements, etc.); and
(C) Budgets. Costs in the institution’s
budget must be necessary, reasonable,
allowable, and appropriately
documented;
(ii) Performance Standard 2—
Administrative capability. The new
institution must be administratively
capable. Appropriate and effective
management practices must be in effect
to ensure that the Program operates in
accordance with this part. To
demonstrate administrative capability,
the new institution must document that
it meets the following criteria:
(A) Has an adequate number and type
of qualified staff to ensure the operation
of the Program in accordance with this
part;
(B) If a sponsoring organization,
documents in its management plan that
it employs staff sufficient to meet the
ratio of monitors to facilities, taking into
account the factors that the State agency
will consider in determining a
sponsoring organization’s staffing needs,
as set forth in (c)(1) of this section; and
(C) If a sponsoring organization has
Program policies and procedures in
writing that assign Program
responsibilities and duties, and ensure
compliance with civil rights
requirements; and
(iii) Performance Standard 3—
Program accountability. The new
institution must have internal controls
and other management systems in effect
to ensure fiscal accountability and to
ensure that the Program will operate in
accordance with the requirements of
this part. To demonstrate Program
accountability, the new institution must
document that it meets the following
criteria:
(A) Governing board of directors. Has
adequate oversight of the Program by an
independent governing board of
directors as defined at § 226.2;
(B) Fiscal accountability. Has a
financial system with management
controls specified in writing. For new
sponsoring organizations, these written
operational policies must assure:
(1) Fiscal integrity and accountability
for all funds and property received,
held, and disbursed;
(2) The integrity and accountability of
all expenses incurred;
(3) That claims will be processed
accurately, and in a timely manner;
(4) That funds and property are
properly safeguarded and used, and
expenses incurred, for authorized
Program purposes; and
(5) That a system of safeguards and
controls is in place to prevent and
detect improper financial activities by
employees;

PO 00000

Frm 00015

Fmt 4702

Sfmt 4702

(C) Recordkeeping. Maintains
appropriate records to document
compliance with Program requirements,
including budgets, accounting records,
approved budget amendments, and, if a
sponsoring organization, management
plans and appropriate records on
facility operations;
(D) Sponsoring organization
operations. If a new sponsoring
organization, documents in its
management plan that it will:
(1) Provide adequate and regular
training of sponsoring organization staff
and sponsored facilities in accordance
with §§ 226.15(e)(12) and (e)(14) and
226.16(d)(2) and (d)(3);
(2) Perform monitoring in accordance
with § 226.16(d)(4), to ensure that
sponsored facilities accountably and
appropriately operate the Program;
(3) If a sponsor of day care homes,
accurately classify day care homes as
tier I or tier II in accordance with
§ 226.15(f); and
(4) Have a system in place to ensure
that administrative costs funded from
Program reimbursements do not exceed
regulatory limits set forth in
§§ 226.6a(b)(1) and 226.12(a).
(E) Meal service and other operational
requirements. Independent centers and
facilities will follow practices that result
in the operation of the Program in
accordance with the meal service,
recordkeeping, and other operational
requirements of this part. These
practices must be documented in the
independent center’s application or in
the sponsoring organization’s
management plan and must demonstrate
that independent centers or sponsored
facilities will:
(1) Provide meals that meet the meal
patterns set forth in § 226.20;
(2) Comply with licensing or approval
requirements set forth in § 226.6(d);
(3) Have a food service that complies
with applicable State and local health
and sanitation requirements;
(4) Comply with civil rights
requirements;
(5) Maintain complete and
appropriate records on file; and
(6) Claim reimbursement only for
eligible meals.
(7) Nondiscrimination statement.
Institutions must submit their
nondiscrimination policy statement and
a media release, unless the State agency
has issued a Statewide media release on
behalf of all institutions;
(8) Documentation of tax-exempt
status. All private nonprofit institutions
must document their tax-exempt status;
and
(9) Preference for commodities or
cash-in-lieu of commodities. Institutions
must state their preference to receive

E:\FR\FM\09APP1.SGM

09APP1

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules
commodities or cash-in-lieu of
commodities.
(c) Sponsoring organization
application requirements. In addition to
the application requirements contained
in paragraph (b) of this section, the State
agency’s application review procedures
must ensure that the following
information is included in a new
sponsoring organization’s application:
(1) Management plan. The State
agency must establish factors, consistent
with this section, that it will consider in
determining whether a new sponsoring
organization has sufficient staff to
perform required monitoring
responsibilities at all of its sponsored
facilities. State agencies must collect
from sponsoring organizations a
complete management plan that
includes:
(i) Detailed information on the
organization’s management and
administrative structure;
(ii) A list or description of the staff
assigned to Program monitoring. Each
sponsoring organization of day care
homes must document that, to perform
monitoring, it will employ the
equivalent of one full-time staff person
for each 50 to 150 day care homes it
sponsors. A sponsoring organization of
centers must document that, to perform
monitoring, it will employ the
equivalent of one full-time staff person
for each 25 to 150 centers it sponsors.
It is the State agency’s responsibility to
determine the appropriate level of
staffing for monitoring for each
sponsoring organization, consistent with
these specified ranges and factors that
the State agency will use to determine
the appropriate level of monitoring staff
for each sponsor. The monitoring staff
equivalent may include the employee’s
time spent on scheduling, travel time,
review time, follow-up activity, report
writing, and activities related to the
annual updating of children’s
enrollment forms;
(iii) The procedures to be used by the
organization to administer the Program
in, and disburse payments to, the child
care facilities under its sponsorship;
(iv) For sponsoring organizations of
day care homes, a description of the
system for making tier I day care home
determinations, and a description of the
system of notifying tier II day care
homes of their options for
reimbursement; and
(v) Any additional information
necessary to document the sponsoring
organization’s compliance with the
performance standards set forth at
paragraph (b)(6) of this section.
(2) Outside employment policy. State
agencies must collect from sponsoring
organizations an outside employment

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

policy. The policy must restrict other
employment by employees that
interferes with an employee’s
performance of Program-related duties
and responsibilities, including outside
employment that constitutes a real or
apparent conflict of interest. The policy
will be effective unless disapproved by
the State agency;
(3) Bond. Sponsoring organizations
must submit a bond, if such bond is
required by State law, regulation, or
policy. If the State agency requires a
bond for sponsoring organizations
pursuant to State law, regulation, or
policy, the State agency must submit a
copy of that requirement and a list of
sponsoring organizations posting a bond
to the appropriate FNSRO on an annual
basis;
(4) Day care home enrollment
information. State agencies must collect
from sponsoring organizations of day
care homes current information on:
(i) The total number of children
enrolled in all homes in the
sponsorship;
(ii) An assurance that day care home
providers’ own children whose meals
are claimed for reimbursement in the
Program are eligible for free or reducedprice meals;
(iii) The total number of tier I and tier
II day care homes that it sponsors;
(iv) The total number of children
enrolled in tier I day care homes;
(v) The total number of children
enrolled in tier II day care homes; and
(vi) The total number of children in
tier II day care homes that have been
identified as eligible for free or reducedprice meals;
(5) Facility lists. The State agency
must collect from each sponsoring
organization a list of all their applicant
day care homes, child care centers,
outside-school-hours-care centers, atrisk afterschool care centers, and adult
day care centers;
(6) Providing benefits to unserved
facilities or participants. (i) Criteria. The
State agency must develop criteria for
determining whether a new sponsoring
organization’s participation will help
ensure the delivery of benefits to
otherwise unserved facilities or
participants, and must disseminate
these criteria to new sponsoring
organizations when they request
information about applying to the
Program; and
(ii) Documentation. The State agency
must collect from the new sponsoring
organization documentation that its
participation will help ensure the
delivery of benefits to otherwise
unserved facilities or participants in
accordance with the State agency’s
criteria;

PO 00000

Frm 00016

Fmt 4702

Sfmt 4702

21033

(7) Notice to parents. The State
agency must collect a copy of the
sponsoring organization’s notice to
parents, in a form and, to the maximum
extent practicable, language easily
understandable by the participant’s
parents or guardians. The notice must
inform them of their facility’s
participation in CACFP, the Program’s
benefits, the name and telephone
number of the sponsoring organization,
and the name and telephone number of
the State agency responsible for
administration of CACFP;
(8) Serious deficiency procedures. If
the sponsoring organization chooses to
establish procedures for determining a
day care home seriously deficient that
supplement the procedures in paragraph
§ 226.16(l), the State agency must collect
a copy of those supplemental
procedures in the application. If the
State agency has made the sponsoring
organization responsible for the
administrative review of a proposed
termination of a day care home’s
agreement for cause, pursuant to
§ 226.6(l)(1), the State agency must
collect a copy of the sponsoring
organization’s administrative review
procedures. The sponsoring
organization’s supplemental serious
deficiency and administrative review
procedures must comply with
§§ 226.16(l) and 226.6(l);
(9) Facility applications. The State
agency must ensure collection and
review of the following information for
every sponsored facility:
(i) An application for participation for
each child care and adult day care
facility accompanied by all necessary
supporting documentation;
(ii) Timely information concerning
the eligibility status of child care and
adult day care facilities (such as
licensing or approval actions);
(iii) For sponsoring organizations of
day care homes, the full legal names and
any other names previously used,
mailing address, and date of birth of
each provider;
(iv) Documentation that all day care
homes and sponsored centers meet
Program licensing or approval
requirements; and
(v) The State agency must ensure that
no facilities are participating under
more than one sponsoring organization;
and
(10) Disclosure of potential conflicts
of interest. The State agency must
require sponsoring organizations to
disclose any less-than-arms-length
transactions in the operation of CACFP
that are anticipated in the upcoming
year. The State agency approval of such
transactions must be consistent with
FNS Instruction 796–2 (‘‘Financial

E:\FR\FM\09APP1.SGM

09APP1

21034

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

Management—Child and Adult Care
Food Program’’). Sponsoring
organizations also must disclose to the
State agency any other potential
conflicts of interest, such as
relationships among officers, board
members, and employees.
(d) Application requirements for
independent and sponsored centers.
State agencies must obtain and review
the following additional information
from centers:
(1) Participant eligibility information.
State agencies must collect current
information on the number of enrolled
participants eligible for free, reducedprice and paid meals;
(2) Documentation of licensing/
approval. State agencies must collect
documentation demonstrating that each
center meets Program licensing or
approval requirements;
(3) Documentation of for-profit center
eligibility. State agencies must collect
documentation that each for-profit
center meets the definition set forth in
§ 226.2, For-profit center; and
(4) At-risk afterschool care centers. In
addition to the general CACFP
application requirements, State agencies
must collect documentation from at-risk
institutions demonstrating that each atrisk afterschool care center meets the
program eligibility requirements in
§§ 226.17a(a) and 226.17a(b), and
sponsoring organizations must submit
documentation that each sponsored atrisk afterschool care center meets the
area eligibility requirements in
§ 226.17a(f).

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

§ 226.6b State agency annual information
submission requirements for renewing
institutions.

(a) Annual information submission
requirements for renewing institutions.
Each State agency must establish annual
information submission procedures to
confirm the continued eligibility of
renewing institutions under this part.
Renewing institutions must not be
required to submit a free and reducedprice policy statement or a
nondiscrimination statement unless
substantive changes are made to either
statement. In addition, the State
agency’s review procedures must ensure
that institutions annually submit
information or certify that certain
information is still true based on the
requirements of this section. For
information that must be certified, any
new changes made in the past year and
not previously reported to the State
agency must be updated in the renewal
information submission. Any additional
information submitted in the renewal
must be certified by the institution to be
true. This section contains the

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

information that must be submitted,
certified or updated annually.
(b) Eligibility certification for
institutions. The State agency must
ensure that all renewing institutions
certify the following:
(1) Presence on National disqualified
list. The State agency must ensure that
renewing institutions certify that neither
the institution nor its principals are on
the National disqualified list. The State
agency must also ensure that renewing
sponsoring organizations certify that no
sponsored facility or facility principal is
on the National disqualified list. The
State agency must compare the
institution’s certification with the
National disqualified list to ensure its
accuracy at the time of renewal;
(2) Ineligibility for other publicly
funded programs. The State agency
must ensure that renewing institutions
submit a list of the publicly funded
programs in which the institution and
its principals have participated in the
past seven years that have not been
previously reported to the State agency.
Institutions must certify that the
institution and the institution’s
principals have not been declared
ineligible for any other publicly funded
program by reason of violating that
program’s requirements in the past
seven years. In lieu of certification, if
not previously submitted, the institution
may submit documentation that the
institution or the principal previously
declared ineligible has been fully
reinstated in, or determined eligible for,
that program and has repaid any debts
owed. If the State agency has reason to
believe that the renewing institution or
any of its principals were determined
ineligible to participate in another
publicly funded program by reason of
violating that program’s requirements,
the State agency must follow up with
the entity administering the publicly
funded program to gather sufficient
evidence to determine whether the
institution or its principals were, in fact,
determined ineligible;
(3) Information on criminal
convictions. The State agency must
ensure that renewing institutions certify
that the institution’s principals have not
been convicted of any activity that
occurred during the past seven years
and that indicates a lack of business
integrity, as defined in
§ 226.6(c)(1)(ii)(A);
(4) Submission of names and
addresses. The State agency must
ensure that renewing institutions submit
a certification that the full legal names
and any other names previously used,
mailing address, and date of birth of the
institution’s executive director and
chairman of the board of directors or, in

PO 00000

Frm 00017

Fmt 4702

Sfmt 4702

the case of a for-profit center that does
not have an executive director or is not
required to have a board of directors, the
owner of the for-profit center;
(5) Compliance with performance
standards. The State agency must
ensure that each renewing institution
certifies that it is still in compliance
with the performance standards
described in § 226.6a(b)(6), meaning it is
financially viable, is administratively
capable of operating the Program, and
has internal controls in effect to ensure
accountability;
(6) Licensing. The State agency must
ensure that each independent center
certifies that its licensing or approval
status is up-to-date and that it continues
to meet the licensing requirements
outlined in §§ 226.6(d) and (e).
Sponsoring organizations must certify
that the licensing/approval status of
their facilities is up-to-date and that
they continue to meet the licensing
requirements outlined in §§ 226.6(d)
and (e). If the independent center or
facility has a new license not previously
on file with the State agency, a copy
must be submitted unless the State
agency has other means of confirming
the licensing or approval status of any
independent center or facility providing
care; and
(7) At-risk information. The State
agency must ensure that independent atrisk afterschool care centers or
sponsoring organizations of at-risk
afterschool care centers certify that they
still meet the requirements of
§ 226.17a(b). Sponsoring organizations
of at-risk afterschool care centers must
provide area eligibility data in
compliance with the provisions of
§ 226.15(g). In accordance with
§ 226.6(f)(5)(ii), State agencies must
determine the area eligibility of each
independent at-risk afterschool care
center that is already participating in
the Program.
(c) Administrative budget submission
for sponsoring organizations. The State
agency must ensure that renewing
sponsoring organizations submit an
administrative budget for the upcoming
year with sufficiently detailed
information concerning projected
CACFP administrative earnings and
expenses, as well as other non-Program
funds to be used in Program
administration, for the State agency to
determine the allowability, necessity,
and reasonableness of all proposed
expenditures, and to assess the
sponsoring organization’s capability to
manage Program funds. The
administrative budget must demonstrate
that the sponsoring organization will
expend and account for funds in
accordance with regulatory

E:\FR\FM\09APP1.SGM

09APP1

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules
requirements, FNS Instruction 796–2,
(‘‘Financial Management—Child and
Adult Care Food Program’’), parts 3015,
3016, and 3019 of this title, and
applicable Office of Management and
Budget circulars. In addition, the
administrative budget submitted by a
sponsor of centers must demonstrate
that the administrative costs to be
charged to the Program do not exceed 15
percent of the meal reimbursements
estimated or actually earned during the
budget year, unless the State agency
grants a waiver in accordance with
§ 226.7(g)(1). For sponsoring
organizations of day care homes seeking
to carry over administrative funds in
accordance with § 226.12(a)(3), the
budget must include an estimate of
requested administrative fund carryover
amounts and a description of the
proposed purpose(s) for which those
funds will be obligated or expended.
(d) Eligibility certification for
sponsoring organizations. In addition to
the certification requirements in
paragraph (b) of this section, the State
agency must ensure that renewing
sponsoring organizations certify the
following:
(1) Management plan. The State
agency must ensure that renewing
sponsoring organizations certify that the
sponsor has reviewed its current
management plan on file with the State
agency and that it is complete and upto-date. If the management plan has
changed, the sponsor must submit
updates that meet the requirements of
§ 226.6a(c)(1). The State agency must
establish factors, consistent with
§ 226.6a(c)(1), that it will consider in
determining whether a renewing
sponsoring organization has sufficient
staff to perform required monitoring
responsibilities at all of its sponsored
facilities. As part of the annual review
of the renewing sponsoring
organization’s management plan, the
State agency must determine the
appropriate level of staffing for the
sponsoring organization, consistent with
the staffing range of monitors set forth
at § 226.6a(c)(1) and the factors the State
agency has established.
(2) Outside employment policy. The
State agency must ensure that renewing
sponsoring organizations certify that the
outside employment policy most
recently submitted to the State agency
remains current and in effect or the
sponsor must submit an updated
outside employment policy at the time
of renewal. The policy must restrict
other employment by employees that
interferes with an employee’s
performance of Program-related duties
and responsibilities, including outside

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

employment that constitutes a real or
apparent conflict of interest.
(3) Facility lists. The State agency
must ensure that each sponsoring
organization certifies that the list of all
of their applicant day care homes, child
care centers, outside-school-hours care
centers, at-risk afterschool care centers,
and adult day care centers on file with
the State agency is current and up-todate.
(4) Facility training. The State agency
must ensure that renewing sponsoring
organizations certify that all facilities
under their sponsorships have adhered
to the training requirements set forth in
Program regulations.
(5) Disclosure of potential conflicts of
interest. The State agency must ensure
that sponsoring organizations certify
that no unreported less-than-armslength transactions or any other
potential conflicts of interest have
occurred in the last year and disclose
any that are anticipated in the upcoming
year. The State agency approval of
anticipated less-than-arms-length
transactions must be consistent with
FNS Instruction 796–2 (‘‘Financial
Management—Child and Adult Care
Food Program’’).
6. In § 226.7 by revising paragraph (g)
and adding a sentence at the end of
paragraph (j) to read as follows:
§ 226.7 State agency responsibilities for
financial management.

*

*
*
*
*
(g) Budget approval. The State agency
must review institution budgets as
described in §§ 226.6a(b)(1) and
226.6b(c) and must limit allowable
administrative claims by each
sponsoring organization to the
administrative costs approved in its
budget, except as provided in this
section. The budget must demonstrate
the institution’s ability to manage
Program funds in accordance with this
part, FNS Instruction 796–2 (‘‘Financial
Management—Child and Adult Care
Food Program’’), parts 3015, 3016, and
3019 of this title, and applicable Office
of Management and Budget circulars.
Sponsoring organizations must submit
an administrative budget to the State
agency annually, and independent
centers must submit budgets as
frequently as required by the State
agency. Budget levels may be adjusted
to reflect changes in Program activities.
If the institution does not intend to use
non-CACFP funds to support any
required CACFP functions, the
institution’s budget must identify a
source of non-Program funds that could
be used to pay overclaims or other
unallowable costs. If the institution
intends to use any non-Program

PO 00000

Frm 00018

Fmt 4702

Sfmt 4702

21035

resources to meet CACFP requirements,
these non-Program funds should be
accounted for in the institution’s
budget, and the institution’s budget
must identify a source of non-Program
funds that could be used to pay
overclaims or other unallowable costs.
(1) For sponsoring organizations of
centers, the State agency is prohibited
from approving the sponsoring
organization’s administrative budget, or
any amendments to the budget, if the
administrative budget shows the
Program will be charged for
administrative costs in excess of 15
percent of the meal reimbursements
estimated to be earned during the
budget year. However, the State agency
may waive this limit if the sponsoring
organization provides justification that
it requires Program funds in excess of 15
percent to pay its administrative costs
and if the State agency is convinced that
the institution will have adequate
funding to provide meals meeting the
requirements of § 226.20. The State
agency must document all waiver
approvals and denials in writing, and
must provide a copy of all such letters
to the appropriate FNSRO.
(2) For sponsoring organizations of
day care homes seeking to carry over
administrative funds in accordance with
§ 226.12(a)(3), the State agency must
require the budget to include an
estimate of the requested administrative
fund carryover amount and a
description of the proposed purpose(s)
for which those funds will be obligated
or expended by the end of the fiscal year
following the fiscal year in which they
were received. In approving a carryover
request, State agencies must consider
whether the sponsoring organization has
a financial management system that
meets Program requirements and is
capable of controlling the custody,
documentation and disbursement of
carryover funds. As soon as possible
after fiscal year close-out, the State
agency must require sponsoring
organizations carrying over
administrative funds to submit an
amended budget for State agency review
and approval. The amended budget
must identify the amount of
administrative funds actually carried
over and describe the purpose(s) for
which the carryover funds have been or
will be used.
*
*
*
*
*
(j) * * * In addition, each State
agency must establish procedures to
recover administrative funds from
sponsoring organizations of day care
homes which are not properly payable
under FNS Instruction 796–2
(‘‘Financial Management—Child and

E:\FR\FM\09APP1.SGM

09APP1

21036

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

Adult Care Food Program’’), are in
excess of the 10 percent maximum
carryover amount, or any carryover
amounts not expended or obligated by
the end of the fiscal year following the
fiscal year in which they were received.
*
*
*
*
*
7. In § 226.9, redesignate paragraphs
(c) and (d) as paragraphs (d) and (e),
respectively; and add new paragraph (c)
to read as follows:
§ 226.9 Assignment of rates of
reimbursement for centers.

*

*
*
*
*
(c) If the State agency is allowing the
use of claiming percentages or a blended
per-meal rate of reimbursement as
described in paragraph (b) of this
section, the State agency must require
centers to submit current eligibility
information on enrolled participants, in
order to calculate a blended rate or
claiming percentage.
*
*
*
*
*
§ 226.10

[Amended]

8. In § 226.10, amend paragraph (a) by
removing the
citation‘‘§ 226.6(f)(3)(iv)(F)’’ in the first
sentence and adding the citation
‘‘§ 226.6(f)(7)(vi)’’ in its place.
9. In § 226.12, revise paragraph (a) to
read as follows:

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

§ 226.12 Administrative payments to
sponsoring organizations for day care
homes.

(a) General. Sponsoring organizations
of day care homes receive payments for
administrative costs, subject to the
following conditions:
(1) Sponsoring organizations shall
receive reimbursement for the
administrative costs of the sponsoring
organization in an amount that is not
less than the product obtained each
month by multiplying:
(i) The number of day care homes of
the sponsoring organization submitting
a claim for reimbursement during the
month, by
(ii) The appropriate administrative
rate(s) announced annually in the
Federal Register.
(2) FNS determines these
administrative reimbursement rates by
annually adjusting the following base
administrative rates as set forth in
§ 226.4(i):
(i) Initial 50 day care homes, 42
dollars;
(ii) Next 150 day care homes, 32
dollars;
(iii) Next 800 day care homes, 25
dollars;
(iv) Additional day care homes, 22
dollars.
(3) With State agency approval, a
sponsoring organization may carry over

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

a maximum of 10 percent of
administrative funds received under
paragraph (a)(1) of this section for use
in the following fiscal year. If such
funds are not obligated or expended in
the following fiscal year, they must be
returned to the State agency in
accordance with § 226.7(j).
(4) State agencies must recover any
administrative funds not properly
payable in accordance with FNS
Instruction 796–2 (‘‘Financial
Management—Child and Adult Care
Food Program’’).
*
*
*
*
*
10. In § 226.15:
a. Revise paragraphs (b) and (e)(1);
and
b. Amend paragraph (g) by removing
‘‘§ 226.6(f)(1)(ix)’’ in the last sentence
and adding ‘‘§ 226.6(f)(5)’’ in its place.
The revisions read as follows:
§ 226.15

Institution provisions.

*

*
*
*
*
(b) New applications and renewals.
Each new institution must submit to the
State agency with its application all
information required for its approval as
set forth in § 226.6a. Such information
must demonstrate that a new institution
has the administrative and financial
capability to operate the Program in
accordance with this part and with the
performance standards set forth in
§ 226.6a(b)(6). Renewing institutions
must certify that they are capable of
operating the Program in accordance
with this part and as set forth in
§ 226.6b(b).
*
*
*
*
*
(e) * * *
(1) Copies of the initial application,
renewal information submissions, and
supporting documents submitted to the
State agency;
*
*
*
*
*
11. In § 226.16:
a. Revise paragraph (b);
b. Amend paragraph (d) introductory
text by removing the words ‘‘paragraph
(b)(1) of this section’’ in the second
sentence and adding ‘‘§ 226.6a(c)(1)’’ in
its place;
c. Amend paragraph (d)(4)(iii)(C) by
removing the word ‘‘and’’ from the end
of paragraph;
d. Amend paragraph (d)(4)(iii)(D) by
removing the period from the end of the
paragraph and adding a semicolon in its
place;
e. Add new paragraphs (d)(4)(iii)(E)
and (F);
f. Amend paragraph (f) by revising the
citation ‘‘§ 226.6(b)(4)(ii)(A)’’ to read
‘‘§ 226.6(b)(4)(ii)’’;
g. Revise paragraph (h); and
h. Revise paragraph (l)(2)(vii).

PO 00000

Frm 00019

Fmt 4702

Sfmt 4702

The additions and revisions read as
follows:
§ 226.16 Sponsoring organization
provisions.

*

*
*
*
*
(b) Each new sponsoring organization
must submit to the State agency with its
application all information required for
its approval, and the approval of the
facilities under its jurisdiction, as set
forth in § 226.6a. The application must
demonstrate that the institution has the
administrative and financial capability
to operate the Program in accordance
with the Program regulations. Renewing
sponsoring organizations must submit
information in accordance with
§ 226.6b.
*
*
*
*
*
(d) * * *
(4) * * *
(iii) * * *
(E) The timing of unannounced
reviews must be varied so that they are
unpredictable to the facility; and
(F) All types of meal service must be
subject to review and sponsoring
organizations must vary the meal
service reviewed.
*
*
*
*
*
(h) Sponsoring organizations of child
care centers, adult day care centers,
emergency shelters, at-risk afterschool
care centers, or outside-school-hours
care centers shall:
(1) Enter into a permanent agreement
with unaffiliated sponsored centers and
sponsored day care homes that at a
minimum addresses the requirements
set forth in the provisions of §§ 226.17,
226.17a, 226.18, 226.19, and 226.19a, as
applicable. Nothing in the preceding
sentence shall be construed to limit the
ability of the sponsoring organization to
suspend or terminate the permanent
agreement in accordance with this part;
and
(2) Make payments of program funds
within five working days of receipt from
the State agency, on the basis of the
management plan approved by the State
agency, and may not exceed the
Program costs documented at each
facility during any fiscal year; except in
those States where the State agency has
chosen the option to implement a meals
times rates payment system. In those
States which implement this optional
method of reimbursement, such
disbursements may not exceed the rates
times the number of meals documented
at each facility during any fiscal year.
*
*
*
*
*
(l) * * *
(2) * * *
(vii) A determination that the day care
home has been convicted of any activity

E:\FR\FM\09APP1.SGM

09APP1

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules
that occurred during the past seven
years and that indicated a lack of
business integrity, as defined in
§ 226.6(c)(1)(ii)(A).
*
*
*
*
*
12. Section 226.17 is revised to read
as follows:

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

§ 226.17

Child care center provisions.

(a) Child care centers may participate
in the Program either as independent
centers or under the auspices of a
sponsoring organization; provided,
however, public and private nonprofit
centers shall not be eligible to
participate in the Program under the
auspices of a for-profit sponsoring
organization. Child care centers
participating as independent centers
shall comply with the provisions of
§ 226.15.
(b) All child care centers,
independent or sponsored, shall meet
the following requirements:
(1) Child care centers must have
Federal, State, or local licensing or
approval to provide day care services to
children. Child care centers, which are
complying with applicable procedures
to renew licensing or approval, may
participate in the Program during the
renewal process, unless the State agency
has information that indicates that
renewal will be denied. If licensing or
approval is not available, a child care
center may participate if it demonstrates
compliance with CACFP child care
standards or any applicable State or
local child care standards to the State
agency. At-risk afterschool care centers
shall comply with licensing
requirements set forth in § 226.17a(d).
(2) Except for for-profit centers, child
care centers shall be public, or have tax
exempt status under the Internal
Revenue Code of 1986.
(3) Each child care center
participating in the Program must serve
one or more of the following meal
types—breakfast; lunch; supper; and
snack. Reimbursement must not be
claimed for more than two meals and
one snack or one meal and two snacks
provided daily to each child. At-risk
afterschool care centers shall comply
with limits on daily reimbursement set
forth in § 226.17a(h).
(4) Each child care center
participating in the Program shall claim
only the meal types specified in its
approved application in accordance
with the meal pattern requirements
specified in § 226.20. For-profit child
care centers may not claim
reimbursement for meals served to
children in any month in which less
than 25 percent of the children in care
(enrolled or licensed capacity,
whichever is less) were eligible for free

VerDate Mar<15>2010

14:50 Apr 06, 2012

Jkt 226001

or reduced-price meals or were title XX
beneficiaries. However, children who
only receive at-risk afterschool snacks
and/or at-risk afterschool meals must
not be included in this percentage.
Menus and any other nutritional records
required by the State agency shall be
maintained to document compliance
with such requirements.
(5) A child care center with preschool
children may also be approved to serve
a breakfast, snack, and supper to schoolage children participating in an outsideschool-hours care program meeting the
criteria of § 226.19(b) that is distinct
from its day care program for preschoolage children. The State agency may
authorize the service of lunch to such
participating children who attend a
school that does not offer a lunch
program, provided that the limit of two
meals and one snack, or one meal and
two snacks, per child per day is not
exceeded.
(6) A child care center with preschool
children may also be approved to serve
a snack or meal to school-age children
participating in an at-risk afterschool
care program meeting the requirements
of § 226.17a that is distinct from its day
care program for preschool children,
provided that the limit of two meals,
and one snack, or one meal and two
snacks, per child per day is not
exceeded.
(7) A child care center may utilize
existing school food service facilities or
obtain meals from a school food service
facility, and the pertinent requirements
of this part must be addressed in a
written agreement between the child
care center and school. The center shall
maintain responsibility for all Program
requirements set forth in this part.
(8) Each child care center, except atrisk afterschool care centers, shall
collect and maintain documentation of
the enrollment of each child, including
information used to determine
eligibility for free and reduced-price
meals in accordance with § 226.23(e)(1).
In addition, Head Start participants
need only have a Head Start statement
of income eligibility, or a statement of
Head Start enrollment from an
authorized Head Start representative, to
be eligible for free meal benefits under
CACFP. Such documentation of
enrollment must be updated annually,
signed by a parent or legal guardian, and
include information on each child’s
normal days and hours of care and the
meals normally received while in care.
(9) Each child care center, except atrisk afterschool care centers, must
maintain daily records of time of service
meal counts by type (breakfast, lunch,
supper, and snacks) served to enrolled
children, and to adults performing labor

PO 00000

Frm 00020

Fmt 4702

Sfmt 4702

21037

necessary to the food service. At-risk
afterschool care centers must maintain
records as required by § 226.17a(k).
(10) Each child care center must
require key staff, as defined by the State
agency, to attend Program training prior
to the center’s participation in the
Program, and at least annually
thereafter, on content areas established
by the State agency.
(11) Each child care center must
permit the Department, the State
agency, and the sponsoring
organization, if applicable, to visit the
child care center and review its meal
service and records during its hours of
child care operations.
(12) Sponsored child care centers
must promptly inform the sponsoring
organization about any change in its
licensing or approval status.
(13) Unaffiliated sponsored child care
centers have the right to receive in a
timely manner reimbursement for meals
served to eligible children for which the
sponsoring organization has received
payment from the State agency.
However, if, with the child care center’s
consent, the sponsoring organization
will incur costs for the provision of
program foodstuffs or meals on behalf of
the center, and subtract such costs from
Program payments to the center, the
particulars of this arrangement shall be
specified in the agreement. The
sponsoring organization must not
withhold Program payments to any
child care center for any other reason,
except that the sponsoring organization
may withhold from the child care center
any amounts that the sponsoring
organization has reason to believe are
invalid, due to the child care center
having submitted a false or erroneous
meal count.
(14) The State agency and an
independent child care center have the
right to terminate the agreement for
cause or, subject to § 226.6(c),
convenience. Sponsoring organizations
and unaffiliated sponsored centers have
the right to terminate the agreement for
cause or convenience.
(15) If the State agency has approved
a time limit for submission of meal
records by child care centers, child care
centers must be in compliance.
(16) If so instructed by its sponsoring
organization, sponsored child care
centers must distribute a copy of the
sponsoring organization’s notice to
parents.
(c) Unaffiliated sponsored child care
centers shall enter into a written
permanent agreement with the
sponsoring organization which specifies
the rights and responsibilities of both
parties. At a minimum, the agreement

E:\FR\FM\09APP1.SGM

09APP1

21038

Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Proposed Rules

shall embody the provisions set forth in
paragraph (b) of this section.
(d) Independent child care centers
shall enter into a written permanent
agreement with the State agency which
specifies the rights and responsibilities
of both parties as required by
§ 226.6(b)(4). At a minimum, the
agreement shall embody the applicable
provisions set forth in paragraph (b) of
this section.
(e) Each child care center shall
comply with the recordkeeping
requirements established in § 226.10(d),
paragraph (b) of this section and, if
applicable, § 226.15(e). Failure to
maintain such records shall be grounds
for the denial of reimbursement.
(f) Nothing in this section shall be
construed to limit the ability to
terminate the permanent agreement
with an independent or unaffiliated
sponsored center in accordance with
this part.
13. In § 226.17a:
a. Revise paragraph (a)(1) introductory
text;
b. Remove paragraphs (a)(1)(v), (e), (f),
(g), and (l), redesignate paragraphs (h)
through (k) as paragraphs (e) through
(h), respectively, and redesignate
paragraphs (m) through (q) as
paragraphs (i) through (m) respectively;
c. Amend paragraph (b)(1)(iv) by
removing the words ‘‘paragraph (i)’’ and
adding ‘‘paragraph (f)’’ in their place;
d. Amend newly redesignated
paragraph (f)(3) by removing the words
‘‘, except in cases where the State
agency has determined it is most
efficient to incorporate area eligibility
decisions into the three-year application
cycle’’ from the third sentence; and
e. Add new paragraph (n).
The addition and revision read as
follows:

pmangrum on DSK3VPTVN1PROD with PROPOSALS-1

§ 226.17a At-risk afterschool care center
provisions.

(a) * * *
(1) Eligible organizations. To receive
reimbursement for at-risk afterschool
snacks and at-risk afterschool meals,
organizations must meet the criteria
below.
*
*
*
*
*
(n) Permanent agreements.
Unaffiliated sponsored at-risk
afterschool care centers shall enter into
a written permanent agreement with the
sponsoring organization which specifies
the rights and responsibilities of both
parties. At a minimum, the agreement
shall embody the provisions set forth in
§ 226.17(b).
14. In § 226.18, revise paragraph
(b)(12) as follows:
§ 226.18

*

*

Day care home provisions.

*

VerDate Mar<15>2010

*

*

14:50 Apr 06, 2012

Jkt 226001

(b) * * *
(12) The responsibility of the
sponsoring organization, upon the
request of a tier II day care home, to
collect applications and determine the
eligibility of enrolled children for free or
reduced-price meals and the ability of
the tier II day care home to assist in
collecting applications from households
and transmitting the applications to the
sponsoring organization. However a tier
II day care home may not review the
collected applications and sponsoring
organizations may prohibit a tier II day
care home from assisting in collection
and transmittal of applications if the
day care home does not comply with the
process as described in
§ 226.23(e)(2)(viii);
*
*
*
*
*
15. In § 226.19, add paragraph (d) as
follows:

household consent form must explain
that:
(A) The household is not required to
complete the income eligibility form in
order for their children to participate in
CACFP;
(B) The household may return the
application to either the sponsoring
organization or the day care home
provider;
(C) By signing the letter and giving it
the day care home provider, the
household has given the day care home
provider written consent to collect and
transmit the household’s application to
the sponsoring organization; and
(D) The application will not be
reviewed by the day care home
provider.
*
*
*
*
*

§ 226.19 Outside-school-hours care center
provisions.

Dated: April 2, 2012.
Robin D. Bailey, Jr.,
Acting Administrator, Food and Nutrition
Service.

*

[FR Doc. 2012–8332 Filed 4–6–12; 8:45 am]

*
*
*
*
(d) Unaffiliated sponsored outsideschool-hours-care centers shall enter
into a written permanent agreement
with the sponsoring organization which
specifies the rights and responsibilities
of both parties. At a minimum, the
agreement must address the provisions
set forth in § 226.17(b).
16. In § 226.19a, add paragraph (d) as
follows:
§ 226.19a Adult day care center
provisions.

*

*
*
*
*
(d) Unaffiliated sponsored adult day
care centers shall enter into a written
permanent agreement with the
sponsoring organization which specifies
the rights and responsibilities of both
parties. At a minimum, the agreement
must address the provisions set forth in
§ 226.17(b).
17. In § 226.23,
a. Amend paragraph (e)(2)(vi), by
removing the word ‘‘and’’ from the end
of the paragraph;
b. Amend paragraph (e)(2)(vii)(B), by
removing the period and adding ‘‘; and’’
in its place; and
c. Add paragraph (e)(2)(viii).
The addition reads as follows:
§ 226.23

Free and reduced-price meals.

*

*
*
*
*
(e) * * *
(2) * * *
(viii) If a tier II day care home elects
to assist in collecting and transmitting
the applications to the sponsoring
organization, it is the responsibility of
the sponsoring organization to establish
procedures to ensure the provider does
not review or alter the application. The

PO 00000

Frm 00021

Fmt 4702

Sfmt 4702

BILLING CODE 3410–30–P

DEPARTMENT OF ENERGY
10 CFR Parts 429 and 430
[Docket No. EERE–2011–BT–TP–0071]
RIN 1904–AC67

Energy Conservation Program: Test
Procedures for Light-Emitting Diode
Lamps
Office of Energy Efficiency and
Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking.
AGENCY:

The U.S. Department of
Energy (DOE) proposes to establish test
procedures for light-emitting diode
(LED) lamps to support implementation
of labeling provisions by the Federal
Trade Commission (FTC) established
under the Energy Policy and
Conservation Act (EPCA). The proposed
test procedures define methods for
measuring the lumen output, input
power, and relative spectral distribution
(to determine correlated color
temperature, or CCT) of LED lamps.
Further, the proposed test procedures
define methods for measuring the lumen
maintenance of the LED source (the
component of the LED lamp that
produces light) to project the rated
lifetime of LED lamps. The rated
lifetime of the LED lamp is the time
required for the LED source component
of the lamp to reach lumen maintenance
of 70 percent (that is, 70 percent of
initial light output). After reviewing

SUMMARY:

E:\FR\FM\09APP1.SGM

09APP1