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

DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 210 and 220

[FNS-2011-0019]

RIN 0584-AE09

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

AGENCY:

Food and Nutrition Service, USDA.

ACTION:

Interim final rule.

SUMMARY:

This interim final rule amends the National School Lunch Program and School Breakfast Program regulations to establish nutrition standards for all foods sold in schools, other than food sold under the lunch and breakfast programs. Amendments made by Section 208 of the Healthy, Hunger-Free Kids Act of 2010 (HHFKA) require the Secretary to establish nutrition standards for such foods, consistent with the most recent Dietary Guidelines for Americans, and directs the Secretary to consider authoritative scientific recommendations for nutrition standards; existing school nutrition standards, including voluntary standards for beverages and snack foods; current State and local standards; the practical application of the nutrition standards; and special exemptions for infrequent school-sponsored fundraisers (other than fundraising through vending machines, school stores, snack bars, à la carte sales and any other exclusions determined by the Secretary). In addition, this interim final rule requires schools participating in the National School Lunch Program and School Breakfast Program to make potable water available to children at no charge in the place where lunches are served during the meal service, consistent with amendments made by section 203 of the HHFKA, and in the cafeteria during breakfast meal service. This interim final rule is expected to improve the health and well-being of the Nation's children, increase consumption of healthful foods during the school day, and create an environment that reinforces the development of healthy eating habits.

DATES:

Effective date:

This rule is effective August 27, 2013.

Implementation dates:

State agencies, local educational agencies and school food authorities must implement the provisions of this rule as follows:

1. The

potable water

provisions in §§ 210.10(a)(1)(i) and 220.8(a)(1) must be implemented no later than August 27, 2013.

2. All other provisions of this interim final rule must be implemented beginning on July 1, 2014.

Comment Date:

Written comments on this interim final rule must be received on or before October 28, 2013 to be assured of consideration.

ADDRESSES:

The Food and Nutrition Service (FNS), United States Department of Agriculture (USDA or Department), invites interested persons to submit written comments on this interim final rule. To be considered for this rulemaking, written comments must be submitted by one of the following methods:

•

Federal eRulemaking Portal:

Go to

http://www.regulations.gov

, select “Food and Nutrition Service” from the agency drop-down menu, and click “Submit.” In the Docket ID column of the search results select “FNS-2011-0019” to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link.

•

By Mail:

Send comments to William Wagoner, Section Chief, Policy and Program Development Branch, Child Nutrition Division, Food and Nutrition Service, P.O. Box 66874, Saint Louis, MO 63166. Mailed comments must be postmarked on or before the comment deadline identified in the

DATES

section of this preamble to be assured of consideration.

All submissions received in response to this interim final rule will be included in the record and will be available to the public. Please be advised that the substance of the comments and the identity of the individuals or entities submitting comments will be subject to public disclosure. FNS will also make the comments publicly available by posting a copy of all comments on

http://www.regulations.gov

.

FOR FURTHER INFORMATION CONTACT:

William Wagoner, Section Chief, Policy and Program Development Branch, Child Nutrition Division, Food and Nutrition Service, 3101 Park Center Drive, Alexandria, Virginia 22302, or by telephone at (703) 305-2590.

SUPPLEMENTARY INFORMATION:

Executive Summary

Purpose of the Regulatory Action

This interim final rule sets forth provisions to implement amendments made by sections 203 and 208 of Public Law 111-296, the Healthy, Hunger-Free Kids Act of 2010 (HHFKA), to the Child Nutrition Act of 1966 (CNA) and the Richard B. Russell National School Lunch Act (NSLA) for schools that participate in the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). This rule amends the NSLP and SBP regulations consistent with amendments made in the HHFKA. The HHFKA requires that the Secretary promulgate regulations to establish nutrition standards for foods sold in schools other than those foods provided under the CNA and the NSLA. The amendments made by the HHFKA specify that such nutrition standards apply to all foods sold (a) outside the school meal programs; (b) on the school campus; and (c) at any time during the school day. In addition, the amendments made by the HHFKA require that such standards be consistent with the most recent Dietary Guidelines for Americans and that the Secretary consider authoritative scientific recommendations for nutrition standards; existing school nutrition standards, including voluntary standards for beverages and snack foods; current State and local standards; the practical application of the nutrition standards; and special exemptions for infrequent school-sponsored fundraisers (other than fundraising through vending machines, school stores, snack bars, à la carte sales and any other exclusions determined by the Secretary). These changes are intended to improve the health and well-being of the Nation's children, increase consumption of healthful foods during the school day and create an environment that reinforces the development of healthy eating habits.

The standards for food and beverages in this interim final rule represent minimum standards that local educational agencies, school food authorities and schools are required to meet. Should they wish to do so, State agencies and/or local school districts have the discretion to establish their own standards for non-program foods sold to children, as long as such standards are consistent with the Federal standards. This interim final rule also requires, per the amendments made by the HHFKA, that schools participating in the NSLP make free potable water available to children in the place lunches are served during

meal service, and also at breakfast when breakfast is served in the cafeteria.

Summary of Major Provisions

Competitive foods and beverages must meet the nutrition standards specified in the interim final rule, beginning July 1, 2014. A special exemption to the standards is allowed for foods and beverages that do not meet competitive food standards but which are sold for the purpose of conducting infrequent school-sponsored fundraisers. Such exempt fundraisers must not occur more often than the frequency specified by the State agency. Exempted fundraiser foods or beverages may not be sold in competition with school meals in the food serving area during the meal service. In addition, NSLP and SBP entrées sold à la carte are exempt from the interim final rule's nutrient standards if sold on the day that they are offered as part of a reimbursable meal, or sold on the following school day.

Food Requirements

To be allowable, a competitive food must meet all of the competitive food nutrient standards

and:

• Be a grain product that contains 50 percent or more whole grains by weight or have as the first ingredient a whole grain;

or

• Have as the first ingredient one of the non-grain major food groups: fruits, vegetables, dairy or protein foods (meat, beans, poultry, seafood, eggs, nuts, seeds, etc.);

or

• Be a combination food that contains

1/4

cup of fruit and/or vegetable;

or

• For the period through June 30, 2016, contain 10 percent of the Daily Value of a nutrient of public health concern based on the most recent Dietary Guidelines for Americans (i.e., calcium, potassium, vitamin D or dietary fiber). Effective July 1, 2016, this criterion is obsolete and may not be used to qualify as a competitive food; and

• If water is the first ingredient, the second ingredient must be one of the food items above.

Fresh, canned, and frozen fruits or vegetables with no added ingredients except water, or in the case of fruit, packed in 100 percent juice, extra light, or light syrup are exempt from the interim final rule's nutrient standards. Canned vegetables that contain a small amount of sugar for processing purposes are also exempt.

Competitive foods must contain 35 percent or less of total calories from fat per item as packaged or served. Exemptions to the total fat standard are granted for reduced fat cheese and part-skim mozzarella cheese, nuts, seeds, nut or seed butters, products consisting of only dried fruit with nuts and/or seeds with no added nutritive sweeteners or fat, and seafood with no added fat.

Competitive foods must contain no more than 10 percent of total calories from saturated fat per item as packaged or served. Exemptions to the saturated fat standard are granted for reduced fat cheese and part-skim mozzarella cheese, nuts, seeds, nut or seed butters, and products consisting of only dried fruit with nuts and/or seeds with no added nutritive sweeteners or fat.

Competitive foods must have 0 g of trans fat per item as packaged or served.

Sodium content in snacks is limited to 230 mg per item as packaged or served. On July 1, 2016, the sodium standard will move to 200 mg per item as packaged or served. Entrée items must have no more than 480 mg of sodium per item as packaged or served, unless they meet the exemption for NSLP/SBP entrée items.

Total sugar must be no more than 35 percent by weight. Exemptions to the sugar standard are provided for dried whole fruits or vegetables; dried whole fruit or vegetable pieces; dehydrated fruits or vegetables with no added nutritive sweeteners; and dried fruits with nutritive sweeteners that are required for processing and/or palatability purposes.

Snack items and side dishes served à la carte must have no more than 200 calories per item as packaged or served, including accompaniments such as butter, cream cheese, salad dressing, etc. Entrée items sold à la carte must contain no more than 350 calories including accompaniments, unless they meet the exemption for NSLP/SBP entrée items.

Accompaniments must be included in the nutrient profile as a part of the item served.

Beverage Requirements

Allowable beverages for elementary students are limited to plain water (carbonated or uncarbonated), lowfat milk (unflavored) and nonfat milk (including flavored), nutritionally equivalent milk alternatives (as permitted by the school meal requirements), and full strength fruit or vegetable juices and full strength fruit and vegetable juice diluted with water or carbonated water. All beverages must be no more than eight ounces with the exception of water, which is unlimited.

Allowable beverages for middle school students are limited to plain water (carbonated or uncarbonated), lowfat milk (unflavored) and nonfat milk (including flavored), nutritionally equivalent milk alternatives (as permitted by the school meal requirements), and full strength fruit or vegetable juice and full strength fruit or vegetable juice diluted with water or carbonated water. All beverages must be no more than 12 ounces, with the exception of water, which is unlimited.

Elementary and middle school foods and beverages must be caffeine free with the exception of naturally occurring trace amounts.

Allowable beverages for high school students are limited to plain water (carbonated or uncarbonated), lowfat milk (unflavored) and nonfat milk (including flavored), nutritionally equivalent milk alternatives (as permitted by the school meal requirements), and full strength fruit or vegetable juice and full strength fruit and vegetable juice diluted with water or carbonated water. Milk and milk equivalent alternatives and fruit or vegetable juice must be no more than 12 ounces.

Also allowed in high schools are calorie-free, flavored and/or carbonated water and other calorie-free beverages that comply with the FDA requirement of less than five calories per 8 ounce serving (or less than or equal to 10 calories per 20 fluid ounces), in no more than 20 ounce servings. Beverages of up to 40 calories per eight fluid ounce (or 60 calories per 12 fluid ounce) in no more than 12 ounce servings are also allowed. There is no ounce restriction on plain water (carbonated or uncarbonated). Beverages containing caffeine are also permitted. Allowable beverages are available in the food service area and elsewhere without restriction.

Costs, Benefits and Transfers

This interim final rule requires schools to improve the nutritional quality of foods offered for sale to students outside of the Federal school lunch and school breakfast programs. The new standards apply to foods sold à la carte, in school stores, snack bars, or vending machines. The principal benefit of such a rule is improvement in public health. The primary purpose of the rule is to ensure that foods sold in competition with school meals (competitive foods) are consistent with the most recent Dietary Guidelines, effectively holding competitive foods to the same standards as other foods sold at school during the school day. The link between poor diet and health problems (such as childhood obesity) is a matter of policy concern because the associated health problems produce significant social costs; imposing nutrition standards on competitive foods is one way to ensure that children

are provided with healthy food options throughout the school day.

The Department anticipates the rule will result in significant changes to the nutritional quality of competitive foods available in schools, although it is not possible to quantify those benefits on overall diets or student health. Excess body weight has long been demonstrated to have adverse health, social, psychological, and economic consequences for affected adults, and recent research has also demonstrated that excess body weight has negative impacts for obese and overweight children. Ancillary benefits, although also not quantifiable, may be realized by the nutrition standards in the rule, e.g., improving the nutritional value of competitive foods will support the efforts of parents to promote healthy choices at home and at school, reinforce school-based nutrition education and promotion efforts, and contribute significantly to the overall effectiveness of the school nutrition environment in promoting healthful food and physical activity choices.

Upon implementation of the rule, students will have new food choices which will meet standards for calories, fats, sugar, and sodium, and have whole grains, lowfat dairy, fruits, vegetables, or protein foods as their main ingredients. Our regulatory impact analysis examines a range of possible behavioral responses of students and schools to these changes. To estimate the effects on school revenue, we look to the experience of school districts that have adopted or piloted competitive food reforms in recent years. While no State standard aligns to all of the provisions of the rule, these State standards offer the closest “real-world” analogue to the rule.

The available information indicates that many schools have successfully introduced competitive food reforms with little or no loss of revenue. In some of those schools, losses from reduced sales of competitive foods were fully offset by increases in reimbursable meal revenue. In other schools, students responded favorably to the healthier options and competitive food revenue increased or remained at previous levels.

But not all schools that adopted or piloted competitive food standards fared as well. Some of the same studies and reports that highlight school success stories note that other schools sustained losses after implementing similar standards. The competitive food revenue lost by those schools was not offset (at least not fully) by revenue gains from the reimbursable meal programs.

We present a series of possible school revenue effects in the regulatory impact analysis that reflect the variation in outcomes across these case studies, differences in the adopted nutrition standards and implementation strategies, and differences in the schools' economic circumstances. This discussion illustrates a range of potential outcomes; the limited nature of available data and the substantial variation in school experiences to date prevent any assessment of the most likely outcome. The analysis examines the possible effects of the rule on school revenues from competitive foods, the administrative costs of complying with the rule, and the benefits to school children. The magnitude of these effects is subject to considerable uncertainty; the ultimate impact of the rule will be determined by the manner in which schools implement the new standards and how students respond. That said, the most current and comprehensive research available does indicate that nutritional standards for competitive foods can be successfully implemented with no revenue loss or even revenue gains by schools.

Background

The NSLP served an average of 31.6 million children per day in Fiscal Year (FY) 2012. In that same FY, the SBP served an average of 12.9 million children daily.

The Richard B. Russell National School Lunch Act (NSLA) (42 U.S.C. 1751 et seq.) and the Child Nutrition Act of 1966 (CNA) (42 U.S.C. 1771 et seq.) require the Secretary to establish nutrition standards for meals served under the NSLP and SBP, respectively. Prior to the enactment of the Healthy, Hunger-Free Kids Act of 2010 (HHFKA), section 10 of the CNA limited the Secretary's authority to regulate competitive foods, i.e., foods sold in competition with the school lunch and breakfast programs, to those foods sold in the food service area during meal periods. The Secretary did not have authority to establish regulatory requirements for food sold in other areas of the school campus or at other times in the school day.

The HHFKA, enacted December 13, 2010, directed the Secretary to promulgate regulations to establish science-based nutrition standards for foods sold in schools other than those foods provided under the NSLP and SBP. Section 208 of the HHFKA amended section 10 of the CNA (42 U.S.C. 1779) to require that such nutrition standards apply to all foods sold:

• Outside the school meal programs;

• On the school campus; and

• At any time during the school day.

Section 208 requires that such standards be consistent with the most recent Dietary Guidelines for Americans (DGA) and that the Secretary consider authoritative scientific recommendations for nutrition standards; existing school nutrition standards, including voluntary standards for beverages and snack foods; current State and local standards; the practical application of the nutrition standards; and special exemptions for infrequent school-sponsored fundraisers (other than fundraising through vending machines, school stores, snack bars, à la carte sales and any other exclusions determined by the Secretary).

In addition, the amendments made by section 203 of the HHFKA amended section 9(a) of the NSLA (42 U.S.C. 1758(a)) to require that schools participating in the NSLP make potable water available to children at no charge in the place where meals are served during the meal service. This is a nondiscretionary requirement of the HHFKA that became effective October 1, 2010.

The Department published a proposed rule in the

Federal Register

on February 8, 2013 (78 FR 9530), also titled

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

This rule proposed nutrition standards for foods offered for sale to students outside of the Federal school lunch and school breakfast programs, including foods sold à la carte and in school stores and vending machines. The proposed standards were designed to complement recent improvements in school meals, and to help promote diets that contribute to students' long term health and well-being. For information on recent improvements to school meals, refer to the final rule,

Nutrition Standards in the National School Lunch and School Breakfast Programs

(January 26, 2012, at 77 FR 4088). The proposed rule also would have required schools participating in the NSLP and afterschool snack service under NSLP to make water available to children at no charge during the lunch and afterschool snack service.

As previously indicated, the nutrition standards established by the Secretary must be consistent with the most recent DGA, which are the 2010 DGA released on January 31, 2011. The guidelines are available at

http://www.cnpp.usda.gov/DietaryGuidelines.htm

. In accordance with the amendments made by the HHFKA, in developing competitive food

standards, the Secretary was also to consider authoritative scientific recommendations for nutrition standards; existing school nutrition standards, including voluntary standards for beverages and snack foods and State and local standards; and the practical application of the nutrition standards. As part of USDA's review of authoritative scientific recommendations for nutrition standards, the Agency gave consideration to the National Academies' Institute of Medicine's (IOM) 2007 report,

Nutrition Standards for Foods in Schools: Leading the Way Toward Healthier Youth

(available at:

http://www.iom.edu/Reports/2007/Nutrition-Standards-for-Foods-in-Schools-Leading-the-Way-toward-Healthier-Youth.aspx

).

The Department also conducted a broad review of nutrition standards developed by other entities, including USDA's HealthierUS School Challenge (HUSSC) standards, existing State and local school nutrition standards for foods and beverages sold in competition with school meals, and existing voluntary standards and recommendations developed by various organizations such as the National Alliance for Nutrition and Activity and the Alliance for a Healthier Generation. In addition, the Department solicited input from Federal child nutrition program stakeholders, including nutrition and health professionals, academia, industry, interest groups and the public through a variety of channels. The practical application of the competitive food nutrition standards in school settings was a key consideration for the standards.

USDA received a total of 247,871 public comments during the 60-day comment period from February 8, 2013, through April 9, 2013. This total included several single submissions with thousands of identical comments. Approximately 245,665 of these were form letters, nearly all of which were related to 104 different mass mail campaigns. The remaining comments—over 2,200—were unique comments rather than form letters. Comments represented a diversity of interests, including advocacy organizations; health care organizations; industry and trade associations; farm and industry groups; schools, school boards and school nutrition and education associations; State departments of education; consumer groups; and others. Comments were analyzed using computer software that facilitated the identification of the key issues addressed by the commenters.

In general, there was support for the proposed rule. Approximately 17,827 submissions, including a mass mail campaign, expressed general overall support for the proposed rule in its entirety without commenting on specific provisions. Approximately 426 submissions expressed general opposition to the proposed rule in its entirety without commenting on specific provisions. USDA considered all comments in the development of this interim final rule. Given the unprecedented volume and complexity of comments on the proposed rule, USDA prepared a comprehensive comment summary and analysis which includes detailed information on the comments, including the source of the comments. The description and analysis of comments in this preamble focus on general comment themes, most frequent comments, and those that influenced revisions to the proposed rule. The preamble also discusses modifications made to the proposed rule in response to public input. To view all public comments on the proposed rule, go to

www.regulations.gov

and search for public submissions under document number FNS-2011-0019. Once the search results populate, click on the blue text titled, “Open Docket Folder.” The comprehensive comment summary and analysis is available as supporting material under the docket folder summary. It is also available at

www.fns.usda.gov/cnd/Governance/Legislation/allfoods.htm

.

USDA greatly appreciates the public comments as they have been essential in developing an interim final rule that is expected to improve the quality of foods sold in schools participating in the NSLP and SBP.

General Requirements

Definitions

The amendments made by the HHFKA stipulate that the nutrition standards for competitive food apply to all foods and beverages sold: (a) Outside the school meals programs; (b) on the school campus; and (c) at any time during the school day. The proposed rule at § 210.11(a) included definitions of

Competitive food, School day,

and

School campus,

as follows:

Competitive food

means all food and beverages other than meals reimbursed under programs authorized by the Richard B. Russell National School Lunch Act and the Child Nutrition Act of 1966 available for sale to students on the

School campus

during the

School day

.

School day

means, for the purpose of competitive food standards implementation, the period from the midnight before, to 30 minutes after the end of the official school day.

School campus

means, for the purpose of competitive food standards implementation, all areas of the property under the jurisdiction of the school that are accessible to students during the school day.

Another term,

Combination foods

was also proposed to be defined under § 210.11(a) to mean products that contain two or more components representing two or more of the recommended food groups: fruit, vegetable, dairy, protein or grains.

In addition, an

Entrée item

was defined in § 210.11(k)(1) of the proposal as an item that includes only the following three categories of main dish food items:

• A combination food of meat or meat alternate and whole grain rich bread;

• A combination food of vegetable or fruit and meat or meat alternate; or

• A meat or meat alternate alone, with the exception of yogurt, low-fat or reduced fat cheese, nuts, seeds and nut or seed butters.

The preamble provided several examples for each part of the entrée definition.

Almost 6,000 commenters provided input on the proposed definition of

Competitive food

. Many of these commenters generally agreed with the proposed definition. Of the more than 6,000 comments received on the definition of

School day,

many generally agreed with the proposed definition. Numerous commenters suggested the definition should be expanded to include the extended school day and afterschool programs that take place on the school campus. Commenters recommended a range of times, both before and after school, including 30 minutes before the start of the instructional day, instead of the midnight before.

Per amendments by section 208 of the HHFKA, the CNA requires that the competitive food standards apply to foods sold at any time during the school day, which does not include afterschool programs, events and activities. The timeframe for the school day definition starting the “midnight before” was proposed to ensure that the competitive food standards would apply during the School Breakfast Program meal service, in recognition of the variety of school schedules and methods of serving breakfast to students.

Almost 3,000 commenters provided input on the proposed definition of

School campus

. Many of these commenters generally agreed with the proposed definition. Several

commenters requested clarification on the applicability of the definition to various locations and activities, including teachers' lounges and similar areas restricted to faculty and staff. The proposed definition of

School campus

includes specific reference to areas that are “accessible to students” during the school day. To the extent that teachers' lounges and other similar areas are restricted areas not accessible to students, the competitive food standards in this rule would not apply to foods sold in those areas.

Approximately 850 commenters provided input on the proposed definition of

Entrée item.

Several commenters requested a separate definition of “breakfast entrée” to allow grain only, whole grain rich entrées, which are commonly served in the SBP. Including this definition would allow a higher calorie limit for many popular breakfast items such as pancakes, waffles, bagels and cereal, some of which could have difficulty qualifying under the snack/side item limits. The Department acknowledges that the proposed definition of

Entrée item

could present challenges to schools in serving some traditional breakfast items. At this time, the consequences of modifying the proposed definition of

Entrée item

or adding a separate definition of “breakfast entrée” are unclear. The Department would appreciate further comment on this issue in the context of the totality of the competitive food standards set forth in this interim final rule, so that we can appropriately address this in future guidance and/or the final rule.

A few commenters recommended that meat snack items, such as beef jerky and meat sticks, be excluded similar to yogurt, cheese, nuts, seeds and nut butters, as these are typically not considered main dishes but rather snacks. USDA agrees and will add an exclusion for meat snack items to the definition.

Accordingly, this interim final rule codifies the proposed definitions of

Combination foods, Competitive food, School day,

and

School campus

at § 210.11(a), without change. In addition, this interim final rule adopts the proposed definition of

Entrée item,

with an additional exception added for meat snacks, and a technical correction to change “whole grain rich bread” to “whole grain rich food” to ensure that entrées with pasta, rice and other grain items are included as intended. The definition of

Entrée item

is also moved to § 210.11(a) of this interim final rule, as the definition is applicable to several provisions across the competitive food standards.

State and Local Educational Agency Standards

Under § 210.11(b)(1) of the proposed rule, State and/or local educational agencies would have the discretion to establish additional restrictions on competitive food, as long as they are consistent with the provisions set forth in program regulations.

Approximately 10,280 commenters addressed the discretion of States and local school districts to establish more rigorous competitive food standards. Numerous commenters expressly supported the proposed provision. However, a few commenters expressed concern about additional competitive food restrictions created by States and/or individual school districts, arguing that the standards should be as consistent as possible across States. The commenters asserted that having one set of standards would facilitate the development of nutritious formulations by manufacturers which could potentially lower the overall cost.

The ability of State agencies and school districts to establish additional standards that do not conflict with the Federal competitive food requirements is consistent with the intent of section 208 of the HHFKA, and with the operation of the Federal school meal programs in general. That discretion also provides an appropriate level of flexibility to States and school districts to set or maintain additional requirements that reflect their particular circumstances consistent with the development of their local school wellness policies. Any additional restrictions on competitive food established by school districts must be consistent with both the Federal requirements as well as any State requirements.

Accordingly, this interim final rule codifies in § 210.11(b)(1), as proposed, the provision allowing States and local educational agencies to establish additional restrictions on competitive food that are not inconsistent with the Federal requirements.

Nutrition Standards for Competitive Food

In response to section 208 of the HHFKA, the proposed rule at § 210.11(c) included general nutrition standards for foods sold in schools outside of the Federal school meal programs. At a minimum, all competitive food sold to students on the school campus during the school day would be required to meet these competitive food nutrition standards.

General Nutrition Standards for Competitive Food

Under § 210.11(c)(1) and (c)(2) of the proposal, an allowable competitive food item would be required to meet all of the proposed competitive food nutrient standards and:

• Be a grain product that contains 50 percent or more whole grains by weight or have whole grains as the first ingredient; or

• Have as a first ingredient one of the non-grain major food groups as defined by the 2010 DGA: fruits, vegetables, dairy products, protein foods (meat, beans, poultry, seafood, eggs, nuts, seeds, etc.); or

• Contain 10 percent of the Daily Value of a naturally occurring nutrient of public health concern from the DGA (i.e., calcium, potassium, vitamin D or dietary fiber); or

• Be a combination food that contains at least

1/4

cup of fruit or vegetable.

If water is the first ingredient listed for a food item, the second ingredient must be one of the food items above.

General Comments

Approximately 209,400 commenters expressed general support for the food requirements in the proposed rule, while approximately 20 commenters expressed general opposition to the food requirements.

Some commenters recommended that USDA remove the general standards for food and only require competitive food to meet the nutrient standards. The Department does not agree. The general standards for competitive food, as proposed, are consistent with the IOM recommendations, and are intended to promote and encourage the consumption of foods in their whole forms as much as possible, as recommended by the DGA. Removing the general standards and requiring that foods meet only the nutrient standards would not support this goal.

Some commenters recommended that USDA require a proportionate increase in, and/or recommended amounts of, food group contributions for entrée-type competitive food items, since entrées are larger and should contribute more to dietary needs than snacks or side dishes. We acknowledge that due to their larger size and composition, entrée items generally contribute more to diets than other items. However, the Department does not agree that a separate, higher general standard for entrées is necessary, since an entrée's portion size and overall nutrient content will be controlled by the standards for calories, fats, sodium and sugar. A separate general standard for entrées

would also add complexity to the determination of whether a food item meets the standards.

More than 1,100 commenters recommended that combination foods be required to contain only

1/8

cup of fruit or vegetable, instead of

1/4

cup. The comment reflects USDA's current policy allowing schools to credit

1/8

cup fruit or vegetable toward the total quantity required for school meals. Maintaining the higher

1/4

cup fruit/vegetable quantity for combination foods generally supports the availability of more nutritious products and is consistent with the IOM recommendation and the DGA. However, it is possible that combination foods with less than

1/4

cup of fruit or vegetable could qualify under the whole grain rich or food group criteria, depending on their composition.

One commenter suggested specifying that “dairy products” include non-standard products such as cultured dairy snacks and frozen dairy desserts. In drafting the proposed rule, the Department did not intend to exclude non-standard dairy products such as those mentioned by the commenter. We will ensure that guidance and technical assistance materials in support of this interim final rule will include that clarification.

Based on these comments, this interim final rule does not make any change to these proposed general standards for competitive food, except to correct technical errors with references in the proposed regulatory text regarding the applicability of water as the first ingredient in a product, and to clarify that fruit “and/or” vegetable may be present in a combination food. Additional discussion of the general standards related to whole grains and naturally occurring nutrients of concern follows.

Whole Grains

As mentioned above, one of the general standards for competitive food, proposed at paragraphs (c)(2)(ii) and (e) in § 210.11, would require that grain products contain 50 percent or more whole grains by weight, or have whole grains as the first ingredient.

Approximately 25 commenters expressed support for the proposed whole grain standard, stating that this standard would align with the DGA as well as the school meal standard. Other commenters urged amendment of the standard by allowing FDA whole grain health claims to ensure consistency with the standards for school meals. Approximately 40 commenters supported making the standard more stringent, suggesting that 100 percent of grains should be whole grain, not whole grain rich.

Approximately 980 commenters supported making the proposed standard less stringent. Some of these commenters suggested that USDA expand the whole grain rich grain product standard to allow products that contain at least 8 grams of whole grains per serving.

As indicated in the preamble to the proposed rule, this standard is consistent with the DGA recommendations, the whole grain rich requirements for school meals, including FDA health claims, and the HUSSC whole grain rich requirement. The whole grain criteria for competitive food is used as a criterion for determining product allowability, while school meals' whole grain rich criteria determine crediting of the grain portion of menu items toward the grain component of the meal. Allowing the additional measures for grain suggested by some commenters such as ≥ 8 grams of whole grain would not ensure that grain products contain at least 50 percent whole grain and would be inconsistent with the DGA. Therefore, this interim final rule adopts the standard as proposed.

Naturally Occurring Nutrients

One of the general standards for competitive food, proposed at § 210.11(c)(2)(iv), would require an allowable competitive food to contain 10 percent of the Daily Value of a naturally occurring nutrient of public health concern (i.e., calcium, potassium, vitamin D, or dietary fiber). The proposed rule requested comments on whether or not food items that contain only naturally occurring nutrients should be allowed, or whether food items to which specific nutrients of concern have been added should also be allowable.

Approximately 450 commenters expressed support for the proposal to limit non-DGA food group competitive food to only those with “naturally occurring” 10 percent Daily Value of nutrients of concern. Numerous commenters reasoned that limiting nutrients to those that are naturally occurring would promote the intake of foods closer to their whole, natural state, which is recommended in the 2010 DGA, and is consistent with the IOM recommendations. Several commenters expressed concern that if the competitive food requirements permitted fortification, unhealthy or less healthy foods would be fortified and made available in schools. Some commenters also argued that crediting nutrients added through fortification could lead food manufacturers to add nutrients to foods that would not usually be sources of a particular nutrient and could lead to the potential for nutrient imbalances. Some commenters suggested that school food service personnel would require training to identify which food items contain naturally occurring nutrients of concern versus those that have been fortified. Several commenters suggested that the regulation specify that the nutrients of concern are based on the most recent DGA so that if future versions of the DGA include different nutrients of concern, USDA would have the authority to update them for competitive food.

A few commenters urged USDA to broaden the list of “nutrients of concern” to include vitamins A and C, iron, folic acid, and protein, referencing the FDA definition of “healthy” (21 CFR 101.65(d)(2)) and the current Nutrition Facts label.

Approximately 1,240 commenters opposed the proposed restriction to only “naturally occurring” nutrients. Several commenters argued that allowing competitive foods to qualify because of fortified nutrients would provide greater flexibility in menu planning and increase the variety of items that schools can offer as competitive foods. Several commenters stated that the current nutrition information on food labels does not distinguish between fortified and naturally occurring nutrients and that there is no standardized labeling for nutrients of concern. These commenters argued that the requirement for nutrients should be aligned with the information that is currently present on food nutrition labels. These same commenters concluded that it would be challenging or impossible for food service staff to determine from food labels what nutrients are naturally occurring and which are added through fortification.

This is a particularly challenging issue. The Department recognizes some of the current difficulties and limitations with determining whether products contain naturally occurring nutrients. We also appreciate the complexity this would create for local educational agencies and schools in identifying allowable competitive food, as well as the challenges for State agencies in monitoring compliance with these standards. In addition, there are existing voluntary standards that have no restriction on adding nutrients to qualify, and therefore some product manufacturers may not be prepared to support a naturally occurring nutrient standard.

However, as indicated in the preamble to the proposed rule, the Department also supports recognizing only naturally occurring nutrient sources as more consistent with the recommendation of the DGA that “nutrients should come primarily from foods.” The nutrients of concern referenced in the proposed rule—calcium, potassium, vitamin D, and dietary fiber—are explicitly identified in the 2010 DGA. It is not appropriate for the Department to add other nutrients at this time, but it would be the Department's intent to update the nutrients as future changes occur. As commenters noted, the proposed criterion is also consistent with the recommendations from IOM, which indicated that this approach “reinforces the importance of improving the overall quality of food intake rather than nutrient-specific strategies such as fortification and supplementation.”

Therefore, in recognition of the current marketplace and implementation limitations but also mindful of important national nutrition goals, this interim final rule implements a phased-in approach to identifying allowable competitive food under the general standard. For the initial implementation period in School Year 2014-15, through June 30, 2016, the general food standard will include a criterion that an allowable competitive food may contain 10 percent of the Daily Value of a nutrient of public health concern (i.e., calcium, potassium, vitamin D, or dietary fiber). The specified nutrient may be naturally occurring, which is encouraged, or may be added to the product. Effective July 1, 2016, the criterion for 10 percent of the Daily Value of a nutrient of public health concern will be removed as a general criterion. At that time, competitive food must qualify on the basis of being whole grain rich, having one of the non-grain main food groups as the first ingredient (or second if water if the first ingredient), or a combination food with at least

1/4

cup fruit and/or vegetable. This approach will allow three years for product manufacturers to reformulate their products, if desired, to qualify under the other criteria of the general standards. It will also provide a more straightforward method for schools to identify allowable products, both initially and in the long-term. Ultimately this will more closely align the competitive food standards with the DGA, as required by the HHFKA. Should the 2015 DGA identify additional nutrients of concern applicable to school-age children, the Department anticipates allowing these additional nutrients to qualify products until that criterion is removed on July 1, 2016.

Summary of Changes to the General Nutrition Standards

Accordingly, this interim final rule modifies the proposed general standards for competitive food to require that an allowable competitive food item must meet all of the competitive food nutrient standards

and:

• Be a grain product that contains 50 percent or more whole grains by weight or have whole grains as the first ingredient;

or

• Have as a first ingredient one of the non-grain major food groups: Fruits, vegetables, dairy, protein foods (meat, beans, poultry, seafood, eggs, nuts, seeds, etc.);

or

• Be a combination food that contains at least

1/4

cup of fruit and/or vegetable;

or

• Through June 30, 2016, contain 10 percent of the Daily Value of a nutrient of public health concern from the DGA (i.e., calcium, potassium, vitamin D or dietary fiber).

If water is the first ingredient listed for a food item, the second ingredient must be one of the food items listed above. These provisions are found in paragraphs (c)(1) and (c)(2) in § 210.11 of this interim final rule.

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

The proposed rule at § 210.11(c)(3) identified two alternatives by which any menu item (both entrées and side dishes) provided as part of the NSLP and/or SBP school meal would be exempt from all or some of the proposed competitive food nutrition standards. Under both proposed alternatives, grain based dessert products would be required to meet all competitive food standards, and all menu items would be required to be served in the same or smaller portion sizes as the NSLP and SBP.

Under proposed Alternative A1, all menu items provided as part of the NSLP or SBP reimbursable meal would be exempt from all of the proposed competitive food standards

except the standards established for fat and sugar

. (The fat and sugar standards are discussed later in this preamble.)

Under proposed Alternative A2, all menu items provided as part of the NSLP or SBP reimbursable meal would be exempt from all of the proposed competitive food standards,

provided such menu items are served within specified timeframes

. Two alternatives (Alternatives B1 and B2) were proposed regarding the timing of allowable service of the exempted menu items. The proposed alternatives would allow an exemption to the proposed nutrient standards for competitive food for NSLP and SBP menu items served:

•

On the same day

that the items were served in the school meals program (proposed Alternative B1); or

•

Within four operating days

of service in the programs (proposed Alternative B2).

The Department received a wide variety of comments on the proposed exemptions for NSLP/SBP menu items.

More than 209,000 commenters suggested that NSLP/SBP menu items should not receive any exemption from the competitive food standards. Many suggested that allowing exemptions would introduce “loopholes” for items sold in the à la carte lines. Others asserted that the nutritional benefits of the school meal are diminished when items from the meal are sold individually. Several of these commenters warned that the exemptions would undermine the integrity of the competitive food standards.

Approximately 740 commenters suggested that NSLP/SBP menu items should be exempted from all competitive food standards. Some of these commenters specifically opposed restrictions on fat, sugar, sodium and the frequency of allowable sale of NSLP/SBP menu items, which they asserted would decrease flexibility and increase food costs for schools. Some commenters supported the idea that because foods in reimbursable meals have already been determined to be a nutritious part of a school meal, they should not be subjected to a second set of nutrition standards in order to be served as a competitive food.

Approximately 25 commenters expressed support for proposed Alternative A1 (NSLP/SBP menu items sold à la carte exempt from all competitive food standards except the fat and sugar standards). Several commenters recommended that if NSLP/SBP menu items are exempted, Alternative A1 should be chosen over Alternative A2 because students could purchase those foods à la carte at any time but Alternative A1 would promote limited fat and sugar intake.

Approximately 935 commenters expressed support for proposed Alternative A2 (NSLP/SBP menu items sold à la carte exempt from all competitive food standards). These commenters cited reasons for their support including flexibility in menu planning for school food authorities, positive messaging to students about

healthy foods, and consistency between à la carte and reimbursable meal requirements. Several of the commenters that supported proposed Alternative A2 did so with the recommendation that there be no frequency restrictions for service of the à la carte menu items. Some of these commenters suggested that not allowing the service of NSLP/SBP menu items would send a confusing message that particular foods are healthful when they are part of a meal but not when they are sold separately. Another commenter recommended that only NSLP/SBP entrées be exempted from the competitive food standards, and not side dishes.

Approximately 40 commenters expressed support for proposed Alternative B1 (allowing an exemption to the nutrient standards for NSLP/SBP menu items on the day of service). Several commenters suggested that this alternative would offer consistency between the à la carte offering and the school meal offerings. Other commenters suggested that schools be allowed to serve NSLP/SBP menu items on the day the items are offered as well as the day after.

Approximately 80 commenters expressed support for proposed Alternative B2 (allowing an exemption to the nutrient standard for NSLP/SBP menu items served within four operating days of their service in the meal). Commenters suggested that proposed Alternative B2 would provide the most flexibility for menu planners and would reduce food waste.

Approximately 960 commenters expressed the view that there should be no frequency restrictions on the service of NSLP/SBP menu items, citing implementation difficulties such inventory control and tracking and maintaining student participation. Other commenters suggested that compliance with the meal pattern would ensure that students are consuming nutritious foods.

The Department appreciates the diverse public comment on this provision. Any exemption to the competitive food standards for NSLP/SBP menu items must ensure that improvements from updated school meal standards are not undermined and also take into account implementation by program operators and messaging to students. This interim final rule adopts an exemption for NSLP/SBP entrée items only. Side dishes served à la carte would be required to meet all applicable competitive food standards. The exemption for the entrée items is available on the day the entrée item is served in NSLP/SBP, and the following school day. Entrée items are provided an exemption, but side dishes are not, in an attempt to balance significant commenter opposition to any exemptions for NSLP/SBP menu items and needed menu planning flexibilities. The approach adopted in this interim final rule supports the concept of school meals as being healthful, and provides flexibility to program operators in planning à la carte sales and handling leftovers. The “day after” exemption is provided primarily to accommodate leftovers. We anticipate that this approach, along with the recent changes to school meal standards will result in healthier menu items in meals than in the past, including entrées.

Additionally, providing flexibility for schools to sell à la carte those entrée items that are served as part of the reimbursable meal on the day of service greatly mitigates potential operational disruption in the cafeteria that may occur from students being confused about whether particular foods being served to other students can be purchased individually. This approach also mitigates potential confusion among parents, students and schools that a particular entrée item is healthful when sold as part of the reimbursable meal but not when the same entrée item is sold separately. That said, USDA will closely monitor this exemption during implementation to determine the overall nutrient profile of products being offered under the exemption, as well as any food safety impacts related to leftovers served à la carte. Should the exemption undermine the overall goal of the competitive food standards for healthier products for sale in schools, we will consider a stricter standard.

Accordingly, this interim final rule, in § 210.11(c)(3)(i), provides an exemption to the competitive food standards for NSLP and SBP entrée items that are offered on the same day or the school day after they are offered in the NSLP or SBP. Exempt entrées that are sold as competitive food must be offered in the same or smaller portion sizes as the NSLP and SBP, and with the same accompaniments.

Fruits and Vegetables

Consistent with the DGA and IOM recommendations, the proposed rule at § 210.11(d) would exempt from the competitive food nutrition standards fresh, frozen and canned fruits and vegetables with no added ingredients except water or, in the case of fruit, packed in 100 percent fruit juice or extra light syrup.

Over 900 commenters asserted that the proposed exemption for fruits and vegetables should be expanded, including a recommendation that USDA expand the exemption to include fruit packed in light syrup. These commenters and others also recommended expanding the exemption to allow certain canned vegetables to which a small amount of sugar has been added to maintain the structural integrity of the vegetable. A few commenters supported the allowance of frozen fruit with added sugar. Some commenters expressed the need to include dried fruit with no added ingredients in the proposed nutrient standard exemption.

USDA agrees that the fruit and vegetable nutrient exemption should be expanded to include fruit packed in light syrup, consistent with what is allowed in school meals. The Department also agrees that this exemption should include canned vegetables to which a small amount of sugars has been added to maintain the structural integrity of the vegetable, e.g., corn and peas, as is allowed in USDA's Special Supplemental Nutrition Program for Women, Infants and Children (WIC). We would like to clarify that frozen fruit with added sugar is also exempt, if it can be considered to be packed in extra light syrup or light syrup. The Department prefers to address an exemption for dried fruit under the sugar standard, since including dried fruit under the general nutrient exemption for fruits and vegetables may result in servings that are high in calories due to the nature of dried fruit.

Accordingly, this interim final rule codifies in § 210.11(d) an exemption to the nutrient standards for fresh, frozen and canned fruits and vegetables with no added ingredients except water or, in the case of fruit, packed in 100 percent fruit juice, extra light syrup, or light syrup; and for canned vegetables that contain a small amount of sugar for processing purposes, to maintain the quality and structure of the vegetable.

Nutrient Standards

The proposed rule included standards for total fat, saturated fat, trans fat, total sugars, calories, and sodium. These standards were proposed to apply to the competitive food “per portion as packaged” or “per portion.” Over 206,000 commenters expressed support for the proposed nutrient standards for competitive food, while approximately 1,050 expressed general opposition. A few commenters suggested that the phrase “per portion as packaged” needs clarification because there is a difference between a “portion” and a “serving.” One commenter stated that per portion as packaged means the

entire package of food sold, not a serving within the package.

The intent of the proposed language “per portion as packaged” and “per portion” was to apply the competitive food standards to the item sold to the student, as noted by the commenter, and not to each “serving” in a package. Some packaged items may include more than one “serving”, as indicated on the Nutrition Facts label. We also understand that some items provided as a competitive food are not “packaged” by a manufacturer but rather are scratch prepared in the school and served to the student. For clarity, we are modifying the regulatory text for the nutrient standards to use the term “per item as packaged or served” instead of “per portion as packaged” or “per portion.” This language more effectively reflects how the standards must be applied.

Total Fat, Saturated Fat and Trans Fat

To qualify as an allowable competitive food, the proposal at § 210.11(f)(1) would require that not more than 35 percent of the total calories per portion as packaged be derived from fat. Exemptions to the total fat requirement, in proposed § 210.11(f)(2), would include:

• Reduced fat cheese; and

• Nuts and seeds and nut/seed butters (excluding combination products that contain nuts, nut butters or seeds or seed butters with other ingredients such as peanut butter and crackers, trail mix, chocolate covered peanuts, etc.); and

• Products that consist of only dried fruit with nuts and/or seeds with no added nutritive sweeteners or fat; and

• Seafood

with no added fat

.

For saturated fat, the proposal at § 210.11(g)(1) would require that less than 10 percent of the total calories per portion of a food be derived from saturated fat. The proposal included an exemption to the saturated fat standard, in paragraph (g)(2), for reduced fat cheese.

Under proposed § 210.11(h), the trans fat content of a competitive food must be zero grams trans fat per portion as packaged (not more than 0.5 g per portion).

Several thousand commenters expressed support for the proposed limits on total fat, saturated fat, and trans fat; many also expressed specific support for the proposed exemptions from the fat standards. Approximately 130 commenters were opposed to the proposed restriction on total fat; approximately 70 commenters were opposed to the proposed restriction on saturated fat; and a few commenters opposed the proposed trans fat restriction. These commenters argued in favor of making the restrictions less stringent or eliminating the standards entirely.

Some commenters wanted USDA to consider adding an exemption for nuts and seeds and nut/seed butters to the saturated fat standard, in addition to the proposed total fat standard exemption. The Department agrees with providing a saturated fat exemption for nuts and seeds and nut/seed butters, given the healthy fat profile and positive nutrition benefits of these products.

Numerous commenters urged USDA to expand the exemption for reduced fat cheeses to include all cheeses, citing the importance of increasing children's access to dairy products. Many of the commenters in support of the exemption for reduced fat cheese asked USDA not to extend the exemption to combination products that include reduced-fat cheese (e.g., cheese and crackers). A few commenters recommended that USDA extend the fat exemptions to part-skim cheese (mozzarella), which is lower in fat than full fat cheese but may not necessarily meet the FDA criteria for the reduced fat claim.

In response, USDA looked closely at the fat content of cheeses, including part-skim cheeses, to determine if additional exemptions to the fat standards are warranted. Based on our examination, we agree that extending an exemption to the total fat and saturated fat standards for part-skim mozzarella cheese is appropriate, as there is an FDA standard of identity for part-skim mozzarella cheese. In addition, there is a similar fat profile for part-skim mozzarella compared to many reduced fat cheeses. Other part-skim cheese may be exempt if it also meets the FDA requirement as a reduced fat cheese. The reduced-fat cheese (and now part-skim mozzarella) exemptions do not apply to combination foods.

Another commenter recommended that protein foods which supply at least 10 percent Daily Value for protein be exempt from the total fat and saturated fat limits. The Department does not agree that such an exemption from the fat standards is appropriate. To support the DGA, meat and poultry should be consumed in lean forms to decrease the intake of solid fat. Nuts and seeds and nut/seed butters and seafood, which have been exempted, contain oils rather than solid fats.

Accordingly, this interim final rule codifies in § 210.11(f) the total fat and saturated fat standards and exemptions as proposed, with additional exemptions to the total fat and saturated fat standards for part-skim mozzarella cheese, an additional exemption to the saturated fat standard for nuts and seeds and nut/seed butters, and clarification that the standards apply to the item as packaged or served. This language also clarifies that the exemptions for cheese and nuts and seeds and nut/seed butters do not apply to combination foods. The trans fat standard is adopted in this interim final rule as proposed, in § 210.11(g).

Total Sugars

The proposed rule at § 210.11(i)(1) provided two alternatives for comment regarding total sugars in foods. Under proposed Alternative C1, total sugars contained in a competitive food could not be more than 35 percent of

calories

per portion. Under proposed Alternative C2, not more than 35 percent of the

weight

per portion could be derived from total sugars.

Regardless of which measure (total sugars by calories or weight) is utilized, the proposed rule at § 210.11(i)(2) would provide the following exemptions to the total sugar standard:

• Dried whole fruits or vegetables; dried whole fruit or vegetable pieces; and dehydrated fruits or vegetables with no added nutritive sweeteners;

• Products that consist of only dried fruit with nuts and/or seeds with no added nutritive sweeteners or fat; and

• Flavored and unflavored nonfat and low-fat yogurt with no more than 30 grams of total sugars per 8 ounce serving.

More than 2,500 commenters expressed general support for a sugar restriction for competitive food. Approximately 70 commenters supported proposed Alternative C1 (total sugar by calories), citing consistency with IOM and other public health recommendations. Some commenters stated that Alternative C1 would be easier to implement because the calculation is simpler to perform. A number of commenters argued that a standard based on calories would be better than limiting sugars to 35 percent by weight, which would allow a number of sugary foods to be sold that would otherwise be excluded by a limit based on percent of calories, e.g., those with high water content such as ice pops, fruit snacks, ice cream, pudding, granola bars, and snack cakes.

More than 1,100 commenters expressed support for proposed Alternative C2 (total sugars by weight). These commenters argued that this is the standard many schools and food manufacturers have been using, and that it is consistent with other standards such as USDA's HUSSC and the Alliance for a Healthier Generation, which many schools have already

implemented. Many commenters stated that this alternative would allow greater flexibility and would permit more products that are favorites among students, such as low-fat ice cream, sweetened frozen fruit, and yogurt parfaits. Several commenters expressed support for Alternative C2 because they believe it would be easier to implement. A few commenters asserted that it would be easier for school food service personnel to assess a product's conformance to the sugar standard as a percentage of the product's weight because it would only involve calculations based on information provided on the Nutrition Facts label.

Many commenters suggested USDA should set the sugar standard based on added sugars, rather than total sugars. These commenters argued that added sugars are what science shows should be limited in children's diets. However, these commenters acknowledged that added sugars are not specified on the Nutrition Facts label, which would make it difficult for local schools to determine. Consequently, some of these commenters urged USDA to work with FDA to ensure that added sugars are listed on the revised Nutrition Facts label.

In response, USDA agrees with these commenters that a sugar standard based on added sugars is preferable but that it would be very difficult for local program operators to implement and State agencies to monitor since the current Nutrition Facts label does not differentiate between naturally occurring and added sugars. If added sugars information is required on the Nutrition Facts label in the future, USDA would anticipate updating the standards for competitive food to incorporate that standard.

The interim final rule adopts Alternative C2, which requires that 35 percent or less of the weight of the food come from total sugars. We acknowledge that this standard generally allows more products to qualify, but the portion sizes of these and all foods would be limited by the calorie and fat standards. Sugar by weight is also a standard used by some voluntary standards. State agencies and school districts could choose to implement a sugar standard based on calories, as long as it is at least as restrictive as the regulatory standard (i.e., no allowable product under the calorie measure could exceed 35 percent sugar by weight). As mentioned earlier, any additional restrictions on competitive food established by school districts must be consistent with both the Federal requirements as well as any State requirements.

Approximately 350 commenters provided input on the proposed exemptions to the sugar standard. Many of these commenters expressed support for the sugar exemptions as proposed. Approximately 130 commenters addressed the exemption for dried fruits/vegetables. Numerous commenters expressed general support for the exemption for dried fruits/vegetables with no added nutritive sweeteners. Many commenters suggested expanding the sugar exemptions to allow certain dried fruits with added nutritive sweeteners where it is required for processing and palatability. However, many other commenters did not support an expansion of the exemption for dried fruits with added caloric sweeteners. A few commenters requested that processed fruit and vegetable snacks (e.g., fruit strips or fruit drops) be included under the proposed exemption for dried fruit, as many are processed with fruit juice concentrate.

USDA supports an additional limited exemption for dried fruit with added nutritive sweeteners only when the added sweeteners are required for processing and/or palatability of the product, such as dried cranberries, tart cherries and blueberries. The portion sizes of these dried fruits would be limited by the calorie standards. The Department, however, does not agree that processed fruit and vegetable snacks should be included under either dried fruit exemption. Since these snack type products are not whole dried fruit pieces, the fruit concentrate (added sugar) used to make these products is often the primary ingredient. These products could still qualify without the exemption as a competitive food if they meet all of the standards, including a fruit or vegetable as the first ingredient.

Approximately 360 commenters addressed the proposed exemption of flavored and unflavored non-fat and low-fat yogurts from the sugar limit. Most of these commenters expressed support for the proposed exemption, based on a desire to increase the availability of popular dairy products that children are likely to eat. Several commenters recommended that the 30 grams per 8 ounce limit for total sugars in yogurt be scaled proportionately by serving size (e.g., 22 grams total sugar for a 6 ounce portion). Several commenters proposed more restrictive standards for yogurt products to receive an exemption from the sugar limit, while a few commenters proposed less restrictive standards.

The intention of the proposed exemption for yogurt was that the total sugars limit be scaled according to serving size. Since this interim final rule adopts a sugar standard based on the weight of the product, as discussed above, an exemption for yogurt is unnecessary and is removed in this interim final rule. However, USDA encourages local program operators to select yogurt with lower amounts of sugar whenever possible. Ingredient lists reveal that many popular drinkable yogurts have significant levels of added sugars instead of sugars conveyed naturally from fruit or dairy. USDA will gather additional information as competitive food standards are implemented and may address standards for drinkable yogurt in a future rulemaking.

Accordingly, this interim final rule requires, in § 210.11(h)(1), that the total sugar content of a competitive food must be not more than 35 percent of

weight

per item as packaged or served. Section 210.11(h)(2) includes the exemptions to the total sugar standard that were proposed, except for the yogurt exemption which is not retained. This section also includes an exemption for dried fruit with added nutritive sweeteners that are required for processing and/or palatability purposes. USDA will issue future guidance on determining which dried fruits with added nutritive sweeteners for processing and/or palatability qualify for the exemption.

Calories and Sodium

Under the proposed rule at § 210.11(j), snack items and side dishes sold à la carte could contain no more than 200 calories and 200 mg of sodium per portion as served, including the calories and sodium in any accompaniments, and must meet all other nutrient standards for non-entrée items.

Under proposed § 210.11(k), entrée items sold à la carte could contain no more than 350 calories and 480 mg sodium per portion as served, including any accompaniments, and meet all other nutrient standards.

As indicated in the

Definitions

section of this preamble, an entrée item was defined in § 210.11(k)(1) of the proposal, and would apply in determining the calorie and sodium limits.

Calories

Almost 2,600 commenters expressed general support for calorie restrictions for competitive food, while approximately 30 commenters generally opposed the proposed calorie restrictions.

Approximately 200,000 commenters suggested separate calorie limits by grade, similar to the structure of the school meal program, reasoning that

children have different calorie needs as they grow. Some of these commenters stated that many schools across the country have already successfully implemented tiered calorie maximums for snack foods as part of the Alliance for a Healthier Generation's Healthy Schools Program.

More than 1,000 commenters opposed the proposed calorie limits for entrees, while approximately 165 opposed the proposed limits for snack items. Commenters said the proposed limits were too stringent and would limit student access to many food products. Some of these commenters stated that the calorie limit for entrée items is inconsistent with USDA's HUSSC criteria, and is not required for entrees served as part of the NSLP. Other commenters expressed concern that manufacturers would have to expend resources to repackage or reformulate products to meet a 200 calorie limit for snack items, stating that many manufacturers' current packaging for school districts is just slightly over 200 calories. Some commenters provided specific suggestions for alternative calorie limits for snacks, ranging from 240 to 300 calories, and for entrées, ranging from 400 to 500 calories.

This interim final rule retains the proposed calorie limits for snacks/side dishes (200 calories per item as packaged or served), and entrée items (350 calories per item as packaged or served), which are consistent with IOM recommendations and some voluntary standards. The Department does not agree that higher limits are appropriate, as suggested by some commenters. In addition, we appreciate that separate calorie limits by grade levels for snacks would align with existing voluntary standards that many schools have adopted, and would be more tailored to the nutritional needs of children of different ages. However, separate calorie limits for different grade levels would also add complexity for local program operators with schools of varying grade levels. State agencies or school districts could choose to implement varying calorie limits based on grades, provided the maximum level does not exceed the limit in this interim final rule. Please note that the calorie limit for entrée items would apply to all entrées that do not meet the exemption for NSLP/SBP entrée items.

Sodium

Over 2,600 commenters expressed support for the proposed limits on sodium of 200 mg per portion as served for snacks/side dishes and 480 mg per portion as served for entrée items. Some of these commenters cited studies that they asserted show a growing prevalence of high blood pressure in American children linked to obesity rates, high sodium level intakes, and high calorie diets.

More than 900 commenters generally opposed the proposed sodium restrictions. Approximately 80 commenters specifically opposed the proposed sodium limit for entrées, while approximately 90 opposed the proposed limits for snack items. Many suggested the sodium limits be raised and made consistent with the NSLP/SBP standards or with USDA's HUSSC standards, citing difficulty for manufacturers to reduce sodium levels while maintaining palatability and low food costs. Several commenters recommended that the sodium reductions should be phased in gradually to allow taste preferences and manufacturers time to adjust. A few commenters suggested that additional assessments of health and student acceptance be conducted or reviewed prior to setting sodium requirements. Some commenters provided suggestions for higher sodium limits, ranging from 230 mg to 360 mg for snacks and 550 mg to 650 mg for entrées. One commenter, a manufacturer, wanted USDA to add an exemption to the sodium limit for natural reduced fat cheese and reduced fat, reduced sodium pasteurized processed cheese.

The Department's proposed standards for sodium were based on the IOM recommendations. The proposed “per portion as served” standards for competitive food were considered in the context of overall sodium limits for school meals, the first of which take effect in School Year 2014-15, the same school year these competitive food standards are implemented. USDA acknowledges that sodium reduction is an issue that impacts the broader marketplace, not just schools, and understands that sodium reduction is a process that will take time. However, it is an important health issue that must be addressed. We also understand that there are existing voluntary standards for competitive food that have a higher sodium limit of 230 mg for snacks/side dishes, which means there are existing products that have been formulated to meet the higher standard available to schools. Therefore, we are setting an initial limit for sodium for snacks and side dishes of 230 mg per item as packaged or served, for the first two years of implementation of these standards. As of July 1, 2016, the sodium limit for snacks and side dishes will be reduced to 200 mg per item as packaged or served. This phased in approach will ensure product availability for schools for initial implementation and provide ample time for manufacturers to adjust to meet the lower limit. We are not changing the proposed entrée limit of 480 mg per item as packaged and served, as entrées served in school meals will be covered under the NSLP/SBP entrée item exemption, in § 210.11(c)(3)(i). We are also not providing an exemption to the sodium standard for cheese, as we are concerned given the nutrient profile of cheese that this would result in high sodium products as competitive food.

Summary of Changes to Calories and Sodium Limits

Accordingly, this interim final rule in § 210.11(i) requires that snack items and side dishes sold à la carte must have not more than 200 calories and 230 mg of sodium per item as packaged or served, including accompaniments, and must meet all other nutrient standards. Effective July 1, 2016, these snack items and side dishes must have not more than 200 calories and 200 mg of sodium per item as packaged or served. Section 210.11(j) requires that entrée items sold à la carte, other than those that meet the exemption for NSLP/SBP entrée items, must have not more than 350 calories and 480 mg of sodium per item as packaged or served, including accompaniments, and must meet all other nutrient standards.

Accompaniments

The proposed rule at § 210.11(n) limited the use of accompaniments to competitive food, such as cream cheese, jelly, butter, salad dressing, etc., by requiring that all accompaniments to a competitive food item be pre-portioned and included in the nutrient profile as part of the food item served.

More than 1,000 commenters opposed the requirement that accompaniments be pre-portioned as being costly and impractical.

About 20 commenters supported requiring accompaniments to be included in the nutrient profile as part of the food item served. Some of these commenters urged USDA to amend the proposed requirement to include an average serving size of the appropriate accompaniments when evaluating the nutrient profile for an item. Other commenters urged USDA to provide technical assistance to schools on strategies to limit accompaniments that are high in sodium, fats, and sugars.

About 470 commenters did not support pre-portioning or inclusion of accompaniments in the nutrient profile of the competitive food.

In response to these comments, USDA acknowledges that pre-portioning of

accompaniments could add some cost and complication to competitive food service in some schools. We maintain, however, as many commenters did, that it is important to account for the dietary contribution of accompaniments in determining whether a food item may be served as a competitive food. Therefore, this rule removes the proposed requirement for pre-portioning of competitive food accompaniments but retains the requirement that accompaniments be included in the nutrient profile of foods. Schools may determine the average serving size of the accompaniments at the site of service (e.g., school district). This is similar to the approach schools have used in conducting nutrient analysis of school meals in the past. USDA will provide guidance and technical assistance as needed during implementation.

Accordingly, this interim final rule requires, in § 210.11(l) that the accompaniments to a competitive food item must be included in the nutrient profile as a part of the food item served in determining if an item meets the nutrition standards for competitive food. The contribution of the accompaniments may be based on the average serving size of the accompaniment used per item.

Chewing Gum

The proposed rule did not address chewing gum. Several commenters recommended that USDA provide an exemption from the competitive food standards for sugar-free chewing gum, claiming it has a proven impact on dental and oral health. Some of these commenters also suggested that States should retain the authority to establish more restrictive standards governing the sale of sugar-free gum in their schools should they chose to do so for reasons unrelated to health or nutrition.

USDA agrees that sugar-free chewing gum should be provided an exemption from the competitive food standards. Clinical studies have shown that chewing sugarless gum for 20 minutes following meals can help prevent tooth decay. State agencies and school districts may choose not to allow the sale of sugar-free gum, for a variety of reasons.

Accordingly, this interim final rule includes in § 210.11(c)(3)(ii) an exemption to the competitive food standards for sugar-free chewing gum.

Nutrition Standards for Beverages

The proposed rule at paragraphs (b)(2) and (m) of § 210.11 established standards for allowable beverage types for elementary, middle and high school students. At all grade levels, water, low fat and nonfat milk, and 100 percent juice would be allowed, in specified maximum container sizes which varied by grade level. The proposed rule would also allow additional beverages for high school students, specifically calorie-free and low-calorie (less than 40 or 50 calories per 8 ounces) beverages, with and without carbonation. These additional beverages for high school students would not be allowed in the meal service area during meal service. This approach was designed to recognize the wide range of beverages available to high school students in the broader marketplace and the increased independence such students have, relative to younger students, in making consumer choices. The proposed beverage requirements in § 210.11(m) included:

Elementary School

• Plain water (no size limit);

• Low fat milk, plain (not more than 8 fluid ounces);

• Non fat milk, plain or flavored (not more than 8 fluid ounces);

• Nutritionally equivalent milk alternatives as permitted by the school meal requirements (not more than 8 fluid ounces); and

• 100% fruit/vegetable juice (not more than 8 fluid ounces).

Middle School

• Plain water (no size limit);

• Low fat milk, plain (not more than 12 fluid ounces);

• Non fat milk, plain or flavored (not more than 12 fluid ounces);

• Nutritionally equivalent milk alternatives as permitted by the school meal requirements (not more than 12 fluid ounces); and

• 100% fruit/vegetable juice (not more than 12 fluid ounces).

High School

• Plain water (no size limit);

• Low fat milk, plain (not more than 12 fluid ounces);

• Non fat milk, plain or flavored (not more than 12 fluid ounces);

• Nutritionally equivalent milk alternatives as permitted by the school meal standards (not more than 12 fluid ounces); and

• 100% fruit/vegetable juice (not more than 12 fluid ounces);

Additional beverages proposed to be allowed for sale in high school, but not in the meal service area during the meal service:

• Calorie-free, flavored and/or carbonated water (not more than 20 fluid ounces);

• Other beverages (not more than 20 fluid ounces) that comply with the FDA requirement for bearing a “calorie free” claim of less than 5 kcals/serving; and

• Other beverages in ≤ 12 oz servings. Two “other beverage” alternatives were proposed:

• Allow beverages with not more than 40 calories per 8 fluid ounce serving or 60 calories per 12 fluid ounce serving. (proposed Alternative D1)

• Allow beverages with not more than 50 calories per 8 fluid ounce serving or 75 calories per 12 ounce fluid serving. (proposed Alternative D2)

Over 10,000 commenters expressed general support for the proposed beverage requirements, while only approximately 55 commenters expressed general opposition. Many commenters provided specific suggestions related to the proposed beverage requirements. Discussion of these comments and USDA's response follows.

Grade Groupings

A few commenters suggested that USDA use only two grade groups for the beverage standards—elementary and secondary—to ease implementation. Some commenters stated that it would be difficult and/or costly to administer the proposed beverage requirements in combined grade campuses, such as 7-12 or K-12. In response, USDA appreciates that implementation could be more difficult in schools with overlapping grade groups, but considers it important to maintain the three grade groupings proposed. These groupings reflect IOM's recommendations and appropriately provide additional choices to high school students, based on their increased level of independence. USDA will provide technical assistance and facilitate the sharing of best practices during implementation.

Water

Some commenters encouraged USDA to change “plain water” to “water with no additives.” Several commenters urged USDA to allow carbonated water without additives at all grade levels with no portion size limit. One commenter recommended that the standards allow for water with carbonation and/or natural flavors but not sweeteners (whether caloric or non-caloric) at all grade levels. Some commenters, including advocacy organizations, asked USDA to clarify that water could include added fluoride.

In response, the nutritional differences between carbonated water without additives and water are insignificant. Therefore, USDA agrees that this rule should not restrict access on portion size at any grade levels. However, we are not allowing natural

flavors or sweeteners under this standard for all grade levels; these beverages would likely qualify as allowable beverages for high school students. As for terminology, USDA is retaining the use of the term “plain water,” as it accurately describes the intent of what may be provided in unlimited quantities at all grade levels. We recognize that some bottled waters have added minerals including fluoride, which is acceptable.

Milk

Some commenters suggested replacing the term “plain milk” with “unflavored milk.” USDA agrees that unflavored milk (e.g., milk with no sweeteners) is a more accurate term than plain milk, and it is also consistent with terminology used in the school meal patterns. Therefore, we will modify the regulatory text to use the term “unflavored milk.”

Several commenters provided input on flavored milk. A few commenters requested that USDA allow low fat flavored milk, in addition to nonfat flavored milk. To address the sugar content in flavored milk, commenters made several suggestions. One suggestion would establish a sugar maximum of no more than 28 grams of sugar per 8 fluid ounces of milk. Another suggestion would have USDA provide schools with information on how to select flavored milk that contains minimum levels of added sugars. USDA was also encouraged to provide a calorie limit for flavored milk (no more than 130 calories per 8 fluid ounces) to help limit calories and added sugar intake.

USDA does not support allowing low fat flavored milk. It is not an allowable milk type under the school meal patterns, based on IOM's school meal recommendations to help control calories. USDA recognizes that some flavored milk (even nonfat versions) can be high in calories and added sugars, but we are not supportive of requiring a calorie or sugar limit for flavored milk at this time. Nonfat flavored milk is allowed in the school meal patterns without any sugar or calorie caps. In general, schools that wish to offer nonfat flavored milk must select products that are lower in calories and added sugars, in order to stay within the school meal calorie ranges. The milk offered with the school meal is usually the same milk that is offered for sale to students à la carte. In addition, over time many manufacturers have reformulated flavored milk to be lower in calories and added sugar. We will continue to monitor this issue as the competitive food standards are being implemented to determine if a future calorie cap and/or sugar limit for flavored milk is warranted. We will also provide technical assistance as necessary to assist schools in selecting flavored milk with lower sugar levels.

Juice

Many commenters supported the proposal to require 100 percent juice, as well as the proposed portion size limits. Several of these commenters recommended allowing diluted juices, with and without carbonation, at all grade levels. Some commenters encouraged USDA to allow juice diluted with water, but only in high schools. Some commenters suggested a calorie cap for all juices that are sold, and similarly other commenters suggested smaller maximum serving sizes for 100 percent juice.

Beverages combining full-strength juice and water or carbonated water are increasingly popular in the marketplace. Allowing these blends with juice results in a product with fewer calories and less sugar than a comparable amount of natural unsweetened 100 percent juice, and provides additional options for schools. Therefore, this interim final rule allows 100 percent fruit and/or vegetable juice diluted with water, with or without carbonation and with no added sweeteners, at all grade levels. The portion size limit for each grade level would be the same as the maximum juice portion size—i.e., 8 fluid ounces for elementary schools, and 12 fluid ounces for middle and high schools. We do not agree that is it necessary to add a calorie cap for full-strength juice, as calories are controlled by the portion size limit.

Other Beverages for High School

USDA received a significant number of comments on the proposed standards for other beverages allowed in high school.

A few commenters wanted low-calorie beverages to be available in elementary and middle schools as well as high schools, while others opposed these beverages at any grade level.

A few commenters also requested that USDA modify the proposed language regarding FDA's “calorie free” claim, to avoid inconsistent treatment of very low calorie beverages based on labeling decisions made by manufacturers and allowed by FDA. The suggested modification would specify beverages could contain less than 5 calories per 8 fluid ounces, or less than or equal to 10 calories per 20 fluid ounces.

Several commenters expressed support for establishing a more stringent calorie restriction for low-calorie beverages in high schools. A few commenters expressed opposition to sports drinks in schools, stating these beverages contribute to excess calorie consumption and are not needed for hydration. Approximately 30 commenters supported proposed Alternative D1 (allowing no more than 40 calories per 8 fluid ounces and no more than 60 calories per 12 fluid ounces), 12 ounces maximum. A few commenters requested technical changes to the proposed language for clarity and consistency. Several commenters suggested a limit of 40 calories “per container,” instead of the standards that were proposed. These commenters reasoned that the FDA defines low-calorie beverages as those with fewer than or equal to 40 calories per Reference Amount Customarily Consumed (RACC).

More than 500 commenters supported proposed Alternative D2 (allowing no more than 50 calories in 8 fluid ounces and no more than 75 calories in 12 fluid ounces), 12 ounces maximum. Several commenters recommended that USDA adopt a modified version of Alternative D2 that would reflect the fact that FDA rounding rules require a beverage with 75 calories in a 12 ounce portion to be labeled as having 80 calories per 12 fluid ounces.

In response, USDA appreciates the input provided by commenters on the proposed standards for other beverages allowed in high school. In this interim final rule, we are allowing calorie-free beverages with a maximum container size of 20 fluid ounces, as proposed but with the technical changes requested by commenters. We are also adopting proposed Alternative D1 for lower-calorie beverages, which allows up to 40 calories per 8 ounces and 60 calories per 12 ounces, with the maximum proposed 12 ounce limit. This standard allows a great variety of popular beverage choices to be available for sale in high schools, while also limiting the calories these beverages could provide. Limiting the maximum container size to 12 ounces for these lower calories beverages also reinforces the important concept of appropriate serving sizes for items with calories.

Restrictions on the Sale of Other Beverages in High School—“Time and Place” Rule

Approximately 1,300 commenters addressed proposed “time and place” restrictions for the sale of other beverages in high school. Numerous commenters opposed the distinction in the proposed rule between beverages allowed to be sold during meal times in meal service areas (i.e., water, milk and

juice) and those available only outside of meal times and meal service areas (other beverages in high school). These commenters argued that if an alternative beverage is allowed under the competitive food standards, it should be allowed regardless of the point of service. They reasoned that allowing the sale of lower-calorie and calorie-free beverages but not during the meal periods would send a mixed message to students regarding whether such beverages are a part of a healthy diet or should be avoided. Some of these commenters also stated that this provision would drive revenue from school nutrition programs into the alternative areas of the schools because students would go elsewhere to purchase those beverages.

USDA agrees with commenters that the distinction on when and where beverages can be sold in high schools during the school day may be unnecessary. The beverage standards adopted in this interim final rule allow a variety of beverage choices in high school, while limiting their calories. Therefore, we are removing the “time and place” restrictions for “other” beverages in high schools, as set forth in the proposed rule. Therefore, this rule does not restrict the sale of any allowable beverage, at any grade level, throughout the school day anywhere on the school campus. However, USDA will monitor this provision to ensure that the sale of such competitive beverages in the food service area does not negatively impact consumption of milk, an excellent source of calcium. USDA will continue monitoring milk sales and consumption in schools in periodic studies. State agencies or school districts could choose to prohibit sale of these other beverages in food service areas.

Summary of Changes to Nutrition Standards for Beverages

Accordingly, this interim final rule codifies, in § 210.11(m)(1) and (m)(2), the proposed nutrition standards for beverages for elementary schools and middle schools, with the addition of plain carbonated water with no size limit; 100 percent juice diluted with water (with or without carbonation and with no added sweeteners) in the proposed size limit for juice for each grade group; and a change in terminology from plain milk to unflavored milk.

Section 210.11(m)(3) of this interim final rule adopts the proposed nutrition standards for water, milk and juice in high schools, with the addition of plain carbonated water with no size limit; 100 percent juice diluted with water (with or without carbonation and with no added sweeteners) in no more than 12 ounces; and a change in terminology from plain milk to unflavored milk.

In addition, § 210.11(m)(3) allows, in high schools, calorie-free, flavored water, with or without carbonation (no more than 20 fluid ounces); other beverages that are labeled to contain less than 5 calories per 8 fluid ounces, or less than or equal to 10 calories per 20 fluid ounces (no more than 20 fluid ounces); and other beverages that are labeled to contain no more than 40 calories per 8 fluid ounces or 60 calories per 12 fluid ounces (no more than 12 fluid ounces).

Caffeine

The proposed rule at § 210.11(l) would require foods and beverages available in elementary and middle schools to be caffeine free, with the exception of trace amounts of naturally occurring caffeine substances. This is consistent with IOM recommendations. However, the proposed nutrition standards for beverages would permit caffeine for high school students, and the proposed rule requested commenter input on this issue.

Over 350 commenters supported the proposed caffeine restrictions for elementary and middle schools. Approximately 120 commenters thought the standard for these lower grade levels should be less restrictive. Some commenters requested guidance on what constitutes “trace amounts of naturally occurring” caffeine. More than 400 commenters supported allowing caffeine in high schools, while 75 commenters opposed allowing caffeine for high school students at all, citing that it is not consistent with IOM's recommendation. A number of commenters, including advocacy organizations, also highlighted their particular concern over the growing popularity and consumption of energy drinks because these often have very high levels of caffeine. One of these commenters cited potential adverse health and safety effects of energy drinks on students.

USDA is concerned, as are some commenters, that some foods and beverages with very high levels of caffeine may not be appropriate to be sold in schools, even at the high school level. Although the American Academy of Pediatrics discourages the consumption of caffeine and other stimulants by children and adolescents, the FDA has not set a daily caffeine limit for children. However, FDA recently announced that it will investigate the safety of caffeine in food products, particularly its effects on children and adolescents. The FDA announcement cites a proliferation of products with caffeine that are being aggressively marketed to children, including “energy drinks.” FDA is working with the IOM to convene a public workshop in the near future to explore these issues, including determining a safe level for caffeine consumption and the potential consequences to children of caffeinated products in the food supply.

Given the lack of authoritative recommendations at this time, this interim final rule will not prohibit caffeine for high school students. However, USDA acknowledges commenters' concerns and encourages schools to be mindful of the level of caffeine in food and beverages when selecting products for sale in schools, especially when considering the sale of high caffeine products such as energy drinks. USDA will continue to monitor research and recommendations on caffeine in children as we develop a final rule. We will also provide guidance to program operators on what constitutes trace amounts of naturally occurring caffeine, for use at the elementary and middle school levels.

Accordingly, this interim final rule codifies the caffeine provisions, as proposed, in § 210.11(k).

Non-nutritive sweeteners

The proposal did not explicitly address the issue of non-nutritive sweeteners; however, the proposal would allow calorie-free and low-calorie beverages in high schools, which implicitly would allow beverages including non-nutritive sweeteners.

Approximately 40 commenters addressed the use of non-nutritive sweeteners in food products. Some commenters opposed allowing artificially sweetened beverages. For example, some commenters opposed the sale of diet sodas, whereas others stated that there is little evidence regarding the advisability of intake of sugar-sweetened beverages versus intake of non-nutritive sweeteners in beverages. In contrast, some commenters supported the use of non-nutritive sweeteners. USDA appreciates commenter input but is not explicitly addressing in the regulatory text of this interim final rule the use of non-nutritive sweeteners. Local program operators can decide whether to offer items for sale with non-nutritive sweeteners.

Other Requirements

Fundraisers

Proposed § 210.11(b)(5) would require that food and beverage items sold

during the school day meet the nutrition standards for competitive food, but would allow for special exemptions for the purpose of conducting infrequent school-sponsored fundraisers. Commenters were asked to address two proposed alternatives to establishing the limitations on the frequency of specially exempted fundraisers. Under the proposed alternatives, the frequency would be specified:

• By the State agency during such periods that schools are in session (proposed Alternative E1); or

• By the State agency and approved by USDA during such periods that schools are in session (proposed Alternative E2).

In either case, the proposed rule required that no specially exempted fundraiser foods or beverages would be sold in competition with school meals in the food service area during meal service.

As stated in the preamble to the proposed rule, the proposal would not limit the sale of food items that meet the proposed nutrition requirements (as well as the sale of non-food items) at fundraisers. In addition, the proposed standards would not apply to food sold during non-school hours, weekends and off-campus fundraising events such as concessions during after-school sporting events.

Approximately 85 commenters supported proposed Alternative E1 allowing State agencies the discretion to determine the allowed frequency of exempted fundraisers. Commenters argued that State agencies possess the necessary knowledge, understanding or resources to make decisions about what “limited number” of fundraisers is appropriate for their communities. Several commenters requested clarifying that if a State agency does not specify an acceptable exempted fundraiser frequency, it would be implied that no exemptions are granted.

Approximately 800 commenters expressed support for proposed Alternative E2 which would allow State agencies to set the frequency of exempted fundraisers, with USDA approval, citing that this would better ensure consistent application of nutrient standards across all fundraisers. Some commenters suggested that USDA should set the number or standards for exempt fundraisers per year for purposes of consistency. A few commenters provided more specific recommendations for the frequency of fundraisers.

More than 600 commenters suggested that there should be no exemptions for fundraisers from the competitive food standards because fundraiser foods compete with school meals and providing exemptions would blur the message of good nutrition practices.

Approximately 550 commenters provided comments regarding the place and/or time that specially exempted fundraisers could be sold. Numerous commenters suggested that USDA prohibit sales by exempt fundraisers across the entire school campus instead of only food service areas during meal service.

Several commenters expressed concern over the potential loss of revenue if fundraisers are limited; other commenters were concerned about the effects of the proposed fundraiser limitations on schools, clubs and student organizations that rely on revenue from fundraising.

Some commenters requested clarification that the competitive food standards did not apply to fundraisers in which the food was not intended to be consumed on the school campus (e.g., catalog sales or frozen pizzas and cookie dough).

In response, USDA believes that the most appropriate approach to specifying the standards for exempt fundraisers is to allow State agencies to set the allowed frequency (proposed Alternative E1). If a State agency does not specify the exemption frequency, no fundraiser exemptions may be granted. As noted in the preamble to the proposed rule, USDA's expectation is that State agencies will ensure that the frequency of such exempt fundraisers on school grounds during the school day does not reach a level to impair the effectiveness of the competitive food requirements in this rule. It is not USDA's intent that the competitive food standards in this interim final rule apply to fundraisers in which the food sold is clearly not for consumption on the school campus during the school day. It is important to note that school districts may implement more restrictive competitive food standards, including those related to the frequency with which exempt fundraisers may be held in their schools, and further restrictions on the areas and times when exempt fundraisers may occur.

Accordingly, § 210.11(b)(4) of this interim final rule specifies that competitive food and beverage items sold during the school day must meet the nutrition standards for competitive food, and that a special exemption is allowed for the sale of food and/or beverages that do not meet the competitive food standards for the purpose of conducting an infrequent school-sponsored fundraiser. Such specially exempted fundraisers must not take place more than the frequency specified by the State agency during such periods that schools are in session. Finally, no specially exempted fundraiser foods or beverages may be sold in competition with school meals in the food service area during the meal service.

Availability of Water During the Meal Service

The proposed rule at § 210.10(a)(1) would require schools to make potable water available to children at no charge in the place where lunches and afterschool snacks are served during the meal service. The proposed rule encouraged, but did not require potable water to be served in the SBP. The proposal responded to amendments made to Section 9(a)(5) of the NSLA, 42 U.S.C. 1758(a)(5), by section 203 of the HHFKA which requires schools participating in the school lunch program to make available to children free of charge, potable water for consumption in the place where meals are served during meal service and which was effective as of October 1, 2010.

Approximately 490 commenters addressed implementation issues related to this provision. Approximately 7,000 commenters addressed other issues. Many of these commenters expressed support for the requirement for schools to make potable water readily accessible to children at no charge during the school meal service. Many commenters urged USDA to strengthen the proposed water requirements to include breakfast food service. Several commenters opposed requiring that potable water be available in schools in the afterschool snack service, citing concern that some groups outside of school food service may have logistical difficulty complying. Many commenters suggested that USDA specify that schools must make potable water available “readily accessible without restriction” in addition to being “available” (e.g., if only one water source is available, cups should be provided).

USDA agrees with many commenters that the potable water requirement be added to the breakfast meal service. We acknowledge, however, the variety of models of serving school breakfast including kiosks and breakfast in the classroom. In recognition of these alternative approaches to serving breakfast, we are only requiring the availability of free potable water during the SBP breakfast meal service when breakfast is served in the cafeteria. We encourage schools to provide water in other settings to the extent possible. In addition, we understand that afterschool

snack service could present logistical difficulties in compliance. Therefore, we are not requiring that free potable water be made available during afterschool programs, though we would strongly encourage program operators to do so, to the extent possible, particularly if milk or juice is not offered as part of the snack.

USDA issued an implementation memorandum entitled

Child Nutrition Reauthorization 2010: Water Availability During National School Lunch Program Meal Service,

on April 14, 2011 (SP 28-2011). On July 12, 2011, the memorandum was revised to provide more detailed guidance in the form of a series of questions and answers regarding the implementation of the water requirement. This memorandum is available on the FNS Web site at

http://www.fns.usda.gov/cnd/governance/policy.htm.

In that memorandum, we indicated that water should be available “without restriction,” to ensure program operators implement the provision as intended. The words “without restriction” are included in this interim final rule, and the memorandum will be updated to reflect the addition of breakfast when it is served in the cafeteria.

Please note that this provision, as revised, will become effective 60 days after publication of this interim final rule, as the HHFKA potable water provision was effective as of October 1, 2010, and program operators have been implementing the requirement for lunch meal service since that time.

Accordingly, this interim final rule, in § 210.10(a)(1), requires that schools make potable water available and accessible without restriction to children at no charge in the place where lunches are served during the meal service. In addition, § 220.8(a)(1) requires that when breakfast is served in the cafeteria, schools must make potable water available and accessible without restriction to children at no charge.

Recordkeeping Requirements

Under proposed § 210.11(b)(3), local educational agencies and school food authorities would be required to maintain records documenting compliance with the proposed requirements. Local educational agencies would be responsible for maintaining records documenting compliance with the competitive food nutrition standards for food sold in areas that are outside of the control of the school food service operation. Local educational agencies also would be responsible for ensuring any organization designated as responsible for food service at the various venues in the school (other than the school food service) maintains records documenting compliance with the competitive food nutrition standards. The school food authority would be responsible for maintaining records documenting compliance with the competitive food nutrition standards for foods sold in meal service areas during meal service periods. Required records would include, at a minimum, receipts, nutrition labels and/or product specifications for the items available for sale.

Many commenters expressed concerns about these recordkeeping requirements. Some suggested recordkeeping is an unfunded mandate; others considered it costly, unrealistic and/or not necessary. Yet others recommended minimizing the recordkeeping on non-school groups. A number of commenters representing school food service were concerned that the local educational agency would require school food service to be responsible for recordkeeping on behalf of school food service as well as other entities/organizations within the local educational agency. These commenters were particularly concerned that additional recordkeeping responsibilities would compromise their efforts to implement the updated school meal pattern requirements. Additionally, they were concerned that school food service could not affect the requirements throughout the local educational agency since they have no authority over other school organizations. Some commenters suggested the responsibility should be at the local educational agency, not at individual schools. Finally, some commenters suggested a delayed implementation of the recordkeeping requirements, including an opportunity to study the impact of the requirements.

The Department appreciates that this regulation will create some new challenges initially, as schools seek to improve the school nutrition environment. However, evaluating records is essential to the integrity of the competitive food standards. To determine whether a food item is an allowable competitive food, the local educational agency designee(s) must assess the nutritional profile of the food item. Absent an evaluation of the nutritional profile, the local educational agency has no way of knowing whether a food item meets the nutrition standards set forth in this interim final rule. The recordkeeping requirement simply requires the local educational agency to retain the reviewed documentation (e.g., the nutrition labels, receipts, and/or product specifications).

Perhaps the larger issue raised by commenters is who is responsible for this activity. The Department does not necessarily expect the responsibility to rest solely with the nonprofit school food service. School food service personnel are expected to have a clear understanding of the nutrition profile of foods purchased using nonprofit school food service funds for reimbursable meals, à la carte offerings, etc. Retaining receipts, nutrition labels or product specifications for foods purchased with nonprofit school food service funds is a part of doing business. Yet their authority and responsibilities are typically limited to the nonprofit school food service. Local educational agencies are responsible for ensuring that all entities involved in food sales within a school understand that the local educational agency as a whole must comply with these requirements.

The Department appreciates that sorting through who is responsible will initially require planning and cooperation which could be facilitated by the local school wellness policy designee(s). Section 204 of the HHFKA amended the NSLA by adding section 9A (42 U.S.C. 1758b) which requires each local educational agency to (a) establish a local school wellness policy which includes nutrition standards for all foods available on each school campus, and (b) designate one or more local educational agency officials or school officials, to ensure that each school complies with the local school wellness policy. State agencies were advised of the section 204 requirements in FNS Memorandum,

Child Nutrition Reauthorization 2010: Local School Wellness Policies,

issued July 8, 2011 (SP 42-2011).

The Department acknowledges the first year of implementation may be challenging as groups work together to establish a healthy school nutrition environment; however, if the local school wellness designee(s), school food service and other entities and groups work together to share information on allowable foods, we believe that implementation in future years will be greatly streamlined. As always, State agencies and the Department will provide technical assistance to facilitate implementation of the competitive food nutrition standards. Further, since implementation is not required until July 1, 2014, local educational agencies have time to sort out implementation issues and ensure all parties are well trained. Delayed implementation combined with the opportunities for public comment provided by this

interim final rule, have the added benefit of providing additional information which will inform the final rule and future research agendas.

Finally, the Department would like to address the comment suggesting this requirement is an unfunded mandate. The Department provides cash and donated food assistance to States and schools participating in the NSLP and SBP to strengthen and expand food service programs for children. In exchange, State agencies and participating local educational agencies/school food authorities agree to comply with the regulations set forth in 7 CFR 210 and 220.

Accordingly, the interim final rule at 210.11(b)(2), codifies the provision, as proposed, with one minor technical change. The proposed rule stated the school food authority is responsible for maintaining records documenting compliance with these standards in meal service areas during meal service periods. The interim final rule modifies this language to state that the school food authority is responsible for maintaining records for foods served under the auspices of the nonprofit school food service. This change acknowledges that nonprofit school food service activity may extend beyond meal service areas.

Compliance

Proposed § 210.18(h)(7) would require State agencies to ensure that local educational agencies comply with the nutrition standards for competitive food and retain documentation demonstrating compliance with the competitive food service and standards.

A number of commenters, largely school food service personnel, expressed concerns about how monitoring would occur for foods sold by groups outside of the school food service. Some commenters believed technical assistance would be insufficient and raised questions about means to effect compliance, e.g., some sort of fiscal action. Other commenters expressed concerns about the need to train and educate non-school food service personnel as to how to comply with the regulations.

The Department agrees that training will be needed to ensure compliance with the nutrition standards. As mentioned under

Recordkeeping,

the Department envisions local educational agency designees, potentially the local school wellness coordinator(s), taking the lead in developing performance or compliance standards and training for all local educational personnel tasked with selling competitive food on the school campus during the school day. The Department and State agencies will also offer training to ensure local educational agencies are able to comply in the most efficient manner possible.

School food service operations are routinely monitored by State agencies. State agencies conduct administrative reviews of school nutrition program operations once every three years. However, the HHFKA expanded the scope of the Department's responsibilities to include the school nutrition environment, not just school nutrition program operations. The Department now has responsibilities regarding the development and implementation of local school wellness policies, as required by the amendments made to the NSLA by section 204 of the HHFKA. In addition, the Department now has oversight and authority of foods sold outside of the school nutrition programs on the school campus during the school day, as required by the amendments made to the NSLA by section 208 of the HHFKA.

The Department will be addressing the scope of these extended monitoring responsibilities in a forthcoming proposed rule addressing administrative review requirements. Interested parties will have an opportunity to comment on the Department's approach to monitoring during the public comment period following publication of the proposed administrative review rule. The Department would like to assure commenters that we see technical assistance and training as the first approach to non-compliance, however, we recognize that egregious, repeated cases of non-compliance may require a more aggressive approach. In this regard, section 303 of the HHFKA amended section 22 of the NSLA (42 U.S.C. 1769c) to provide the Department with the authority to impose fines against any school or school food authority failing to comply with program regulations. This authority will be addressed in a forthcoming proposed rule addressing a number of integrity issues related to local educational agencies administering the Child Nutrition Programs. As with the proposed administrative rule, interested parties will have an opportunity to address these issues during a public comment period following publication of that proposed integrity rule.

Accordingly, § 210.18(h) is adopted as proposed.

Special Situations

The proposed rule would have required all local educational agencies and schools participating in the NSLP and SBP to meet the competitive food nutrition standards.

Several commenters noted the competitive food nutrition standards may be difficult for small schools, residential child care institutions (RCCIs) and culinary programs to administer. Commenters noted small or medium-sized schools may not have sufficient resources to carry out the required calculations or comply with the proposed recordkeeping requirements. In the case of RCCIs, one commenter noted that existing State regulations for juvenile detention centers may obviate the need for USDA nutrition standards for competitive foods. Several commenters recommended that foods made and sold by career centers and culinary arts programs be exempted from the competitive food standards, as the foods made in these programs may not meet the new standards and, therefore, could not be sold at student-run cafes. Alternatively, the proposed standards could limit the skills development necessary for careers in the food industry because the foods prepared would exceed the proposed standards. Yet other commenters argued there should be no difference between standards applying to the nonprofit school food service and other food service operations in the schools, such as school stores, culinary arts programs and vending machines. The competitive food standards should “level the playing field” between the nonprofit school food service and other school food sellers, including culinary arts programs.

Regarding small schools and RCCIs, the Department firmly believes the overall health and well-being of students in small entities is just as important as that of students in large entities. For this reason, the interim final rule continues to apply to all schools participating in the NSLP and SBP, including small schools and RCCIs. However, we do appreciate that these entities may have staffing limitations that make implementation more challenging. We look to the State agency to provide guidance to these entities, possibly sharing observations on allowable products and practices employed by other school districts in the State to meet the requirements. Schools with limited resources are likely to offer a limited number of competitive foods for sale which may facilitate meeting the requirements in these situations.

Career centers and culinary arts programs present a more challenging issue. These programs often make and sell foods to students. These programs are providing vocational training for culinary art careers. Students are

preparing to enter the workforce where the nutritional standards and requirements may vary widely from those required under the NSLP and SBP. Applying the nutrition standards for competitive food to these programs may limit the skill development necessary for careers in the food industry. Section 12(c) of the NSLA (42 U.S.C. 1760(c)) and section 11(a) of the CNA (42 U.S.C. 1780(a)) prohibit the Secretary from imposing any requirement with respect to teaching personnel, curriculum, instructions, methods of instruction, and materials for instruction in any school. However, section 10 of the CNA, as amended by section 208 of the HHFKA requires any food sold outside of the school meal programs, on the school campus and at any time during the school day to meet the competitive food nutrition standards set forth in this interim final rule. Therefore, in recognition of the potential conflict of legislative intent, the Department is willing to consider each situation on a case by case basis, and provide a waiver where appropriate. State agencies are advised to contact FNS' Regional Offices as situations arise.

Related Information

Implementation

State agencies and local educational agencies must implement the competitive food provisions of this interim final rule beginning on July 1, 2014, as specified in the DATES section of this preamble. Amendments made by section 208 of the HHFKA made it clear that the Department must allow State and local educational agencies at least one full school year from the date of publication of this interim final rule to implement the competitive food provisions. For this reason, the interim final rule retains the existing competitive food requirements which included a prohibition on the sale of foods of minimal nutritional value in the food service areas during the meal periods (hereafter termed “foods of minimal nutritional value regulation”). Prior to August 27, 2013, these requirements were found at 7 CFR 210.11.

State and local educational agencies may begin implementing the competitive food provisions of this interim final rule prior to July 1, 2014; provided that those provisions complement and do not conflict with the foods of minimal nutritional value regulation which remains in effect through June 30, 2014.

To effect these changes, the foods of minimal nutritional value regulation (entitled

Competitive food services

) is being redesignated as § 210.11a in this rule. The new interim competitive food nutrition standards are added to § 210.11. The Department intends to remove § 210.11a and its corresponding Appendix B in the final rule. Similar changes are made to the breakfast program regulations. Until such time as the final rule is published, the Department added paragraph § 210.11a(c), which limits the effective period for the foods of minimal nutritional value regulation through June 30, 2014. Thus, when the new interim regulations take effect, the old regulations expire.

Summary of Interim Final Rule Competitive Food Standards

Food/nutrient

Standard

Exemptions to the standard

General Standard for Competitive Food

To be allowable, a competitive FOOD item must:

(1) Meet all of the proposed competitive food nutrient standards; and

(2) Be a grain product that contains 50% or more whole grains by weight or have whole grains as the first ingredient*;

or

(3) Have as the first ingredient* one of the non-grain main food groups: fruits, vegetables, dairy, or protein foods (meat, beans, poultry, seafood, eggs, nuts, seeds, etc.);

or

(4) Be a combination food that contains at least

1/4

cup fruit and/or vegetable; or

(5) Contain 10% of the Daily Value (DV) of a nutrient of public health concern (i.e., calcium, potassium, vitamin D, or dietary fiber). Effective July 1, 2016 this criterion is obsolete and may not be used to qualify as a competitive food

• Fresh and frozen fruits and vegetables with no added ingredients except water are exempt from all nutrient standards.

• Canned fruits with no added ingredients except water, which are packed in 100% juice, extra light syrup, or light syrup are exempt from all nutrient standards.

• Canned vegetables with no added ingredients except water or that contain a small amount of sugar for processing purposes to maintain the quality and structure of the vegetable are exempt from all nutrient standards.

* If water is the first ingredient, the second ingredient must be one of the above.

NSLP/SBP Entrée Items Sold à la Carte

Any entrée item offered as part of the lunch program or the breakfast program is exempt from all competitive food standards if it is served as a competitive food on the day of service or the day after service in the lunch or breakfast program

Grain Items

Acceptable grain items must include 50% or more whole grains by weight, or have whole grains as the first ingredient

Total Fats

Acceptable food items must have ≤ 35% calories from total fat as served

• Reduced fat cheese (including part-skim mozzarella) is exempt from the total fat standard.

• Nuts and seeds and nut/seed butters are exempt from the total fat standard.

• Products consisting of only dried fruit with nuts and/or seeds with no added nutritive sweeteners or fats are exempt from the total fat standard.

• Seafood with no added fat is exempt from the total fat standard.

Combination products are not exempt and must meet all the nutrient standards.

Saturated Fats

Acceptable food items must have <10% calories from saturated fat as served

• Reduced fat cheese (including part-skim mozzarella) is exempt from the saturated fat standard.

• Nuts and seeds and nut/seed butters are exempt from the saturated fat standard.

• Products consisting of only dried fruit with nuts and/or seeds with no added nutritive sweeteners or fats are exempt from the saturated fat standard.

Combination products are not exempt and must meet all the nutrient standards.

Trans Fats

Zero grams of trans fat as served (≤0.5 g per portion).

Sugar

Acceptable food items must have ≤35% of weight from total sugar as served.

• Dried whole fruits or vegetables; dried whole fruit or vegetable pieces; and dehydrated fruits or vegetables with no added nutritive sweeteners are exempt from the sugar standard.

• Dried whole fruits, or pieces, with nutritive sweeteners that are required for processing and/or palatability purposes (i.e., cranberries, tart cherries, or blueberries) are exempt from the sugar standard.

• Products consisting of only dried fruit with nuts and/or seeds with no added nutritive sweeteners or fats are exempt from the sugar standard.

Sodium

Snack items and side dishes sold à la carte: ≤230 mg sodium per item as served. Effective July 1, 2016 snack items and side dishes sold à la carte must be: ≤200 mg sodium per item as served, including any added accompaniments.

Entrée items sold à la carte: ≤480 mg sodium per item as served, including any added accompaniments.

Calories

Snack items and side dishes sold à la carte: ≤ 200 calories per item as served, including any added accompaniments.

Entrée items sold à la carte: ≤350 calories per item as served including any added accompaniments.

Accompaniments

Use of accompaniments is limited when competitive food is sold to students in school. The accompaniment must be included in the nutrient profile as part of the food item served and meet all proposed standards.

Caffeine

Elementary and Middle School: foods and beverages must be caffeine-free with the exception of trace amounts of naturally occurring caffeine substances.

High School: foods and beverages may contain caffeine.

Beverages

Elementary School

• Plain water or plain carbonated water (no size limit);

• Low fat milk, unflavored (≤8 fl oz);

• Non fat milk, flavored or unflavored (≤8 fl oz), including nutritionally equivalent milk alternatives as permitted by the school meal requirements;

• 100% fruit/vegetable juice (≤8 fl oz); and

• 100% fruit/vegetable juice diluted with water (with or without carbonation), and no added sweeteners (≤8 fl oz).

Middle School

• Plain water or plain carbonated water (no size limit);

• Low-fat milk, unflavored (≤12 fl oz);

• Non-fat milk, flavored or unflavored (≤12 fl oz), including nutritionally equivalent milk alternatives as permitted by the school meal requirements;

• 100% fruit/vegetable juice (≤12 fl oz); and

• 100% fruit/vegetable juice diluted with water (with or without carbonation), and no added sweeteners (≤12 fl oz).

High School

• Plain water or plain carbonated water (no size limit);

• Low-fat milk, unflavored (≤12 fl oz);

• Non-fat milk, flavored or unflavored (≤12 fl oz), including nutritionally equivalent milk alternatives as permitted by the school meal requirements;

• 100% fruit/vegetable juice (≤12 fl oz);

• 100% fruit/vegetable juice diluted with water (with or without carbonation), and no added sweeteners (≤12 fl oz);

• Other flavored and/or carbonated beverages (≤20 fl oz) that are labeled to contain ≤5 calories per 8 fl oz, or ≤10 calories per 20 fl oz; and

• Other flavored and/or carbonated beverages (≤12 fl oz) that are labeled to contain ≤40 calories per 8 fl oz, or ≤60 calories per 12 fl oz.

Sugar-free Chewing Gum

Sugar-free chewing gum is exempt from all of the competitive food standards and may be sold to students at the discretion of the local educational agency.

Procedural Matters

Issuance of an Interim Final Rule and Date of Effectiveness

USDA, under the provisions of the Administrative Procedure Act at 5 U.S.C. 553(b)(B), finds for good cause that it is impracticable to issue a final rule at this time and thus is issuing an interim final rule, as authorized by section 208 of the Healthy, Hunger-Free Kids Act of 2010, Public Law 111-296, enacted on December 13, 2010. On February 8, 2013, USDA published a proposed rule to implement section 208 of the Healthy, Hunger-Free Kids Act of 2010 (78 FR 9530). The rule provided for a 60-day comment period, which ended on April 9, 2013. This interim final rule reflects comments received during that period. Section 208 requires that implementation of this statutory provision shall take effect at the beginning of the school year that is not earlier than one year and not later than two years following the date of the publication of an interim final or final rule. USDA recognizes that the significant, statutorily established, implementation delay will provide federal and state partners a lengthy period in which to provide technical assistance and administrative support to SFAs working toward compliance. At this time, as provided for in the

DATES

section, USDA invites public comment on this interim final rule. USDA will consider amendments to the rule based on comments submitted during the 120-day comment period. The agency will address comments and affirm or amend the interim final rule in a final rule.

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 interim final rule has been designated an “economically significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.

Regulatory Flexibility Analysis

This rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). The interim final rule directly regulates the 54 State education agencies and 3 State Departments of Agriculture that operate the NSLP pursuant to agreements with USDA's Food and Nutrition Service. While State agencies are not considered small entities as State populations exceed the 50,000 threshold for a small government jurisdiction, many of the service-providing institutions that work with them to implement the program do meet definitions of small entities.

The requirements established by this interim final rule will apply to school districts, which meet the definitions of “small governmental jurisdiction” and other establishments that meet the definition of “small entity” in the Regulatory Flexibility Act. An Initial Regulatory Flexibility Act analysis is included as an Appendix to this rule.

Unfunded Mandates Reform Act

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

requirements of sections 202 and 205 of the UMRA.

Executive Order 12372

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

Executive Order 13132

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

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is intended to have preemptive effect with respect to any State or local laws, regulations or policies which conflict with its provisions or which would otherwise impede its full implementation. This rule is not intended to have retroactive effect unless specified in the

DATES

section of the final rule. Prior to any judicial challenge to the provisions of this rule or the application of its provisions, all applicable administrative procedures must be exhausted.

Civil Rights Impact Analysis

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

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR part 1320), requires that the Office of Management and Budget (OMB) approve all collections of information by a Federal agency from the public before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current, valid OMB control number. This rule does contain information collection requirements subject to approval by OMB under the Paperwork Reduction Act of 1995.

A 60-day notice was embedded into the proposed rule, “

7 CFR Parts 210 and 220 National School Lunch Program and School Breakfast Program: Nutrition Standards for All Foods Sold in School as Required by the Healthy Hunger Free Kids Act of 2010,”

published in the

Federal Register

at 78 FR 9530 on February 8, 2013, which provided the public an opportunity to submit comments on the information collection burden resulting from this rule. The information collection requirements associated with this interim final rule have been submitted for approval to the Office of Management and Budget (OMB). FNS will publish a document in the

Federal Register

once these requirements have been approved.

FNS is requesting 927,634 burden hours for recordkeeping to document compliance with the new nutrition standards. The estimated average number of respondents for this rule is 122,662 (57 State agencies, 20,858 school food authorities, and 101,747 schools). The following table reflects the estimated burden associated with the new information collection requirements.

Estimated Annual Burden for 0584-New, 7 CFR Part 210 National School Lunch Program and School Breakfast Program: Nutrition Standards for All Foods Sold in School

Section

Estimated

number of

recordkeepers

Records per

recordkeeper

Average

annual

records

Average

burden per

record

Annual

burden hours

Recordkeeping:

SA shall ensure that the LEA complies with the nutrition standards for competitive foods and retains documentation demonstrating compliance

7 CFR 210.18(h)(7)

57

122

6,954

0.25

1,739

LEAs and SFAs shall be responsible for maintaining records documenting compliance with the competitive food standards

7 CFR 210.11(b)(3)

20,858

1

20,858

20

417,160

Organizations responsible for competitive food service at various venues in schools shall maintain records

7 CFR 210.11(b)(3)

101,747

1

101,747

5

508,735

Total Recordkeeping Burden

122,662

1.0562

129,559

7.1599

927,634

E-Government Act Compliance

The Food and Nutrition Service is committed to complying with the E-Government Act of 2002, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services and for other purposes.

Executive Order 13175—Consultation and Coordination With Indian Tribal Governments

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

1. HHFKA Webinar & Conference Call—April 12, 2011

2. Mountain Plains—HHFKA Consultation, Rapid City, SD—March 23, 2011

3. HHFKA Webinar & Conference Call—June, 22, 2011

4. Tribal Self-Governance Annual Conference in Palm Springs, CA—May 2, 2011

5. National Congress of American Indians Mid-Year Conference, Milwaukee, WI—June 14, 2011

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

Currently, FNS provides regularly scheduled quarterly consultation sessions as a venue for collaborative conversations with Tribal officials or their designees. The most recent specific discussion of the Nutrition Standards for Foods Sold in Schools proposed rule was included in the consultation conducted on February 13, 2013. No questions or comments were raised specific to this rulemaking at that time.

Reports from these consultations are part of the USDA annual reporting on Tribal consultation and collaboration. FNS will respond in a timely and meaningful manner to Tribal government requests for consultation concerning this rule.

Regulatory Impact Analysis Summary

A Regulatory Impact Analysis (RIA) was developed for this proposal, which is summarized below. The full RIA is included as an Appendix to this rule.

Need for Action

The interim final rule responds to two provisions of the Healthy, Hunger-Free Kids Act of 2010. Section 208 of HHFKA amended Section 10 of the Child Nutrition Act of 1966 to require the Secretary to establish science-based nutrition standards for all foods sold in schools during the school day.

Response to Comments

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

Benefits

The primary purpose of the rule is to ensure that nutrition standards for competitive foods are consistent with the most recent DGA recommendations, effectively holding competitive foods to the same standards as the rest of the foods sold at school during the school day. These standards, combined with recent improvements in school meals, will help promote diets that contribute to students' long-term health and well-being. And they will support parents' efforts to promote healthy choices for children at home and at school.

Obesity has become a major public health concern in the U.S., with one-third of U.S. children and adolescents now considered overweight or obese (Beydoun and Wang 2011

1

), with current childhood obesity rates four times higher in children ages six to 11 than they were in the early 1960s (19 vs. 4 percent), and three times higher (17 vs. 5 percent) for adolescents ages 12 to 19.

2

Research focused specifically on the effects of obesity in children indicates that obese children feel they are less capable, both socially and athletically, less attractive, and less worthwhile than their non-obese counterparts.

3

Further, there are direct economic costs due to childhood obesity: $237.6 million (in 2005 dollars) in inpatient costs

4

plus annual prescription drug, emergency room, and outpatient costs of $14.1 billion.

5

1

Beydoun, M.A. and Y. Wang. 2011. Socio-demographic disparities in distribution shifts over time in various adiposity measures among American children and adolescents: What changes in prevalence rates could not reveal.

International Journal of Pediatric Obesity,

6:21-35. As cited in Food Labeling: Calorie Labeling of Articles of Food in Vending Machines NPRM. 2011. Preliminary Regulatory Impact Analysis, Docket No. FDA-2011-F-0171.

2

Ogden et al.

Prevalence of Obesity Among Children and Adolescents: United States, Trends 1963-1965 Through 2007-2008.

CDC-NHCS, NCHS Health E-Stat, June 2010. On the web at

http://www.cdc.gov/nchs/data/hestat/obesity_child_07_08/obesity_child_07_08.htm

.

3

Riazi, A., S. Shakoor, I. Dundas, C. Eiser, and S.A. McKenzie. 2010. Health-related quality of life in a clinical sample of obese children and adolescents. Health and Quality of Life Outcomes, 8:134-139. Samuels & Associates. 2006. Competitive Foods. Policy Brief prepared by Samuels & Associates for The California Endowment and Robert Wood Johnson Foundation. Available at:

http://www.healthyeatingactivecommunities.org/downloads/.

4

Trasande, L., Y. Liu, G. Fryer, and M. Weitzman. 2009. Trends: Effects of Childhood Obesity on Hospital Care and Costs, 1999-2005.

Health Affairs,

28:w751-w760.

5

Cawley, J. 2010. The Economics of Childhood Obesity.

Health Affairs,

29:364-371. As cited in Food Labeling: Calorie Labeling of Articles of Food in Vending Machines NPRM. 2011. Preliminary Regulatory Impact Analysis, Docket No. FDA-2011-F-0171.

Because the factors that contribute both to overall food consumption and to obesity are so complex, it is not possible to define a level of disease or cost reduction expected to result from implementation of the rule. There is some evidence, however, that competitive food standards can improve children's dietary quality.

• Taber, Chriqui, and Chaloupka (2012

6

) concluded that California high school students consumed fewer calories, less fat, and less sugar at school than students in other States. Their analysis “suggested that California students did not compensate for consuming less within school by consuming more elsewhere” (p. 455).

6

Taber, D.R., J.F. Chriqui, and F. J. Chaloupka. 2012. Differences in Nutrient Intake Associated With State Laws Regarding Fat, Sugar, and Caloric Content of Competitive Foods.

Archives of Pediatric & Adolescent Medicine,

166:452-458.

• Schwartz, Novak, and Fiore, (2009

7

) determined that healthier competitive food standards decreased student consumption of low nutrition items with no compensating increase at home.

7

Schwartz, M.B., S.A. Novak, and S.S. Fiore. 2009. The Impact of Removing Snacks of Low Nutritional Value from Middle Schools.

Health Education & Behavior,

36:999-1011.

• Researchers at Healthy Eating Research and Bridging the Gap found that “[t]he best evidence available indicates that policies on snack foods and beverages sold in school impact children's diets and their risk for obesity. Strong policies that prohibit or restrict the sale of unhealthy competitive foods and drinks in schools are associated with lower proportions of

overweight or obese students, or lower rates of increase in student BMI” (Healthy Eating Research and Bridging the Gap, 2012, p. 3

8

).

8

Healthy Eating Research and Bridging the Gap. 2012. Influence of Competitive Food and Beverage Policies on Children's Diets and Childhood Obesity. Available at

http://www.healthyeatingresearch.org/images/stories/her_research_briefs/Competitive_Foods_Issue_Brief_HER_BTG_7-2012.pdf.

A recent, comprehensive, and groundbreaking assessment of the evidence on the importance of competitive food standards conducted by the Pew Health Group concluded that a national competitive foods policy would increase student exposure to healthier foods, decrease exposure to less healthy foods, and would also likely improve the mix of foods that students purchase and consume at school. Researchers concluded that these kinds of changes in food exposure and consumption at school are important influences on the overall quality of children's diets.

Although nutrition standards for foods sold at school alone may not be a determining factor in children's overall diets, they are critical to providing children with healthy food options throughout the entire school day. Thus, these standards will help to ensure that the school nutrition environment does all that it can to promote healthy choices, and help to prevent diet-related health problems. Ancillary benefits could derive from the fact that improving the nutritional value of competitive foods may reinforce school-based nutrition education and promotion efforts and contribute significantly to the overall effectiveness of the school nutrition environment in promoting healthful food and physical activity choices.

9

9

Pew Health Group and Robert Wood Johnson Foundation. 2012. Health Impact Assessment: National Nutrition Standards for Snack and à la Carte Foods and Beverages Sold in Schools. Available online:

http://www.pewhealth.org/uploadedFiles/PHG/Content_Level_Pages/Reports/KS%20HIA_FULL%20Report%20062212_WEB%20FINAL-v2.pdf

.

Costs

Any rule-induced benefit of healthier eating by school children would be accompanied by costs, at least in the short term. Healthier food may be more expensive than unhealthy food—either in raw materials, preparation, or both—and this greater expense would be distributed among students, schools, and the food industry. Moreover, students who switch to less-preferred foods and beverages could experience a utility loss. If students do not switch to healthier foods, they may incur travel or other costs related to obtaining their preferred choices from a location less convenient than school. Regardless of student response, the proposed rule would also impose administrative costs on schools and their food authorities.

Transfers

The rule requires schools to improve the nutritional quality of foods offered for sale to students outside of the Federal school lunch and school breakfast programs. The new standards apply to foods sold à la carte, in school stores or vending machines, and, with limited exceptions, through in-school fundraisers sponsored by students, parents, or other school-affiliated groups. Upon implementation of the rule, students will face new food choices from these sources. The new choices will meet standards for fat, saturated fat, sugar, and sodium, and have whole grains, low fat dairy, fruits, vegetables, or protein foods as their main ingredients. Our analysis examines a range of possible behavioral responses of students and schools to these changes. To estimate potential effects on school revenue, we look to the experience of school districts that have adopted or piloted competitive food reforms in recent years.

The practice of selling foods in competition with federally reimbursable program meals and snacks is widespread. In SY 2004-2005, 82 percent of all schools—and 92 percent of middle and high schools—offered à la carte foods at lunch. Vending machines were available in 39 percent of all schools, including 13 percent of elementary schools, 72 percent of middle schools, and 87 percent of high schools (Fox, et al., 2012; Volume 1, p. 3-42).

The limited information available indicates that many schools have successfully introduced competitive food reforms with little or no loss of revenue and in a few cases, revenues from competitive foods increased after introducing healthier foods. In some of the schools that showed declines in competitive food revenues, losses from reduced sales were fully offset by increases in reimbursable meal revenue. In other schools, students responded favorably to the healthier options and competitive food revenue declined little or not at all.

But not all schools that adopted or piloted competitive food standards fared as well. Some of the same studies and reports that highlight school success stories note that other schools sustained some loss after implementing similar standards. While in some cases these were short-term losses, even in the long-term the competitive food revenue lost by those schools was not offset (at least not fully) by revenue gains from the reimbursable meal programs.

Our analysis examines the possible effects of the rule on school revenues from competitive foods and the administrative costs of complying with the rule's competitive foods provisions. The analysis uses available data to construct model-based scenarios that different schools may experience in implementing the rule. While these vary in their impact on overall school food revenue, each scenario's estimated impact is relatively small (+0.5 percent to −1.3 percent). In comparison, the regulations implementing the school food service revenue provisions of HHFKA would increase average overall school food revenue by roughly six percent. That said, the data behind the scenarios are insufficient to assess the frequency or probability of schools experiencing the impacts shown in each.

List of Subjects

7 CFR Part 210

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

7 CFR Part 220

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

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

PART 210—NATIONAL SCHOOL LUNCH PROGRAM

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

Authority:

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

”

2. In § 210.1, the second sentence of paragraph (b) is revised to read as follows:

§ 210.1

General purpose and scope.

(b) * * * It specifies Program responsibilities of State and local officials in the areas of program administration, preparation and service of nutritious lunches, the sale of competitive foods, payment of funds, use of program funds, program monitoring, and reporting and recordkeeping requirements.

3. In § 210.10, amend paragraph (a)(1)(i) by adding a sentence at the end to read as follows:

§ 210.10

Meal requirements for lunches and requirements for afterschool snacks.

(a) * * *

(1) * * *

(i) * * * Schools must make potable water available and accessible without restriction to children at no charge in the place(s) where lunches are served during the meal service.

§ 210.11

[Redesignated as § 210.11a]

4. Redesignate § 210.11 as § 210.11a and dd new § 210.11 to read as follows:

§ 210.11

Competitive food service and standards.

(a)

Definitions.

For the purpose of this section:

(1)

Combination foods

means products that contain two or more components representing two or more of the recommended food groups: fruit, vegetable, dairy, protein or grains.

(2)

Competitive food

means all food and beverages other than meals reimbursed under programs authorized by the Richard B. Russell National School Lunch Act and the Child Nutrition Act of 1966 available for sale to students on the

School campus

during the

School day.

(3)

Entrée item

means an item that is either:

(i) A combination food of meat or meat alternate and whole grain rich food; or

(ii) A combination food of vegetable or fruit and meat or meat alternate; or

(iii) A meat or meat alternate alone with the exception of yogurt, low-fat or reduced fat cheese, nuts, seeds and nut or seed butters, and meat snacks (such as dried beef jerky).

(4)

School campus

means, for the purpose of competitive food standards implementation, all areas of the property under the jurisdiction of the school that are accessible to students during the school day.

(5)

School day

means, for the purpose of competitive food standards implementation, the period from the midnight before, to 30 minutes after the end of the official school day.

(b)

General requirements for competitive food.

(1)

State and local educational agency policies.

State agencies and/or local educational agencies must establish such policies and procedures as are necessary to ensure compliance with this section. State agencies and/or local educational agencies may impose additional restrictions on competitive foods, provided that they are not inconsistent with the requirements of this part.

(2)

Recordkeeping.

The local educational agency is responsible for the maintenance of rec

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