WIC Farmers' Market Nutrition Program

SUMMARY: This final rule amends and finalizes an interim rule that was

published on March 11, 1994 establishing requirements for the operation

and management of the WIC Farmers' Market Nutrition Program (FMNP). The

purposes of the FMNP are to provide resources to women, infants, and

children who are nutritionally at risk, in the form of fresh,

nutritious, unprepared foods (such as fruits and vegetables) from

farmers' markets; to expand the awareness and use of farmers' markets;

and to increase sales at such markets.

This rule also implements the nondiscretionary FMNP mandates of the

Healthy Meals for Healthy Americans Act of 1994, signed November 2,

1994.

EFFECTIVE DATE: This final rule is effective on October 1, 1995.

FOR FURTHER INFORMATION CONTACT: Barbara Hallman or Debra Whitford,

Supplemental Food Programs Division, Food and Consumer Service, USDA,

3101 Park Center Drive, Room 540, Alexandria, Virginia 22302, (703)

305-2730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be not significant for purposes of

Executive Order 12866 and therefore has not been reviewed by the Office

of Management and Budget.

Executive Order 12372

This program is subject to Executive Order 12372, which requires

intergovernmental consultation with State and local officials (7 CFR

part 3015, subpart V, and final rule-related notice published June 24,

1983 (48 FR 29114)).

Executive Order 12778

This rule has been reviewed under Executive Order 12778, 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 so specified in the ``Effective Date'' paragraph of this

preamble. Prior to any judicial challenge to the provisions of this

rule or the application of its provisions, all applicable

administrative procedures must be exhausted.

Regulatory Flexibility Act

The Department has also reviewed this rule in relation to the

requirements of the Regulatory Flexibility Act of 1980 (Pub. L. 96-354,

94 Stat. 1164, September 19, 1980). The Administrator of the Food and

Consumer Service has certified that this final rule does not have a

significant economic impact on a substantial number of small entities.

Participating farmers and farmers' markets will be affected by the FMNP

requirements and increased sales generated by FMNP recipients. In

addition, participating State and local agencies will be affected by

FMNP administration requirements. Participating State and local

agencies receive Federal food and administrative funds to meet the

requirements established in this rule. In addition, State agencies must

contribute at least 30 percent of the cost of the program, except

Indian Tribal Organizations which may receive a negotiated match

contribution that is less than 30 percent but not less than 10 percent.

Finally, there are no costs to farmers or farmers' markets for applying

for the FMNP.

Paperwork Reduction Act

The reporting requirements established by this rulemaking have been

reviewed and approved under Office of Management and Budget control

number 0584-0477, in accordance with the Paperwork Reduction Act of

1980 (44 U.S.C. 3507).

Estimated Annual Reporting and Recordkeeping Burden

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

Annual Average Annual

Section of number of Annual burden per burden

regulations respondents frequency response hours

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

Reporting

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

248.4............... 26 1 50 1,300

248.10(b)........... 550 1 2 1,100

248.17(b)(2)(ii).... 4 1 10 40

248.18(b)........... 26 1 15 390

248.23(b)........... 26 2 4.5 234

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

Total......... 576 ........... ........... 3,064

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

Recordkeeping

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

248.9............... 26 1 1 26

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248.10(a) (2) (3)... 1,100 1 2 2,200

248.10(e)........... 110 1 2 220

248.10(f)........... 26 1 5 130

248.11.............. 26 1 12 312

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

Total......... 1,126 1 ........... 2,888

===================================================

Total

Reporting and

Recordkeeping

Burden....... ........... ........... ........... 5,952

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

Good Cause Determinations

This final rule incorporates several new statutory requirements

from the Healthy Meals for Healthy Americans Act of 1994 (Pub. L. 103-

448) enacted on November 2, 1994 which became effective October 1,

1994. These provisions were not contained in the prior interim rule of

March 11, 1994 and pertain primarily to funding issues. The provisions

include the following: A 17 percent administrative cost reimbursement

rate for all State agencies, authority to negotiate the matching

requirement for Indian Tribal Organizations, expansion of the

definition of State agency, change in the division of funds remaining

after base grants have been allocated to 75 percent for current States

for expansion and 25 percent to initiate new States, availability of up

to 2 percent of total grant for market development, and elimination of

carry forward authority. These resulting regulatory changes are non-

discretionary, and accordingly, good cause exists for waiving prior

notice and comment.

Background

Section 501 of the Hunger Prevention Act of 1988 (Pub. L. 100-435),

enacted on September 19, 1988, amended the Child Nutrition Act of 1966

(CNA), 42 U.S.C. 1771 et seq., to add a new subsection 17(m) which

authorized up to 10 Farmers' Market Coupon Demonstration Projects

(demonstration projects) for a 3-year period.

Although authorization for the demonstration projects expired at

the end of Fiscal Year 1991, as part of the Rural Development,

Agriculture, and Related Agency Appropriations Act for Fiscal Year 1992

(Pub. L. 102-142), Congress appropriated up to $3 million to carry on

the projects. As a result, the demonstration projects operated another

year, through Fiscal Year 1992.

Based largely on the success of the demonstration projects, on July

2, 1992, the President signed the WIC Farmers' Market Nutrition Act of

1992 (Pub. L. 102-314). This Act amended section 17(m) of the CNA (42

U.S.C. 1786(m)) to authorize the FMNP as a permanent program.

Therefore, on March 11, 1994, the Department published an interim rule

(59 FR 11508) addressing the mandates of Pub. L. 102-314. Also included

in the interim rule were references to requirements in Department-wide

rules which apply to Uniform Administrative Requirements for Grants and

Cooperative Agreements to State and Local Governments (7 CFR part

3016), Governmentwide Debarment and Suspension (Non-Procurement)

Requirements (7 CFR part 3017), Governmentwide Requirements for Drug-

Free Workplace (7 CFR part 3017), Governmentwide Restrictions on

Lobbying (7 CFR part 3018), Departmental regulations on

nondiscrimination (7 CFR part 15, 15a, and 15b), Title VI of the Civil

Rights Act of 1964, Title IX of the Education Amendments of 1972,

section 504 of the Rehabilitation Act of 1973, the Age Discrimination

Act of 1975, and independent audit requirements in accordance with 7

CFR part 3015, 3016.26 or part 3051.

Summary of Comments Received on the Interim Rule

The March 11, 1994 interim rule provided for a 120-day comment

period, which ended on July 11, 1994. Fifteen comment letters were

received from a variety of sources, including FMNP State agencies, WIC

State agencies, a public interest group, a governor's office, a

Congressional office, and an orchard.

The Department has given all comments careful consideration in the

development of this final rule and would like to thank all commenters

who responded. Following is a discussion of each provision that

received comments, and an explanation of the changes made in this final

rule. Provisions on which no comments were received or no changes were

made as a result of Public Law 103-448, are not addressed in the

preamble and remain as published in the interim rule.

Conceptual Framework for FMNP Policy Making (Outlined in Preamble

Section of the Interim Rule Under WIC Farmers' Market Nutrition

Program, States With Demonstration Projects)

The interim rule stated in the preamble section that because the

FMNP will operate as an adjunct to WIC, the preamble would only discuss

in detail individual provisions that are unique to the FMNP. Three

commenters remarked that it was inappropriate for FCS to make the

statement outlined above. These commenters suggested that the final

rule reflect the distinctive differences between WIC and FMNP. This

statement in the interim rule was merely intended to highlight the fact

that since FMNP eligibility is limited to WIC participants or persons

on the WIC waiting list, the programs are intended to operate in a

complementary fashion. The focus of the interim rule and this final

rule, however, are the distinct rules for operation of the FMNP. WIC

Program regulations are not affected by this rule.

1. Definitions (Sec. 248.2)

In the interim rule, ``Eligible foods'' were defined as fresh,

nutritious, unprepared, domestically grown fruits, vegetables and herbs

for human consumption. Eligible foods may not be processed or prepared

beyond their natural state except for usual harvesting and cleaning

processes. Honey, maple syrup, cider, nuts, seeds, eggs, meat, cheese

and seafood are examples of foods not eligible under the FMNP.

Several commenters addressing this provision opposed or supported

with modifications, the definition. Three commenters wanted apple cider

included in the list of eligible foods because, as they indicated,

``cider is not processed''. Two commenters wanted herbs excluded from

the definition because they believed herbs were not nutritious and were

not specified in the law. Other commenters approved the

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definition as long as ``locally grown'' replaced ``domestically

grown''. These commenters expressed the view that this would preserve

the unique identity and significance of the FMNP. They further stated

that the Department should require that produce be locally grown.

According to these same commenters, State agencies could then further

clarify how they define locally grown.

In view of the concerns raised by commenters that ``locally grown''

be included in the definition of eligible foods and the Department's

interpretation of the intent of Congress, we have replaced

``domestically grown'' with ``locally grown'' in the definition of

eligible foods in the final rule, provided that in no instance can the

State agency define ``locally grown'' to include foods grown outside of

the United States and its territories. States shall generally consider

locally grown to mean produce grown only within State borders but may

define it to include areas in neighboring States adjacent to its

borders.

After thorough consideration, we have determined that apple cider

should remain excluded from the list of eligible food items. This

conclusion was based on the Department's view that any food that has

been altered from its naturally occurring state, except for usual

harvesting and cleaning processes, is considered to be ``processed''

for purposes of the FMNP. The primary purpose of preventing FMNP coupon

sales of processed foods is to prevent the value of the coupons from

being expended on processing costs. Regarding the comments concerning

``herbs'', the Department has retained them in the definition of

eligible foods. The Department would like to point out, however, that

State agencies have the ability to develop their own list of eligible

foods within the regulatory definition, so a State agency may choose to

exclude herbs if they wish to do so.

``Farmer'' was defined as an individual authorized to sell produce

at participating farmers' markets. Individuals who exclusively sell

produce grown by someone else, such as wholesale distributors, cannot

be authorized to participate in the FMNP. State agencies have the

option to authorize individual farmers or farmers' markets.

About half of the commenters responding to this definition opposed

the definition. Of those opposed, some stated that the Department

should set a standard that a participating farmer must grow at least

half of the produce that he/she sells at the market. Another commenter

suggested that the Food and Consumer Service (FCS) consult with the

Agricultural Marketing Service and convene a taskforce of State FMNP

directors to develop a definition of ``farmer''.

Of the commenters who supported this definition, they did so as

long as ``who locally grows fresh fruits and/or vegetables'' is

included in the definition.

The Department believes that the definition of ``farmer''

established in the interim rule provides each State agency with the

broadest flexibility in authorizing farmers to meet the specific needs

of its program. The definition allows State agencies, if they so

desire, to set a standard for the amount of produce a participating

farmer must grow. Therefore, the Department is retaining the definition

of ``farmer'' as it was set forth in the interim rule. Because the

Department has included ``locally grown'' in the definition of eligible

foods, it has not been repeated in the definition of ``farmer''.

``Farmers' market'' was defined as an association of local farmers

who assemble for the purpose of selling their produce directly to

consumers. In cases where recipient access to farmers' markets is an

issue, and with prior FCS approval, the definition of farmers' market

may be expanded to include farmstands at which authorized farmers sell

their produce.

The majority of commenters supported the definition as long as some

of the issues regarding ``farmstands'' are modified. Some of these

commenters suggested that FCS should not have to grant prior approval

for every farmstand. Other commenters disagreed with the Department's

discussion in the preamble which stated that farmstands are not as

stable as markets. One other commenter suggested inserting ``at a

defined location'' into the definition.

Two commenters opposed the definition. One of these commenters

stated that farmstands should not be generally precluded from the FMNP.

The commenter indicated that this is an example of the WIC Program

focusing solely on the interests of the WIC population while ignoring

the interests of the farmers' markets.

Based on the comments received, the Department has revised the

definition of farmers' market by inserting ``at a defined location''

after the words ``who assemble for the purpose of selling their produce

directly to consumers''. We have also clarified that prior FCS approval

for farmstands may be obtained through the State Plan process.

``In-kind contributions'' has been added in Sec. 248.2 to

accommodate its inclusion as an alternative for meeting the match

requirement. For purposes of the FMNP, in-kind contributions means

property or services which benefit the FMNP and which are contributed

by non-Federal sources without charge to the FMNP.

``Matching requirement'' was defined in the interim rule as non-

Federal cash outlays in an amount equal to not less than 30 percent of

the total FMNP costs for the fiscal year. This match may be satisfied

through non-Federal cash expenditures for the FMNP or for similar

farmers' market programs which operate during the same period as the

FMNP.

One commenter approved of the provision as stated and another

commenter opposed it stating that the match should be reduced from 30

percent to 25 percent of the total cost of the Program.

As later explained in the definition of ``similar programs'', some

commenters suggested that low-income be included when referencing other

groups served by similar programs that are used to meet the matching

requirement. Based on these comments, we have made this revision in the

definition of ``matching requirement'' in the final rule.

The match requirement is set by statute. Section 204(v)(1) of

Public Law 103-448 (November 2, 1994) amended section 17(m)(3) of the

CNA (42 U.S.C. 1786(m)(3)) to allow the Secretary to negotiate a lower

percentage of matching funds for Indian Tribal Organizations, but not

lower than 10 percent of the total cost of the program. The negotiated

match is authorized if the Indian State agency demonstrates to the

Secretary financial hardship for the affected Indian tribe, band,

group, or council. The final rule has been revised to reflect this new

authority. The lower negotiated rate is only available to Indian Tribal

Organizations.

The Department has further revised the definition in the final rule

by removing the word ``cash'' from the definition. This adjustment was

made in order to accommodate in-kind contributions which may be used to

meet the match requirement. Finally, the wording in the first sentence

of the definition has been slightly modified for clarity.

``Recipient'' was defined as a person chosen by the State agency to

receive FMNP benefits. Such a person must be a woman, infant over four

months of age, or child, who receives benefits under the WIC Program or

is on the waiting list to receive benefits under the WIC Program.

Infants under four months of age are excluded from eligibility in the

FMNP based on the recommendation of the American

[[Page 49742]]

Academy of Pediatrics (AAP) that such infants not consume solids due to

the level of development of their gastrointestinal tract.

One commenter suggested omitting the clause which excludes infants

four months of age or younger since this is understood and since it

conflicts with the legislation that allows for the serving of

households.

The Department believes the definition serves as a cautionary

reminder of the AAP recommendation to participants and, accordingly,

has decided to retain the definition as it was stated in the interim

rule.

``Similar Programs'' was defined as other farmers' market projects

or programs which serve women, infants and children, or other

categories of recipients, such as, but not limited to, elderly persons.

The majority of commenters supported this definition as long as it

was modified to state that these similar programs must serve low-income

people. One commenter suggested that a maximum income guideline should

be established for non-WIC households, equal to that which is used in

WIC, for those States utilizing the similar programs provision to meet

the matching requirement.

In view of the comments received, the Department has inserted the

words ``low-income'' before ``women, infants and children'' to clarify

the types of similar programs that can be used to meet the matching

requirement. A corresponding adjustment has also been made to the

definition of ``matching requirement.''

``State'' has been added in Sec. 248.2 since it is referred to in

the text of the regulation. ``State'' means any of the 50 States, the

District of Columbia, the Commonwealth of Puerto Rico, the Virgin

Islands, Guam, American Samoa, and the Northern Marianas Islands.

``State agency.'' The interim rule defined ``State agency'' to be

the agriculture, health or comparable department of each State. Section

204(v)(11) of Pub. L. 103-448 amended Section 17(m)(11)(D) of the CNA

(42 U.S.C. 1786(m)(11)(D)), to expand the definition of State agency to

include any other agency approved by the chief executive officer of the

State. The Department wishes to clarify that, for purposes of this

rule, when reference is made to, ``State agencies that have not

participated in the FMNP'' or to ``State agencies that are

participating for the first time'', this does not refer to a FMNP that

has previously been administered by a different entity within the

State. This final rule incorporates these revisions.

2. State Plan Requirements (Sec. 248.4(a))

a. Farmstand Locations. The interim regulations required that

States wishing to authorize farmstands may do so only when recipient

access to farmers' markets is an issue and with prior approval from

FCS. Because the State Plan process is the vehicle States have for

submitting their program plans for approval, we have clarified in

Sec. 248.4(a)(10)(ii) of this rule that State agencies desiring to

authorize farmstands justify doing so through the State Plan process.

For further clarification, the State Plan submission requirements in

Sec. 248.4(a)(8)(i) have been revised to include the number and

location of farmstands and their proximity to clinics. The Department

believes this will permit evaluation of whether recipient access to

farmers' markets is at issue.

b. Requests for Market Development/Technical Assistance Funds. As

set forth in section 204(v)(2)(B) of Pub. L. 103-448 and clarified in

Sec. 248.14(h) of this rulemaking, States may use up to 2 percent of

total program funds for market development or technical assistance if

the Secretary determines that the State intends to promote the

development of farmers' markets in socially or economically

disadvantaged areas, or remote rural areas, where individuals eligible

for participation in the program have limited access to locally grown

fruits and vegetables. The Department believes that the State Plan

process is the most efficient method for handling requests to direct

program funding to market development or technical assistance.

Accordingly, a new Sec. 248.4(a)(20) is added to require State agencies

desiring to fund such activities to request and to justify the need for

such activities in the State Plan.

3. Data Collection (Secs. 248.4 (a)(16) and (17))

The interim regulations required that State agencies submit, as an

addendum to the State Plan, information on the change in consumption of

fresh fruits and vegetables by recipients; and information on the

effects of the FMNP on the use of farmers' markets, the marketing of

agricultural products, and recipients' awareness regarding farmers'

markets.

One commenter stated that the data collection requirement which

assesses the effects of the FMNP on recipients and farmers is

appropriate if it is cost effective and generates reliable information.

Section 204(v)(7) of Pub. L. 103-448 amended the information

collection requirements as they pertain to the collection of

information on the change in consumption of fresh fruits and vegetables

by recipients and the effects of the program on farmers' markets. The

CNA now requires that such information shall only be collected if it is

available. Sections 248.4(a) (15) and (16) of this final rule have been

modified accordingly. In any data collection effort for the FMNP, the

Department encourages the use of the most cost-efficient method that

yields reliable information.

4. Recipient or Household Allocation of Benefits (Sec. 248.6(c))

This provision of the interim rule allows State agencies to

allocate the quantity of benefits on an individual basis or a household

basis. In situations where benefits are issued on a household basis,

the household could receive fewer benefits as a unit than it otherwise

would if benefits were allocated to individual household members. Under

either allocation methodology, foods provided are intended for the sole

benefit of FMNP recipients and are not intended to be shared with other

non-participating household members.

One commenter approved of the provision as long as the statement

that foods be approved for the sole use of WIC participants in the FMNP

household be omitted. Other commenters indicated that since the CNA

permits benefits to be issued on a household basis, it clearly suggests

that the exclusion of any household member is not the intent of the

FMNP.

One other commenter objected to the inclusion of a household

benefit allocation option because, as was indicated, ``it is not an

equitable way to allocate benefits to participants''.

The Department has decided to retain the definition as it was

stated in the interim rule. As explained in the preamble to the interim

rule, the Department believes State agencies should retain the option

of reaching a greater number of households by allocating benefits on a

household basis. The statement that the foods should be solely for use

by FMNP participants is consistent with the FMNP's eligibility

requirements.

5. Coupon and Market Management--Authorization/Training Visits

(Sec. 248.10(a)(4))

The interim rule required that a State agency conduct a documented

on-site training visit prior to, or at the time of, authorization of a

farmer or farmers' market. The on-site visit shall include, at a

minimum, provision of information

[[Page 49743]]

concerning eligible foods and proper FMNP coupon redemption procedures.

All commenters responding to this provision opposed the timeframe

of the provision. These commenters stated that markets are not open

prior to, or at the time of authorization, so it would be impossible to

conduct on-site visits.

The primary reason for requiring the documented on-site training

visit prior to, or at the time of, authorization was to ensure that

farmers/farmers' markets were advised of critical program information

concerning, at a minimum, eligible foods and proper FMNP coupon

redemption procedures before they began accepting FMNP coupons. The

Department is sensitive to the concerns raised by the commenters

regarding the practical application of this provision. Therefore, based

on the comments, the Department has revised the provision to read,

``the State agency shall conduct face-to-face training for all newly

authorized farmers and farmers' markets prior to their commencing

participation in the FMNP.'' ``Newly authorized'' refers to those

farmers/farmers' markets in their first year of participation in the

FMNP. In addition, during their first year of participation, new

farmers/farmers' markets must be considered ``high-risk'' and must be

placed in the pool from which other high-risk farmers/farmers' markets

are placed for selection of farmers/farmers' markets to monitor.

Monitoring requirements are outlined in Sec. 248.10(e).

The face-to-face training must include the minimum training

requirements outlined in Sec. 248.10(d). Face-to-face training prior to

participation in the program provides safeguards to ensure that new

farmers/farmers' markets are properly informed of program requirements

prior to initiation of the program.

6. Farmers' Markets Agreements (Sec. 248.10(a))

The introductory paragraph of Sec. 248.10(a) of the interim rule

stated that the State agency is responsible for the fiscal management

of, and accountability for, farmers/farmers' markets. Two of the

commenters responding to this provision believed it created the

impression that the State agency's FMNP oversight responsibilities are

not just limited to FMNP-related activities. Accordingly, the

introductory language in Sec. 248.10(a) is amended by this final rule

to clarify that in operating the FMNP, the State agency is only

responsible for FMNP-related activities of the farmer/farmers' market,

not their actions or activities in general.

The Department also wishes to clarify the face-to-face training

requirements in Sec. 248.10(d). In those State agencies that enter into

authorization agreements with farmers' markets, the market managers may

receive the face-to-face training and then, in turn, may provide such

training to their participating farmers. This would fulfill the face-

to-face training requirements of Sec. 248.10(d). Alternatively, State

agencies may meet this requirement by assuming responsibility for face-

to-face training both for market managers and for participating

farmers.

7. Monitoring and Review of Farmers/Farmers' Markets and Local Agencies

and Sanctions--(Secs. 248.10(e) (2) and (4))

The interim regulations required that State agencies rank

participating farmers and farmers' markets by risk factors, and that

they conduct annual, on-site monitoring of at least 10 percent of

farmers and 10 percent of farmers' markets beginning with those farmers

and markets identified as being the highest risk. Mandatory high-risk

indicators are a proportionately high volume of FMNP coupons redeemed

by a farmer as compared to other farmers within the farmers' market and

within the State, and recipient complaints. The interim rule also

required that at least every 2 years, State agencies conduct a review

of all local agencies within their jurisdiction.

Several commenters opposed these provisions. One commenter said

that the transitory nature of farmers makes monitoring and sanctioning

requirements not enforceable. Another commenter suggested eliminating

the comparison of farmers for determination of which are high-risk,

since as this commenter indicated, farmers' markets may be very small

with only a low volume of coupons redeemed, and therefore, not inclined

to abuse the Program.

Two commenters approved of the provisions as long as some

adjustments to the provisions are made. One of these commenters

suggested that it is impractical for administrative efficiency reasons,

to conduct on-site monitoring of markets and farmers in strict rank

order of risk.

Another commenter said that it is impractical to conduct WIC local

agency reviews at the same time as the FMNP reviews, given the short

amount of time (summer months) that the FMNP is being administered. The

commenter suggested clarifying this section to accommodate the seasonal

nature of the FMNP. One commenter stated that the 10 percent standard

used for farmers and farmers' markets should also be applied to local

agencies, which the interim regulations also require to be reviewed

every two years. This commenter went on to say that the requirement to

review all local agencies every two years is unrealistic given staffing

and budget constraints, plus the limited time FMNP coupons are actually

being distributed at the local agency.

Based on some of the comments received, the Department has revised

the provisions. First, we wish to clarify that even in farmers' markets

where farmers are very small with a low volume of coupons redeemed,

significant differences in redemption rates may indicate program abuse.

Accordingly, the Department believes comparing redemption rates among

farmers in each market and within the State represents a valid high-

risk indicator. Although the final rule still requires State agencies

to consider comparison of redemption rates among farmers in each

market, the Department points out that State agencies are free to

accord this factor whatever weight they deem appropriate in

establishing the high-risk rankings.

The Department is further modifying the final rule to clarify that

high-risk farmers and farmers' markets are not required to be visited

in strict rank order of their risk. Rather, once State agencies have

identified the highest risk farmers and farmers' markets to be

monitored, the State agency can determine the schedule or order in

which they will be visited based on location, staff resources and other

factors. Accordingly, the phrase ``beginning with'' has been deleted

from Sec. 248.10(e)(2).

With regard to the monitoring requirements for farmers and farmers'

markets contained at Sec. 248.17(e)(1)(i), a State agency commenter

suggested that the 10 percent minimum requirement targeted at farmers

and markets determined to be ``high-risk'' was inadequate, and that it

should be modified to include a monitoring visit for farmers and

farmers' markets that have never previously participated in the FMNP.

The Department has considered this comment and has determined that a

monitoring visit to all farmers that have never previously participated

in the FMNP may be excessive for some States during one FMNP season.

The Department has however taken the comment into consideration and has

modified Sec. 248.10(e)(2) to require State agencies to include lack of

previous participation in the FMNP, as a high-risk indicator along with

the other high-risk indicators in Sec. 248.10(e)(2). Accordingly,

farmers in their first year of participation may

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now be subject to monitoring visits. The final rule identifies three

mandatory high-risk indicators: 1. a proportionately high volume of

FMNP coupons redeemed by a farmer as compared to other farmers within

the farmers' market and within the State; 2. recipient complaints; and

3. farmers and farmers' markets in their first year of FMNP operation.

The Department would like to clarify that the intent behind

defining a farmer/farmers' market as high-risk in the FMNP is for

purposes of identifying those farmers/farmers' markets that may be

subject to a monitoring visit. It is in no way intended to stigmatize

them with a label. Farmers participating in the FMNP for the first time

are considered high-risk (and thus subject to monitoring) because they

have not previously participated and so may not be as familiar with

program operations.

If after application of the high-risk indicators, a State agency

identifies fewer than 10 percent of its farmers and farmers' markets as

high-risk, the State agency shall randomly select additional farmers

and farmers' markets to monitor in order to meet the 10 percent

minimum.

The high-risk indicators listed above generally apply to a State

agency already participating in the FMNP. A State agency participating

in the FMNP for the first time shall, in lieu of applying the high-risk

criteria, randomly select 10 percent of its participating farmers and

10 percent of its participating farmers' markets for monitoring visits.

The Department also wishes to clarify that 10 percent of farmers

and 10 percent of farmers' markets must be monitored, not 10 percent of

farmers within a market selected for review. For example, if there are

five farmers' markets in a participating State and 40 farmers, the

State shall monitor at a minimum, one farmers' market and four farmers.

These four farmers may or may not be participating within the one

farmers' market being monitored.

With regard to local agency reviews, the Department encourages

State agencies to conduct reviews of FMNP practices at WIC local

agencies during the FMNP season. We have clarified that, when this is

not practical, reviews of FMNP practices at the WIC local agency may be

conducted any time during the year. Reviews conducted outside of the

FMNP season would include a review of documents and procedural plans or

practices of those items listed in Sec. 248.17(c)(1)(ii). The final

regulatory language at Sec. 248.17(c)(1)(ii) has also been clarified to

read as follows: ``WIC State agency reviews of WIC local agencies

conducted for the WIC Program may contribute to meeting the FMNP

requirement that all local agencies be reviewed once every two years if

the reviews include reviews of FMNP practices.''

8. FMNP Costs--Composition of Allowable Costs and Specified Allowable

Administrative Costs (Sec. 248.12(a))

In Sec. 248.12(a)(1)(ii) of the interim rule, the reference to ``7

CFR part 3015'' was in error. It has been changed to read ``7 CFR part

3016'' in the final rule.

Certain administrative costs associated with the first year of

operating the FMNP were listed in Sec. 248.14(g)(1) of the interim rule

which concerns administrative funding. These items were previously

listed as allowable start up costs eligible for the 2 percent

additional administrative allowance for a State's first year of

operation. Because Pub. L. 103-448 increased the general administrative

allowance from 15 to 17 percent and removed the 2 percent allowance for

start up expenses, these items have been consolidated with the list of

general allowable administrative costs found at Sec. 248.12(b)(8)-(13).

9. Matching Amount (Sec. 248.14(a)(1)(i)

Section 204(v)(1) of the Pub. L. 103-448 amended section 17(m)(3)

of the Act to permit the Secretary to negotiate with an Indian State

agency a lower percentage of matching funds than the 30 percent

requirement, but not lower than 10 percent of the total cost of the

program, if the Indian State agency demonstrates to the Secretary

financial hardship for the affected Indian tribe, band group, or

council. The final rule has been amended to reflect this change in the

Law.

The Department has also provided for the allowance of in-kind

contributions to be used to meet the state match requirement by

revising Sec. 248.14(a)(1)(ii) to read: ``A State agency may count any

form of contribution authorized by 7 CFR 3016.24 toward the State

matching requirement, including in-kind contributions.''

10. Distribution of Funds to Previously Participating State Agencies

(Sec. 248.14(b))

The interim rule stated that provided sufficient FMNP funds are

available, each State agency that participated in the FMNP in the prior

fiscal year shall receive not less than the amount of funds the State

agency received in the most recent year in which it received funding,

if it otherwise complies with program requirements.

One commenter opposed the provision stating that, because of the

stability clause for participating States, the FMNP could be perceived

as perpetuating inequities among States which have been participating

in the program longer.

This provision was derived from Section 17(m)(6)(B)(i) of the CNA

which states that as long as the appropriation is sufficient and the

State agency provides the required matching funds, the State agency

shall receive not less than the amount of funds it received in the most

recent fiscal year in which it received funds. As such, Sec. 248.14(b)

is retained in this final rule, with minor editorial changes.

11. Ratable Reduction (Sec. 248.14(c))

The interim rule stated that if amounts appropriated for any fiscal

year for grants under the FMNP are not sufficient to pay to each

previously participating State agency at the level they received in the

most recent fiscal year, each State agency's grant shall be ratably

reduced, except that, if sufficient funds are available, each State

agency shall receive at least $50,000 or the amount that the State

agency received for the prior fiscal year if that amount is less than

$50,000.

As one commenter emphasized, it is not the intent of the Law that

the $50,000 minimum funding level apply to all States wishing to

participate in the FMNP. Rather, this funding level is intended to

serve as the minimum funding level a State agency will receive if

ratable funding reductions are necessary due to insufficient

appropriations.

Pursuant to section 204(v)(4) of the Pub. L. 103-448, the

insufficient funding reduction floor has been raised from $50,000 to

$75,000. In addition, the analysis accompanying the bill clarifies that

the $75,000 threshold is not meant to serve as a minimum grant level

for first-year requests from States. Section 248.14(c) has been revised

to reflect the new level of $75,000.

12. Expansion of Participating State Agencies (Sec. 248.14(d))

As required by section 17(m)(6)(G) of CNA, the interim rule

provided that 45 to 55 percent of any funds that remained after funding

States at the level they received in the most recent fiscal year of

operation shall be allocated to current State agencies to fund new

participants, with the remaining 45 to 55 percent made available to

State agencies which have not previously participated. Any funds

recovered will be reallocated in

[[Page 49745]]

accordance with the appropriate method determined by FCS.

Section 204(v)(6) of Pub. L. 103-448 amended section 17(m)(6)(G) of

the CNA to change this ratio so that funds remaining after funding

States at the level they received in the most recent fiscal year of

operation shall be allocated on a ratio of 75 percent for existing

States to expand their FMNP and to 25 percent for States to start new

programs. Section 248.14(d) of the final regulation has been modified

to reflect this change.

13. Administrative Funding and Market Development/Technical Assistance

(Sec. 248.14(g))

Under the interim regulations, a State agency was limited to not

more than 15 percent of the total FMNP funds for administration except

that: (1) Up to an additional 2 percent of total FMNP funds could be

used for the first year of operation to cover certain start-up costs

and (2) after the first year of operation, with the Secretary's

permission, up to an additional 2 percent of total FMNP funds could be

used toward FMNP administrative expenses.

Most of the commenters opposed the provision because of the 15

percent limit, suggesting instead a 17 percent rate for all States.

Section 204(v)(2) of Pub. L. 103-448 amended section 17(m)(5)(F) to

permit FMNP State agencies to use up to 17 percent of the total amount

of the Federal grant and the required State agency match for

administrative expenses. The amendment eliminated the 2 percent add-ons

for new State agencies or for existing State agencies which

demonstrated ``financial need.'' Section 204(v)(2)(B)(ii) of Pub. L.

103-448 also amended the CNA to now permit State agencies to use not

more than 2 percent of total program funds for market development or

technical assistance to farmers' markets if the Secretary determines

that the State intends to promote the development of farmers' markets

in socially or economically disadvantaged areas, or remote rural areas,

where individuals eligible for participation in the program have

limited access to locally grown fruits and vegetables. Section

248.14(g) has been revised to reflect these changes in the

administrative funding level and the availability of funds for market

development or technical assistance.

14. Carry Forward/Backspend (Sec. 248.14(i))

Section 204(v)(9) of Pub. L. 103-448 amended the CNA to eliminate

the ability of FMNP State agencies to carry forward up to 5 percent of

their Federal grant. The CNA continues to permit FMNP State agencies to

``backspend'' up to 5 percent of their Federal grant. Accordingly, this

change is reflected in Sec. 248.14(i) of this final rule.

15. Appeals Procedures for Farmers (Sec. 248.17)

For purposes of clarification, Sec. 248.17(f) is modified by this

final rule. The change is made to clarify that, where a State agency

does not authorize individual farmers, it shall specify the appropriate

appeals procedure to be used by a farmer who is denied authorization,

disqualified or sanctioned by the farmers' market or farmers'

association.

16. Records and Reports (Sec. 248.23)

Under the interim rule, State agencies were required to submit to

FCS, financial and FMNP performance data on a yearly basis as specified

by FCS and required by section 17(m)(8) of the CNA. Program performance

data include recipient data by category.

One commenter opposed the provision requiring the collection of

recipient data by category when benefits are allocated by household,

unless additional funds are made available to enable States to develop

and design computer systems to accurately compile and report the data.

The Department is retaining the definition as set forth in the

interim rule since such information collection is required by section

17(m)(8)(A) of the CNA.

List of Subjects in 7 CFR Part 248

Food assistance programs, Food donations, Grant programs, Social

programs, Infants and children, Maternal and child health, Nutrition

education, Public assistance programs, WIC, Women.

Accordingly, the interim rule adding 7 CFR part 248 which was

published at 59 FR 11517-11529 on March 11, 1994, is adopted as a final

rule with the following changes.

PART 248--WIC FARMERS' MARKET NUTRITION PROGRAM (FMNP)

1. The authority citation for part 248 continues to read as

follows:

Authority: 42 U.S.C. 1786.

2. In Sec. 248.2:

a. Definitions of ``In-kind contributions'' and ``State'' are added

in alphabetical order.

b. The first sentence in the definition of ``Eligible foods'' is

revised and two new sentences are added at the end of the definition.

c. The first sentence in the definition of ``Farmers' market'' is

revised.

d. The third sentence in the definition of ``Farmstand'' is

revised.

e. The definition of ``Matching requirement'' is revised.

f. The definition of ``Program or FMNP'' is revised.

g. The definition of ``Similar programs'' is revised.

h. The definition of ``State agency'' is revised.

The revisions and additions read as follows:

Sec. 248.2 Definitions.

* * * * *

Eligible foods means fresh, nutritious, unprepared, locally grown

fruits, vegetables and herbs for human consumption. * * * State

agencies shall consider locally grown to mean produce grown only within

State borders but may also define it to include areas in neighboring

States adjacent to its borders. Under no circumstances can produce

grown outside of the United States and its territories be considered

eligible foods.

* * * * *

Farmers' market means an association of local farmers who assemble

at a defined location for the purpose of selling their produce directly

to consumers. * * *

Farmstand * * * With prior FCS approval, through the State Plan

process, a State agency may authorize a farmstand or a nonprofit

organization operating a farmstand to participate in the FMNP where

necessary to ensure adequate recipient access to farmers' markets.

* * * * *

In-kind contributions mean property or services which benefit the

FMNP and which are contributed by non-Federal parties without charge to

the FMNP.

* * * * *

Matching requirement means non-Federal outlays in an amount equal

to not less than 30 percent of the total FMNP costs for the fiscal

year. The Secretary may negotiate with an Indian State agency a lower

percentage of matching funds, but not lower than 10 percent of the

total cost of the program, if the Indian State agency demonstrates to

the Secretary financial hardship for the affected Indian tribe, band,

group, or council. The match may be satisfied through non-Federal

expenditures for the FMNP or for similar farmers' market programs which

operate during the same period as the FMNP. Similar programs include

other farmers' market programs which serve low-income women, infants

and children (who may

[[Page 49746]]

or may not be WIC participants or on the waiting list for WIC

services), as well as other categories of low-income recipients, such

as, but not limited to, low-income elderly persons.

* * * * *

Program or FMNP * * * The Special Supplemental Nutrition Program

for Women, Infants and Children (WIC) is authorized by section 17 of

the Child Nutrition Act of 1966, as amended. Within section 17, section

17(m) authorizes the FMNP.

* * * * *

Similar programs means other farmers' market projects or programs

which serve low-income women, infants and children, or other categories

of recipients, such as, but not limited to, elderly persons.

State means any of the 50 States, the District of Columbia, the

Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa,

and the Northern Marianas Islands.

State agency means the agriculture department, the health

department or any other agency approved by the chief executive officer

of the State; an Indian tribe, band or group recognized by the

Department of the Interior; an intertribal council or group which is an

authorized representative of Indian tribes, bands or groups recognized

by the Department of the Interior and which has an ongoing relationship

with such tribes, bands or groups for other purposes and has contracted

with them to administer the Program; or the appropriate area office of

the Indian Health Service (IHS), an agency of the Department of Health

and Human Services.

* * * * *

3. In Sec. 248.4:

a. Paragraph (a)(8)(i) is revised.

b. Paragraphs (a)(10)(ii) through (a)(10)(viii) are redesignated as

paragraphs (a)(10)(iii) through (a)(10)(ix), respectively.

c. A new paragraph (a)(10)(ii) is added.

d. Paragraph (a)(15) is revised.

e. Paragraph (a)(16) is removed.

f. Paragraph (a)(17) is redesignated as paragraph (a)(16) and is

revised.

g. Paragraphs (a)(18), (a)(19), and (a)(20) are redesignated as

paragraphs (a)(17), (a)(18), and (a)(19), respectively.

h. A new paragraph (a)(20) is added.

The additions and revisions read as follows:

Sec. 248.4 State Plan.

(a) * * *

(8) * * *

(i) The number and addresses of participating markets, farmstands

and area WIC clinics including a map outlining the service area and

proximity of markets/farmstands to clinics; and

* * * * *

(10) * * *

(ii) For those State agencies desiring to authorize farmstands,

justification for doing so.

* * * * *

(15) If available, information on the change in consumption of

fresh fruits and vegetables by recipients. This information shall be

submitted as an addendum to the State Plan and shall be submitted at

such a date specified by the Secretary.

(16) If available, information on the effects of the program on

farmers' markets. This information shall be submitted as an addendum to

the State Plan and shall be submitted at such a date specified by the

Secretary.

* * * * *

(20) For those State agencies requesting the extra 2 percent

administrative rate for market development or technical assistance to

promote such development in disadvantaged areas or remote rural areas,

an explanation of their justification and plans for the use of such

funds.

* * * * *

4. In Sec. 248.8 paragraph (a) is revised to read as follows:

Sec. 248.8 Level of benefits and eligible foods.

(a) General. State agencies shall identify in the State Plan the

fresh, nutritious, unprepared, locally grown fruits, vegetables and

herbs which are eligible for purchase under the FMNP. Ineligible foods

for the purpose of the FMNP include, but are not limited to: honey,

maple syrup, cider, nuts and seeds, eggs, cheese, meat and seafood.

Locally grown shall mean produce grown only within a State's borders

but may be defined to include border areas in adjacent States. Under no

circumstances can produce grown outside of the United States and its

territories be considered eligible foods.

* * * * *

5. In Sec. 248.10:

a. The second sentence of paragraph (a) introductory text is

revised.

b. Paragraph (a)(4) is revised.

c. The introductory text of paragraph (d) is revised.

d. The first and second sentences of paragraph (e)(2) are revised.

e. Two new sentences are added at the end of paragraph (e)(2).

f. The last sentence of paragraph (e)(4) is revised.

The revisions and additions read as follows:

Sec. 248.10 Coupon and market management.

(a) General. * * * The State agency is responsible for the fiscal

management of, and accountability for FMNP-related activities for

farmers/farmers' markets. * * *

* * * * *

(4) The State agency shall ensure that face-to-face training is

conducted prior to start up of the first year of FMNP participation of

a farmers' market and individual farmer. The face-to-face training

shall include at a minimum those items listed in paragraph (d) of this

section.

* * * * *

(d) Annual training for farmers/farmers' market managers. State

agencies shall conduct annual training for farmers/farmers' market

managers participating in the FMNP. The State agency shall conduct a

face-to-face training for all farmers and farmers' market managers who

have never previously participated in the program prior to their

commencing participation in the FMNP. After a farmer/farmers' market

manager's first year of FMNP operation, State agencies have discretion

in determining the method used for annual training purposes. At a

minimum, annual training shall include instruction emphasizing:

* * * * *

(e) Monitoring and review of farmers/farmers' markets and local

agencies. * * *

(2) Each State agency shall rank participating farmers and farmers'

markets by risk factors, and shall conduct annual, on-site monitoring

of at least 10 percent of farmers and 10 percent of farmers' markets

which shall include those farmers and markets identified as being the

highest-risk. Mandatory high-risk indicators are a proportionately high

volume of FMNP coupons redeemed by a farmer as compared to other

farmers within the farmers' market and within the State, recipient

complaints, and farmers and farmers' markets in their first year of

FMNP operation. * * * If application of the high-risk indicators

results in fewer than 10 percent of farmers and farmers' markets as

high-risk, the State agency shall randomly select additional farmers

and farmers' markets to be monitored in order to meet the 10 percent

minimum. The high-risk indicators listed above generally apply to a

State agency already participating in the FMNP. A State agency

participating in the FMNP for the first time shall, in lieu of applying

the high-risk indicators, randomly select 10 percent of its

participating farmers and 10 percent of

[[Page 49747]]

its participating farmers' markets for monitoring visits.

* * * * *

(4) * * * WIC State agency reviews of WIC local agencies, which

include reviews of FMNP practices, may contribute to meeting the

requirement that all local agencies be reviewed once every 2 years.

* * * * *

Sec. 248.11 [Amended]

6. In Sec. 248.11, paragraph (g) is amended by removing the

reference to ``Sec. 248.10(f)'' and adding, in its place, a reference

to ``Sec. 248.10(h)''.

7. In Sec. 248.12:

a. The fourth sentence of paragraph (a)(1)(i) is revised.

b. Paragraph (a)(1)(ii) is redesignated as paragraph (a)(1)(iii)

and the third sentence is amended by removing the reference to ``7 CFR

part 3015'' and adding in its place, a reference to ``7 CFR part

3016''.

c. A new paragraph (a)(1)(ii) is added.

d. New paragraphs (b)(8), (b)(9), (b)(10), (b)(11), (b)(12),

(b)(13) and (b)(14) are added.

The additions and revisions read as follows:

Sec. 248.12 FMNP costs.

(a) General.--(1) Composition of allowable costs.* * *

(i) Food Costs and administrative costs. * * * Except as provided

in Sec. 248.14(g) of this part, a State agency's administrative costs

under the FMNP may not exceed 17 percent of its total FMNP costs.* * *

(ii) Market development or technical assistance costs. Market

development or technical assistance costs are those costs under

Sec. 248.14(h) incurred to promote the development of farmers' markets

in socially or economically disadvantaged areas, or remote rural areas,

where individuals eligible for participation in the program have

limited access to locally grown fruits and vegetables. Subject to a

determination by the Secretary under Sec. 248.14(h), a State agency

may, during any fiscal year, use not more than 2 percent of total

program funds for such market development or technical assistance.

* * * * *

(b) Specified allowable administrative costs.* * *

(8) The cost of determining which local WIC sites will be utilized.

(9) The cost of recruiting and authorizing farmers/farmers' markets

to participate in the FMNP.

(10) The cost of preparing contracts for farmers/farmers' markets

and local WIC providers.

(11) The cost of developing a data processing system for redemption

and reconciliation of FMNP coupons.

(12) The cost of designing program training and informational

materials.

(13) The cost of coordinating FMNP implementation responsibilities

between designated administering agencies.

8. In Sec. 248.14:

a. A new sentence is added before the second sentence of paragraph

(a)(1)(i).

b. Paragraph (a)(1)(ii) is revised.

c. A new sentence is added at the end of paragraph (a)(1)(iii).

d. Paragraph (b) is revised.

e. Paragraph (c) is revised.

f. The first sentence of paragraphs (d)(1) and (d)(2) are revised

and paragraph (d)(3) is revised.

g. Paragraph (e)(1) is amended by removing the words ``(exclusive

of the 5 percent carry forward)'' from the first and second sentences

of that paragraph.

h. Paragraph (g) is revised.

i. Paragraphs (h), (i) and (j) are redesignated as paragraphs (i),

(j) and (k) respectively.

j. A new paragraph (h) is added.

k. Newly redesignated paragraph (i) is revised.

l. Newly redesignated paragraph (j) is revised.

m. Newly redesignated paragraph (k) is revised.

The revisions and additions are as follows:

Sec. 248.14 Distribution of funds.

(a) Conditions for receipt of Federal funds.--(1) Matching of

funds.

(i) Match amount. * * * The Secretary may negotiate a lower

percentage of matching funds, but not lower than 10 percent of the

total cost of the program, in the case of an Indian State agency that

demonstrates to the Secretary financial hardship for the affected

Indian tribe, band, group, or council.* * *

(ii) Sources of matching contributions. A State agency may count

any form of contribution authorized by 7 CFR 3016.24 toward the State

matching requirement including in-kind contributions.

(iii) Failure to match. * * * This match amount may be lower for

those Indian State agencies that have demonstrated to the Secretary

financial hardship as set forth in paragraph (a)(1)(i) of this section.

* * * * *

(b) Distribution of FMNP funds to previously participating State

agencies. Provided that sufficient FMNP funds are available, each State

agency that participated in the FMNP in any prior fiscal year, shall

receive not less than the amount of funds the State agency received in

the most recent fiscal year in which it received funding, if it

otherwise complies with the requirements established in this part.

(c) Ratable reduction. If amounts appropriated for any fiscal year

for grants under the FMNP are not sufficient to pay to each previously

participating State agency at least an amount as identified in

paragraph (b) of this section, each State agency's grant shall be

ratably reduced, except that, to the extent permitted by available

funds, each State agency shall receive at least $75,000 or the amount

that the State agency received for the most recent prior fiscal year in

which the State participated, if that amount is less than $75,000.

(d) Expansion of participating State agencies and establishment of

new State agencies.* * *

(1) Of the remaining funds, 75 percent shall be made available to

State agencies already participating in the FMNP that wish to serve

additional recipients.* * *

(2) Of the remaining funds, 25 percent shall be made available to

State agencies that have not participated in the FMNP in any prior

fiscal year. * * *

(3) In any fiscal year, any FMNP funds that remain unallocated

after satisfying the requirements of paragraphs (d)(1) and (d)(2) of

this section, shall be reallocated in accordance with paragraph (k) of

this section.

* * * * *

(g) Administrative funding. A State agency shall have available for

administrative costs an amount not greater than 17 percent of total

FMNP funds. The 17 percent administrative cost limitation shall not

apply to any funds that a State agency may contribute in excess of its

minimum matching requirement. A State agency may use any non-Federal

contributions in excess of the 30 percent (or the negotiated percentage

for those Indian State agencies that received a lower amount) matching

requirement for food and/or administrative costs.

(h) Market development. A State agency shall be permitted to use

not more than 2 percent of total program funds for market development

or technical assistance to farmers' markets if the Secretary determines

that the State intends to promote the development of farmers' markets

in socially or economically disadvantaged areas, or remote rural areas,

where individuals eligible for participation in the program have

limited access to locally grown fruits and vegetables.

(i) Transfer of funds. A State agency may use not more than 5

percent of the

[[Page 49748]]

Federal FMNP funds made available for the fiscal year to reimburse

expenses incurred by the FMNP during a preceding fiscal year. The State

agency shall provide such justification for its request to spend back

funds under this paragraph as FNS may require.

(j) Recovery of unused funds. State agencies shall return to FCS

any unexpended funds made available for a fiscal year by February 1 of

the following fiscal year.

(k) Reallocation of funds. Any funds recovered under paragraphs

(d)(3) and (j) of this section will be reallocated in accordance with

the appropriate method determined by FCS.

9. In Sec. 248.16 the second sentence in paragraph (f) is revised

to read as follows:

Sec. 248.16 Administrative appeal of State agency decisions.

* * * * *

(f) Additional appeals procedures for State agencies which

authorize farmers' markets and not individual farmers. * * * A State

agency which authorizes farmers' markets and not individual farmers

shall ensure that procedures are in place to be used when a farmer

seeks to appeal an action of a farmers' market or association denying

the farmer's application to participate, or sanctioning or

disqualifying the farmer.

10. In Sec. 248.17:

a. The third sentence of the introductory text of paragraph (b) is

revised.

b. The first sentence of paragraph (c)(1)(i) is revised.

c. Two new sentences are added at the end of paragraph (c)(1)(ii).

The revisions and additions read as follows:

Sec. 248.17 Management evaluations and reviews.

* * * * *

(b) Responsibilities of FCS. * * * These evaluations shall also

include reviews of selected local agencies, and on-site reviews of

selected farmers/farmers' markets. * * *

* * * * *

(c) Responsibilities of State agencies. * * *

(1) * * *

(i) Annual monitoring reviews of participating farmers/farmers'

markets, including on-site reviews of a minimum of 10 percent of

farmers and 10 percent of farmers' markets, which includes those

farmers and markets identified as being the highest risk. First year of

operation in the FMNP shall be considered a high-risk indicator. * * *

(ii) * * * WIC State agency reviews of local agencies conducted for

the WIC Program may contribute to meeting the FMNP requirement that all

local agencies be reviewed once every two years if the reviews include

reviews of FMNP practices. When the WIC State agency conducts a review

of the local agency outside of the FMNP season, a review of documents

and procedural plans of the FMNP, rather than actual FMNP activities,

is acceptable.

* * * * *

11. In Sec. 248.25, paragraph (a) is revised to read as follows:

Sec. 248.25 FMNP information.

* * * * *

(a) Connecticut, Maine, Massachusetts, New Hampshire, New York,

Rhode Island, Vermont: U.S. Department of Agriculture, FNS, Northeast

Region, 10 Causeway Street, Room 501, Boston, Massachusetts 02222-1066.

* * * * *

12. Section 248.26 is revised to read as follows:

Sec. 248.26 OMB control number.

The collecting of information requirements for Part 248 have been

approved by the Office of Management and Budget and assigned OMB

control number 0584-0477.

Dated: September 20, 1995.

William E. Ludwig,

Administrator, Food and Consumer Service.

[FR Doc. 95-23950 Filed 9-26-95; 8:45 am]

BILLING CODE 3410-34-U