Food Distribution ProgramsReduction of the Paperwork Burden

SUMMARY: This rule proposes to amend the Food Distribution Program

regulations, the Emergency Food Assistance Program regulations, and the

Food Distribution Program for Households on Indian Reservations

regulations to implement the provisions of the Child Nutrition and WIC

Reauthorization Act of 1989 regarding paperwork reduction for food

distribution programs. The proposals contained in this rule would

extend the maximum effective periods for agreements between Federal,

distributing, and recipient agencies, contracts of distributing and

subdistributing agencies with storage facilities, contracts between

recipient agencies and food service management companies, and State

plans of operation; remove the requirement that commodity acceptability

information be submitted for the following program categories:

charitable institutions, nonprofit summer camps, the Summer Food

Service Program for Children, and the Emergency Food Assistance

Program; relax monitoring requirements for distributing agencies with

regard to charitable institutions and nonprofit summer camps, and the

food service management companies under contract with them; and, amend

regulatory language to reflect modified information collection

requirements. The proposals would, in short, effect a substantial

reduction in the information collection requirements imposed on

distributing and recipient agencies, and the paperwork generated in

fulfilling these requirements, in administering food distribution

programs.

DATES: To be assured of consideration, comments must be postmarked on

or before May 13, 1997.

ADDRESSES: Comments should be sent to: Lillie Ragan, Assistant Branch

Chief, Household Programs Branch, Food Distribution Division, Food and

Consumer Service, U.S. Department of Agriculture, Park Office Center,

Room 502, 3101 Park Center Drive, Alexandria VA 22302-1594. Comments in

response to this rule may be inspected at 3101 Park Center Drive, Room

502, Alexandria VA, during normal business hours (8:30 a.m. to 5 p.m.,

Mondays through Fridays).

FOR FURTHER INFORMATION CONTACT: Lillie Ragan at the above address or

telephone (703) 305-2662.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This proposed 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 for any purpose other than

approval of the changes in the information collection burden proposed

in the rule.

Regulatory Flexibility Act

This action has also been reviewed with regard to the requirements

of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). The

Administrator of the Food and Consumer Service (FCS) has certified that

this action will not have a significant economic impact on a

substantial number of small entities. The procedures in this rulemaking

would primarily affect FCS Regional Offices, and the distributing and

recipient agencies that administer food distribution programs. Private

enterprises that enter into agreements for the storage of donated food

or meal service management would also be affected. While some of these

entities constitute small entities, a substantial number will not be

affected. Further, any economic impact will not be significant.

Executive Order 12372

These programs are listed in the Catalog of Federal Domestic

Assistance under 10.550, 10.568, and 10.569, respectively, and are

subject to the provisions of Executive Order 12372, which requires

intergovernmental consultation with State and local officials (7 CFR

part 3015, Subpart V and final rule-related notices published at 48 FR

29114, June 24, 1983 and 49 FR 22676, May 31, 1984).

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.

3507), the Food and Consumer Service is submitting for public comment

the changes in the information collection burden that would result from

the adoption of the proposals in the rule.

Comments are invited on: (a) whether the proposed collection of

information is necessary for the proper performance of the functions of

the agency, including whether the information will have practical

utility; (b) the accuracy of the agency's estimate of the burden of the

proposed collection of information, including the validity of the

methodology and assumptions used; (c) ways to enhance the quality,

utility, and clarity of the information to be collected; and (d) ways

to minimize the burden of the collection of information on those who

are to respond, including through the use of appropriate automated,

electronic, mechanical, or other technological collection techniques or

other forms of information technology. To be assured of consideration,

comments must be postmarked on or before May 13, 1997. Comments may be

sent to Wendy Taylor, Desk Officer, Office of Information and

Regulatory Affairs, Office of Management and Budget (OMB), Washington

DC 20503. All comments will be summarized and included in the request

for OMB approval of the proposed changes in the information collection

burden. All comments will become a matter of public record. For further

information, or for copies of the information collections discussed

below, please contact Lillie Ragan, Assistant Branch Chief, Household

Programs Branch, Food Distribution Division, Food and Consumer Service,

U.S. Department of Agriculture, Park Office Center, Room 502, 3101 Park

Center Drive, Alexandria, Virginia 22302-1594, or telephone (703)305-

2662.

Title: Food Distribution Regulations and Forms.

OMB Number: 0584-0293.

Expiration Date: 9/30/97.

[[Page 12109]]

Type of Request: Revision of a currently approved collection.

Abstract: Agreements, contracts, and plans of operation. The rule

proposes to: (1) make agreements between distributing agencies and

recipient agencies (food banks, soup kitchens, charitable institutions,

emergency feeding organizations, etc.) to operate food distribution

programs permanent, with amendments made as necessary, instead of

annual; (2) allow distributing or subdistributing agencies to sign

contracts with storage facilities for the storage of donated foods for

a maximum duration of five years, instead of the present one year, with

options for two additional years; (3) allow recipient agencies

(charitable institutions, summer camps, and nutrition programs for the

elderly) to sign contracts with food service management companies for

one year, with four additional one-year options, instead of one year

with two additional one-year options; and, (4) make the plan submitted

by State agencies and Indian Tribal Organizations to operate the Food

Distribution Program on Indian Reservations (FDPIR) ongoing, instead of

annual, with amendments made as necessary.

Submission of Inventory Reports. The rule proposes to require

semiannual submission of the recently revised form FCS-155, the

Inventory Management Register (the revised form has been approved by

OMB). This form is a report of excessive commodity inventories--i.e.,

inventories exceeding a six-month supply--that helps to ensure that

commodities will be utilized before going out of condition. Regulations

presently require monthly submission of form FCS-155.

Collection of Commodity Acceptability Information. The rule

proposes to exclude certain food distribution program categories from

those for which distributing agencies must submit commodity

acceptability information, because of the substantial reduction in

surplus commodities now available to these programs. The exempted

program categories would be charitable institutions, summer camps, the

Summer Food Service Program for Children (SFSP), and the Emergency Food

Assistance Program (TEFAP). Commodity acceptability information is

collected for other food distribution programs to ensure that

commodities distributed are of the types and forms most acceptable to

program recipients.

Respondents: Respondents include State agencies and Indian Tribal

Organizations administering food distribution programs, and, in some

cases, recipient agencies responsible for local administration and

distribution of donated commodities.

Estimated Number of Respondents: State agencies and Indian Tribal

Organizations administering food distribution programs number 171;

recipient agencies number approximately 11,200.

Estimated Number of Responses per Respondent: Frequency of response

for the inventory reports would be semiannual, or 2 per year. Frequency

of response for agreements between distributing and recipient agencies,

the State plans, and the distributing and recipient agency contracts

with storage facilities and food service management companies would

vary, depending on necessary amendments to the agreements and plans,

and the length of the contracts. It is estimated that, on average, both

amendments and contracts would be completed every four years, or at a

frequency of 0.25 per year. Frequency of response for the commodity

acceptability reports would continue to be annual, but distributing

agencies would not be required to submit commodity acceptability

information for charitable institutions, summer camps, SFSP, and TEFAP,

thus reducing the number of responses to be submitted.

Estimate of Burden: The present and proposed estimates of the

reporting burden for the information collections affected by this rule

are detailed below. These estimates are based on information obtained

from distributing and recipient agencies administering food

distribution programs through various vehicles such as meetings and the

review of information submitted in State plans. The information

includes the number of respondents, frequency of responses per year for

each respondent, number of hours per response, and the total burden

hours for each information collection.

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

Respndnts. Freq. Hrs./Resp. Total Hrs.

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

Distributing and Recipient Agency Agreement:

Present............................................... 11,211 1 0.33 3,700

Proposed.............................................. 11,211 0.25 0.20 561

Distributing or Subdistributing Agency Contracts w/Storage

Facilities:

Present............................................... 250 1 0.33 83

Proposed.............................................. 250 0.25 0.33 21

Contracts w/Food Service Management Companies:

Present............................................... 300 1 0.33 99

Proposed.............................................. 300 0.25 0.33 25

Inventory Reports (FCS-155):

Present............................................... 80 12 1.75 1,680

Proposed.............................................. 80 2 0.25 40

Commodity Acceptability Reports:

Present............................................... 466 1 50 23,300

Proposed.............................................. 252 1 50 12,600

FDPIR State Plan:

Present............................................... 97 1 10 970

Proposed.............................................. 97 0.25 3 73

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

Estimated Total Annual Burden on Respondents: The total annual

burden under OMB Control Number 0584-0293 would be reduced from

1,190,971 hours to 1,174,459 hours: a difference of 16,512 hours.

Title: Federal-State Agreement, FCS-74

OMB Number: 0584-0067

Expiration Date: 6/30/98

Type of Request: Revision of a currently approved collection.

Abstract: The Federal-State Agreement, form FCS-74, is used to

ensure that distributing agencies administering child nutrition and

food distribution programs comply with Federal regulations applicable

to the programs. This rule proposes to make

[[Page 12110]]

permanent, instead of annual, the agreement that distributing agencies

administering food distribution programs (and not child nutrition

programs) sign with the Food and Consumer Service (FCS). Amendments

would be made as necessary, at the request of FCS.

Respondents: State agencies and Indian Tribal Organizations

administering food distribution programs.

Estimated Number of Respondents: 147 State agencies and Indian

Tribal Organizations would be affected.

Estimated Number of Responses per Respondent: The agreements would

be permanent for the affected State agencies, with amendments to the

agreement submitted as necessary. It is estimated that such amendments

would be required, on average, every four years. Thus, the annual

number of responses per respondent would be 0.25.

Estimate of Burden: The following estimates are based on the

anticipated frequency of need for changes. For each of the 147 affected

State agencies and Indian Tribal Organizations, the agreement would

take approximately 0.25 hours to complete, and would be completed, on

average, 0.25 times per year. Thus, the annual reporting burden for

these agencies would be 9.2 hours.

Estimated Total Annual Burden on Respondents: The total annual

burden under OMB Number 0584-0067 would be reduced from 34,494 hours to

34,466 hours: a difference of 28 hours.

Executive Order 12988

This proposed 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 so specified in the ``Effective Date'' section of the preamble

of the final rule. There are no administrative procedures which must be

exhausted prior to any judicial challenge to the provisions of this

rule or the application of its provisions.

Background

The Child Nutrition and WIC Reauthorization Act of 1989, Pub. L.

101-147, (hereinafter referred to as ``the Act''), was enacted on

November 10, 1989. Section 108 of the Act amended what was then Section

19 of the National School Lunch Act (NSLA), 42 U.S.C 1769a, to include

a requirement that the Secretary endeavor to reduce the paperwork

burden for State and local educational agencies, schools, and other

agencies participating in nutrition assistance programs. The Act

required that, in determining ways to reduce the paperwork burden, the

Secretary (1) consult with State and local administrators of nutrition

assistance programs; (2) convene at least one meeting with the program

administrators; and (3) solicit suggestions from the general public.

(Section 710 of Pub. L 104-193, the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996, repealed Section 49 of the

NSLA.)

Accordingly, on April 9, 1990, a Notice was published in the

Federal Register (55 FR 13156) soliciting comments regarding the

reduction of the paperwork burden associated with the administration of

the child nutrition and food distribution programs. One hundred and

sixty-five comments addressing issues associated with paperwork

reduction for food distribution programs were received. Comments were

received from 105 schools, 49 State agencies, five food processors,

four professional associations (including the American Commodity

Distribution Association and the American School Food Service

Association), one Indian Tribal Organization, and one consultant.

Following the receipt of comments, on July 30, 1990, a Paperwork

Reduction Task Force (hereinafter referred to as the ``Task Force''),

comprised of representatives from two commodity distribution

associations, 13 school or food distribution program administrators,

and two FCS Regional Office directors, was convened to review the

comments received in response to the Notice. The actions taken to date

by the Department in response to Congress' directive in Section 108 of

Pub. L. 101-147 are discussed in detail below.

Five commenters recommended that the amount of information a State

is required to submit to the Department before a commodity complaint

can be investigated be reduced. In response to these recommendations,

through consultation with FCS Regional Office and State agency

representatives, a list of data that must be provided prior to FCS

taking any action regarding a complaint was developed and made

available to all Regional Offices for dissemination to State agencies.

While other information may subsequently be requested, submission of

all required basic data at the time the complaint is reported permits

FCS to begin taking appropriate action in a much more timely manner.

FCS has also taken steps to simplify the process of transmitting

the data needed to act on commodity complaints by revising the Special

Nutrition Programs Integrated Information System (SNPIIS) to allow FCS

Regional Offices to submit complaint data electronically. An

informational booklet containing instructions as to how to input

complaint data into the system has been disseminated to all FCS

Regional Offices.

In order to streamline the process of reporting commodity

complaints, FCS has set up a telephone ``hot line'' for use on a pilot

basis. Under the pilot project, selected distributing or recipient

agencies within certain States may report commodity complaints to FCS

Headquarters directly, via a toll-free 800 number or facsimile machine.

All FDPIR State agencies, including all Indian Tribal Organizations

acting as State agencies pursuant to 7 CFR 253.2(h), may report

commodity complaints to FCS Headquarters directly via the hot line

also. While those agencies utilizing the hot line must still provide

certain basic information before the problem can be resolved, they have

more flexibility in the format used to report the information than

those agencies reporting commodity complaints through State and FCS

Regional offices, and receive a more immediate response to their

concerns. If the pilot project, the initial phase of which concluded on

September 30, 1996, indicates that direct reporting of commodity

complaints to the national office provides better service to the

recipients utilizing USDA commodities, by reducing the amount of time

required to resolve complaints, then access to the hot line will be

extended to all States.

Five commenters suggested that the Department allow distributing

agencies to waive commodity losses of $100 or less. Since this was

already the Department's policy, the Department has considered how to

provide clarification of the policy. In addition, FCS has consulted

with Regional Offices to resolve various issues relating to losses

resulting from the improper storage or distribution of commodities,

including the responsibility for initiating claims, and the cost

efficiency of the claims process. This consultation has resulted in the

development of draft guidance material which was disseminated to FCS

Regional Offices for comment on April 15, 1994. The guidance material

establishes the Department's position on issues relative to: (1) what

entity is responsible for pursuing the various types of claims; (2)

conditions under which storage facilities can offset shortages with

[[Page 12111]]

overages; (3) allowable uses of funds derived from salvage and

recycling; (4) what funds should be deposited into the distributing

agency's general salvage account and the allowable uses of such funds;

(5) the handling of losses of ``bonus'' commodities; and (6) the

thresholds that have been established for use in determining what

entity has the authority to make a claim determination, and to

compromise, waive, or suspend claims. Several of the changes discussed

in the guidance material have been implemented through policy

memoranda. However, some changes can only be effectuated by revising

``Non-Audit Claims--Food Distribution Program,'' FCS Instruction 410-1,

and/or through the rulemaking process. The issue of increasing the

limit under which State agencies can waive a claim is one that must be

addressed through the rulemaking process for the Emergency Food

Assistance Program (TEFAP) and by revision of the FCS instruction for

all other food distribution programs.

Twenty-one commenters suggested that forms FCS-155 (Monthly Report

of Receipt and Distribution of Donated Foods) and FCS-155A (Shipment of

Commodities by Delivery Order) be eliminated, or that these inventory

reports be required less frequently. After a review of the usefulness

of the forms in 1991 and 1992, FCS concluded that it would not be

feasible to eliminate them, but that they could be modified to reduce

the paperwork burden for State agencies. Accordingly, forms FCS-155 and

FCS-155A were modified by removing some columns that collected

duplicate information.

With full implementation of the Processed Commodities Inventory

Management System (PCIMS), FCS decided to reexplore the usefulness of

forms FCS-155 and FCS-155A, and initiated a pilot project in 1994 to

determine if information entered in PCIMS would make the collection of

information in the reports redundant. After identifying relevant

information that can be accessed through this system, an alternate,

less time-consuming inventory reporting form was developed for use by

those State agencies participating in the pilot project. After

evaluating the results of the pilot project, this form--the revised

FCS-155--was further refined to collect information on excessive

commodity inventories only, and not the detailed information on receipt

and distribution of commodities currently reported. Excessive commodity

inventories are defined in 7 CFR 250.14(f) as those that exceed a six-

month supply. The revised FCS-155--renamed the Inventory Management

Register--was submitted for approval to the Office of Management and

Budget (OMB), and was approved by OMB on September 13, 1995, as part of

OMB #0584-0293. Also resulting from the pilot project, submittal of

form FCS-155A, which served to verify receipt of shipments of commodity

delivery orders, was found to be unnecessary. Distributing agencies

report receipts for foods delivered to the Kansas City Commodity

Office, utilizing form KC-269A, the Distributing Agency Consignee

Receipt, as directed in FCS Instruction 709-5, Shipment and Receipt of

Foods. Thus, distributing agencies administering child nutrition and

food distribution programs--except for FDPIR and the Commodity

Supplemental Food Program (CSFP)--now submit the revised FCS-155, the

Inventory Management Register, to FCS regional offices, and no longer

submit form FCS-155A. State agencies and Indian Tribal Organizations

administering FDPIR and CSFP submit more detailed information on

program participation, inventories of donated foods, and distribution

of donated foods to households, on a monthly basis, utilizing forms

FCS-152 (for FDPIR) and FCS-153 (for CSFP). Unlike other programs, the

information reported on these inventory forms is not currently

available through automated systems. Thus, State agencies and Indian

Tribal Organizations must continue to submit forms FCS-152 and FCS-153

for FDPIR and CSFP, respectively. As with other programs, however, the

submittal of form FCS-155A to verify the shipment of commodities by

delivery order is no longer required. This form was discontinued in

October 1995 for FDPIR, and in November 1995 for CSFP.

Twenty-eight commenters to the 1990 Notice suggested that commodity

acceptability reports be submitted annually, rather than semi-annually,

as was then required by law. Subsequent to the publication of the

Notice, however, Section 1773(d) of Pub. L. 101-624, the Food,

Agriculture, Conservation, and Trade Act of 1990, subsequently amended

Section 3(f)(2) of the Commodity Distribution Reform Act and WIC

Amendments of 1987 (Pub. L. 100-237; 7 U.S.C. 612c note) to require the

collection of commodity acceptability information annually. In order to

further reduce the paperwork burden, however, we are proposing to amend

regulations to exempt certain program categories from the annual

reporting requirement, while still conforming to the mandate of Pub. L.

100-237. This proposal is described below, in the section of this

preamble entitled ``Food Distribution Program Regulations (7 CFR Part

250).''

Additionally, a revision of form FCS-663, Commodity Acceptability

Report, has been developed with input from FCS Regional Offices and

State agencies. This revised form will substantially decrease the

paperwork burden for distributing and recipient agencies in reporting

commodity acceptability information, while still providing valuable

information on the commodity preferences of program recipients. The

revised form FCS-663 was approved by OMB on September 13, 1995, as part

of OMB #0584-0293.

Five commenters recommended that the State plan describing the

operation and administration of TEFAP, presently submitted annually, be

considered permanent, with amendments submitted as specific changes in

the administration of the program are made. However, on August 22,

1996, President Clinton signed into law the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996, Pub. L. 104-193, which, in

Section 871(b) amended Section 202A of the Emergency Food Assistance

Act of 1983, Pub. L. 98-8 (7 U.S.C. 7503(a)), to require State agencies

to submit a TEFAP State plan every four years, with amendments

submitted as necessary, for the Department's approval. The four-year

requirement for submission of the TEFAP State Plan, instead of annual

submission, became effective on August 22, 1996. The Department will

address these, as well as other changes in the administration of TEFAP

resulting from passage of Pub. L. 104-193, through a separate

rulemaking.

Four commenters recommended that the distributing agency evaluation

of the cost efficiency of storage facilities be discontinued, or

required less frequently. The requirement that distributing agencies

periodically evaluate the cost-effectiveness of their current storage

systems (7 CFR 250.14) will be addressed in a separate rule.

Comments relative to commodity processing have been addressed in a

final rule which was published in the Federal Register on December 7,

1994 (59 FR 62973).

In addition to the policy and regulatory changes discussed above,

the Department is proposing to amend several regulatory requirements

contained in Parts 250, 251, and 253, based on comments received in

response to the Notice. The proposed regulatory amendments contained in

this rule are discussed in detail below.

[[Page 12112]]

Food Distribution Program Regulations (7 CFR Part 250)

Duration Requirements for Agreements and Contracts

Currently, Section 250.12(a) of the regulations requires that

distributing agencies enter into agreements with the Department that

are effective for only one year. In addition, Section 250.12(b) limits

agreements between State and recipient entities to only one year, with

the possibility of two one-year extensions. Sections 250.12(b) and

250.14(d) limit the length of contracts of distributing and

subdistributing agencies with storage facilities to only one year, with

the possibility of two one-year extensions. These regulations also

restrict the length of contracts between distributing agencies and

carriers to the same duration limits. Agreements between State agencies

and subdistributing or recipient agencies must establish (1) the

conditions under which donated foods will be made available, and (2)

responsibility for loss, damage, or improper use of donated foods.

Agreements of State or subdistributing agencies with storage facilities

must contain provisions designed to ensure that storage facilities

properly identify, store, and account for donated commodities.

Numerous commenters suggested that the one-year limit on agreements

be removed. Thirty-one commenters suggested that agreements between

State and recipient agencies be made permanent with provision for

amendments as necessary. Eleven commenters also suggested that the

annual agreement between the Department and State agencies be made

permanent. Eighteen commenters also recommended extending the duration

of contracts between distributing and subdistributing agencies and

storage facilities for the storage of donated foods.

The Department agrees that requiring Federal-State agreements to be

completed anew each year is burdensome and unnecessary. Accordingly,

this rule proposes to amend Sec. 250.12(a) to provide for permanent

agreements between the Department and State agencies, with amendments

to be made at the request of FCS. In addition, distributing agencies

would be required to notify FCS of the information as the agreement

changes. The Department's authority under Secs. 3015.124(a) and 3016.43

to terminate agreements for cause would not be affected by this

proposed change. Furthermore, the availability of funds and commodities

beyond those amounts available at the time the ``permanent'' agreements

are signed is dependent upon future Congressional appropriations and

FCS's annual decision to continue the agreement.

With regard to annual agreements between distributing and recipient

agencies, the Department recognizes the need for a relaxation of the

paperwork burden, and proposes to amend Sec. 250.12(b) to provide for

permanent agreements between distributing agencies and recipient

agencies, with amendments to be made as necessary. Distributing

agencies must ensure that recipient agencies provide, on a timely

basis, by amendment to the agreement, any information on changes in

program administration, including, but not limited to, changes in site

locations, number of meals or needy persons to be served, or changes

resulting from amendments to Federal regulatory requirements and

policy. Because of the nature of, and volatility in costs of, services

provided by carriers, and by subdistributing agencies that are not

recipient agencies (i.e., do not distribute donated foods to eligible

recipients or utilize foods to provide services to those eligible), the

Department believes that agreements between distributing agencies and

these entities should remain one year, with an option for two one-year

extensions. The proposed restructuring of Sec. 250.12 to detail the

different duration requirements for agreements between distributing

agencies and the various types of local entities is described below.

The Department agrees that contracts of longer duration between

State agencies and storage facilities would reduce the paperwork

burden. Such contracts would also be attractive to storage facilities,

as they would not have to bid so frequently for a new contract.

Furthermore, longer contracts would provide more time to amortize

expenses incurred in ensuring a high quality of service. Therefore, to

provide distributing agencies with maximum flexibility in contracting

for storage facilities, the Department proposes to amend Sec. 250.14(d)

to extend the contract period to be effective for no longer than five

years, including option years. Thus, distributing agencies may choose

to negotiate contracts for a five-year, or three-year, period, or for

one year with option years not exceeding four, etc. This flexibility

will enable State agencies to enter into contracts of whatever duration

in their estimation will yield the best combination of quality service

and cost, subject only to the five-year maximum. This rule also

proposes to make some technical changes in paragraphs (d) and (e) of

Sec. 250.14 by revising some incorrect references.

Under current regulations, food service management companies may be

employed to conduct the food service operations of charitable

institutions, nonprofit summer camps for children, nutrition programs

for the elderly, schools, nonresidential child care institutions, and

service institutions receiving donated foods. The duration of contracts

between these companies and charitable institutions, nonprofit summer

camps for children, and nutrition programs for the elderly is limited,

in Sec. 250.12(c), to one year, with an option for two additional one-

year periods. Section 210.16(d) sets the duration of contracts between

school food authorities, which administer school nutrition programs,

and food service management companies at one year, with an option for

four additional one-year periods. Although the commenters to the 1990

Notice did not address agreements with food service management

companies, this rule proposes, in the interest of reducing the

paperwork burden, to revise Sec. 250.12(c) to make contracts between

these companies and charitable institutions, nonprofit summer camps for

children, and nutrition programs for the elderly, of the same maximum

duration as those between food service management companies and school

food authorities. As part of the proposed revision of this section,

paragraph (2), addressing the length of time that records shall remain

available, would be removed, as recordkeeping requirements will be

established for all entities contracting with distributing,

subdistributing, or recipient agencies in Sec. 250.16.

This rule proposes to restructure Sec. 250.12 so as to more clearly

state the duration requirements for all food distribution program

agreements, as described above. The restructuring entails the revision

of Sec. 250.12(b) to describe the terms and conditions of distributing

agency agreements with recipient agencies, subdistributing agencies,

carriers, and other entities, and the creation of a new Sec. 250.12(c)

to address the duration of such agreements. Secs. 250.12(c), 250.12(d),

and 250.12(e) would be redesignated as Secs. 250.12(d), 250.12(e), and

250.12(f), respectively. In conformance with the restructuring of

Sec. 250.12, this rule proposes to delete reference to Sec. 250.12(c)

and insert instead reference to Sec. 250.12(d) in the following

Secs. 250.3, in the definition of ``food service management company'';

250.19(b)(1)(iv); 250.40(a)(4); 250.41(a)(3); 250.42(a); 250.48(a)(1);

and, 250.49(a). Additionally, this rule

[[Page 12113]]

proposes to make a technical change in the redesignated Sec. 250.12(e),

which addresses storage facility contracts, by replacing the incorrect

reference to Sec. 250.14(c) (``Reviews'') with a reference to Sec.

250.14(d) (``Contracts'').

Collection and Submission of Commodity Acceptability Information

7 CFR 250.13(k)(1) currently requires that State agencies obtain

information from recipient agencies which reflects: (1) The types and

forms of donated foods that are most useful to recipients; (2)

commodity specification recommendations; and (3) requests for options

regarding package sizes and forms of commodities. Paragraph (k)(2) of

this Section lists the categories of recipient agencies from which

State agencies are to obtain this information; paragraph (k)(3)

stipulates that this information be submitted to FCS on an annual

basis, utilizing form FCS-663.

Historically, USDA has donated a steady, dependable supply of foods

acquired under the Commodity Credit Corporation's price-support

operations to a variety of outlets, including charitable institutions

and nonprofit summer camps for children. These donated foods have

included cereal and grain products such as flour, cornmeal, rice,

rolled wheat and oats, bulgur, macaroni, and spaghetti; peanut and oil

products, such as roasted peanuts, peanut butter, peanut granules,

soybean oil, and soybean shortening; and dairy products. However, due

to the significant amounts of these foods that were distributed to

recipient agencies in the past, changes in price-support legislation,

and changes in agricultural market conditions, the inventories of

available donated foods have been greatly reduced. At the present time,

Federal inventories of surplus commodities are insufficient to supply

food distribution programs on a regular basis.

While donated foods may also become available to charitable

institutions and nonprofit summer camps for children through surplus-

removal actions, their availability cannot be assured, and the types of

commodities available can be expected to vary significantly over time.

Because of the variety in the types and forms of donated foods

previously available on an ongoing basis to charitable institutions and

nonprofit summer camps for children, the Department applied to these

institutions the regulatory requirement for annual collection and

reporting of commodity acceptability information. However, since

surplus commodities are not currently available to these institutions

on a regular basis, the Department has determined that collection of

commodity acceptability information from them no longer serves a useful

purpose.

For the same reasons, surplus commodities are also no longer

available in TEFAP on a regular basis. Although, since 1989,

commodities have been purchased, under authority of the Emergency Food

Assistance Act of 1983 (Pub. L. 98-8; 7 U.S.C. 7501-16), to supplement

the distribution of the dwindling surplus foods to needy households,

the amount of funds appropriated for commodity purchases in TEFAP has

been greatly reduced in recent years. Since the foods from which States

may select for distribution to TEFAP households are the same as those

available for distribution to eligible households in CSFP or FDPIR, the

Department believes that it is not necessary to require State agencies

to submit separate commodity acceptability reports for TEFAP.

USDA regulations (7 CFR 250.13(k)) also presently require that

commodity acceptability information for SFSP be submitted. However,

because the target group is the same as that for the National School

Lunch and School Breakfast Programs (which are included in the

legislative requirement), and because the donated foods provided are

the same, or similar, to donated foods provided in those programs, the

Department considers the collection and submission of commodity

acceptability information for recipient agencies participating in SFSP

to be redundant.

The Commodity Distribution Reform Act and WIC Amendments of 1987

(Pub. L. 100-237; 7 U.S.C. 612c note) provides the basis for the

Department's regulations requiring the collection of commodity

acceptability information from recipient agencies. Section 3(a)(1)(B)

of Pub. L. 100-237 provides that this data must be utilized by the

Department in determining the types and forms of foods to be purchased

for certain food distribution programs. The law does not, however,

specifically include SFSP or nonprofit summer camps for children among

those recipient agencies from which such information must be obtained.

Additionally, the law requires the collection and use of commodity

acceptability information only to the extent practicable for TEFAP, and

for the donation of foods to charitable institutions. Therefore, as

part of the Department's effort to reduce the paperwork burden, and for

the reasons discussed above, this rule proposes to revise

Sec. 250.13(k)(2) to exclude SFSP, summer camp, TEFAP, and charitable

institution recipient agencies from those for which distributing

agencies are required to submit commodity acceptability information.

Such distributing agencies may still choose to collect and submit to

FCS information on commodity acceptability from these categories of

recipient agencies, and all such submissions would be carefully

reviewed by FCS.

In conformance with the above proposals, this rule also proposes to

amend Sec. 250.13(k)(3) to delete reference to the annual submission by

November 30th of commodity acceptability reports for summer camps and

SFSP (for which reports would not be required), and to clarify that

distributing agencies must submit commodity acceptability reports (for

those programs for which reports would be required, as stipulated in

Sec. 250.13(k)(2)) to FCS Regional Offices by April 30th each year.

Additionally, this rule proposes to make a technical change to

Sec. 250.24(d)(1) by removing the word ``semi-annual'' to reflect the

current requirement contained in section 3(f)(2) of Pub. L. 100-237, as

amended, which mandates the annual collection of commodity

acceptability information. This statutory change was addressed in a

final rule published in the Federal Register on July 22, 1993 (58 CFR

39113).

Submission of Inventory Reports

As previously described in this Preamble, most distributing

agencies report excessive inventories of donated foods on the revised

FCS-155, the Inventory Management Register, while distributing agencies

administering FDPIR and CSFP use the more detailed inventory reports,

forms FCS-152 (FDPIR) and FCS-153 (CSFP), to submit data on program

participation, commodity distribution to households, and inventory

levels. This rule proposes to revise the language in Sec. 250.17(a) to

accurately describe the reporting function of FCS-155, which now

requires reporting of excessive inventories only, and to require

semiannual submission of this form, instead of monthly submissions,

unless FCS determines that (a) more frequent reporting is necessary to

maintain program accountability, or (b) less frequent reporting is

sufficient to meet program needs. Reference would continue to be made

to the submission of the FCS-155, or ``other format approved by FCS''--

the other currently approved formats being, of course, forms FCS-152

and FCS-153, utilized in FDPIR and CSFP, respectively. Lastly, we

propose to delete reference to a list of individual food orders

received for each food item delivered (the function

[[Page 12114]]

of the FCS-155A, which has been found to be unnecessary, as discussed

above).

Monitoring Requirements for Charitable Institutions and Summer Camps

7 CFR 250.19(b) requires State agencies to establish review

procedures to ensure compliance with Federal regulations addressing

household eligibility, food ordering and storage, inventory controls,

reporting and recordkeeping requirements, and civil rights provisions.

Section 250.19(b)(1)(i) presently requires State agencies to conduct

on-site reviews of each participating charitable institution, nonprofit

summer camp for children, and nutrition program for the elderly at

least once every four years, with at least 25 percent of the total

number of such institutions reviewed each year. Section

250.19(b)(1)(iv) requires biennial reviews of all food service

management companies under contract with recipient agencies that have

agreements with distributing agencies. Because of the reduced

availability of USDA commodities for charitable institutions and

nonprofit summer camps for children, as discussed in detail above, the

Department believes that the requirements governing monitoring reviews

for these recipient agencies, as well as the food service management

companies under contract with them, are excessive. Thus, the Department

proposes in this rule to revise Sec. 250.19(b)(1)(i) to require that

State agencies perform on-site reviews of charitable institutions,

nonprofit summer camps for children, and the food service management

companies under contract with them, at a minimum: (1) whenever the

State agency identifies actual or probable deficiencies in program

administration through audits, investigations of complaints, reports

submitted by recipient agencies, or any other information available to

the State agency which, at the discretion of the State agency, warrants

an on-site review; or, (2) at the request of FCS. State agencies are

encouraged to conduct more frequent reviews as resources and work

schedules permit. Section 250.19(b)(1)(iv) is proposed to be revised to

note the exception of food service management companies under contract

with charitable institutions and nonprofit summer camps for children

from the biennial review requirement for food service management

companies under contract with other types of recipient agencies.

FCS Instruction 113-3, ``Civil Rights Compliance and Enforcement--

Food Distribution Programs,'' presently includes an on-site review

requirement of recipient agencies every five years to ensure compliance

with civil rights regulations. In accordance with the above proposed

change in on-site review requirements for charitable institutions and

nonprofit summer camps for children, this provision of the instruction

would be removed. The revised instruction would require that on-site

reviews to ensure compliance with civil rights provisions be conducted

under conditions, and at the frequency, established by Federal

regulations for the various types of recipient agencies. While the

proposed rule relaxes on-site review requirements, distributing,

subdistributing, and recipient agencies would be required to continue

to comply with all other provisions in Federal regulations and FCS

Instruction 113-3, including the collection of racial/ethnic

participation data, to ensure that discrimination because of race,

color, national origin, age, sex, or handicap does not occur in the

operation of food distribution programs.

This rule also proposes to restructure Sec. 250.19(b)(1) to address

in separate subparagraphs nutrition programs for the elderly, on the

one hand, and charitable institutions and nonprofit summer camps for

children, on the other, because of the different monitoring

requirements that would result from adoption of the proposal described

above. In addition, this rule proposes to make a technical change in

Sec. 250.19(b)(1)(i) by deleting the incorrect reference to

Sec. 250.14(a) (``Standards for Warehousing and Distribution Systems'')

and inserting instead reference to Sec. 250.14(b) (``Standards for

Storage Facilities'').

The Emergency Food Assistance Program (7 CFR Part 251)

Duration Requirements for Agreements with Distributing and Recipient

Agencies

Section 251.2(c) of the regulations requires that distributing

agencies enter into an agreement with the Department for the receipt of

TEFAP foods and Federal funds for administrative costs. In addition to

entering into agreements with the Department, distributing agencies are

also required to enter into agreements with eligible emergency feeding

organizations (EFOs). As stated in Sec. 251.4(a), Part 250 applies to

the administration of TEFAP, to the extent that it is not inconsistent

with Part 251. While the duration requirements for these types of

agreements are not stipulated under this Part, 7 CFR 250.12(b) limits

the length of such agreements to one year. The provisions contained in

Sec. 251.2(c) also require that distributing agencies enter into

agreements with EFOs that receive Federal funds and that such

agreements be limited to one year, with an option for renewal for two

one-year periods.

As discussed in detail above, commenters recommended that Federal-

State agreements be made ongoing in order to reduce the paperwork

burden. The Department concurs with this recommendation, and proposes

to amend Sec. 251.2(c) to make TEFAP Federal-State agreements

permanent, with amendments to be made at the request of FCS, and to

make agreements between distributing agencies and EFOs permanent, with

amendments to be made as necessary. In addition, distributing agencies

must ensure that EFOs provide, on a timely basis, by amendment to the

agreement, any changed information, including any changes resulting

from amendments to Federal regulations or policy. Such information must

include, but not be limited to, changes in the number of distribution

sites and their locations, number of needy persons to be served,

frequency of distributions, household eligibility criteria to be used

in certifying households, and allocation of TEFAP administrative funds.

Submission of Inventory Reports

This rule proposes to amend Sec. 251.10(d)(2) to direct State

agencies to adhere to the inventory reporting requirements stipulated

in Sec. 250.17(a), since State agencies administering TEFAP will also

utilize the revised form FCS-155, the Inventory Management Register, to

report excessive commodity inventories. Household participation data

will also continue to be reported utilizing this form, at the same

frequency that inventory information is reported. This rule proposes to

include this requirement in the final sentence of Sec. 251.10(d)(2),

and to delete Sec. 251.10(d)(3), which presently addresses this

requirement, for both State agencies and EFOs. It will be up to each

State agency to determine how best to collect the necessary information

from the EFOs. Additionally, this rule proposes to amend

Sec. 251.10(a)(1) to remove reference to the obsolete Sec. 250.6(r),

and to refer to Sec. 250.16 instead.

Food Distribution Program on Indian Reservations (7 CFR Part 253)

Plan of Operation

Section 253.5(a) of the regulations requires that the State agency

(including Indian Tribal Organizations acting as the State agency)

responsible for the

[[Page 12115]]

administration of the Food Distribution Program on Indian Reservations

submit a plan of operation each year to FCS for approval. The

provisions in this section require that such plans contain a

description of the storage and distribution facilities to be utilized,

the method of assuring that only eligible households receive benefits,

and other information relative to the administration of the program.

Although the commenters did not recommend a change to the

requirement that State agencies submit a plan of operation to FCS each

year, the Department believes that, because the plan's contents do not

change much from year to year, the plan should be permanent, with

amendments added as changes in program administration are made. Thus,

this rule proposes to amend Sec. 253.5(a) to make the plan of operation

permanent, with amendments to be added as: (a) changes in State agency

administration of the program, as described in the plan, are made; or,

(b) at the request of FCS, e.g., in response to changes in State agency

plan requirements or guidance. The Department's authority under

Secs. 3015.124(a) and 3016.43 to terminate agreements for cause would

not be affected by this proposed change.

Application for Federal Assistance

State agencies and Indian Tribal Organizations must continue to

submit an application to receive Federal administrative funds on an

annual basis, as required by Sec. 253.9(c). However, this rule proposes

to amend this section of the regulations to reflect the fact that this

application is now made through completion of standard form SF-424,

which is mandated by 7 CFR Part 3016 (``Uniform Administrative

Requirements for Grants and Cooperative Agreements to State and Local

Governments''), instead of form AD-623. This rule also proposes to

delete the statement in this section encouraging Indian Tribal

Organizations which act as State agencies to first submit applications

through the State clearinghouse, as agencies of State government are

required to do under 7 CFR Part 3015 (Uniform Federal Assistance

Regulations), Subpart V. The Department does not believe that this

statement is in the spirit of the Presidential directive of April 29,

1994 (``Government-to-Government Relations with Native American Tribal

Governments,'' 59 FR 22951, May 4, 1994), which encourages agencies of

the Federal government to work directly with Native American Tribal

Governments.

List of Subjects

7 CFR Part 250

Aged, Agricultural commodities, Business and industry, Food

assistance programs, Food donations, Food processing, Grant programs-

social programs, Indians, Infants and children, Price support programs,

Reporting and recordkeeping requirements, School breakfast and lunch

programs, Surplus agricultural commodities.

7 CFR Part 251

Aged, Agricultural commodities, Business and industry, Food

assistance programs, Food donations, Grant programs-social programs,

Indians, Infants and children, Price support programs, Reporting and

recordkeeping requirements, School breakfast and lunch programs,

Surplus agricultural commodities.

7 CFR Part 253

Administrative practice and procedure, Food assistance programs,

Grant programs, Social programs, Indians, Reporting and recordkeeping

requirements, Surplus agricultural commodities.

Accordingly, 7 CFR parts 250, 251, and 253 are proposed to be

amended as follows.

PART 250--DONATION OF FOODS FOR USE IN THE UNITED STATES, ITS

TERRITORIES AND POSSESSIONS AND AREAS UNDER ITS JURISDICTION

1. The authority citation for part 250 continues to read as

follows:

Authority: 5 U.S.C. 301; 7 U.S.C. 612c, 612c note, 1431, 1431b,

1431e, 1431 note, 1446a-1, 1859, 2014, 2025; 15 U.S.C. 713c; 22

U.S.C. 1922; 42 U.S.C. 1751, 1755, 1758, 1760, 1761, 1762a, 1766,

3030a, 5179, 5180.

Secs. 250.3, 250.19, 250.40, 250.41, 250.42, 250.48, 250.49 [Amended]

2. In Sec. 250.3, in the definition of Food service management

company, and in Secs. 250.19(b)(1)(iv), 250.40(a)(4), 250.41(a)(3),

250.42(a), 250.48(a)(1), and 250.49(a), the citation ``250.12(c)'' is

removed wherever it appears, and the citation ``250.12(d)'' is added in

its place.

3. In Section 250.12:

a. The third and fourth sentences of paragraph (a) are revised;

b. The concluding text of paragraph (b) is removed;

c. Paragraphs (c), (d), and (e) are redesignated as paragraphs (d),

(e) and (f), and a new paragraph (c) is added; and

d. Newly redesignated paragraphs (d) and (e) are revised.

The revisions and addition read as follows:

Sec. 250.12 Agreements and contracts.

(a) Agreements with Department. * * * The agreements shall be

considered permanent, with amendments to be made at the request of FCS.

In addition, agreements between the Department and State Agencies on

Aging that elect to receive cash in lieu of commodities shall also be

considered permanent, with amendments to be made at the request of FCS.

* * * * *

(c) Duration of distributing agency agreements.--(1) Recipient

agencies. Distributing agency agreements with recipient agencies shall

be considered permanent, with amendments to be made as necessary.

Distributing agencies shall ensure that recipient agencies provide, on

a timely basis, by amendment to the agreement, any changed information,

including, but not limited to, any changes resulting from amendments to

Federal regulatory requirements and policy and changes in site

locations, and number of meals or needy persons to be served.

(2) Subdistributing agencies, carriers, and other entities.

Distributing agency agreements with subdistributing agencies that are

not recipient agencies, carriers, and other entities shall be in effect

for not longer than one year, and shall provide that they may be

extended at the option of both parties for two additional one-year

periods. The party contracting with the distributing agency shall

update all pertinent information and demonstrate that all donated food

received during the period of the previous agreement has been accounted

for, before an agreement is extended.

(3) Termination of agreements. Agreements may be terminated for

cause by either party upon 30 days notice.

(d) Food service management company contracts. Food service

management companies may be employed to conduct the food service

operations of nonprofit summer camps for children, charitable

institutions, nutrition programs for the elderly, schools,

nonresidential child care institutions, and service institutions. In

instances when a food service management company is employed to provide

such services, the recipient agency shall enter into a written contract

with the food service management company. The contract shall expressly

provide that any donated foods received by the recipient agency and

made available to the food service management company shall be utilized

[[Page 12116]]

solely for the purpose of providing benefits for the employing agency's

food service operation, and it shall be the responsibility of the

recipient agency to demonstrate that the full value of all donated

foods is used solely for the benefit of the recipient agency. All food

service management companies shall be subject to review by the

distributing agency for compliance with contractual requirements, in

accordance with Sec. 250.19(b)(1). In the case of nonprofit summer

camps for children, charitable institutions, and nutrition programs for

the elderly, the contract shall be in effect for no longer than one

year, and may provide that it be extended at the option of both parties

for not more than four additional one-year periods. Contracts shall

provide that they may be terminated for cause by either party upon 30

days notice. Prior to extension of the contract, the nonprofit summer

camp for children, charitable institution, or nutrition program for the

elderly shall update all pertinent information and demonstrate that all

donated food received during the previous contract period has been

accounted for.

(e) Storage facility contracts. When contracting for storage

facilities, distributing agencies and subdistributing agencies shall

enter into a written contract, in accordance with Sec. 250.14(d).

* * * * *

4. In Sec. 250.13:

a. Paragraph (k)(2) is amended by removing the words ``the Summer

Food Service Program'', ``charitable institutions, summer camps,'' and

``, and the Emergency Food Assistance Program''; and by adding ``and''

before ``the Food Distribution Program on Indian Reservations''; and

b. Paragraph (k)(3) is revised to read as follows:

Sec. 250.13 Distribution and control of donated foods.

* * * * *

(k) * * *

(3) Timeframes for submission. Distributing agencies shall submit

commodity acceptability reports to the appropriate FCSRO by April 30th

of each year on form FCS-663.

5. In Sec. 250.14:

a. The introductory text of paragraph (d) is amended by removing

the first three sentences, and adding two new sentences in their place;

b. Paragraph (d)(1) is amended by removing the reference to

``paragraph (a)'' and adding in its place a reference to ``paragraph

(b)''; and

c. Paragraph (e) is amended by removing the citation

``Sec. 250.14(b)'' in the first sentence, and adding in its place a

reference to ``paragraph (c) of this section''; and, by removing the

reference to ``paragraph (e)'' in the fourth sentence, and adding in

its place a reference to ``paragraph (f)''.

The additions read as follows:

Sec. 250.14 Warehousing, distribution and storage of donated foods.

* * * * *

(d) Contracts. When contracting for storage facilities,

distributing agencies and subdistributing agencies shall enter into

written contracts to be effective for no longer than five years,

including option years extending a contract. Before the exercise of

option years, the storage facility shall update all pertinent

information and demonstrate that all donated foods received during the

previous contract period have been accounted for. * * *

* * * * *

6. Section 250.17 is amended by revising paragraph (a) to read as

follows:

Sec. 250.17 Reports.

(a) Inventory reports and receipt of donated foods. Distributing

agencies shall complete and submit to the FCSRO semiannual reports

regarding excessive inventories (as defined in Sec. 250.14(f)) of

donated foods, utilizing form FCS-155, the Inventory Management

Register, except that distributing agencies shall submit monthly

inventory information on form FCS-152, for the Food Distribution

Program on Indian Reservations, and on form FCS-153, for the Commodity

Supplemental Food Program. FCS may require the use of other reporting

formats. FCS may also require that form FCS-155 be submitted more

frequently than semiannually if necessary to maintain program

accountability, and that any inventory report be submitted less

frequently if sufficient to meet program needs. Reports shall be

submitted not later than 30 calendar days after the last month in the

reporting period as established by FCS.

* * * * *

7. In Sec. 250.19:

a. Paragraph (b)(1)(i) is revised;

b. Paragraphs (b)(1)(ii), (b)(1)(iii), and (b)(1)(iv) are

redesignated as paragraphs (b)(1)(iii), b(1)(iv), and b(1)(v),

respectively;

c. A new paragraph (b)(1)(ii) is added; and,

d. Newly redesignated paragraph (b)(1)(v) is revised.

The revisions and addition read as follows:

Sec. 250.19 Reviews.

* * * * *

(b) Responsibilities of distributing agencies.

(1) * * *

(i) An on-site review of all nutrition programs for the elderly

under agreement in accordance with Sec. 250.12(b), at least once every

four years, with not fewer than 25 percent of these programs being

reviewed each year. These reviews shall also include on-site reviews of

the storage facilities of sites receiving donated foods to ensure

compliance with Sec. 250.14(b);

(ii) An on-site review of all charitable institutions and nonprofit

summer camps for children under agreement in accordance with

Sec. 250.12(b), and the food service management companies under

contract with these recipient agencies in accordance with

Sec. 250.12(d), at a minimum, whenever the distributing agency

identifies actual or probable deficiencies in program administration,

including compliance with civil rights provisions, through audits,

investigations of complaints, reports submitted by recipient agencies,

or any other information available to the State agency which, at the

discretion of the State agency, warrants an on-site review, or at the

request of FCS;

* * * * *

(v) A biennial review of all food service management companies

under contract with recipient agencies in accordance with

Sec. 250.12(d), except that:

(A) Food service management companies under contract with

charitable institutions and nonprofit summer camps for children shall

be reviewed in accordance with paragraph (b)(1)(ii) of this section;

and,

(B) Food service management companies under contract with schools

participating in the National School Lunch Program or commodity schools

under part 210 of this chapter, or with schools participating in the

School Breakfast Program under part 220 of this chapter, shall be

reviewed in accordance with the provisions set forth in parts 210 and

220.

* * * * *

Sec. 250.24 [Amended]

8. In Sec. 250.24, paragraph (d)(1) is amended by removing the word

``semi-annual''.

PART 251--THE EMERGENCY FOOD ASSISTANCE PROGRAM

1. The authority citation for part 251 is revised to read as

follows:

Authority: 7 U.S.C. 7501-7516.

2. Section 251.2 is amended by revising paragraph (c) to read as

follows:

[[Page 12117]]

Sec. 251.2 Administration.

* * * * *

(c) Each State agency that distributes donated foods to emergency

feeding organizations or receives payments for storage and distribution

costs in accordance with Sec. 251.8 shall perform those functions

pursuant to an agreement entered into with the Department. This

agreement shall be considered permanent, with amendments to be made at

the request of FCS. Such State agencies shall enter into a written

agreement with eligible emergency feeding organizations. This agreement

shall provide that emergency feeding organizations agree to operate the

program in accordance with the requirements of this part, and, as

applicable, Part 250 of this chapter. The agreement shall be considered

permanent, with amendments to be made as necessary. State agencies

shall ensure that emergency feeding organizations provide, on a timely

basis, by amendment to the agreement, any information on changes in

program administration, including, but not limited to, any changes

resulting from amendments to Federal regulations or policy.

3. In Sec. 251.10:

a. Paragraph (a)(1) is amended by removing the citation

``Sec. 250.6(r)'' and adding in its place the citation ``Sec. 250.16'';

b. Paragraph (d)(2) is revised to read as follows; and

c. Paragraph (d)(3) is removed.

Sec. 251.10 Miscellaneous provisions.

* * * * *

(d) Reports. * * *

(2) Each State agency shall complete and submit to the FCSRO

reports to ensure that excessive inventories of donated foods are not

maintained, in accordance with the requirements of Sec. 250.17(a) of

this chapter. Such reports shall also include the total number of

households served in the State since the previous report submittal,

based upon current information received from emergency feeding

organizations.

* * * * *

PART 253--ADMINISTRATION OF THE FOOD DISTRIBUTION PROGRAM FOR

HOUSEHOLDS ON INDIAN RESERVATIONS

1. The authority citation for part 253 continues to read as

follows:

Authority: 91 Stat. 958 (7 U.S.C. 2011-2027), unless otherwise

noted.

2. Section 253.5 is amended by removing the first two sentences of

the introductory text of paragraph (a)(1) and adding, in their place,

three new sentences to read as follows:

Sec. 253.5 State agency requirements.

(a) Plan of operation. (1) The State agency that assumes

responsibility for the Food Distribution Program shall submit a plan of

operation for approval by FCS. Approval of the plan shall be a

prerequisite to the donation of commodities available for use by

households under Sec. 253.9. The approved plan shall be considered

permanent, with amendments to be added as changes in State agency

administration or management of the program, as described in the plan,

are made, or at the request of FCS. * * *

* * * * *

3. Section 253.9 is amended by revising paragraph (c)(1) to read as

follows:

Sec. 253.9 Administrative funds for State agencies.

* * * * *

(c) Application for funds. (1) Any State agency administering a

Food Distribution Program that desires to receive administrative funds

under this section shall submit form SF-424, ``Application for Federal

Assistance,'' to the appropriate FCS Regional Office at least three

months prior to the beginning of a Federal fiscal year. The application

shall include budget information, reflecting by category of expenditure

the State agency's best estimate of the total amount to be expended in

the administration of the program during the fiscal year. FCS may

require that detailed information be submitted by the State agency to

support or explain the total estimated amounts shown for each budget

cost category. As required by 7 CFR 3015, Subpart V, agencies of State

government shall submit the application for Federal assistance to the

State clearinghouse before submitting it to the FCSRO. ITOs shall not

be subject to this requirement.

* * * * *

Dated: March 10, 1997.

William E. Ludwig,

Administrator.

[FR Doc. 97-6427 Filed 3-13-97; 8:45 am]

BILLING CODE 3410-30-U