For-Profit Center Participation in the Child and Adult Care Food Program, 62057-62058 [E6-17640]

Agencies

• DEPARTMENT OF AGRICULTURE
• Food and Nutrition Service

[Federal Register Volume 71, Number 204 (Monday, October 23, 2006)]
[Rules and Regulations]
[Pages 62057-62058]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-17640]



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Federal Register / Vol. 71, No. 204 / Monday, October 23, 2006 / 
Rules and Regulations

[[Page 62057]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 226

RIN 0584-AD66


For-Profit Center Participation in the Child and Adult Care Food 
Program

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule adopts without change the interim rule, published on 
July 27, 2005, which added a provision to the Child and Adult Care Food 
Program (CACFP) regulations authorizing for-profit centers providing 
child care or outside-school-hours care to participate based on the 
income eligibility of 25 percent of children in care for free or 
reduced price meals. This provision, which has been available 
nationwide through annual appropriation acts since December 2000, was 
permanently established by the Child Nutrition and WIC Reauthorization 
Act of 2004. This rule permits the ongoing participation of for-profit 
centers in the CACFP based on the income eligibility of children in 
care for free or reduced price meals.

DATES: This final rule is effective November 22, 2006.

FOR FURTHER INFORMATION CONTACT: Keith Churchill or Minh Pham, Child 
Care and Summer Section, Policy and Program Development Branch, Child 
Nutrition Division, Food and Nutrition Service, USDA, 3101 Park Center 
Drive, Alexandria, VA 22302, phone (703) 305-2590.

SUPPLEMENTARY INFORMATION:

I. Background

Why Was the Interim Rule Published?

    An interim rule on the participation of for-profit centers in the 
CACFP was published on July 27, 2005 (70 FR 43259). The interim rule 
was issued in response to Section 119(a) of the Child Nutrition and WIC 
Reauthorization Act of 2004 (Pub. L. 108-265), which amended section 
17(a)(2)(B)(i) of the Richard B. Russell National School Lunch Act 
(NSLA) (42 U.S.C. 1766(a)(2)(B)(i)) to permanently authorize for-profit 
centers that provide child care or outside-school-hours care to 
participate in the CACFP if 25 percent of the children in care are 
eligible for free or reduced price meals under the Program.
    This criterion provides an additional means by which for-profit 
centers may qualify for Program participation. For-profit centers in 
all States have been permitted to participate in the Program since 
December 2000, when a provision of Public Law 106-554, added Section 
17(a)(2)(B)(i) to the NSLA, 42 U.S.C. 1766(a)(2)(B)(i). That time-
limited provision was subsequently renewed annually until made 
permanent by Public Law 108-265 on June 30, 2004. Prior to December 
2000, the Food and Nutrition Service (FNS) implemented separate but 
similar authority in section 17(p) of the NSLA, 42 U.S.C. 1766(p), 
permitting for-profit centers in three States (Kentucky, Iowa, and 
Delaware) to participate in the Program. Section 119(a)(2) of Public 
Law 108-265 struck this provision. As a result of the permanent 
statutory provision affecting for-profit centers, these States were 
notified that the pilot projects were eliminated and their affected 
for-profit centers were incorporated into regular for-profit Program 
participation under section 17(a)(2)(B)(i).
    This authority differs from that in section 17(a)(2)(B)(ii) (42 
U.S.C. 1766(a)(2)(B)(ii)), which permits for-profit centers providing 
child care or outside-school-hours care to participate in the CACFP if 
they receive compensation from the State title XX funds and if at least 
25 percent of the enrolled children or the licensed capacity (whichever 
is less) receive benefits under title XX of the Social Security Act. 
This criterion was established by Public Law 101-147, which 
reauthorized child nutrition programs in November 1989, and is located 
at section 17(a)(2)(B)(ii) of the NSLA.
    This final rule adopts the definition of ``For-profit center'' in 
Sec.  226.2, which was added to the CACFP regulations by the interim 
rule. This definition describes the eligibility criteria pertaining to 
for-profit centers serving children and adults. All other changes, 
which were made by the interim rule and are adopted by this final rule, 
stem from this new definition of for-profit center. These changes 
consist primarily of name changes in which the new term ``For-profit 
center'' is substituted for ``Proprietary title XIX center'' or 
``Proprietary title XX center''.

What Comments Were Received on the Interim Rule?

    We did not receive any comments on the interim rule.

II. Procedural Matters

Executive Order 12866

    This rule has been determined to be not significant and was not 
reviewed by the Office of Management and Budget in conformance with 
Executive Order 12866.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Roberto Salazar, 
Administrator for the Food and Nutrition Service, has certified that 
this rule will not have a significant economic impact on a substantial 
number of small entities. This final rule implements a statutory change 
that permanently authorizes for-profit centers to participate in the 
Child and Adult Care Food Program on the basis of income eligibility of 
25 percent of children in care for free or reduced price meals. This 
provision has been available to for-profit centers as an eligibility 
criterion for participation in the Program since FY 2001. Since the 
provision is not new, the Food and Nutrition Service estimates that the 
permanent designation of this eligibility criterion will not 
substantially increase the number of for-profit centers that may apply 
to participate in the Program.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under Section 202 of the UMRA,

[[Page 62058]]

the Department generally must prepare a written statement, including a 
cost/benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures to State, local, or tribal 
governments in the aggregate, or to the private sector, of $100 million 
or more in any one year. When such a statement is needed for a rule, 
section 205 of the UMRA generally requires the Department to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, more cost-effective or least burdensome alternative 
that achieves the objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) that impose costs on State, local, 
or tribal governments or to the private sector of $100 million or more 
in any one year. This rule is, therefore, not subject to the 
requirements of sections 202 and 205 of the UMRA.

Executive Order 12372

    The Child and Adult Care Food Program is listed in the Catalog of 
Federal Domestic Assistance under No. 10.558. For the reasons set forth 
in the final rule in 7 CFR part 3015, Subpart V and related Notice 
published at 48 FR 29114, June 24, 1983, this program is included in 
the scope of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials.

Executive Order 13132

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

Executive Order 12988

    The 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 Dates paragraph of the rule. Prior to any 
judicial challenge to the provisions of this rule or the application of 
its provisions, all applicable administrative procedures must be 
exhausted. In the Child and Adult Food Care Program, the administrative 
procedures are set forth at 7 CFR 226.6(k), which establishes appeal 
procedures and 7 CFR 226.22 and 7 CFR parts 3016 and 3019, which 
address administrative appeal procedures for disputes involving 
procurement by State agencies and institutions.

Civil Rights Impact Analysis

    FNS has reviewed this final rule in accordance with the Department 
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify and 
address any major civil rights impacts the rule might have on 
minorities, women, and persons with disabilities. After a careful 
review of the rule's intent and provisions, FNS has determined that 
there is no negative effect on these groups. All data available to FNS 
indicate that protected individuals have the same opportunity to 
participate in the CACFP as non-protected individuals. Regulations at 7 
CFR 226.6(f)(1) require that CACFP institutions agree to operate the 
Program in compliance with applicable Federal civil rights laws, 
including 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 the Department's 
regulations concerning nondiscrimination (7 CFR Part 15, 15a, and 15b). 
At 7 CFR 226.6(m)(1), State agencies are required to monitor CACFP 
institution compliance with these laws and regulations.

Paperwork Reduction Act

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

E-Government Act Compliance

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

List of Subjects in 7 CFR Part 226

    Accounting, Aged, Day care, Food assistance programs, Grant 
programs, Grant programs--health, American Indians, Individuals with 
disabilities, Infants and children, Intergovernmental relations, Loan 
programs, Reporting and recordkeeping requirements, Surplus 
agricultural commodities.

PART 226--CHILD AND ADULT CARE FOOD PROGRAM

    Accordingly, the interim rule amending 7 CFR part 226, which was 
published at 70 FR 43259 on July 27, 2005, is adopted as a final rule 
without change.

    Dated: October 13, 2006.
Roberto Salazar,
Administrator, Food and Nutrition Service.
 [FR Doc. E6-17640 Filed 10-20-06; 8:45 am]
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