Senior Farmers' Market Nutrition Program Regulations, 74618-74654 [06-9569]

Agencies

• DEPARTMENT OF AGRICULTURE
• Food and Nutrition Service

[Federal Register Volume 71, Number 238 (Tuesday, December 12, 2006)]
[Rules and Regulations]
[Pages 74618-74654]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-9569]



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Part III





Department of Agriculture





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Food and Nutrition Service



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7 CFR Part 249



Senior Farmers' Market Nutrition Program Regulations; Final Rule

Federal Register / Vol. 71, No. 238 / Tuesday, December 12, 2006 / 
Rules and Regulations

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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 249

RIN 0584-AD35


Senior Farmers' Market Nutrition Program Regulations

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Final rule.

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SUMMARY: This final rule implements the provision of the Farm Security 
and Rural Investment Act of 2002 that gives the Secretary of 
Agriculture the authority to promulgate regulations for the operation 
and administration of the Senior Farmers' Market Nutrition Program 
(SFMNP), thereby making it a permanent program rather than a 
competitive grant. The purposes of the SFMNP are to provide resources 
in the form of fresh, nutritious, unprepared, locally grown fruits, 
vegetables, and herbs from farmers' markets, roadside stands, and 
community supported agriculture programs to low-income seniors; to 
increase the domestic consumption of agricultural commodities by 
expanding or aiding in the expansion of domestic farmers' markets, 
roadside stands, and community supported agriculture programs; and to 
develop or aid in the development of new and additional farmers' 
markets, roadside stands, and community supported agriculture programs.

DATES: This rule becomes effective on January 11, 2007.

FOR FURTHER INFORMATION CONTACT: Debra Whitford or Donna Hines, 
Supplemental Food Programs Division, Food and Nutrition Service, USDA, 
3101 Park Center Drive, Room 528, Alexandria, Virginia 22302, (703) 
305-2746, OR Debbie.Whitford@fns.usda.gov, or Donna.Hines@fns.usda.gov.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be Significant and was reviewed by 
the Office of Management and Budget in conformance with Executive Order 
12866.

Regulatory Impact Analysis

    As required for all rules that have been designated as Significant 
by the Office of Management and Budget, a Regulatory Impact Analysis 
was developed for this rule. It is attached as an appendix to this 
final rule.

Need for Action

    Congress established the SFMNP in Section 4402 of Public Law 107-
171 to provide resources in the form of fresh, nutritious, unprepared, 
locally grown fruits, vegetables, and herbs from farmers' markets, 
roadside stands, and community supported agriculture programs (CSAs) to 
low-income seniors; increase the domestic consumption of agricultural 
commodities by expanding or aiding in the expansion of domestic 
farmers' markets, roadside stands, and CSA programs; and develop or aid 
in the development of new and additional farmers' markets, roadside 
stands, and CSA programs. This final rule provides operating guidelines 
for the SFMNP, consistent with legislative intent.
    The requirements of the final USDA rule for the SFMNP are similar 
to two USDA interventions: The WIC Farmers' Market Nutrition Program 
(FMNP), for individuals participating in the Special Supplemental 
Nutrition Program for Women, Infants and Children (WIC) and those 
individuals on a waiting list for WIC benefits; and the Senior Farmers' 
Market Nutrition Pilot Program (SFMNPP), administered by USDA as a 
pilot program in 2001. The SFMNP has been administered by USDA as a 
competitive grant program since Fiscal Year (FY) 2001. Establishing 
rules for the SFMNP similar to the FMNP and SFMNP eases the 
administrative burden for USDA, State agencies, farmers, and program 
recipients.

Benefits

Benefits to Seniors
    Low-income seniors will be afforded nutrition education as well as 
a coupon benefit ranging in value from $20 to $50 per annum, which will 
be used to purchase fresh, unprepared fruits, vegetables, and herbs 
intended to improve seniors' diets. Seniors, and ultimately 
participating farmers, in each State agency will benefit from the total 
Federal grant to the State agencies minus the amount that State 
agencies spend on administration--up to 10 percent of the total grant.
    It is possible that seniors will not eat additional fresh fruits 
and vegetables, but rather will substitute the fruits and vegetables 
that they would have purchased with their own funds with fruits and 
vegetables purchased with SFMNP coupons. You, et al., ``Consumer Demand 
for Fresh Fruits and Vegetables in the United States'' (1998) found 
that the demand for fresh fruits and vegetables in the United States 
was responsive to price changes, but not changes in income.
Benefits to Farmers
    Farmers will collect revenue from redeemed coupons up to the total 
Federal grants to State agencies for food costs (the total amount of 
revenue collected will depend also on the amount of the grant State 
agencies use to cover administrative costs). Additional revenue may be 
reaped as seniors might spend their own money (and in some States, food 
stamps) to purchase additional goods at the farmers' markets. Farmers 
will also benefit from the exposure of new populations to farmers' 
markets, roadside stands and CSAs, which could lead to increased 
revenues.
    In FY 2005, the SFMNP operated at 2,663 farmers' markets, 2,001 
roadside stands and 237 CSAs. USDA's Economic Research Service (ERS) 
reported in 2001, that the SFMNP has not been as effective [as 
envisioned] in developing new farmers' markets, produce stands, and 
community supported agricultural programs or in expanding existing 
ones. Nevertheless, ERS suggests that given evidence from the WIC FMNP, 
the SFMNP could increase the number of farmers' markets, roadside 
stands, and CSAs in the long run.

Costs

    The costs associated with the SFMNP are based on the following 
assumptions:
     Funding for FY 2007-FY 2011 is maintained at the current 
authorized level of $15 million annually (assumes no carryover funds 
are available in 2007-2011);
     State agencies use 10 percent of the Federal grant for 
administration in FY 2007-FY 2011;
     State agencies provide an average benefit level of $17.50 
to recipients (as shown in Table 4 on page 25); and
     The poverty rate among seniors remains constant over the 
period of analysis.
    FNS also assumes for the purpose of this analysis that total 
funding and benefit levels will not be indexed for inflation; 
therefore, their value has been deflated using projections of the 
Consumer Price Index--Urban index for fresh fruits and vegetables (1989 
baseline). Based on these assumptions, we estimate there will be little 
change in the percent of SFMNP eligibles served in the analysis period, 
due to the large number of eligibles nationally.
    Because the resources devoted to the SFMNP are likely to be small 
in comparison to the size of the eligible population, the permanent 
Program will not enable State agencies to reach the majority of those 
eligible. However, the minimum and maximum benefit levels

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put forth in this final rule will help enable State agencies to serve 
as many eligible individuals as possible. The final rule allows for 
future growth, should additional funds be made available. Further, 
State agencies are allowed to contribute their own funds to enhance 
their Federal SFMNP grants. There were five State agency grantees that 
added State funds to their SFMNP food benefits in FY 2005.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act (5 U.S.C. 601-612). Nancy Montanez Johner, 
Under Secretary for Food, Nutrition, and Consumer Services, has 
certified that this rule will not have a significant economic impact on 
a substantial number of small entities. The provisions of this 
rulemaking are applicable to all State and local agencies, farmers, 
farmers' markets, roadside stands, and community supported agriculture 
programs, regardless of their size or of the volume of SFMNP business 
they conduct.

Public Law 104-4, Unfunded Mandate Reform Act of 1995 (UMRA)

    Title II of the UMRA 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, FNS generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures by State, local, or tribal 
governments in the aggregate, or 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 FNS 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 final rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local, or tribal 
governments or the private sector of $100 million or more in any one 
year. Thus, the rule is not subject to the requirements of Sections 202 
and 205 of the UMRA.

Executive Order 12372

    The Senior Farmers' Market Nutrition Program is listed in the 
Catalog of Federal Domestic Assistance under No. 10.576. For the 
reasons set forth in the final rule in 7 CFR part 3015, Subpart V and 
related Notice (48 FR 29115, June 24, 1983), this program is included 
in the scope of Executive Order 12372 that requires intergovernmental 
consultation with State and local officials.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is intended to have preemptive effect with 
respect to any State or local laws, regulations, or policies that 
conflict with its provisions or that would otherwise impede its full 
implementation. This rule is not intended to have retroactive effect 
unless so specified in the Dates paragraph of the preamble of the final 
rule. Prior to any judicial challenge to the application of the 
provisions of this rule, all applicable administrative procedures must 
be exhausted.
    In the Senior Farmers' Market Nutrition Program, the administrative 
procedures are as follows:
     Local agencies, farmers, farmers' markets, roadside 
stands, and community supported agriculture programs--State agency 
hearing procedures issued pursuant to 7 CFR 249.16;
     Applicants and participants--State agency hearing 
procedures pursuant to 7 CFR 249.16;
     Sanctions against State agencies (but not claims for 
repayment assessed against a State agency) pursuant to 7 CFR 249.17--
administrative appeal in accordance with 7 CFR 249.16; and
     Procurement by State or local agencies--administrative 
appeal to the extent required by 7 CFR 3016.36.

Federalism Summary Impact Statement

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

Civil Rights Impact Analysis

    FNS has reviewed this rule in accordance with FNS 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, and the characteristics of SFMNP participants, FNS has 
determined that none of the provisions in this rule have a discernible 
impact on minorities, women, or persons with disabilities that are 
likely to result in inequitable treatment. FNS specifically prohibits 
the State agencies, and their cooperators, that administer the SFMNP 
from engaging in actions that discriminate against any individual in 
any of the protected classes (see 7 CFR 249.7 for the nondiscrimination 
policy in the SFMNP). Where State agencies have options, and they 
choose to implement a certain provision, they must implement it in such 
a way that it complies with the SFMNP regulations set forth at Sec.  
249.7.

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 collection of information unless it displays a current valid OMB 
control number. The information collections in this rule are being 
reviewed by OMB and will not be effective until they have received OMB 
approval. Once they have received OMB approval, FNS will publish a 
notice in the Federal Register.

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.

Background

History of the SFMNP--FY 2001 Through FY 2004

    USDA's Commodity Credit Corporation (CCC) established the Senior 
Farmers' Market Nutrition Program (SFMNP) in November 2000 as a pilot 
program (65 FR 65825, Nov. 2, 2000). A brief history of the program 
from FY 2001-FY 2004 was included in the preamble to the proposed rule. 
A total of $15 million was made available for the pilot SFMNP, in which 
grant awards ranging from $9,000 to $1.2 million were made to 30 
States, 5 Indian tribal governments, and the District of Columbia. 
Nearly 420,000 low-income seniors participated in the

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SFMNP that first year. In FY 2002, Public Law 107-78 (the Agriculture, 
Rural Development, Food and Drug Administration and Related Agencies 
Appropriations Act) provided $10 million from FNS' Commodity Assistance 
Program account to continue the SFMNP for a second year.
    An additional $5 million was provided from CCC funds by Section 
4402 of the Farm Security and Rural Investment Act of 2002 (the Farm 
Bill), Public Law 107-171 (7 U.S.C. 3007). The Farm Bill also 
authorized the SFMNP for FY 2003 through FY 2007, provided funding at 
$15 million for each of those years, and gave FNS the authority to 
develop regulations as deemed necessary for the SFMNP. The basic 
structure of the SFMNP has remained unchanged since its inception, with 
only slight modifications in the competitive grant process. By the end 
of FY 2004, 47 State agencies were participating in the program, and 
over 800,000 seniors had received SFMNP benefits during that year's 
market season.
    The information below brings the history of the SFMNP up to date 
since the proposed rule was published.

SFMNP--FY 2005 Through FY 2006

    Just prior to the beginning of FY 2005, OMB clarified to FNS that 
SFMNP funds that were not expended in the previous fiscal year could 
not be carried over for allocation in the current fiscal year, i.e., 
that only $15 million could be allocated to grantees. To accommodate 
this clarification, FNS reduced each participating SFMNP State agency's 
grant award for FY 2005 by 10.2 percent. No funds were available to 
support the expansion of any current grantee's existing program, or the 
addition of any new State agencies that might have been interested in 
initiating a new SFMNP. Additionally, one State agency discontinued its 
SFMNP operation due to the unavailability of State funds. The SFMNP 
funds that had been initially allocated to this grantee were then 
redistributed proportionally to the remaining 46 SFMNP State agencies. 
Despite the reduction in their grant awards, the 46 State agency 
grantees not only continued to operate the SFMNP, but many were also 
able to leverage State, local, or private funds to make up the 
difference.
    Public Law 108-447 (Rural Development, Food and Drug Administration 
and Related Agencies Appropriations Act 2005) included a provision that 
allows FNS to allocate any unspent funds from FY 2005, as well as the 
$15 million appropriated for FY 2006, to eligible SFMNP grantees. The 
availability of these unspent funds is expected to restore the grant 
awards for the 46 current SFMNP State agencies to levels approaching 
the grants that were awarded in FY 2004, but there will still be 
insufficient funds to solicit grant applications from new State 
agencies.

Consistency With the WIC Farmers' Market Nutrition Program (FMNP)

    USDA's FNS has administered the FMNP since its inception as a pilot 
program in 1988, through its transition to an authorized independent 
program when the WIC Farmers' Market Nutrition Act of 1992 (Pub. L. 
102-314) amended Section 17(m) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(m)). The FMNP provides coupons to eligible WIC participants 
(or to individuals on WIC waiting lists) for the purchase of fresh, 
nutritious, unprepared fruits, vegetables and herbs at farmers' markets 
and, at the State agency's option, at roadside stands or farm stands. 
Many of the State agencies that have received SFMNP grant awards since 
FY 2001 were already established as administering agencies for the FMNP 
in that State. Based on the similar natures of the FMNP and the SFMNP, 
and in an effort to create consistency between the two programs, this 
final rule is constructed on the framework of the FMNP regulations, for 
which the final rule was published in the Federal Register on September 
27, 1995 (60 FR 49739).

General Summary of Comments Received on the SFMNP Proposed Rule

    The SFMNP Proposed Rule was published in the Federal Register on 
May 26, 2005 (70 FR 30558), with a 90-day comment period. A total of 
415 comments were received on the Proposed Rule, over half of which 
were from program participants, and generally expressed support for the 
SFMNP's establishment as a permanent nutrition assistance program. One 
comment was opposed to the proposed rule in all of its provisions, and 
another commenter suggested that the SFMNP not be changed in any aspect 
beyond the addition of available funding.
    The remaining comments were submitted from a variety of sources, 
including current SFMNP State agency grantees, State agencies not 
currently participating in the Program but interested in doing so, 
local agencies, farmers, professional organizations and associations, 
Congressional delegations, advocacy groups, nutritionists, and private 
citizens. The major comments are addressed by topic in further detail 
throughout this preamble.
    What follows is a discussion of each section of the final SFMNP 
rule, including the major provisions set forth in each section; a brief 
summary of the comments received that addressed these issues; and FNS' 
rationale for either modifying each section in the final rule, or 
retaining its provisions as initially proposed. The section numbers 
referenced in the following discussion shall be sections of Title 7, 
Code of Federal Regulations, unless otherwise indicated.
1. General Purpose and Scope (Sec.  249.1)
    While the essential purpose of the SFMNP is very similar to that of 
the FMNP, it differs from the FMNP purpose in one significant aspect--
it includes community supported agriculture (CSA) programs (as defined 
in Sec.  249.2) as allowable outlets for accepting SFMNP coupons or 
funds. CSA programs, while fairly familiar to the small farmer and 
sustainable agriculture communities, have not previously been 
associated with FNS programs.
    A total of 220 comments were received in support of converting the 
SFMNP from a competitive grant program to permanent status, and of the 
stated purposes of the program. In fact, close to 200 form letters were 
sent in by participating seniors in a single county. The purposes and 
scope of the SFMNP are retained in this final rule unchanged from the 
proposal.
    As directed by the provisions of Public Law 107-171 (7 U.S.C. 
3007), the purpose and scope of the SFMNP are to improve/enhance the 
diets of low-income seniors by enabling them to obtain fresh fruits and 
vegetables from farmers' markets, roadside stands, and CSA programs, 
and to develop or expand these outlets by broadening their customer 
bases.
2. Definitions (Sec.  249.2)
    Most of the definitions used in this rulemaking for the SFMNP are 
either the same as those used in the FMNP or are definitions used in 
the SFMNP competitive grant program. The majority of these definitions 
were either not addressed by commenters at all, or were supported by 
general comments to that effect. Therefore, with the exception of the 
definitions addressed below, all of the other definitions contained in 
Sec.  249.2 of this final rule are retained as proposed.
    ``Bulk purchase.'' A number of SFMNP grantees have used a modified 
CSA program model in which bulk quantities of certain produce items, 
such as apples or sweet potatoes, were purchased directly from 
authorized

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farmers by the State agency. These items were then equitably divided 
among SFMNP participants, and distributed directly to them, either at a 
central distribution point (such as a local senior center) or through 
some type of home delivery network. Such a program model was found to 
be very successful, but was not addressed in the proposed rule. Three 
commenters argued that the bulk purchase option should be retained in 
the permanent SFMNP, and FNS concurs with this position, as long as it 
is carefully managed to ensure that all other program requirements are 
met, e.g, only eligible foods are purchased in bulk for distribution, 
farmers from whom the produce is purchased are authorized by the State 
agency, and the value of the produce provided to SFMNP participants 
does not exceed the allowable maximum of $50 per participant. 
Therefore, a definition for ``bulk purchase'' is added to the list of 
regulatory definitions at Sec.  249.2; additional information regarding 
the bulk purchase option is also provided in Section 10 of this 
preamble.
    ``Eligible foods.'' In the proposed rule, FNS defined ``eligible 
foods'' as fresh, nutritious, unprepared, locally grown fruits, 
vegetables, and herbs for human consumption. Three commenters suggested 
that the proposed definition of ``eligible foods'' be broadened to 
include fruits and vegetables that are not otherwise available through 
local production, as well as other nutritionally healthful items such 
as dried fruits and raw nuts. Another 6 commenters supported the 
addition of locally-produced honey to the list of eligible foods, and 2 
comments supported allowing dried beans for purchase. One comment 
suggested the inclusion of any edible farm produce, with an emphasis on 
variety, while another proposed that State agencies be given the 
authority to determine what food items should be considered to be 
eligible for purchase under the SFMNP. Finally, one commenter suggested 
that FNS should provide a master list of eligible foods from which 
State agencies would select the items that could be purchased with 
SFMNP benefits or funds.
    While FNS understands the motivation behind the suggested addition 
of such items as honey, dried fruits or beans, and raw nuts to the list 
of eligible SFMNP foods, it has no legislative authority to make such 
additions. The Farm Security and Rural Investment Act of 2002 (Pub. L. 
107-171, also known as the Farm Bill) specifically stipulates that 
SFMNP funds are to be used for the purchase of fresh, unprepared fruits 
and vegetables. State agencies do have a considerable amount of 
latitude in determining which fruits and vegetables are allowed for 
purchase within the Federal definition of eligible foods. It is not 
realistic to expect FNS to provide a master list of eligible foods 
beyond what is included in the current definition; FNS believes that 
individual State agencies are in the best position to know which fruits 
and vegetables are appropriate for sale within that State. Further, 
horticultural advances are constantly being made, and FNS would not 
want to exclude a potentially eligible fruit or vegetable from 
inclusion by establishing an exhaustive--and possibly inaccurate--list 
of eligible foods for the SFMNP.
    Therefore, the definition of ``eligible foods'' for the SFMNP will 
be retained in this final rule as proposed.
    ``Locally grown.'' In the proposed rule, ``locally grown'' was 
defined as foods that are grown within the borders of the State that 
the project serves. State agencies also have the option to define 
``locally grown'' to mean foods grown in areas of States adjacent to 
that State, as long as such areas are part of the United States, and/or 
to use a more stringent definition than the one established by FNS. Two 
comments were received that addressed the proposed definition of 
``locally grown''. One commenter expressed concern that the definition 
as proposed is not sufficiently restrictive to ensure that the 
interests of local (i.e., within-State) farmers are protected, and 
suggested that the definition be strengthened to include a mandatory 
percentage of locally grown produce that must be offered for purchase 
through the SFMNP by authorized farmers, markets, and/or CSAs. The 
second commenter suggested that State agencies be allowed to define 
``locally grown'' with no federally-imposed restrictions.
    While FNS encourages all participating State agencies to promote 
the sale of locally-grown eligible foods to the greatest extent 
possible, we also realize that circumstances beyond the local farmers' 
control may occur to make it impossible to meet the demands of SFMNP 
participants entirely, at any given point in the market season. Once 
SFMNP coupons have been issued, or CSA shares assigned, a commitment 
has been made by the State agency to the participant that sufficient 
produce will be available to him or her in exchange for the full amount 
of benefits provided, should the participant want to use them. Thus it 
becomes incumbent upon the authorized farmer(s) to find a way to meet 
that demand. FNS believes that each individual State agency is in the 
best position to determine how much of the produce offered must 
actually be grown by the farmer who accepts the SFMNP coupons in a 
transaction. Consistent with the FMNP, SFMNP State agencies will be 
responsible for defining the percentage of produce that must be grown 
by an authorized farmer. However, as clearly stated in the proposed 
rule, FNS believes that it is important for an authorized farmer to 
produce at least some portion of the fruits and vegetables that she/he 
offers for sale. This requirement is intended to support small farmers.
    Therefore, the definition of ``locally grown'' is retained in this 
final rule as set forth in the proposed rule.
    ``Participant.'' The term ``participant'' was suggested by a 
commenter as a replacement for the term ``recipient'' that was included 
in the proposed rule. As the commenter pointed out, ``participant'' is 
consistent with the term used in other FNS-administered nutrition 
assistance programs. FNS agrees; therefore, the definition of 
``recipient'' that was initially set forth in the proposed rulemaking 
is now used to define ``participant'' for SFMNP purposes, the term 
``recipient'' is removed from Sec.  249.2, and the term ``participant'' 
replaces ``recipient''throughout this final rule.
3. Administration (Sec.  249.3)
    This section of the rule delegates to FNS the responsibility within 
USDA for administering the SFMNP, and delegates the responsibility for 
direct administration of the program to State agencies. It also 
requires each State agency to submit an annual State Plan of 
Operations, and to execute written agreements between the administering 
(lead) State agency and any other State, local, or nonprofit agencies 
or entities involved in operating any aspect of the SFMNP. Finally, 
each State agency must ensure that sufficient staff is available to 
administer the SFMNP efficiently and effectively.
    Three comments were received that addressed this section of the 
proposed rulemaking, and most of them were essentially supportive of 
the administrative structure set forth in the proposed rule. One 
commenter proposed that the final rule include a formal delegation of 
authority to operate and/or administer the SFMNP at the local level, 
but this provision is already included as a State agency option at 
Sec.  249.3(d).
    Therefore, Sec.  249.3 is retained in this final rule as proposed.

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4. State Plan Provisions (Sec.  249.4)
    In establishing the SFMNP as a permanent program, Congress gave FNS 
the authority to set out basic standards and requirements for its 
operation. Consistent with other FNS nutrition assistance programs, as 
proposed, each State agency that desires to receive a SFMNP grant, 
including State agencies currently participating in the SFMNP, will 
need to submit a State Plan of Operation for approval by FNS. These 
State Plans will be due by November 15 of each year. Four commenters 
misunderstood this particular provision of the proposed rule, and wrote 
to suggest that submission of a SFMNP State Plan should not be required 
until the final SFMNP rule is published. It was never FNS' intent, nor 
was it suggested in the SFMNP proposed rule, that State Plans would be 
required prior to publication of the final rule. Therefore, the first 
SFMNP State Plans will be due to FNS Regional Offices by February 15, 
2007, for the FY 2007 market season, and by November 15 of each year 
thereafter.
    The State plan process replaces the grant application process that 
was used for the SFMNP since its inception in FY 2001. One commenter 
suggested that the SFMNP continue to be administered as a competitive 
grant program. This is not a feasible option for future oversight of 
the SFMNP; once the status of the SFMNP as a permanent program has been 
established, its administration at the Federal level is expected to be 
consistent with other FNS nutrition assistance programs, i.e., State 
plans are submitted by and approved for each participating State 
agency, and the direct oversight and day-to-day management of the 
program is provided through the seven FNS Regional Offices. Therefore, 
this final rule sets out at Sec.  249.4(a) the specific elements that 
must be included in each State Plan submitted. A complete list of State 
Plan requirements is contained at Sec.  249.4.
    As indicated above, Sec.  249.4(a) sets out specific requirements 
for information that must be included in the State Plan of Operation. 
Many of the requirements included in the SFMNP proposed rule were new 
to SFMNP operators, and reflected administrative requirements that 
generated a considerable number of comments in opposition to the 
requirements. Listed below are discussions of most of the proposed 
information to be included in SFMNP State Plans, the comments received, 
and FNS' decision regarding each proposed provision. Some of the larger 
administrative issues, such as income eligibility determination for 
SFMNP applicants, are addressed in greater detail under their 
respective Sections.
    Number and addresses of authorized participating markets, roadside 
stands, and CSA programs (Sec.  249.4(a)(8)(i))--Two commenters pointed 
out that it is unreasonable to require the actual addresses of all 
authorized SFMNP outlets in November as part of the State Plan before 
the market season actually begins the following spring or summer. As 
noted, markets and roadside stands are not always permanent locations, 
and circumstances may change during the intervening months that cause 
these locations to change. Commenters noted that providing the number 
of outlets by type (market, roadside stand, CSA) that are expected to 
be authorized for the coming season, based on the prior year's 
authorizations and/or projected additions such as new markets that are 
being solicited for inclusion in the SFMNP, should be sufficient. FNS 
agrees with commenters that providing the addresses of market outlets 
for the prior year is sufficient. Therefore, this final is revised in 
Sec.  249.4(a)(8)(i) to require a State agency to provide in its State 
Plan the number and addresses of authorized market outlets that 
participated in the SFMNP during the prior year.
    A technical oversight in this paragraph of the proposed rule has 
also been corrected in this final rule by adding the number of 
individual farmers authorized to accept SFMNP coupons or CSA program 
funds to this requirement.
    Listing of all SFMNP certification/issuance sites, including a map 
outlining the service area and proximity of markets, roadside stands, 
and/or CSA programs to certification/issuance or distribution sites 
(Sec.  249.4(a)(8)(ii))--Similar to the requirement for the addresses 
of all authorized outlets, 4 commenters pointed out that this provision 
is burdensome and unrealistic, given that reasonable access to the 
authorized outlets where participants will be able to use their program 
benefits is essential to the fundamental success of the SFMNP. Again, 
FNS agrees that providing a list of SFMNP certification and issuance 
sites, including a map, for the upcoming market season is not 
reasonable. Therefore, this final is revised in Sec.  249.4(a)(8)(ii) 
to require a State agency to include in its State Plan the SFMNP 
certification and issuance sites, including a map outlining the service 
area and proximity of authorized market outlets that participated in 
the SFMNP during the prior year.
    Determination of areas to be served (Sec.  249.4(a)(9)(i))--In the 
proposed rule, FNS included a provision to require the State agency to 
describe in its State Plan how it intended to select the area(s) within 
the State where SFMNP services would be offered. One commenter 
suggested that FNS should allow State agencies to exercise their own 
discretion in making such decisions. The limited amount of funding that 
is available for the SFMNP currently forces State agencies to make such 
determinations very carefully, and it has become evident over the past 
5 years of operation that the considerations most important to FNS 
(higher concentrations of eligible persons and greater access to 
farmers' markets, roadside stands, and/or CSA programs) are already in 
use by the State agencies that received SFMNP grant awards. While we 
agree that State agencies have discretion to decide how to select the 
areas within the State to offer SFMNP benefits, FNS would like this 
information and believes State agencies should provide it information 
as part of the State Plan. Therefore, this requirement is retained in 
this final rule.
    Method for preventing and identifying dual participation (Sec.  
249.4(a)(9)(iv))--Six commenters opposed the dual participation 
requirement, pointing out that such a requirement is unnecessary in a 
program as small as the SFMNP. These commenters also stated that 
because the majority of SFMNP participants come into the program by 
virtue of their certification for or participation in another 
assistance program (such as Food Stamps or the Commodity Supplemental 
Food Program (CSFP)), the requirement designed to prevent dual 
participation in the SFMNP is redundant, because such programs already 
have mechanisms in place to detect and prevent dual participation. FNS 
believes that the commenters may have misunderstood the intention of 
this requirement, and would like to clarify that such mechanisms are 
not intended to prevent a senior from participating in two different 
programs for which she/he may be eligible, such as CSFP and SFMNP. 
State agencies are still required, however, to have in place a 
mechanism to assure that dual participation within the SFMNP, i.e., 
receipt of SFMNP benefits from more than one local agency or program 
model, can be detected and prevented. Such a mechanism does not have to 
be complicated or elaborate, and may be combined with a procedure 
already in place in a program for which participation or certification 
confers automatic SFMNP eligibility. Therefore, the requirement 
regarding dual

[[Page 74623]]

participation at Sec.  249.4(a)(9)(iv) is retained in this final rule 
as proposed.
5. Selection of New State Agencies (Sec.  249.5)
    This section of the proposed rule stated that only State agencies, 
as defined in Sec.  249.2, would be eligible to receive grants for and 
administer the SFMNP. It also set forth FNS' intention to grandfather 
in as State agencies in the permanent SFMNP those State agencies that 
participated in the SFMNP during the previous fiscal year (i.e., FY 
2006) of the competitive grant program. In regard to the determination 
of entities that should be eligible to serve as SFMNP State agencies, 
one commenter expressed concern that local Area Agencies on Aging (AAA) 
would not be allowed to continue to administer the SFMNP. This is not 
the case. Since its inception, only a bona fide State agency or a 
federally recognized Indian Tribal Government has been eligible to 
receive funds as a SFMNP grantee. However, State agency grantees have 
also, since the inception of the SFMNP, had the option to allow local 
agencies such as AAAs to take on the day-to-day administrative and 
operational functions of the SFMNP. That option was expressly described 
in the proposed rule, and is retained in this final rule at Sec.  
249.5.
    Three comments were received that opposed the proposal to 
grandfather in those State agencies currently participating in the 
SFMNP. These commenters argued that everyone should be given a fair 
opportunity to apply for the Program, and that the grandfathering 
clause is unfair to State agencies that have been unable to join the 
SFMNP. While funding limitations have made it impossible to accept 
applications from prospective SFMNP State agencies for the past 2 
years, we disagree with the concern of overall unfairness. The 
grandfather clause is designed to facilitate the continuation of 
existing programs. Therefore, the clause is retained as proposed. Any 
new State agency interested in participating in the SFMNP is welcome to 
submit a State Plan of Operations to the appropriate FNS Regional 
Office by the regulatory deadline. Such prospective State agencies 
should keep in mind, however, that FNS approval of a SFMNP State Plan 
does not guarantee the availability of Federal funds to support the 
program.
6. Participant Eligibility (Sec.  249.6)
    a. Categorical Eligibility
    In Sec. Sec.  249.2 and 249.6(a)(1) of the proposed rule, FNS 
defined a person categorically eligible for the SFMNP (a ``senior'') as 
an individual 60 years of age or older. Indian tribal organizations 
administering the SFMNP could deem Native Americans who are 55 years of 
age or older as categorically eligible for SFMNP benefits. State 
agencies would have the option to establish a higher age limit, such as 
62 or 65 years of age. Four commenters specifically stated their 
support for these minimum age requirements. One additional commenter 
opposed the requirement for proof of age as an eligibility determinant, 
but no such requirement was included in the proposed rulemaking, nor 
has one been added to this final rule. Although two comments were 
received opposing the option for State agencies to establish a higher 
age limit, FNS believes that this option is important to State agencies 
as a potential caseload management tool.
    At Sec.  249.6(a)(1), FNS also proposed to allow State agencies the 
option to deem disabled individuals under 60 years of age, who live in 
housing facilities occupied primarily by older individuals where 
congregate nutrition services are provided, as categorically eligible 
for SFMNP benefits. SFMNP State agencies opting to serve such disabled 
individuals would be responsible for weighing the relative benefits of 
serving those persons in certain housing facilities against serving 
additional elderly participants who are 60 years of age and older in 
the same, or possibly another, service delivery area. Four comments 
were received that addressed this provision, most of which were 
generally supportive. In fact, only one commenter opposed the 
``mandate'' to serve persons less than 60 years old--a mandate that 
does not exist in either the proposed or this final rule.
    The provisions at Sec.  249.6(a)(1) regarding categorical 
eligibility for the SFMNP are therefore retained as set forth in the 
proposed rule.
b. Residency Requirement
    Section 249.6(a)(2) of the proposed rule would have allowed State 
agencies to establish a residency requirement for SFMNP applicants, to 
determine a service area for any local agency, and to require an 
applicant to reside within that service area at the time of 
application. No durational or fixed residency requirement could be 
imposed. Only one comment was received related to the residency 
requirement for the SFMNP, and that comment reflected support for the 
provision. Therefore, this provision is retained as set forth in the 
proposed rule.
c. Income Eligibility
    In developing the SFMNP proposed rule, FNS identified and 
considered three major aspects to the determination of income 
eligibility for the SFMNP:
    1. What should be the maximum allowable household income?
    2. Should FNS allow automatic income eligibility based on an 
individual's participation in other programs? If so, which programs 
should be included?
    3. How much documentation or verification of income eligibility 
should be required for SFMNP applicants?
    Five comments were received that generally opposed any and all 
income eligibility requirements. FNS does not support this view, 
because of the need for responsible stewardship and fundamental program 
accountability.
    Income eligibility guidelines. As described in the preamble to the 
SFMNP proposed rule, most participating SFMNP State agencies use a 
maximum household income of 185 percent of the annual poverty income 
guidelines. In FY 2005, 36 of the 46 participating SFMNP State agencies 
used an income eligibility standard of 185 percent of the poverty 
guidelines, and another 7 State agencies linked SFMNP income 
eligibility to the maximum income limit used in the Commodity 
Supplemental Food Program (CSFP), i.e., 130 percent (7 CFR 
247.7(a)(3)). A limited number of other variations existed, ranging 
from 150 to 200 percent of the poverty income guidelines. Therefore, in 
the proposed rule, FNS proposed a maximum household income of 185% of 
the poverty guidelines.
    Although over twice as many of the comments received pertaining to 
this provision suggested the option of using an income eligibility 
standard higher than 185 percent as supported the 185 percent limit (15 
and 7, respectively), FNS does not support the option of a higher 
standard, even on a case-by-case basis, because a fundamental principle 
of the SFMNP is to serve as many low-income seniors as possible. 
Therefore, in Sec.  249.6(a)(3), FNS retains the maximum income limit 
of 185 percent for the SFMNP as set forth in the proposed rule.
    Automatic income eligibility based on participation in other 
programs. Under the competitive grant model of the SFMNP, many grantees 
use participation in other means-tested programs, such as the Food 
Stamp Program, the CSFP, and the Food Distribution Program on Indian 
Reservations (FDPIR), to determine eligibility for the SFMNP. All of 
these programs use an income eligibility limit

[[Page 74624]]

that is at or below 130 percent of poverty.
    FNS proposed to continue to allow State agencies to deem applicants 
automatically eligible for the SFMNP based on participation/certified 
eligibility to receive benefits in another means-tested assistance 
program, as determined by the State agency, as long as income 
eligibility is set at or below the SFMNP maximum income, i.e., 185 
percent of the annual poverty income guidelines, and some form of 
documentation is required to establish income eligibility for that 
program.
    All 3 of the comments received addressing this provision were 
supportive. One commenter went on to suggest that persons eligible for 
the Pharmaceutical Assistance to the Aged and Disabled (PAAD) Program 
also be deemed income eligible for the SFMNP. As long as the process 
for establishing eligibility for the PAAD is consistent with the 
requirements described above, and the individual is otherwise 
(categorically and residentially) eligible to participate in the SFMNP, 
FNS has no objection should a State agency wish to include the PAAD 
among its group of programs that confer automatic income eligibility 
for the SFMNP.
    Documentation of income eligibility. Proposed Sec.  249.6(b) would 
have required SFMNP applicants who are not automatically income 
eligible for the program based on participation in or certified 
eligibility for another means-tested program to provide documentation 
of family income at certification.
    This requirement was strongly opposed in 123 comment letters, 
representing every commenter category. They expressed concern about 
imposing an administrative burden of this nature for such a relatively 
small annual benefit. One comment stated that the amount of time and 
effort anticipated to be necessary to obtain proof or documentation of 
income would be excessive given the value of the benefit offered--and 
the cost is unknown. This commenter went on to observe that the self-
identification of need for food assistance, self-declaration of 
participation in another means-tested assistance program, or self-
declaration of income should be the minimum requirement for accessing a 
$20 to $50 annual SFMNP benefit. FNS finds the arguments put forth in 
these comments to be compelling, and has not included in the final rule 
a requirement for income documentation from all SFMNP applicants who 
are not deemed otherwise income eligible. Instead, as set forth in this 
final rule, such applicants may be certified if they sign an affidavit 
affirming that their household income does not exceed the State 
agency's maximum income limit for their individual household size, 
except that State agencies offering a benefit greater than $50 per 
participant through a CSA program may not accept a signed affidavit of 
self-declared income eligibility, but must require documentation of 
household size and income for such participants. State and local 
agencies continue to have the option to verify reported income, in 
order to confirm an applicant's income eligibility for the SFMNP.
d. Certification Periods
    FNS established in the proposed rule at Sec.  249.6(c) a 
certification period for SFMNP participants. As proposed, recipients 
could be certified only for the current fiscal year's SFMNP period of 
operation. One commenter suggested that multiple-year SFMNP 
certification periods should be allowed, but FNS disagrees with this 
suggestion. Funds for the SFMNP are generally too limited, and turnover 
in the pool of potentially eligible senior SFMNP participants is too 
great, to justify such an option. Therefore, the provisions related to 
certification periods in the SFMNP are retained in this final rule as 
proposed.
e. Rights and Responsibilities
    In Sec.  249.6(d), FNS proposed to require State/local agencies to 
inform applicants or authorized representatives/proxies of their SFMNP 
rights and responsibilities. Several comments were received related to 
the Rights and Responsibilities notification--2 generally supported the 
provision, 3 specifically supported the provision of information on 
other services that may be available to SFMNP participants, and one 
suggested that a joint statement be allowed for seniors who are 
participating in both the SFMNP and the CSFP, when both programs are 
administered by the same State agency. FNS appreciates the principle 
behind such a suggestion, but does not agree. Even when one agency is 
responsible for administering multiple programs, such as the SFMNP and 
the CSFP, separate benefits are provided to participants under each 
program. Therefore, FNS believes that it is important to maintain 
separate statements of the participant's rights and responsibilities as 
they pertain to each individual program. This provision is retained in 
this final rule as proposed.
    This section as proposed also required State/local agencies to 
notify applicants in writing if they were ineligible for SFMNP benefits 
(including the reasons for the determination of ineligibility), and of 
their right to a fair hearing. A total of 18 comments were received 
opposing this written notification requirement, arguing that such a 
requirement is excessively burdensome in a program that has such a 
short duration each year. While FNS is sincere in its stated intention 
not to impose any administrative burden on participating State and 
local agencies that is not absolutely necessary, it cannot in good 
conscience eliminate this requirement. Once an individual has applied 
for Program benefits and has been found to be ineligible to receive 
them, that individual is entitled to a formal notification of such a 
determination and of his/her right to a fair hearing to challenge that 
decision. However, FNS also believes that there may be some confusion 
between an actual determination of an individual participant's program 
ineligibility and a State or local agency's inability to provide 
benefits because there simply are not enough funds (in the form of 
coupons or CSA shares) to serve everyone who is interested in receiving 
SFMNP benefits. This provision applies specifically to the former 
instance. The proposed rule did not intend to require that written 
notification be provided to all potentially eligible seniors in the 
State or local service delivery area when funds are not available to 
provide SFMNP benefits.
    The requirement for written notification of applicant ineligibility 
and the right to a fair hearing is therefore retained in this final 
rule as set forth in the proposed rule. However, State and local 
agencies are not expected to implement a complicated or time-consuming 
process in order to provide written notices of ineligibility and the 
right to a fair hearing; a form letter that has the pertinent 
information (date, name, basis of ineligibility, and signature of the 
certifying official) filled in as appropriate and handed to the 
applicant at the time of application is acceptable.
f. Certification Without Charge
    The proposed provision at Sec.  249.6(e), stipulating that no 
applicant or authorized representative may be charged to apply or be 
certified for the SFMNP, was not addressed by commenters. Therefore, 
the provision is retained in the final rule as proposed.
g. Use of Authorized Representatives/Proxies
    The SFMNP proposed rule included a provision requiring any State 
agency electing to allow proxies or authorized representatives to 
obtain a signed statement from the eligible senior designating another 
person as his/her

[[Page 74625]]

authorized representative. This provision was characterized by 4 
commenters as a positive addition; in fact, the use of proxies in the 
SFMNP has been an option for grantees since the program first began. 
However, another 5 comments were received that suggested that the 
requirement for a signed designation of a proxy by the eligible senior 
is too burdensome and should be deleted. FNS strongly disagrees, and 
finds this requirement to be essential in order to assure that SFMNP 
benefits are actually received by the eligible senior for whom they are 
intended. Therefore, in Sec.  249.6(f) of this final rule, the 
provision is retained as proposed.
g. Processing Standards/Waiting Lists
    SFMNP State agencies were required, at Sec.  249.6(g) in the 
proposed rule, to notify applicants of their eligibility or 
ineligibility for benefits, or placement on a waiting list, within 10 
days from the date of application. This provision was proposed to take 
into account the relatively short duration of the SFMNP's actual period 
of operation. Unlike other ongoing nutrition assistance programs, such 
as Food Stamps, FDPIR, or the CSFP, the SFMNP does not usually operate 
year-round. Therefore, it is important that the certification process 
for the SFMNP be expedited to some extent. Reaction to this provision 
was mixed--4 comment letters supported the 10-day standard, while 9 
maintained that it is entirely too short. While FNS cannot agree to the 
30-day processing standard suggested by 3 commenters, we can see some 
benefit to allowing State agencies a slightly longer period of time to 
complete the certification process. Therefore, in this final rule the 
processing standard for the SFMNP is increased at Sec.  249.6(g) to 15 
days. Although this is only 5 days longer than the 10 days initially 
proposed, the reduction of several significant administrative functions 
associated with the certification process (most notably the acceptance 
of a signed affidavit in the income eligibility determination process) 
makes the 15-day standard a reasonable one. State agencies would always 
have the option to establish a shorter processing standard for their 
local SFMNP agencies.
    Further, FNS proposed to require State agencies to keep a waiting 
list of individuals who apply for benefits but cannot be served. This 
information would enable State/local agencies to certify individuals if 
funding within the State is reallocated based on need. The waiting list 
would include the name of the applicant, the date he/she was placed on 
the waiting list, and an address or phone number in order to contact 
the applicant. These requirements are consistent with the FNS-
administered CSFP, which also serves seniors. However, as pointed out 
by 18 commenters, it is not reasonable to maintain a waiting list when 
there is no realistic expectation of additional benefits becoming 
available at some later date. SFMNP benefits are often exhausted very 
quickly, sometimes within a matter of days or even hours. FNS concurs 
with the commenters' position that in such cases, having to maintain a 
waiting list of eligible seniors who are interested in benefits is a 
futile and burdensome requirement. Therefore, this provision has been 
modified in this final rule to require a State agency to maintain a 
waiting list only when there is some reasonable expectation of being 
able to provide benefits at a later date to those additional unserved 
individuals.
7. Nondiscrimination (Sec.  249.7)
    As indicated in Sec.  249.7(a) of the proposed rule, Title VI of 
the Civil Rights Act of 1964 requires that racial and ethnic 
participation data be collected from all SFMNP benefit participants. 
Eight commenters suggested that the racial/ethnic data collection 
requirement be deleted, and another commenter proposed that the data 
collection at least be delayed until the new racial/ethnic categories 
stipulated by OMB are in place for the CSFP as well. FNS recognizes 
that this data collection requirement may duplicate data collections 
that have been performed for SFMNP participants when they applied for 
other nutrition assistance programs such as Food Stamps, FDPIR, and/or 
CSFP. Therefore, to avoid duplicate collection of racial/ethnic data, a 
separate SFMNP collection would not be required for those participants 
who come into the SFMNP as automatically eligible based on their 
participation in another assistance program. Racial/ethnic data must be 
collected for all other SFMNP participants. State agencies must be able 
to provide racial/ethnic data upon request by FNS for all participants, 
whether obtained via another assistance program or collected by the 
SFMNP State agency.
8. Eligible Foods and Level of Benefits (Sec.  249.8)

    Note: In the interest of clarity, the heading for this section 
is modified from the proposed rule to reflect the order of the 
topics addressed.

    A comprehensive discussion regarding eligible foods in the SFMNP is 
included in the preamble to the proposed rule. No other comments in 
addition to those discussed in section 2 of this preamble, regarding 
the definition of ``eligible foods'' for the SFMNP were received. 
Therefore, the provisions related to eligible foods set forth at Sec.  
249.8(a) are retained in this final rule as proposed.
    In Sec.  249.8(b), FNS proposed minimum and maximum annual benefit 
levels of $20 and $50, respectively, for all coupon issuance program 
models (farmers' markets, roadside stands and/or CSA programs). These 
levels were intended to accommodate the majority of State agencies that 
already use at least a $20 benefit level, and are consistent with the 
current average benefit level of SFMNP benefits issued nationwide.
    The proposed minimum and maximum benefit levels resulted in 
comments both for and against the provision. All 11 of the State 
agencies with benefit levels lower than $20, along with several other 
interested State and local SFMNP agencies, wrote to protest the 
necessity of reducing the number of eligible seniors they were 
currently serving in order to raise the benefit level to the $20 
minimum. A relatively small number of commenters (6) supported the 
principle of a regulatory minimum and maximum benefit level, but half 
of those commenters went on to suggest that State agencies be allowed 
to issue a smaller benefit when Federal funds are decreased, such as in 
FY 2005 when all SFMNP grantees experienced an across-the-board 
reduction in their SFMNP grant awards.
    Anecdotal evidence over the past 6 years of SFMNP operation 
consistently indicates that certified participants are more likely to 
make use of their SFMNP benefits when the benefit level is high enough 
to justify one or more trips to a farmers' market, roadside stand, and/
or CSA program for the purchase of eligible fresh fruits and 
vegetables. FNS believes establishing a minimum SFMNP benefit of $20 is 
not only appropriate, but will also be conducive to higher expenditure 
and redemption rates in future years of SFMNP operation. However, FNS 
also recognizes the difficulties that would be encountered by the 11 
State agencies currently offering a seasonal benefit of less than $20.
    The strongest objections to this provision were submitted in 
opposition to the $50 maximum benefit level. A variety of suggestions 
were put forth, including eliminating the benefit cap altogether, 
increasing the maximum benefit to $80 or to $100, and/or allowing State 
agencies the option of setting their own minimum and

[[Page 74626]]

maximum benefits, either for all program models or only for CSAs. 
Requests for a grandfather clause that would allow current State 
agencies to continue issuing the same level of SFMNP benefits came 
primarily from State agencies that expend the largest portion of their 
SFMNP grants on a CSA program model of operation. The basic structure 
of most CSAs is predicated upon shares of at least $100 each, and a 
total of 60 comments were received from State agencies, local agencies, 
participating farmers, and even participants to request that the 
maximum SFMNP benefit level be increased or at least allowed to remain 
at their FY 2004 levels. Nearly 30 farmers stated that if the maximum 
CSA benefit level were reduced to $50, they would no longer be willing 
or able to continue participating in the SFMNP.
    Therefore, FNS has reconsidered the matter of minimum and maximum 
benefit levels in the SFMNP in this final rule, and has revised the 
requirements as follows:
     The minimum benefit level of $20 is retained as proposed, 
except that SFMNP State agencies being grandfathered into the permanent 
program (i.e., that participated in the SFMNP in FY 2006) may continue 
to issue benefits at their FY 2006 levels.
     Current SFMNP State agencies that are grandfathering a CSA 
program model into the permanent program may continue to issue benefits 
to senior participants in the CSA programs at their current (FY 2006) 
levels, except that any State agency whose annual CSA participant 
benefit level is greater than $50 will not be eligible to receive 
expansion funds until the $50 benefit cap in the CSA program model is 
implemented. While FNS is sympathetic to the concerns expressed through 
the public comment process, we also believe in the principle of serving 
as many eligible senior participants as possible with the limited funds 
available to the SFMNP.
     New State agencies who begin operating the SFMNP after FY 
2006 must comply with the $20 benefit minimum as well as the $50 
benefit cap.
    SFMNP State agencies that do not use a CSA program model must 
comply with the $50 benefit cap as provided in the proposed rule.
    As one commenter suggested, State agencies will continue to have 
the option of providing a higher benefit level out of funding sources 
other than the Federal SFMNP grant. Finally, FNS disagrees with the 
commenter who stated that longer growing seasons justify higher benefit 
levels, because it can also be argued that shorter growing seasons, 
with commensurately higher prices for fresh produce because it is only 
available for a short time, can also justify higher benefit levels.
    In order to ensure equitable treatment in and access to the SFMNP, 
FNS proposed in Sec.  249.8(c) that all SFMNP participants served by 
the State agency must be offered the same level of SFMNP benefits. 
Reaction to this provision was almost evenly divided in support and 
opposition, but FNS is still convinced that a consistent statewide 
benefit level is important to the integrity of the SFMNP. Therefore, 
the requirement is retained in this final rule as proposed.
    Also as proposed, FNS has retained in this final rule the provision 
that the same statewide benefit level does not have to be applied for 
SFMNP participants who are receiving benefits through a CSA program. 
Such participants are eligible to receive $50 or more (if the State 
agency is exercising the grandfather clause set forth in Sec.  
249.8(b)) in SFMNP benefits, even if SFMNP participants in that same 
State are issued only $10 (if the State agency has been grandfathered 
in at the lower minimum benefit level) or $20 (for all other State 
agencies) in coupons to use at farmers' markets or roadside stands.
    As proposed and as set forth in this final rule, SFMNP participants 
may also receive benefits through a bulk purchase program model, as 
described in Sec.  249.2, as long as each participant receives an 
equitable value of fruits and vegetables. In addition, the total 
benefit provided to each participant (whether s/he receives a 
combination of coupons and bulk-purchased foods during the course of 
the season, or only bulk-purchased foods) must fall within the minimum 
and maximum levels set forth in this final rule.
    Finally, Sec.  249.8(c) of the proposed rule offered SFMNP State 
agencies the continued option to issue program benefits on either an 
individual or a household basis, as long as State agencies continue to 
report participant information to FNS on an individual basis. The 
household option, if SFMNP State agencies choose to implement it, 
allows more participants to be served with limited funds. The 
provisions contained in this section are retained in this final rule as 
proposed.
    Section 249.8(c)(3) of the proposed rule prohibited sharing of food 
purchased through the SFMNP with non-participating household members. 
Seven commenters opposed this non-sharing provision, calling it 
unenforceable and therefore unnecessary. FNS recognizes the difficulty 
of enforcing such a provision, but maintains that it is nonetheless an 
extremely important one. SFMNP benefits are generally issued to 
individuals with particular nutritiona