Food Distribution Program on Indian Reservations: Administrative Funding Allocations, 50903-50907 [2012-20377]
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50903
Rules and Regulations
Federal Register
Vol. 77, No. 164
Thursday, August 23, 2012
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
[FNS–2010–0020]
RIN 0584–AD85
Food Distribution Program on Indian
Reservations: Administrative Funding
Allocations
Food and Nutrition Service,
USDA.
ACTION: Final rule.
AGENCY:
This rulemaking establishes
the requirements regarding the
allocation of administrative funds for
the Food Distribution Program on
Indian Reservations and the Food
Distribution Program for Indian
Households in Oklahoma, both of which
are referred to as ‘‘FDPIR’’ in this
rulemaking. The rulemaking amends
FDPIR regulations to ensure that
administrative funding is allocated in a
fair and equitable manner. The final rule
also revises FDPIR regulations to clarify
current program requirements relative to
the distribution of administrative funds
to Indian Tribal Organizations (ITOs)
and State agencies.
DATES: Effective Date: This rule is
effective September 24, 2012.
FOR FURTHER INFORMATION CONTACT:
Dana Rasmussen, Chief, Policy Branch,
Food Distribution Division, Food and
Nutrition Service, 3101 Park Center
Drive, Room 506, Alexandria, Virginia
22302, or by telephone (703) 305–2662.
SUPPLEMENTARY INFORMATION:
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SUMMARY:
A. Executive Order 12866, ‘‘Regulatory
Planning and Review’’
This final rule has been determined to
be not significant for purposes of
Executive Order 12866. Therefore it was
not reviewed by the Office of
Management and Budget (OMB).
16:08 Aug 22, 2012
requires intergovernmental consultation
with State and local officials.
This final rule has been reviewed
with regard to the requirements of the
Regulatory Flexibility Act (5 U.S.C.
601–612). The administrator of the Food
and Nutrition Service certified that this
action will not have a significant impact
on a substantial number of small
entities. While ITOs and State agencies
that administer FDPIR will be affected
by this rulemaking, the economic effect
will not be significant.
E. Executive Order 13132, ‘‘Federalism’’
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.
C. Public Law 104–4, ‘‘Unfunded
Mandates Reform Act of 1995’’ (UMRA)
7 CFR Part 253
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B. Title 5, United States Code 601–612,
‘‘Regulatory Flexibility Act’’
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Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA), Public
Law 104–4, establishes requirements for
Federal agencies to assess the effects of
their regulatory actions on State, local,
and Tribal governments and the private
sector. Under Section 202 of the UMRA,
the Food and Nutrition Service (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 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 FNS to
identify and consider a reasonable
number of regulatory alternatives and
adopt the least costly, more costeffective 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) for
State, local, and Tribal governments or
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.
D. Executive Order 12372,
‘‘Intergovernmental Review of Federal
Programs’’
The program addressed in this action
is listed in the Catalog of Federal
Domestic Assistance under No. 10.567.
For the reasons set forth in the final rule
in 7 CFR part 3015, Subpart V and
related Notice published at 48 FR 29115
on June 24, 1983, the donation of foods
in such programs is included in the
scope of Executive Order 12372, which
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1. Prior Consultation With State and
Local Officials
This rulemaking makes regulatory
changes regarding the allocation of
FDPIR administrative funds to the FNS
Regional Offices for further allocation to
the ITOs and State agencies that
administer FDPIR. The programs that
receive FDPIR administrative funding
from FNS’ Regional Offices are all Tribal
or State-administered, federally-funded
programs. On an ongoing basis, the FNS
National and Regional Offices have
formal and informal discussions related
to FDPIR with Tribal and State officials.
FNS meets regularly with the Board and
the membership of the National
Association of Food Distribution
Programs on Indian Reservations
(NAFDPIR), an association of Tribal and
State-appointed FDPIR Program
Directors, to discuss issues relating to
the program. Section F, Tribal Impact
Statement, below, provides additional
information on FNS’ efforts to work
directly with ITOs and State agencies in
the development of the funding
methodology specified in this rule.
2. Nature of Concerns and the Need To
Issue This Rule
For many years, the FNS National
Office used fixed percentages to allocate
FDPIR administrative funds to each of
the FNS Regional Offices, which in turn
allocated the available funding to FDPIR
ITOs and State agencies. However, this
funding methodology did not account
for any administrative cost drivers, such
as the number of ITOs and State
agencies within each Region or the
number of individuals served by each
ITO/State agency. ITOs and State
agencies expressed concern that the
methodology did not allocate funds
equitably to the FNS Regional Offices,
which negatively impacted the capacity
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of certain agencies to adequately
administer the program.
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3. Extent to Which we Address Those
Concerns
FNS has considered the impact of the
final rule on FDPIR ITOs and State
agencies. FNS does not expect the
provisions of this rule to conflict with
any State or local laws, regulations, or
policies. The intent of this rule is to
respond to the concerns of ITOs and
State agencies by ensuring that funds
are allocated to the FNS Regional
Offices as fairly as possible; and to
ensure that related program
requirements with regard to the
allocation of administrative funds to
ITOs and State agencies, as well as ITO
and State agency matching
requirements, are clear and easy to
understand.
F. Executive Order 13175, ‘‘Tribal
Impact Statement’’
This rulemaking makes regulatory
changes regarding the allocation of
FDPIR administrative funds to the FNS
Regional Offices, which further allocate
the funds to the ITOs and State agencies
that administer FDPIR. The changes are
intended to ensure that FDPIR
administrative funding is allocated to
the FNS Regional Offices in a fair and
equitable manner. The final rule also
revises FDPIR regulations to clarify
current program requirements relative to
the allocation of administrative funds to
ITOs and State agencies.
During the course of developing the
proposed and final rules, FNS took
numerous actions to ensure meaningful
and timely input by elected Tribal
leaders. In 2005, FNS convened a work
group comprised of FNS staff and Tribal
and State-appointed FDPIR Program
Directors representing NAFDPIR and its
membership. The work group was asked
to develop a proposal(s) for a new
funding methodology for the allocation
of FDPIR federal administrative funds.
The work group conducted its
deliberations via 33 conference calls
and six face-to-face meetings from May
2005 through October 2007. Discussions
were also held at the annual meetings of
the membership of NAFDPIR, in which
some elected Tribal leaders took part.
The work group and FNS solicited
written comments from elected Tribal
leaders and State officials at various
stages of the development of the funding
methodology. In addition to the requests
for written comments, FNS hosted
public meetings that were held in
January 2007 at four locations
throughout the country. Elected Tribal
leaders and State officials were invited
to discuss the proposal to develop a
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funding methodology at those public
meetings. Discussion from the public
meetings and written comments
submitted to the work group were
considered in presenting
recommendations for a funding
methodology to the FNS Administrator.
In fiscal year 2008, FNS implemented
the funding methodology on a trial
basis. FNS solicited comments from
elected Tribal leaders and State officials
on the impact of the funding
methodology in fiscal year 2008 for
consideration in determining the
funding methodology to be used in
fiscal year 2009, pending the
development of proposed rulemaking.
A rule which proposed to formalize
the funding methodology and clarify
other related program requirements was
published in the Federal Register (75
FR 54530) on September 8, 2010. The
proposed rule referenced the written
comments received on the pilot after
implementation, and solicited further
comments from elected Tribal leaders,
State officials, and other interested
members of the public. A summary of
public comments received on the
September 8, 2010 proposed rule and
the agency’s responses to comments
received are discussed in section II of
the preamble.
G. Executive Order 12988, ‘‘Civil Justice
Reform’’
This final rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. Although the provisions
of this rule are not expected to conflict
with any State or local laws, regulations,
or policies, the 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. Prior
to any judicial challenge to the
provisions of this rule or the application
of its provisions, all applicable
administrative procedures must be
exhausted.
H. Department Regulation 4300–4,
‘‘Civil Rights Impact Analysis’’
FNS has reviewed this 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 this rule will not in
any way limit or reduce the ability of
participants to receive the benefits of
donated foods on the basis of an
individual’s or group’s race, color,
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national origin, sex, age, political
beliefs, religious creed, or disability.
FNS found no factors that would
negatively and disproportionately affect
any group of individuals.
I. Title 44, United States Code, Chapter
35, ‘‘Paperwork Reduction Act’’
The Paperwork Reduction Act of 1995
(44 U.S.C. chapter 35; see 5 CFR part
1320) requires that OMB approve all
collections of information by a Federal
agency from the public before they can
be implemented. Respondents are not
required to respond to any collection of
information unless it displays a current
valid OMB control number. This final
rule does not contain any new
information collection requirements
subject to review and approval by OMB
under the Paperwork Reduction Act of
1995. However, previous burdens for 7
CFR part 253 information collections
associated with this rule have been
approved under OMB control number
0584–0293.
J. Public Law 107–347, ‘‘E-Government
Act Compliance’’
FNS is committed to complying with
the E-Government Act of 2002 to
promote the use of the Internet and
other information technologies to
provide increased opportunities for
citizen access to Government
information and services, and for other
purposes.
Background and Discussion of the Final
Rule
A. Prior Administrative Funding
Allocation Methodology
Prior to this final rulemaking, FDPIR
regulations at 7 CFR part 253 did not
specify a methodology for the allocation
of administrative funds. Under the
traditional practice, the FNS National
Office allocated funds to the FNS
Regional Offices using fixed
percentages. These funding percentages
varied from one Region to the next, did
not change for many years prior to fiscal
year 2008, and did not reflect cost
drivers such as each Region’s share of
national program participation and
current number of ITOs and State
agencies. Regional Offices then
allocated to each ITO or State agency its
share of administrative funds based on
negotiations with such entity. Because
FNS Regional Offices received funding
without regard to the effect of cost
drivers, similar ITOs and State agencies
in different Regions could have received
significantly different funding levels.
Consequently, this method of allocating
funds had the potential to negatively
impact program operations and result in
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inconsistent or uneven service to
participants.
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B. FDPIR Funding Methodology Work
Group and Pilot
To address concerns raised by FDPIR
ITOs and State agencies over potential
FDPIR administrative funding
inequities, a funding methodology work
group was convened by FNS in 2005.
The work group, which was comprised
of FDPIR program representatives,
including NAFDPIR officers, and FNS
staff, was charged with developing a
new methodology for the distribution of
FDPIR administrative funds that would
be fair, objective, and easy to
understand.
Based on the work group’s proposals,
FNS developed an administrative
funding allocation methodology which
was initially implemented on a pilot
basis in fiscal year 2008, and has
continued as a pilot up to the present
time. This funding methodology
allocates funds to the Regional Offices
based on two weighted components:
Each Region’s share of the total number
of participants nationally, and each
Region’s share of the total current
number of ITOs and State agencies
administering the program nationally.
Proportionally more weight was given to
the first element, program participation,
since FNS believes this to be the major
cost driver in the administration of
FDPIR. By using these two factors, FNS
intended to design a funding
methodology that would provide each
FNS Regional Office with adequate
funding to support the operational costs
of all of its programs, including both
larger programs with high participation
and smaller programs with certain basic
administrative costs.
FNS sought comments regarding the
impact of the piloted methodology on
the program. The comments received
were considered in the development of
the proposed rule. Further details on the
proceedings of the work group in
developing proposals for a funding
methodology and the implementation of
the pilot may be found in the preamble
of the proposed rule.
C. Proposed Rule and Analysis of
Comments Received
In a proposed rule published in the
Federal Register on September 8, 2010
(75 FR 54530), FNS proposed to include
in 7 CFR part 253 the administrative
funding methodology that was
implemented on a pilot basis, and that
was based on the work group proposal.
In accordance with that methodology,
sixty-five percent of all administrative
funds available nationally are allocated
to FNS Regional Offices in proportion to
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their share of the number of participants
nationally, averaged over the three
previous fiscal years. FNS believes
program participation to be the major
cost driver. However, in order to
recognize the fixed costs common to
programs of all participation levels, the
remaining 35 percent of all
administrative funds available
nationally are allocated to each FNS
Regional Office in proportion to its
share of the total current number of
ITOs and State agencies administering
the program nationally. By using these
two factors, FNS intended to design a
funding methodology that would
provide each FNS Regional Office with
the funding to support the operational
costs of all of its programs, both large
and small.
Comments were solicited through
December 7, 2010, on the provisions of
the proposed rulemaking. These
comments are discussed below and are
available for review at
www.regulations.gov. To view the
comments received, select ‘‘Public
Submissions’’ from the dropdown menu
entitled ‘‘Select Document Type,’’ and
enter ‘‘FNS–2010–0020’’ in the box
under ‘‘Enter Keyword or ID.’’ Then
click on ‘‘Search.’’
FNS received written comments from
two elected Tribal leaders, five FDPIR
program administrators, one Tribal
nutrition services administrator, and
one private citizen regarding the
proposed funding methodology. Six
commenters supported the funding
allocation methodology, while three
commenters opposed it. Of the six
commenters supporting the
methodology, five specifically cited
support for the funding allocation
factors proposed, i.e., each Region’s
proportionate share of national program
participation and number of programs.
Four of the six commenters cited equity
or fairness as another factor in their
support of the methodology. Four of the
six commenters also specified that the
funding methodology is simple,
straightforward, and easy to understand.
Three supporting commenters cited the
fact that the piloted and proposed
provisions, in conjunction with
increased funding from Congress,
provided the resources needed for their
programs. Finally three commenters
expressed support for the consultation
process prior to pilot implementation.
One commenter stated three key
objections to the proposed funding
methodology: (1) FNS did not consult
with the Tribes and State agencies; (2)
the funding methodology represents a
‘‘one-size fits all’’ approach that does
not recognize each Tribe as a
government with unique needs; and (3)
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the funding methodology is more
beneficial to Tribes with greater
participation rates, and minimizes
services to Tribes with lower
participation rates. Regarding the third
objection, the commenter further stated
that small Tribes should be considered
for supplemental funding.
FNS consulted with elected Tribal
leaders and State officials on multiple
occasions prior to piloting the funding
allocation methodology, as outlined in
the proposed rule. The decision to pilot
the methodology was made in response
to the Congressional expectation that
FNS address funding inequities with the
additional funds provided in fiscal year
2008. In addition to meeting the intent
of Congress, the pilot permitted FNS to
continue consultations with elected
Tribal leaders and State officials. While
we acknowledge that there are varying
perspectives regarding what constitutes
consultation, we believe that there was
adequate consultation.
Regarding the commenter’s objections
in reference to the funding
methodology’s ‘‘one-size-fits-all’’
approach, and its failure to meet the
needs of smaller programs, each FNS
Regional Office continues to negotiate
budgets directly with each FDPIR ITO
and State agency, once the funds are
allocated to the Regions. This permits
each FNS Regional Office the flexibility
to meet the special needs of each ITO
and State agency within its share of the
total administrative funds available,
including smaller ITOs.
In reference to the commenter’s
objection that the funding methodology
is more beneficial to Tribes with greater
participation rates, FNS believes that
program participation is the major cost
driver. However, FNS also recognizes
that there are fixed costs common to
programs of all participation levels. For
that reason, the funding methodology
provides 35 percent of all administrative
funds available nationally to each FNS
Regional Office in proportion to its
share of the total current number of
State agencies administering the
program nationally. The establishment
of this second factor in allocation offers
a proper balance by providing each FNS
Regional Office with funding to support
the operational costs of all programs,
regardless of participation levels.
Another commenter objected to the
use of program participation as a factor
in the funding methodology, stating that
the factor is flawed because increased
Supplemental Nutrition Assistance
Program (SNAP) benefits led to a
decline in FDPIR participation.
However, while FDPIR did experience a
decline in participation, the decline did
not have a disproportionate negative
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impact in a specific Region, nor did it
affect the total administrative funding
available to the program. On the
contrary, such funding increased after
fiscal year 2008.
One commenter stated that the
proposed funding methodology will not
work without: (1) Increasing the FDPIR
income limit and changing the standard
earned income deduction, (2) increasing
the resource limits for the program, (3)
providing more food, including fresh
produce, in FDPIR, and (4) making all
Social Security recipients categorically
eligible for FDPIR. However, these
changes would, for the most part,
impact program eligibility and benefits,
and would not affect the methodology of
allocating administrative funds, which
is the subject of this rule. In a proposed
rule published in the Federal Register
on January 11, 2012 (77 FR 1642), FNS
proposed to eliminate the requirement
that household resources be considered
in determining program eligibility, and
proposed to include additional income
deductions. These changes, if
implemented, would simplify program
administration, and make it easier for
applicants to qualify for program
benefits.
Another commenter stated that the
higher incidence of Native American
health conditions (e.g., diabetes, obesity,
heart conditions) should be the impetus
that drives funding in FDPIR. FNS
recognizes the need to contribute
positively to the health of participants
in all of its nutrition assistance
programs, including FDPIR. Since 2008,
FNS has made $1 million available on
an annual basis for FDPIR nutrition
education, with the goal of enhancing
the nutrition knowledge of FDPIR
participants and fostering positive
lifestyle changes. These funds are
allocated separately from program
administrative funds.
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D. Regulatory Revisions, 7 CFR 253.11
For the purposes of this rule, FDPIR
State agencies include both ITOs and
agencies of state government. In 7 CFR
253.11 of the proposed rule, we
proposed to remove paragraph (a) and
redesignate paragraphs (b) through (h),
and to include, in new paragraphs (a),
(b), and (c):
(1) The methodology for allocating
administrative funds to FNS Regional
Offices, as described above, which has
been implemented on a pilot basis;
(2) Clarification of the requirement for
State agencies to submit budgets to FNS
Regional Offices, and subsequent
allocation to State agencies of funds
required to meet 75 percent of approved
administrative costs; and
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(3) Clarification of the requirement for
State agencies to match administrative
funds allocated to them by covering 25
percent of approved administrative
costs, unless a waiver is submitted and
approved to reduce the matching
requirement.
costs, with the clarification that FNS
Regional Offices provide the
administrative funds to State agencies.
No comments were received on these
proposed provisions. Thus, the
proposed changes are retained in 7 CFR
253.11(b) of this final rule.
1. Funding Methodology
In 7 CFR 253.11(a) of the proposed
rule, we proposed to allocate
administrative funds to the FNS
Regional Offices, to the extent
practicable, in the following manner:
Sixty-five percent of all administrative
funds available nationally would be
allocated to each FNS Regional Office in
proportion to its share of the total
number of participants nationally,
averaged over the three previous fiscal
years; and thirty-five percent of all
administrative funds available
nationally would be allocated to each
FNS Regional Office in proportion to its
share of the total current number of
State agencies administering the
program nationally.
As an outcome of the pilot
implementation, FNS identified the
need to include regulatory language to
ensure that funding is available to
support participation of new State
agencies for which prior participation
data is not available, and that would
permit FNS some limited flexibility to
meet individual State agency
administrative funding needs not
reflected under the two weighted
factors. Consequently, we proposed to
allocate funds to FNS Regional Offices,
in accordance with the funding
methodology described above, ‘‘to the
extent practicable * * *.’’ Based on the
comments discussed above, most of
which were in support of the proposals,
the proposed funding methodology is
included without change in 7 CFR
253.11(a) of this final rule.
3. State Agency Matching Requirement
In 7 CFR 253.11(c) of the proposed
rule, we proposed to set forth the State
agency matching requirements. In 7 CFR
253.11(c)(1), we proposed to indicate
that the State agency must contribute 25
percent of approved administrative
costs, and that both cash and non-cash
contributions may be used to meet the
matching requirement. This is currently
required via FNS Instruction 716–4,
Rev. 1. For the sake of clarity, we
proposed to include in paragraph (c)(1)
the criteria for allowable cash and noncash contributions, similar to what is
currently provided in 7 CFR part 277.
No comments were received on these
proposed provisions. Thus, the
proposed changes are retained in 7 CFR
253.11(c)(1) of this final rule. We have
also added the provision, in current 7
CFR 253.11(b), that the value of services
rendered by volunteers may be used to
meet the matching requirement.
In 7 CFR 253.11(c)(2), we proposed to
permit the State agency to request a
waiver to reduce the matching
requirement to less than 25 percent of
approved administrative costs. In
essence, this clarifies the provision, in
current 7 CFR 253.11(a), regarding
requests for payment of Federal funds in
excess of 75 percent of administrative
costs. We proposed to retain the
requirement that the State agency
provide compelling justification for
meeting less than the 25 percent match
and receiving additional administrative
funds. Furthermore, we proposed to add
a provision which gives the FNS
Regional Office the discretion to provide
additional administrative funds beyond
75 percent. This is consistent with
current program practice. No comments
were received on these proposed
provisions. Thus, the proposed changes
are retained in 7 CFR 253.11(c) of this
final rule.
2. State Agency Budget Submissions
and Allocations
In 7 CFR 253.11(b) of the proposed
rule, we proposed to include the
requirement, in current 7 CFR 253.11(b),
that State agencies submit annual
budgets to FNS for approval, and that
only administrative costs that are
allowable under 7 CFR part 277 may be
included. We proposed to clarify that
the budget request must be sent to the
FNS Regional Office for approval, which
is consistent with directives in FNS
Instruction 700–1, Rev. 2. Finally, we
proposed to include the provision in
current 7 CFR 253.11(a) which specifies
that, within funding limitations, FNS
provides State agencies with
administrative funds necessary to meet
75 percent of approved administrative
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4. Allowable Costs
In this final rule, we are redesignating
current 7 CFR 253.11(c) through (h) as
7 CFR 253.11(e) through (j), in order to
include a new paragraph (d) to clarify
requirements in current 7 CFR 253.11(b)
regarding allowable costs in the use of
administrative funds. Such costs must
be used only for costs that are allowable
under 7 CFR part 277, and that are
incurred in operating FDPIR, and may
not be used to pay costs that are, or may
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be, paid with funds provided from other
Federal sources.
We also proposed to revise the
heading of 7 CFR 253.11 to
‘‘Administrative funds’’ to more clearly
describe the provisions in the section, as
proposed. As we did not receive any
comments relating to this proposal, this
final rule revises the section heading as
proposed.
List of Subjects in 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 part 253 is
amended as follows:
PART 253—ADMINISTRATION OF THE
FOOD DISTRIBUTION PROGRAM FOR
HOUSEHOLDS ON INDIAN
RESERVATIONS
1. The authority citation for 7 CFR
part 253 continues to read as follows:
■
Authority: 91 Stat. 958 (7 U.S.C. 2011–
2036).
2. In § 253.11:
a. Revise the section heading;
b. Remove paragraphs (a) and (b);
c. Redesignate paragraphs (c) through
(h) as paragraphs (e) through (j); and
■ d. Add new paragraphs (a) through
(d).
The revisions and additions read as
follows:
■
■
■
■
mstockstill on DSK4VPTVN1PROD with RULES
§ 253.11
Administrative funds.
(a) Allocation of administrative funds
to FNS Regional Offices. Each fiscal
year, after enactment of a program
appropriation for the full fiscal year and
apportionment of funds by the Office of
Management and Budget, administrative
funds will be allocated to each FNS
Regional Office for further allocation to
State agencies. To the extent practicable,
administrative funds will be allocated to
FNS Regional Offices in the following
manner:
(1) 65 percent of all administrative
funds available nationally will be
allocated to each FNS Regional Office in
proportion to its share of the total
number of participants nationally,
averaged over the three previous fiscal
years; and
(2) 35 percent of all administrative
funds available nationally will be
allocated to each FNS Regional Office in
proportion to its share of the total
current number of State agencies
administering the program nationally.
(b) Allocation of administrative funds
to State agencies. Prior to receiving
VerDate Mar<15>2010
16:08 Aug 22, 2012
Jkt 226001
administrative funds, State agencies
must submit a proposed budget
reflecting planned administrative costs
to the appropriate FNS Regional Office
for approval. Planned administrative
costs must be allowable under part 277
of this chapter. To the extent that
funding levels permit, the FNS Regional
Office allocates to each State agency
administrative funds necessary to cover
75 percent of approved administrative
costs.
(c) State agency matching
requirement. State agencies must match
administrative funds allocated to them
as follows:
(1) Unless Federal administrative
funding is approved at a rate higher
than 75 percent of approved
administrative costs, in accordance with
paragraph (c)(2) of this section, each
State agency must contribute 25 percent
of its total approved administrative
costs. Cash or non-cash contributions,
including third party in-kind
contributions, and the value of services
rendered by volunteers, may be used to
meet the State agency matching
requirement. In accordance with part
277 of this chapter, such contributions
must:
(i) Be verifiable;
(ii) Not be contributed for another
federally-assisted program, unless
authorized by Federal legislation;
(iii) Be necessary and reasonable to
accomplish program objectives;
(iv) Be allowable under Part 277 of
this chapter;
(v) Not be paid by the Federal
Government under another assistance
agreement unless authorized under the
other agreement and its subject laws and
regulations; and
(vi) Be included in the approved
budget.
(2) The State agency may request a
waiver to reduce its matching
requirement below 25 percent of
approved administrative costs. In its
proposed budget, the State agency must
submit compelling justification to the
appropriate FNS Regional Office that it
is unable to meet the 25 percent
matching requirement and that
additional administrative funds are
necessary for the effective operation of
the program. The FNS Regional Office
may, at its discretion, approve a
reduction of the matching requirement
and provide additional administrative
funds to cover more than 75 percent of
approved administrative costs to a State
agency that provides compelling
justification. In its compelling
justification submission, the State
agency must include a summary
statement and recent financial
documents, in accordance with FNS
PO 00000
Frm 00005
Fmt 4700
Sfmt 4700
50907
instructions. Compelling justification
may include but is not limited to:
(i) The need for additional
administrative funding for startup costs
during the first year of program
operation; or
(ii) The need to prevent a reduction in
the level of necessary and reasonable
program services provided.
(d) Use of funds by State agencies.
Any funds received under this section
shall be used only for costs that are
allowable under part 277 of this chapter,
and that are incurred in operating the
food distribution program. Such funds
may not be used to pay costs that are,
or may be, paid with funds provided
from other Federal sources.
*
*
*
*
*
Dated: August 13, 2012.
Audrey Rowe,
Administrator, Food and Nutrition Service.
[FR Doc. 2012–20377 Filed 8–22–12; 8:45 am]
BILLING CODE 3410–30–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 71
Docket No. FAA–2012–0842; Amendment
No. 71–44
RIN 2120–AA66
Airspace Designations; Incorporation
by Reference
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
This action amends Title 14
Code of Federal Regulations (14 CFR)
part 71 relating to airspace designations
to reflect the approval by the Director of
the Federal Register of the incorporation
by reference of FAA Order 7400.9W,
Airspace Designations and Reporting
Points. This action also explains the
procedures the FAA will use to amend
the listings of Class A, B, C, D, and E
airspace areas; air traffic service routes;
and reporting points incorporated by
reference.
SUMMARY:
These regulations are effective
September 15, 2012, through September
15, 2013. The incorporation by reference
of FAA Order 7400.9W is approved by
the Director of the Federal Register as of
September 15, 2012, through September
15, 2013.
FOR FURTHER INFORMATION CONTACT:
Sarah A. Combs, Airspace, Regulations
and ATC Procedures Group, Office of
Airspace Services, Federal Aviation
Administration, 800 Independence
DATES:
E:\FR\FM\23AUR1.SGM
23AUR1
Agencies
[Federal Register Volume 77, Number 164 (Thursday, August 23, 2012)]
[Rules and Regulations]
[Pages 50903-50907]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-20377]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 77, No. 164 / Thursday, August 23, 2012 /
Rules and Regulations
[[Page 50903]]
DEPARTMENT OF AGRICULTURE
Food and Nutrition Service
7 CFR Part 253
[FNS-2010-0020]
RIN 0584-AD85
Food Distribution Program on Indian Reservations: Administrative
Funding Allocations
AGENCY: Food and Nutrition Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rulemaking establishes the requirements regarding the
allocation of administrative funds for the Food Distribution Program on
Indian Reservations and the Food Distribution Program for Indian
Households in Oklahoma, both of which are referred to as ``FDPIR'' in
this rulemaking. The rulemaking amends FDPIR regulations to ensure that
administrative funding is allocated in a fair and equitable manner. The
final rule also revises FDPIR regulations to clarify current program
requirements relative to the distribution of administrative funds to
Indian Tribal Organizations (ITOs) and State agencies.
DATES: Effective Date: This rule is effective September 24, 2012.
FOR FURTHER INFORMATION CONTACT: Dana Rasmussen, Chief, Policy Branch,
Food Distribution Division, Food and Nutrition Service, 3101 Park
Center Drive, Room 506, Alexandria, Virginia 22302, or by telephone
(703) 305-2662.
SUPPLEMENTARY INFORMATION:
A. Executive Order 12866, ``Regulatory Planning and Review''
This final rule has been determined to be not significant for
purposes of Executive Order 12866. Therefore it was not reviewed by the
Office of Management and Budget (OMB).
B. Title 5, United States Code 601-612, ``Regulatory Flexibility Act''
This final rule has been reviewed with regard to the requirements
of the Regulatory Flexibility Act (5 U.S.C. 601-612). The administrator
of the Food and Nutrition Service certified that this action will not
have a significant impact on a substantial number of small entities.
While ITOs and State agencies that administer FDPIR will be affected by
this rulemaking, the economic effect will not be significant.
C. Public Law 104-4, ``Unfunded Mandates Reform Act of 1995'' (UMRA)
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under Section 202 of the UMRA, the
Food and Nutrition Service (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 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 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 rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, and Tribal
governments or 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.
D. Executive Order 12372, ``Intergovernmental Review of Federal
Programs''
The program addressed in this action is listed in the Catalog of
Federal Domestic Assistance under No. 10.567. For the reasons set forth
in the final rule in 7 CFR part 3015, Subpart V and related Notice
published at 48 FR 29115 on June 24, 1983, the donation of foods in
such programs is included in the scope of Executive Order 12372, which
requires intergovernmental consultation with State and local officials.
E. Executive Order 13132, ``Federalism''
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.
1. Prior Consultation With State and Local Officials
This rulemaking makes regulatory changes regarding the allocation
of FDPIR administrative funds to the FNS Regional Offices for further
allocation to the ITOs and State agencies that administer FDPIR. The
programs that receive FDPIR administrative funding from FNS' Regional
Offices are all Tribal or State-administered, federally-funded
programs. On an ongoing basis, the FNS National and Regional Offices
have formal and informal discussions related to FDPIR with Tribal and
State officials. FNS meets regularly with the Board and the membership
of the National Association of Food Distribution Programs on Indian
Reservations (NAFDPIR), an association of Tribal and State-appointed
FDPIR Program Directors, to discuss issues relating to the program.
Section F, Tribal Impact Statement, below, provides additional
information on FNS' efforts to work directly with ITOs and State
agencies in the development of the funding methodology specified in
this rule.
2. Nature of Concerns and the Need To Issue This Rule
For many years, the FNS National Office used fixed percentages to
allocate FDPIR administrative funds to each of the FNS Regional
Offices, which in turn allocated the available funding to FDPIR ITOs
and State agencies. However, this funding methodology did not account
for any administrative cost drivers, such as the number of ITOs and
State agencies within each Region or the number of individuals served
by each ITO/State agency. ITOs and State agencies expressed concern
that the methodology did not allocate funds equitably to the FNS
Regional Offices, which negatively impacted the capacity
[[Page 50904]]
of certain agencies to adequately administer the program.
3. Extent to Which we Address Those Concerns
FNS has considered the impact of the final rule on FDPIR ITOs and
State agencies. FNS does not expect the provisions of this rule to
conflict with any State or local laws, regulations, or policies. The
intent of this rule is to respond to the concerns of ITOs and State
agencies by ensuring that funds are allocated to the FNS Regional
Offices as fairly as possible; and to ensure that related program
requirements with regard to the allocation of administrative funds to
ITOs and State agencies, as well as ITO and State agency matching
requirements, are clear and easy to understand.
F. Executive Order 13175, ``Tribal Impact Statement''
This rulemaking makes regulatory changes regarding the allocation
of FDPIR administrative funds to the FNS Regional Offices, which
further allocate the funds to the ITOs and State agencies that
administer FDPIR. The changes are intended to ensure that FDPIR
administrative funding is allocated to the FNS Regional Offices in a
fair and equitable manner. The final rule also revises FDPIR
regulations to clarify current program requirements relative to the
allocation of administrative funds to ITOs and State agencies.
During the course of developing the proposed and final rules, FNS
took numerous actions to ensure meaningful and timely input by elected
Tribal leaders. In 2005, FNS convened a work group comprised of FNS
staff and Tribal and State-appointed FDPIR Program Directors
representing NAFDPIR and its membership. The work group was asked to
develop a proposal(s) for a new funding methodology for the allocation
of FDPIR federal administrative funds. The work group conducted its
deliberations via 33 conference calls and six face-to-face meetings
from May 2005 through October 2007. Discussions were also held at the
annual meetings of the membership of NAFDPIR, in which some elected
Tribal leaders took part. The work group and FNS solicited written
comments from elected Tribal leaders and State officials at various
stages of the development of the funding methodology. In addition to
the requests for written comments, FNS hosted public meetings that were
held in January 2007 at four locations throughout the country. Elected
Tribal leaders and State officials were invited to discuss the proposal
to develop a funding methodology at those public meetings. Discussion
from the public meetings and written comments submitted to the work
group were considered in presenting recommendations for a funding
methodology to the FNS Administrator.
In fiscal year 2008, FNS implemented the funding methodology on a
trial basis. FNS solicited comments from elected Tribal leaders and
State officials on the impact of the funding methodology in fiscal year
2008 for consideration in determining the funding methodology to be
used in fiscal year 2009, pending the development of proposed
rulemaking.
A rule which proposed to formalize the funding methodology and
clarify other related program requirements was published in the Federal
Register (75 FR 54530) on September 8, 2010. The proposed rule
referenced the written comments received on the pilot after
implementation, and solicited further comments from elected Tribal
leaders, State officials, and other interested members of the public. A
summary of public comments received on the September 8, 2010 proposed
rule and the agency's responses to comments received are discussed in
section II of the preamble.
G. Executive Order 12988, ``Civil Justice Reform''
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. Although the provisions of this rule are not
expected to conflict with any State or local laws, regulations, or
policies, the 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. Prior to any
judicial challenge to the provisions of this rule or the application of
its provisions, all applicable administrative procedures must be
exhausted.
H. Department Regulation 4300-4, ``Civil Rights Impact Analysis''
FNS has reviewed this 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
this rule will not in any way limit or reduce the ability of
participants to receive the benefits of donated foods on the basis of
an individual's or group's race, color, national origin, sex, age,
political beliefs, religious creed, or disability. FNS found no factors
that would negatively and disproportionately affect any group of
individuals.
I. Title 44, United States Code, Chapter 35, ``Paperwork Reduction
Act''
The Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35; see 5
CFR part 1320) requires that OMB approve all collections of information
by a Federal agency from the public before they can be implemented.
Respondents are not required to respond to any collection of
information unless it displays a current valid OMB control number. This
final rule does not contain any new information collection requirements
subject to review and approval by OMB under the Paperwork Reduction Act
of 1995. However, previous burdens for 7 CFR part 253 information
collections associated with this rule have been approved under OMB
control number 0584-0293.
J. Public Law 107-347, ``E-Government Act Compliance''
FNS is committed to complying with the E-Government Act of 2002 to
promote the use of the Internet and other information technologies to
provide increased opportunities for citizen access to Government
information and services, and for other purposes.
Background and Discussion of the Final Rule
A. Prior Administrative Funding Allocation Methodology
Prior to this final rulemaking, FDPIR regulations at 7 CFR part 253
did not specify a methodology for the allocation of administrative
funds. Under the traditional practice, the FNS National Office
allocated funds to the FNS Regional Offices using fixed percentages.
These funding percentages varied from one Region to the next, did not
change for many years prior to fiscal year 2008, and did not reflect
cost drivers such as each Region's share of national program
participation and current number of ITOs and State agencies. Regional
Offices then allocated to each ITO or State agency its share of
administrative funds based on negotiations with such entity. Because
FNS Regional Offices received funding without regard to the effect of
cost drivers, similar ITOs and State agencies in different Regions
could have received significantly different funding levels.
Consequently, this method of allocating funds had the potential to
negatively impact program operations and result in
[[Page 50905]]
inconsistent or uneven service to participants.
B. FDPIR Funding Methodology Work Group and Pilot
To address concerns raised by FDPIR ITOs and State agencies over
potential FDPIR administrative funding inequities, a funding
methodology work group was convened by FNS in 2005. The work group,
which was comprised of FDPIR program representatives, including NAFDPIR
officers, and FNS staff, was charged with developing a new methodology
for the distribution of FDPIR administrative funds that would be fair,
objective, and easy to understand.
Based on the work group's proposals, FNS developed an
administrative funding allocation methodology which was initially
implemented on a pilot basis in fiscal year 2008, and has continued as
a pilot up to the present time. This funding methodology allocates
funds to the Regional Offices based on two weighted components: Each
Region's share of the total number of participants nationally, and each
Region's share of the total current number of ITOs and State agencies
administering the program nationally. Proportionally more weight was
given to the first element, program participation, since FNS believes
this to be the major cost driver in the administration of FDPIR. By
using these two factors, FNS intended to design a funding methodology
that would provide each FNS Regional Office with adequate funding to
support the operational costs of all of its programs, including both
larger programs with high participation and smaller programs with
certain basic administrative costs.
FNS sought comments regarding the impact of the piloted methodology
on the program. The comments received were considered in the
development of the proposed rule. Further details on the proceedings of
the work group in developing proposals for a funding methodology and
the implementation of the pilot may be found in the preamble of the
proposed rule.
C. Proposed Rule and Analysis of Comments Received
In a proposed rule published in the Federal Register on September
8, 2010 (75 FR 54530), FNS proposed to include in 7 CFR part 253 the
administrative funding methodology that was implemented on a pilot
basis, and that was based on the work group proposal. In accordance
with that methodology, sixty-five percent of all administrative funds
available nationally are allocated to FNS Regional Offices in
proportion to their share of the number of participants nationally,
averaged over the three previous fiscal years. FNS believes program
participation to be the major cost driver. However, in order to
recognize the fixed costs common to programs of all participation
levels, the remaining 35 percent of all administrative funds available
nationally are allocated to each FNS Regional Office in proportion to
its share of the total current number of ITOs and State agencies
administering the program nationally. By using these two factors, FNS
intended to design a funding methodology that would provide each FNS
Regional Office with the funding to support the operational costs of
all of its programs, both large and small.
Comments were solicited through December 7, 2010, on the provisions
of the proposed rulemaking. These comments are discussed below and are
available for review at www.regulations.gov. To view the comments
received, select ``Public Submissions'' from the dropdown menu entitled
``Select Document Type,'' and enter ``FNS-2010-0020'' in the box under
``Enter Keyword or ID.'' Then click on ``Search.''
FNS received written comments from two elected Tribal leaders, five
FDPIR program administrators, one Tribal nutrition services
administrator, and one private citizen regarding the proposed funding
methodology. Six commenters supported the funding allocation
methodology, while three commenters opposed it. Of the six commenters
supporting the methodology, five specifically cited support for the
funding allocation factors proposed, i.e., each Region's proportionate
share of national program participation and number of programs. Four of
the six commenters cited equity or fairness as another factor in their
support of the methodology. Four of the six commenters also specified
that the funding methodology is simple, straightforward, and easy to
understand. Three supporting commenters cited the fact that the piloted
and proposed provisions, in conjunction with increased funding from
Congress, provided the resources needed for their programs. Finally
three commenters expressed support for the consultation process prior
to pilot implementation.
One commenter stated three key objections to the proposed funding
methodology: (1) FNS did not consult with the Tribes and State
agencies; (2) the funding methodology represents a ``one-size fits
all'' approach that does not recognize each Tribe as a government with
unique needs; and (3) the funding methodology is more beneficial to
Tribes with greater participation rates, and minimizes services to
Tribes with lower participation rates. Regarding the third objection,
the commenter further stated that small Tribes should be considered for
supplemental funding.
FNS consulted with elected Tribal leaders and State officials on
multiple occasions prior to piloting the funding allocation
methodology, as outlined in the proposed rule. The decision to pilot
the methodology was made in response to the Congressional expectation
that FNS address funding inequities with the additional funds provided
in fiscal year 2008. In addition to meeting the intent of Congress, the
pilot permitted FNS to continue consultations with elected Tribal
leaders and State officials. While we acknowledge that there are
varying perspectives regarding what constitutes consultation, we
believe that there was adequate consultation.
Regarding the commenter's objections in reference to the funding
methodology's ``one-size-fits-all'' approach, and its failure to meet
the needs of smaller programs, each FNS Regional Office continues to
negotiate budgets directly with each FDPIR ITO and State agency, once
the funds are allocated to the Regions. This permits each FNS Regional
Office the flexibility to meet the special needs of each ITO and State
agency within its share of the total administrative funds available,
including smaller ITOs.
In reference to the commenter's objection that the funding
methodology is more beneficial to Tribes with greater participation
rates, FNS believes that program participation is the major cost
driver. However, FNS also recognizes that there are fixed costs common
to programs of all participation levels. For that reason, the funding
methodology provides 35 percent of all administrative funds available
nationally to each FNS Regional Office in proportion to its share of
the total current number of State agencies administering the program
nationally. The establishment of this second factor in allocation
offers a proper balance by providing each FNS Regional Office with
funding to support the operational costs of all programs, regardless of
participation levels.
Another commenter objected to the use of program participation as a
factor in the funding methodology, stating that the factor is flawed
because increased Supplemental Nutrition Assistance Program (SNAP)
benefits led to a decline in FDPIR participation. However, while FDPIR
did experience a decline in participation, the decline did not have a
disproportionate negative
[[Page 50906]]
impact in a specific Region, nor did it affect the total administrative
funding available to the program. On the contrary, such funding
increased after fiscal year 2008.
One commenter stated that the proposed funding methodology will not
work without: (1) Increasing the FDPIR income limit and changing the
standard earned income deduction, (2) increasing the resource limits
for the program, (3) providing more food, including fresh produce, in
FDPIR, and (4) making all Social Security recipients categorically
eligible for FDPIR. However, these changes would, for the most part,
impact program eligibility and benefits, and would not affect the
methodology of allocating administrative funds, which is the subject of
this rule. In a proposed rule published in the Federal Register on
January 11, 2012 (77 FR 1642), FNS proposed to eliminate the
requirement that household resources be considered in determining
program eligibility, and proposed to include additional income
deductions. These changes, if implemented, would simplify program
administration, and make it easier for applicants to qualify for
program benefits.
Another commenter stated that the higher incidence of Native
American health conditions (e.g., diabetes, obesity, heart conditions)
should be the impetus that drives funding in FDPIR. FNS recognizes the
need to contribute positively to the health of participants in all of
its nutrition assistance programs, including FDPIR. Since 2008, FNS has
made $1 million available on an annual basis for FDPIR nutrition
education, with the goal of enhancing the nutrition knowledge of FDPIR
participants and fostering positive lifestyle changes. These funds are
allocated separately from program administrative funds.
D. Regulatory Revisions, 7 CFR 253.11
For the purposes of this rule, FDPIR State agencies include both
ITOs and agencies of state government. In 7 CFR 253.11 of the proposed
rule, we proposed to remove paragraph (a) and redesignate paragraphs
(b) through (h), and to include, in new paragraphs (a), (b), and (c):
(1) The methodology for allocating administrative funds to FNS
Regional Offices, as described above, which has been implemented on a
pilot basis;
(2) Clarification of the requirement for State agencies to submit
budgets to FNS Regional Offices, and subsequent allocation to State
agencies of funds required to meet 75 percent of approved
administrative costs; and
(3) Clarification of the requirement for State agencies to match
administrative funds allocated to them by covering 25 percent of
approved administrative costs, unless a waiver is submitted and
approved to reduce the matching requirement.
1. Funding Methodology
In 7 CFR 253.11(a) of the proposed rule, we proposed to allocate
administrative funds to the FNS Regional Offices, to the extent
practicable, in the following manner: Sixty-five percent of all
administrative funds available nationally would be allocated to each
FNS Regional Office in proportion to its share of the total number of
participants nationally, averaged over the three previous fiscal years;
and thirty-five percent of all administrative funds available
nationally would be allocated to each FNS Regional Office in proportion
to its share of the total current number of State agencies
administering the program nationally.
As an outcome of the pilot implementation, FNS identified the need
to include regulatory language to ensure that funding is available to
support participation of new State agencies for which prior
participation data is not available, and that would permit FNS some
limited flexibility to meet individual State agency administrative
funding needs not reflected under the two weighted factors.
Consequently, we proposed to allocate funds to FNS Regional Offices, in
accordance with the funding methodology described above, ``to the
extent practicable * * *.'' Based on the comments discussed above, most
of which were in support of the proposals, the proposed funding
methodology is included without change in 7 CFR 253.11(a) of this final
rule.
2. State Agency Budget Submissions and Allocations
In 7 CFR 253.11(b) of the proposed rule, we proposed to include the
requirement, in current 7 CFR 253.11(b), that State agencies submit
annual budgets to FNS for approval, and that only administrative costs
that are allowable under 7 CFR part 277 may be included. We proposed to
clarify that the budget request must be sent to the FNS Regional Office
for approval, which is consistent with directives in FNS Instruction
700-1, Rev. 2. Finally, we proposed to include the provision in current
7 CFR 253.11(a) which specifies that, within funding limitations, FNS
provides State agencies with administrative funds necessary to meet 75
percent of approved administrative costs, with the clarification that
FNS Regional Offices provide the administrative funds to State
agencies. No comments were received on these proposed provisions. Thus,
the proposed changes are retained in 7 CFR 253.11(b) of this final
rule.
3. State Agency Matching Requirement
In 7 CFR 253.11(c) of the proposed rule, we proposed to set forth
the State agency matching requirements. In 7 CFR 253.11(c)(1), we
proposed to indicate that the State agency must contribute 25 percent
of approved administrative costs, and that both cash and non-cash
contributions may be used to meet the matching requirement. This is
currently required via FNS Instruction 716-4, Rev. 1. For the sake of
clarity, we proposed to include in paragraph (c)(1) the criteria for
allowable cash and non-cash contributions, similar to what is currently
provided in 7 CFR part 277. No comments were received on these proposed
provisions. Thus, the proposed changes are retained in 7 CFR
253.11(c)(1) of this final rule. We have also added the provision, in
current 7 CFR 253.11(b), that the value of services rendered by
volunteers may be used to meet the matching requirement.
In 7 CFR 253.11(c)(2), we proposed to permit the State agency to
request a waiver to reduce the matching requirement to less than 25
percent of approved administrative costs. In essence, this clarifies
the provision, in current 7 CFR 253.11(a), regarding requests for
payment of Federal funds in excess of 75 percent of administrative
costs. We proposed to retain the requirement that the State agency
provide compelling justification for meeting less than the 25 percent
match and receiving additional administrative funds. Furthermore, we
proposed to add a provision which gives the FNS Regional Office the
discretion to provide additional administrative funds beyond 75
percent. This is consistent with current program practice. No comments
were received on these proposed provisions. Thus, the proposed changes
are retained in 7 CFR 253.11(c) of this final rule.
4. Allowable Costs
In this final rule, we are redesignating current 7 CFR 253.11(c)
through (h) as 7 CFR 253.11(e) through (j), in order to include a new
paragraph (d) to clarify requirements in current 7 CFR 253.11(b)
regarding allowable costs in the use of administrative funds. Such
costs must be used only for costs that are allowable under 7 CFR part
277, and that are incurred in operating FDPIR, and may not be used to
pay costs that are, or may
[[Page 50907]]
be, paid with funds provided from other Federal sources.
We also proposed to revise the heading of 7 CFR 253.11 to
``Administrative funds'' to more clearly describe the provisions in the
section, as proposed. As we did not receive any comments relating to
this proposal, this final rule revises the section heading as proposed.
List of Subjects in 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 part 253 is amended as follows:
PART 253--ADMINISTRATION OF THE FOOD DISTRIBUTION PROGRAM FOR
HOUSEHOLDS ON INDIAN RESERVATIONS
0
1. The authority citation for 7 CFR part 253 continues to read as
follows:
Authority: 91 Stat. 958 (7 U.S.C. 2011-2036).
0
2. In Sec. 253.11:
0
a. Revise the section heading;
0
b. Remove paragraphs (a) and (b);
0
c. Redesignate paragraphs (c) through (h) as paragraphs (e) through
(j); and
0
d. Add new paragraphs (a) through (d).
The revisions and additions read as follows:
Sec. 253.11 Administrative funds.
(a) Allocation of administrative funds to FNS Regional Offices.
Each fiscal year, after enactment of a program appropriation for the
full fiscal year and apportionment of funds by the Office of Management
and Budget, administrative funds will be allocated to each FNS Regional
Office for further allocation to State agencies. To the extent
practicable, administrative funds will be allocated to FNS Regional
Offices in the following manner:
(1) 65 percent of all administrative funds available nationally
will be allocated to each FNS Regional Office in proportion to its
share of the total number of participants nationally, averaged over the
three previous fiscal years; and
(2) 35 percent of all administrative funds available nationally
will be allocated to each FNS Regional Office in proportion to its
share of the total current number of State agencies administering the
program nationally.
(b) Allocation of administrative funds to State agencies. Prior to
receiving administrative funds, State agencies must submit a proposed
budget reflecting planned administrative costs to the appropriate FNS
Regional Office for approval. Planned administrative costs must be
allowable under part 277 of this chapter. To the extent that funding
levels permit, the FNS Regional Office allocates to each State agency
administrative funds necessary to cover 75 percent of approved
administrative costs.
(c) State agency matching requirement. State agencies must match
administrative funds allocated to them as follows:
(1) Unless Federal administrative funding is approved at a rate
higher than 75 percent of approved administrative costs, in accordance
with paragraph (c)(2) of this section, each State agency must
contribute 25 percent of its total approved administrative costs. Cash
or non-cash contributions, including third party in-kind contributions,
and the value of services rendered by volunteers, may be used to meet
the State agency matching requirement. In accordance with part 277 of
this chapter, such contributions must:
(i) Be verifiable;
(ii) Not be contributed for another federally-assisted program,
unless authorized by Federal legislation;
(iii) Be necessary and reasonable to accomplish program objectives;
(iv) Be allowable under Part 277 of this chapter;
(v) Not be paid by the Federal Government under another assistance
agreement unless authorized under the other agreement and its subject
laws and regulations; and
(vi) Be included in the approved budget.
(2) The State agency may request a waiver to reduce its matching
requirement below 25 percent of approved administrative costs. In its
proposed budget, the State agency must submit compelling justification
to the appropriate FNS Regional Office that it is unable to meet the 25
percent matching requirement and that additional administrative funds
are necessary for the effective operation of the program. The FNS
Regional Office may, at its discretion, approve a reduction of the
matching requirement and provide additional administrative funds to
cover more than 75 percent of approved administrative costs to a State
agency that provides compelling justification. In its compelling
justification submission, the State agency must include a summary
statement and recent financial documents, in accordance with FNS
instructions. Compelling justification may include but is not limited
to:
(i) The need for additional administrative funding for startup
costs during the first year of program operation; or
(ii) The need to prevent a reduction in the level of necessary and
reasonable program services provided.
(d) Use of funds by State agencies. Any funds received under this
section shall be used only for costs that are allowable under part 277
of this chapter, and that are incurred in operating the food
distribution program. Such funds may not be used to pay costs that are,
or may be, paid with funds provided from other Federal sources.
* * * * *
Dated: August 13, 2012.
Audrey Rowe,
Administrator, Food and Nutrition Service.
[FR Doc. 2012-20377 Filed 8-22-12; 8:45 am]
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