[Federal Register Volume 70, Number 101 (Thursday, May 26, 2005)]
[Proposed Rules]
[Pages 30558-30589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10388]
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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; Proposed Rule
Federal Register / Vol. 70, No. 101 / Thursday, May 26, 2005 /
Proposed Rules
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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: Proposed rule.
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SUMMARY: This proposed rule implements the provision of the Farm
Security and Rural Investment Act of 2002 that gives the Department of
Agriculture the authority to promulgate regulations for the operation
and administration of the Senior Farmers' Market Nutrition Program
(SFMNP). 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: To be assured of consideration, comments on this proposed rule
must be received by the Food and Nutrition Service on or before July
25, 2005.
ADDRESSES: The Food and Nutrition Service invites interested persons to
submit comments on this proposed rule. Comments may be submitted by any
of the following methods:
Mail: Send comments to Patricia N. Daniels, Director,
Supplemental Food Programs Division, Food and Nutrition Service, USDA,
3101 Park Center Drive, Room 528, Alexandria, Virginia 22302, (703)
305-2746.
Web site: Go to http://www.fns.usda.gov/wic. Follow the
online instructions for submitting comments through the link at the
Supplemental Food Programs Division Web site.
E-Mail: Send comments to [email protected]. Include
``Docket ID Number 0584-AD35, SFMNP Proposed Rule,'' in the subject
line of the message.
Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
All comments submitted in response to this proposed rule will be
included in the record and will be made available to the public. Please
be advised that the substance of the comments and the identities of the
individuals or entities submitting the comments will be subject to
public disclosure. All written submissions will be available for public
inspection at the address above during regular business hours (8:30
a.m. to 5 p.m.) Monday through Friday.
FNS may also make the comments publicly available by posting a copy
of all comments on the FNS Web site at http://www.fns.usda.gov/wic.
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 [email protected], or [email protected].
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be Significant and was reviewed by
the Office of Management and Budget under 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 Economic Impact
Analysis was developed for the SFMNP Proposed Rule. A complete copy of
the Impact Analysis is available by contacting FNS as indicated in the
ADDRESSES section of this Preamble.
In summary, this analysis concludes that the proposed rule to
establish the SFMNP is not likely to have a significant impact on the
nutritional health of seniors, nor is it likely to have a substantial
impact on the market for agricultural commodities, farmers, farmers'
markets, community supported agriculture programs (CSAs), or roadside
stands without additional program funding. While some alternatives to
the proposed rule (set forth in the complete Regulatory Economic Impact
Analysis) may increase the number of eligible seniors served or the
number of SFMNP recipients, the SFMNP at its authorized funding level
will still have minimal impact on the constituencies the program
intends to serve. The current fiscal situation of the States further
impedes possible program growth, as States may be unable to contribute
their own funds for expansion. However, analysis undertaken by FNS
indicates that the pilot program has been beneficial in areas where the
SFMNP now operates. The proposed rule does allow for future growth,
should additional funding be made available.
Regulatory Flexibility Act
This rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act (5 U.S.C. 601-612). Eric Bost, Under
Secretary of Agriculture 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 proposed 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 proposed 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 (SFMNP) 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), this program is included in the scope of
Executive Order 12372 that requires intergovernmental consultation with
State and local officials.
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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, which will be promulgated once the comment period for this
proposed rule has closed. 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:
(1) Local agencies, farmers, farmers' markets, roadside stands, and
community supported agriculture programs--State agency hearing
procedures issued pursuant to 7 CFR 249.16; (2) Applicants and
recipients--State agency hearing procedures pursuant to 7 CFR 249.16;
(3) 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 (4)
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 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, and the characteristics of
SFMNP recipients, 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 proposed
Sec. 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 as proposed at 7 CFR 249.7.
Paperwork Reduction Act (60-Day Notice)
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR
part 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. This proposed rule contains information
collections that are subject to review and approval by OMB; therefore,
FNS is submitting for public comment the new information collection
burden that would result from adoption of the proposals in the rule.
Comments on this proposed rule must be received by July 25, 2005.
Send comments to Office of Information and Regulatory Affairs, OMB,
Attention: Desk Officer for FNS, Washington, DC 20503. Please also send
a copy of your comments to Patricia N. Daniels, Director, Supplemental
Food Programs Division, Food and Nutrition Service, U.S. Department of
Agriculture, 3101 Park Center Drive, Alexandria, VA 22302. For further
information, or for copies of the information collection, please
contact Debra R. Whitford at the above address.
Comments are invited on: (a) Whether the collection of information
is necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility; (b) the
accuracy of the agency's estimate of the burden of the proposed
collection of information, including the validity of the methodology
and assumptions used; (c) ways to enhance the quality, utility, and
clarity of the information to be collected; and (d) ways to minimize
the burden of the collection of information on those who are to
respond, including use of appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology.
All responses to this request for comments will be summarized and
included in the request for OMB approval. All comments will also become
a matter of public record.
Title: Senior Farmers' Market Nutrition Program.
OMB Number: To be assigned.
Expiration Date: Not applicable.
Type of Request: New information collection (new program).
Abstract: This proposed rule implements Section 4402 of the Farm
Security and Rural Investment Act of 2002 that gives the Department of
Agriculture the authority to promulgate regulations for the operation
and administration of the Senior Farmers' Market Nutrition Program
(SFMNP). The purposes of the SFMNP are to provide 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 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.
1. Reporting
Estimated Number of Respondents: 904,088.
Respondents include State agencies, local agencies, recipients, and
authorized SFMNP outlets (farmers, farmers' markets, roadside stands,
and community supported agriculture (CSA) programs).
Estimated Average Number of Responses per Respondent: 1.
Estimated Time per Response: .26 hours.
Estimated Total Annual Burden on Respondents: 235,153 hours.
2. Recordkeeping
Estimated Number of Recordkeepings: 282.
Respondents include State agencies, local agencies, SFMNP
recipients, and authorized SFMNP outlets (farmers, farmers' markets,
roadside stands, and community supported agriculture (CSA) programs).
Estimated Average Number of Recordkeepings per Respondent: 1.
Estimated Time Per Recordkeeping: 8 hours.
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Estimated Total Annual Burden on Respondents: 2,256 hours.
3. Total Annual Reporting/Recordkeeping Requirements
237,409 hours.
Government Paperwork Elimination Act Compliance
FNS is committed to compliance with the Government Paperwork
Elimination Act, which requires Government agencies to provide the
public the option of submitting information or transacting business
electronically to the maximum extent possible.
Background
SFMNP--FY 2001
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). Under the program, CCC made grants
to State agencies and Indian tribal governments on a competitive basis.
The grants were to be used to provide low-income seniors with coupons
they could exchange for eligible foods at farmers' markets, roadside
stands, and community supported agriculture programs. Eligible foods
were defined as fresh, nutritious, unprepared, locally grown fruits,
vegetables, and herbs. Grant funds could be used only to support the
costs of the foods provided under the program; no administrative
funding was available. Because of its prior experience and expertise in
the administration of the WIC Farmers' Market Nutrition Program (a
similar program that provides farmers' market coupons to participants
in the Special Supplemental Nutrition Program for Women, Infants and
Children (WIC)), the Food and Nutrition Service evaluated the grant
applications and administered the SFMNP on behalf of CCC in its pilot
year.
From the inception of the program, the purposes of the SFMNP have
been to: (1) 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; (2) 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 (3) develop or aid in the development of new
and additional farmers' markets, roadside stands, and community
supported agriculture programs.
A total of $15 million was made available for the pilot SFMNP
grants for a one-year period ending December 31, 2001. The opportunity
to submit grant applications for the SFMNP pilot was announced as a
Federal Register Notice on November 2, 2000 (65 FR 65825). This Notice
set out the basic requirements for the grant application as well as the
evaluation criteria against which each application would be reviewed
and scored. An evaluation panel made up of staff from both CCC and FNS
reviewed the applications that were received. The initial competitive
grant process resulted in awards to 30 States, 5 Indian tribal
governments, and the District of Columbia. These grants ranged in
amounts from $9,000 to $1.2 million.
Funds for the pilot program in Fiscal Year (FY) 2001 were made
available pursuant to the CCC Charter Act (``the Act''). Section 5(e)
of the Act (15 U.S.C. 714c(e)) authorizes CCC to use its resources to
``[i]ncrease the domestic consumption of agricultural commodities by
expanding or aiding in the expansion of domestic markets or by
developing or aiding in the development of new and additional markets,
marketing facilities, and uses for such commodities.''
During the 2001 market/harvest season, nearly 420,000 low-income
seniors received coupons that were accepted by 8,500 farmers through
1,200 farmers' markets, nearly 900 roadside stands, and 49 community
supported agriculture programs. For the pilot year, individual coupon
allotments ranged from $10 to $540, with a median value of $40 per
recipient per season. Close to 85 percent of the total grant funds
awarded were expended for the purchase of eligible fruits, vegetables,
and herbs.
SFMNP--FY 2002 Through 2004
The Agriculture, Rural Development, Food and Drug Administration
and Related Agencies Appropriations Act, 2002 (Pub. L. 107-76) provided
$10 million from the Department's 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), Pub. L. 107-171 (7 U.S.C.
3007). The Farm Bill also authorized the SFMNP for FY 2003 through FY
2007, and provided funding at $15 million for each of those years (7
U.S.C. 3007(a)). Section 4402 of the Farm Bill also gave the Department
the authority to develop regulations deemed necessary for the SFMNP (7
U.S.C. 3007(c)).
FNS announced the opportunity to apply for SFMNP funding during FY
2002 on December 13, 2001. A competitive process was once again used to
review and evaluate applications that were received, and 32 States, 3
Indian tribal governments, and the District of Columbia were awarded
SFMNP grants. As in FY 2001, State agencies were responsible for all
administrative expenses associated with the operation and
administration of the SFMNP; the grant awards could only be used for
food costs. In FY 2002, just over 500,000 individuals received SFMNP
coupons for produce made available from approximately 10,000 farmers at
1,500 farmers' markets, 1,000 roadside stands, and 200 community
supported agriculture programs. Just over 89 percent of the SFMNP funds
awarded were expended during the FY 2002 grant period, which ended on
December 31, 2002.
While still administered as a competitive grant for FY 2003, the
SFMNP grant application process was modified slightly. State agencies
that received SFMNP grants in FY 2002 (``current grantees'') were not
required to compete against ``new'' State agencies, i.e., State
agencies that had not previously received an SFMNP grant. Current
grantees were guaranteed funding in FY 2003 equal to the amount of
SFMNP funds they spent in FY 2002; proposals for funds over and above
that level were reviewed against a specific set of evaluation criteria,
separately from the criteria addressed in grant applications from new
State agencies. Once FNS had met its commitment to the FY 2002 SFMNP
grantees at the level of their prior-year expenditures, remaining funds
were made available for allocation to new SFMNP State agencies and to
current State agencies to support expansion or growth in their present
program models. FNS was able to award grants to 4 new State agencies,
as well as to 14 current grantees for expansion of their existing
programs. Participation in the SFMNP for FY 2003 exceeded the FY 2002
totals by a factor of more than 30 percent, serving over 800,000 senior
recipients, with a redemption rate (percentage of coupons actually used
to purchase eligible foods based on the total number of coupons issued
to eligible recipients) of approximately 90 percent.
The process used to award SFMNP grants in FY 2004 was the same as
that used in FY 2003: Grant applications were solicited from State
agencies who wished to receive funds above their FY 2003 expenditure
levels and from State agencies who were interested in initiating the
SFMNP. Again, two
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separate panels reviewed and scored the applications. Once FNS had met
its commitment to the FY 2003 SFMNP grantees at the level of their
prior-year expenditures, remaining funds were made available for
allocation to new SFMNP State agencies and to current State agencies to
support expansion or growth in their present program models. In FY
2004, FNS was able to award grants to 7 new State agencies, as well as
to 15 current grantees for expansion of their existing programs.
Consistent with the pattern that is developing as the SFMNP matures,
participation is expected to increase slightly over the FY 2003 level,
and the redemption rate is expected to remain at between 85 and 90
percent.
Consistency With the WIC Farmers' Market Nutrition Program (FMNP)
USDA's Food and Nutrition Service 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 farmstands. 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 proposed 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).
Difference Between SFMNP Competitive Grants and the SFMNP as an
Established Nutrition Assistance Program
As proposed, the SFMNP is very similar to the programs that have
been operated by State agency grantees through the competitive grant
program since the program's inception in FY 2001. For example, State
agencies will continue to have some flexibility in the basic design of
their programs. However, several significant modifications have been
made to the SFMNP that must be implemented by all participating State
agencies in order to receive future SFMNP grants. These modifications
have been designed to achieve greater consistency within the SFMNP on a
nationwide basis, and fall into 5 major categories:
1. State agency eligibility;
2. Recipient eligibility;
3. Benefit level;
4. Funding; and
5. Community supported agriculture programs.
Following is a discussion of each section of the proposed rule, in
the order presented; the major provisions set forth in each section,
including the specific issues noted above; and the Department's
rationale for each provision.
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 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.
Thus, the purposes and scope of the SFMNP are retained in regulation as
directed by the provisions of Pub. L. 107-171 (7 U.S.C. 3007); i.e., 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. Some of the definitions used in
this proposed rule warrant additional explanation, whereas others are
more straightforward and self-explanatory.
``Administrative costs.'' The proposed rule defines
``administrative costs'' as allowable SFMNP costs as defined in Sec.
249.12(b). Further discussion of the Department's intention to provide
administrative funding for the SFMNP can be found below in Section 12
of this preamble. Allowable administrative costs, which have not
previously been permitted in the SFMNP, are specifically listed at
Sec. 249.12(b) of this proposed rulemaking, and generally include any
expense associated with the operation of the SFMNP except the actual
value of the coupons or CSA shares provided to eligible recipients.
``Community supported agriculture programs.'' CSA programs are
discussed in greater detail in Section 10(i) of this preamble. In the
proposed rule, ``community supported agriculture program'' refers to a
less traditional program model under which one or more farmer(s) grows
food for a group of shareholders (or subscribers) who pledge to buy a
portion of the farmer's crop for that season. State agencies may
purchase shares or subscribe to a CSA program on behalf of individual
SFMNP recipients.
``Compliance buy.'' State agencies may conduct compliance buys as
part of their monitoring efforts. Compliance buys are generally covert,
on-site investigations in which a SFMNP representative poses as a SFMNP
recipient or authorized representative and transacts one or more
coupons and/or in the case of a CSA program, attempts to obtain produce
purchased with SFMNP funds at a distribution site. Because the busy,
informal atmosphere of a farmers' market and/or CSA program
distribution site may make it difficult to detect program violations,
compliance buys can provide an objective measure of whether farmers are
violating SFMNP rules by providing change for SFMNP coupons, collecting
sales tax on purchases made with SFMNP coupons, or providing ineligible
foods to SFMNP recipients.
``Coupon.'' In the SFMNP proposed rule, the term ``coupon'' is used
to refer to a check or to some other negotiable financial instrument by
which benefits under the program are transferred to program recipients.
While many State agencies issue checks (to eligible recipients) that
can be endorsed and deposited directly into the farmer's checking
account for immediate payment, others issue an actual coupon that must
be submitted to the State agency, or to its agent, for review and
payment. For the purposes of this rule, the term ``coupon'' is used
generically to refer to either type of instrument.
``Distribution site.'' It is not always possible in the CSA program
model for SFMNP recipients to travel to the farm where the fruits and
vegetables are actually grown. Nor is it always cost-efficient for the
State agency to include in its CSA contract a provision for the farmer
to assemble and deliver the food packages to individual SFMNP
recipients. Therefore, many State agencies work with their CSA program
farmers to identify one or more locations where recipients or local
agency staff can go on a predetermined schedule to obtain their SFMNP
foods. This rule includes a definition of
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``distribution site'' to refer to such locations.
``Eligible foods.'' One of the stated purposes of the SFMNP is to
provide eligible recipients with ``fresh, nutritious, unprepared foods
(such as fruits and vegetables).'' The Department realizes that a broad
variety of foods are available at farmers' markets and roadside stands,
and through CSA programs, that are not fresh and unprepared, including
jams and jellies, baked goods, maple syrup, cider and fruit juices, and
cheese. Such foods are not eligible foods for the SFMNP.
Among the remaining food choices that meet the fresh, nutritious
and unprepared criteria, the Department decided to limit eligible foods
to fresh fruits, vegetables, and herbs. As a result, although some
foods in addition to fruits, vegetables, and herbs may be considered
``fresh, nutritious, and unprepared,'' they are excluded as eligible
foods. These include honey, as well as protein foods such as eggs, raw
seeds and nuts, meats, fish and seafood. Honey is neither a fruit nor a
vegetable; it is further excluded from consideration as an eligible
food in the interest of consistency with the FMNP, which does not allow
the purchase of honey with program benefits.
The definition of ``eligible foods'' in the SFMNP regulation is
consistent with the one that has been used consistently in the SFMNP
grant solicitations since the inception of the program, and is the one
with which participating SFMNP State agencies are most familiar. This
definition, which specifically addresses questions regarding the
eligibility of certain specific food items, as well as certain types of
foods, is in the Department's opinion more responsive to the issues
that have arisen or are likely to arise in the operation of the SFMNP.
For example, the proposed definition at Sec. 249.2 states that dried
fruits and vegetables, such as prunes, raisins, sun-dried tomatoes, or
dried chili peppers are ineligible for purchase with SFMNP benefits.
Potted fruit, vegetable, or herb plants, dried herbs, wild rice, and
nuts of any kind are likewise ineligible.
``Farmer.'' The term ``farmer'' in this rulemaking refers to
someone who has been authorized by the SFMNP State agency to sell
produce at participating farmers' markets and/or roadside stands, and/
or through CSA programs. Individuals who exclusively sell produce grown
by someone else, such as wholesale distributors, cannot be authorized
to participate in the SFMNP. This is consistent with the definition of
farmer under the FMNP and the Department's belief that the SFMNP should
benefit smaller, local farmers. The SFMNP State agency may authorize
individual farmers or farmers' markets, roadside stands, and/or CSA
programs, at its discretion.
``Farmers' market.'' Pursuant to 7 U.S.C. 3007, two of the three
stated purposes of the SFMNP are to increase the domestic consumption
of agricultural commodities by expanding or aiding in the expansion of
domestic farmers' markets, roadside stands, and CSA programs, and to
develop or aid in the development of new and additional farmers'
markets, roadside stands, and CSA programs. Because the stated purpose
of the SFMNP is virtually identical to that of the FMNP, as proposed in
Sec. 249.2, the definition of ``farmers' market'' is the same as the
definition used for the FMNP.
``Federally recognized Indian tribal government.'' Federally
recognized Indian tribal governments are defined at 7 CFR 3016.3, the
Department's Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and local governments. Federally
recognized Indian tribal governments are recognized as independent
entities, and as such are eligible to apply for and receive SFMNP
grants under the same terms and conditions as geographic State
agencies. These entities may also participate in the SFMNP as local
agencies under the auspices and jurisdiction of the SFMNP-administering
State agency in the geographic State where the tribe or tribal
organization is located.
``Fiscal year.'' As with all Federal grant programs, ``fiscal
year'' refers to the Federal fiscal year which begins on October 1.
``Food costs'' refers only to the cost of eligible foods purchased
at authorized farmers' markets, roadside stands, and/or through CSA
programs. Such costs may not include expenses associated with printing
or issuing SFMNP coupons or benefits in any form.
``Household.'' The definition of ``household'' for the SFMNP is the
same as that used in the FMNP, i.e., a group of related or nonrelated
individuals who are living together as one economic unit (7 CFR 248.2).
``Local agency.'' FNS proposes that ``local agency'' mean a
nonprofit entity or local government agency that is responsible for one
or more administrative functions of the SFMNP's program operation. Such
functions include certifying eligible recipients, issuing SFMNP
coupons, arranging for the distribution of produce through CSA
programs, and/or providing nutrition education or information on the
operational aspects of the Program to SFMNP recipients.
``Locally grown.'' Under the SFMNP, ``locally grown'' refers to
eligible foods (fruits, vegetables, and herbs) grown within the borders
of the administering State and at State option, areas in counties
adjacent to that State. Consistent with the WIC Program, the FMNP, and
other food assistance programs administered by the Department, the
SFMNP values its partnership with American agriculture and therefore
promotes the use of SFMNP coupons to purchase domestically grown
products at participating outlets. Many States already prohibit the use
of SFMNP coupons to purchase foods grown outside of that State.
However, some States define ``locally grown'' as including the counties
outside but adjacent to the State boundary. Therefore, this proposed
rulemaking provides State agencies the option to define ``locally
grown'' to include produce grown in areas of States adjacent to that
State, as long as such areas are part of the United States. State
agencies may want to consider the advantages of establishing ``locally
grown'' guidelines for the purpose of improving marketing opportunities
for local farmers. State agencies other than State Departments of
Agriculture that are administering the SFMNP should work closely with
their Agriculture counterparts to establish a definition of locally
grown that is satisfactory to both entities, i.e., that offers SFMNP
recipients a broad choice of eligible foods while serving to benefit
that State's small or mid-size farmers.
``Nonprofit agency.'' Consistent with other FNS programs,
``nonprofit agency'' refers to a private agency that is exempt from
Federal income tax under the Internal Revenue Code of 1986, as amended
(26 U.S.C. 1, et seq.). While a nonprofit agency may participate as a
local agency in the operation and administration of the SFMNP, it may
not serve as the lead State agency for the Program.
``Nutrition education.'' Nutrition education is an integral
component of all FNS nutrition assistance programs, including the
SFMNP. The Department does not prescribe specific requirements as to
how nutrition education must be provided for the SFMNP. Instead, this
proposed rule offers a definition that addresses the principal elements
of nutrition education. That definition includes individual or group
sessions that encourage SFMNP recipients to build healthful eating
patterns and take action for good health, and the provision of
materials that emphasize
[[Page 30563]]
relationships between nutrition and health. All nutrition education
models, whether they involve individual counseling, group
demonstrations, or written materials such as recipes and pamphlets
about food safety, must be designed to take into consideration the
individual's personal, cultural, and socioeconomic preferences and the
current Dietary Guidelines for Americans.
``Proxy.'' Many seniors are eligible to receive SFMNP benefits but
are unable to participate in the Program for a variety of reasons. Some
of these obstacles include frail health or other physical limitations,
and lack of transportation to and from the farmers' market, roadside
stand, or CSA program distribution site. Several State agencies have
addressed these problems by allowing an eligible senior to designate
another individual as his/her authorized representative, or ``proxy'',
to conduct the SFMNP transactions. Proxies may perform a number of
functions, including applying for the SFMNP on behalf of the eligible
senior, accepting and signing for SFMNP coupons or CSA program shares
when they are issued, shopping for eligible foods at the market or
roadside stand, and/or picking up and delivering eligible foods from a
CSA program distribution site. Therefore, ``proxy'' is defined in this
proposed rule to mean an individual authorized by an eligible senior to
perform any and all of these functions, as long as the eligible senior
ultimately receives the SFMNP benefits. State agencies generally
require a proxy to present documentation, signed by the eligible
senior, of his/her authorization to represent the senior in any SFMNP
activity or transaction, and to be equally responsible for any program
abuse or violation. The terms ``proxy'' and ``authorized
representative'' may be used interchangeably for purposes of this
program.
``Recipient.'' ``Recipient'' is defined for the SFMNP in this
proposed rule as someone whose SFMNP eligibility has been determined
based on the eligibility requirements of the program (described in
detail in Section 6 of this preamble), and to whom coupons or
equivalent benefits have been issued. A recipient may, at State agency
option, be either an individual or a household. This distinction is
discussed in greater detail later in this preamble.
``Roadside stand.'' Also known as a farmstand, ``roadside stand''
in the SFMNP refers to an outlet through which an individual farmer
sells his/her produce directly to consumers. This is in contrast to a
group or association of farmers selling their produce at a farmers'
market or through a CSA program.
``Senior.'' For the SFMNP, ``senior'' generally refers to an
individual not less than 60 years of age. However, State agencies have
the option to establish the minimum age at older than 60. Some SFMNP
State agencies currently use 62 or 65 as the minimum age for SFMNP
eligibility. On the other hand, as discussed in proposed Sec.
249.6(a)(1), State agencies may exercise the option to deem Native
Americans who are 55 years of age or older as categorically eligible
for SFMNP benefits. State agencies may also, at their discretion, deem
disabled individuals under 60 years of age who are currently living in
housing facilities occupied primarily by older individuals (60 years or
older) where congregate nutrition services are provided, as
categorically eligible to receive SFMNP benefits.
``Shareholder.'' Sometimes called a subscriber, a shareholder means
a SFMNP recipient who does not receive his/her program benefits in the
form of checks or coupons that can be used at established farmers'
markets or roadside stands. Instead, the SFMNP State agency may elect
to purchase a full or partial share in a community supported
agriculture program, and to provide the eligible senior with SFMNP
benefits in the form of actual eligible foods.
``State.'' Consistent with Section 15(i) of the Child Nutrition Act
of 1966 (42 U.S.C. 1784(i)), ``State'' for the purposes of the SFMNP
means any of the 50 States, the District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands, Guam, and as applicable, American
Samoa or the Commonwealth of the Northern Marianas.
``State agency.'' ``State agency'' means the organizational unit
within the State, U.S. Territory, or federally recognized Indian tribal
government that has administrative responsibility for the SFMNP. This
includes a State Department of Agriculture, Health, Social Services, a
State Agency on Aging, or any other agency approved by the chief
executive officer of the State (generally the Governor or Tribal
Chief). A nonprofit agency may not be designated as a State agency for
the SFMNP, but may operate as a local agency under the oversight of the
State agency.
``SFPD.'' ``SFPD,'' the entity within FNS that oversees the
administration of the SFMNP on a national basis, refers in this
proposed rule to the Supplemental Food Programs Division of the Food
and Nutrition Service (FNS) of the U.S. Department of Agriculture.
``State Plan.'' ``State Plan'' means a plan of SFMNP operation and
administration that must be submitted annually to FNS. The State Plan
describes the manner in which the State agency intends to implement,
operate, and administer all aspects of the SFMNP within its
jurisdiction. Specific requirements of the SFMNP State Plan are set out
in Sec. 249.4 of this proposed rule.
``WIC Farmers' Market Nutrition Program'' or ``FMNP.'' The WIC
Farmers' Market Nutrition Program (FMNP) refers to an existing program,
originally authorized by the Farmers' Market Nutrition Act of 1992
(Pub. L. 102-314), that was designed to provide resources to women,
infants, and children who are nutritionally at risk (i.e., WIC
participants), in the form of fresh, nutritious, unprepared foods (such
as fruits and vegetables) that can be purchased at farmers' markets; to
expand the awareness and use of farmers' markets; and to increase sales
at such markets. Legislative language pertaining to the FMNP is found
at Section 17(m) of the Child Nutrition Act of 1966 (42 U.S.C.
1786(m)).
3. Administration (Sec. 249.3)
FNS is responsible for the administration of the SFMNP within the
Department, and will provide assistance to State agencies and evaluate
all levels of Program operations to ensure that the goals of the
Program are effectively and efficiently achieved. The Supplemental Food
Programs Division and the FNS Regional offices are responsible for
administration within FNS. Each State agency is responsible for the
effective and efficient administration of the SFMNP within that State,
and must provide guidance to cooperating State and local agencies on
all aspects of SFMNP operations. State SFMNP coordinators/program
managers are expected to communicate with the designated SFMNP contacts
in the appropriate FNS Regional offices, as set forth in Sec. 249.26
of this proposed rule, regarding SFMNP operations.
SFMNP grant funds will be provided to the administering State
agency or agencies designated by the Chief Executive Officer of the
State or Indian tribal organization. A State agency may be the
agriculture department, the health department, the State agency on
aging, or other comparable agency within State government; an Indian
tribe, band, or group recognized by the Department of the Interior; an
intertribal council or group that is an authorized representative of
Indian tribes, bands, or groups recognized by the Department of the
Interior and that has an ongoing relationship with such tribes, bands,
or groups for other purposes and has
[[Page 30564]]
contracted with them to administer the Program; or the appropriate area
office of the Indian Health Service of the Department of Health and
Human Services.
As set forth in this proposed rule, the Chief Executive Officer of
the State would be responsible for coordination between the agency
designated to administer the SFMNP and any other State, local or
nonprofit agency, as necessary, by requiring written agreements between
the agencies. In order to guarantee further successful operation, State
agencies will need to ensure that sufficient staff is available to
administer an efficient and effective Program, and to provide an
outline of administrative staff and job descriptions for staff whose
salaries will be provided in any part from SFMNP funds. Also as set
forth in this proposed rulemaking, the availability of up to 8 percent
of the Federal SFMNP grant for administrative funding for SFMNP
operations (which was not available when the SFMNP was administered as
a competitive grant program) is expected to aid the staffing and
administrative requirements of the Program.
In the absence of Federal administrative funds for the SFMNP under
the pilot program and the competitive grant program, State agencies
operating the program have established effective and often creative
networks and collaborations with other State, local, and private
nonprofit agencies and organizations in order to accomplish their goals
and objectives for the SFMNP. The Department encourages all
participating SFMNP State agencies to continue not only working within
the networks that have already been established, but also to broaden
and enhance these collaborations within the framework of the SFMNP as a
permanent program. Although some administrative costs may now be
covered by the Federal SFMNP grant (see section 14-c of this preamble),
State agencies should keep in mind that SFMNP funds used to defray an
administrative expense may also represent a reduction in the number of
eligible recipients to whom SFMNP benefits can be provided. The
Department does not intend to impose a stringent maintenance of effort
provision that would require SFMNP State agencies to sustain the
current level of non-Federal administrative support (cash as well as
in-kind contributions) that has been available for the operation and
administration of the SFMNP when it was a competitive grant program.
The Department believes that in addition to protecting State agencies
from the potential of significantly reducing their recipient base,
there are many other benefits to maintaining these coordinated
relationships wherever possible--streamlined service delivery,
effective cross-program referrals, and better-targeted nutrition
education modules, to name a few.
4. State Plan Provisions (Sec. 249.4)
In establishing the SFMNP as a permanent program, Congress gave the
Department the authority to set out basic standards and requirements
for its operation. Consistent with other FNS nutrition assistance
programs, 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 the
Department. These State Plans will be due by November 15 of each year.
The State plan process replaces the grant application process that
was used for the SFMNP since its inception in FY 2001. This proposed
rule sets out at Sec. 249.4(a) the specific elements that are
necessary to the approval of each State Plan submitted to the
Secretary. A complete list of the proposed State Plan requirements is
contained in proposed Sec. 249.4.
The Department recognizes that many State agencies administering
the SFMNP also administer the FMNP. Furthermore, many of the
administrative provisions required for the SFMNP and FMNP State plans
are identical. In an effort to minimize the administrative burden for
these State agencies, the Department will allow them to submit one
consolidated State Plan of Operation for both programs in accordance
with guidance provided annually by FNS. This option will be available
only to those State agencies that serve as the lead State agency for
both programs. If the FMNP is administered by the WIC State agency and
the SFMNP in that same State is administered by the State Department of
Agriculture, then two separate State Plans of Operation must be
submitted to FNS. Similarly, if the State Department of Agriculture
administers the FMNP but the State Agency on Aging is the lead agency
for the SFMNP, both of these State agencies must submit separate State
Plans to the appropriate FNS Regional Office. In instances such as
these, the individual State agencies will be responsible for
coordinating any joint or overlapping functions, and for ensuring that
all areas of overlapping functions are fully described in both State
Plans. Examples of overlapping functions may include authorization,
training, and monitoring of farmers, farmers' markets, and/or roadside
stands; nutrition education classes and food demonstrations; and
certification of and issuance to SFMNP recipients.
Some of the issues related to the CSA program models used to
deliver SFMNP benefits are addressed separately in this preamble.
However, because CSA programs differ so significantly from the
traditional coupon model, specific provisions pertaining to CSA
programs will also be required as part of the SFMNP State Plan, as
proposed at Sec. 249.4(a)(12).
As noted above, State Plans of Operation are due to FNS by November
15 of each year. Substantive changes in SFMNP operations that are
anticipated for the coming year or market season, such as the addition
of new service delivery areas or new procedures for certifying eligible
recipients should be included, and fully described in the regular
November 15 submission, whenever possible. The Department understands
that alterations and modifications are sometimes necessary for the
current year's program operation after the State Plan has already been
submitted and approved. In the event that a State agency significantly
modifies any aspect of its program operation or administration, e.g.,
the addition of a new partner agency or a change in its procedure for
issuing coupons to eligible recipients during the course of the market
season, a State Plan amendment must be submitted to FNS for approval.
The State agency may not implement the requested modification until
formal (written) approval has been received from FNS. These
clarifications are described in proposed Sec. 249.4(b) of this rule.
In addition, FNS plans to issue detailed guidance regarding the
required content of the State Plan of Operation to all currently
participating SFMNP State agencies, as well as to other interested
State agencies, in advance of the November 15, 2005 deadline.
5. Selection of State Agencies (Sec. 249.5)
Two major questions arose out of the Department's consideration of
this issue:
a. What entities should be eligible to serve as SFMNP State
agencies, and
b. Should current SFMNP grantees be grandfathered into the
permanent program as participating State agencies?
In regard to the first question (What entities should be eligible
to serve as SFMNP State agencies?), the Department wishes to recognize
and express its appreciation to those nonprofit organizations and local
agencies, such as the Area Agencies on Aging, for their support and
assistance in assuring the smooth operation of the
[[Page 30565]]
SFMNP at the local level. However, the nutrition assistance programs
administered by FNS are generally structured so that Federal program
grants are allocated to designated State agencies. All States, United
States Territories, and federally recognized Indian tribal governments
were eligible to receive SFMNP grants through a competitive process. As
defined in the SFMNP grant solicitations used in the past, SFMNP State
agency eligibility was limited to State Departments of Agriculture,
Aging, Health, or any other agency approved by the chief executive
officer of the State. The FMNP regulations at 7 CFR 248.2 provide a
broader definition of State agency to include an intertribal council or
group that is an authorized representative of Indian tribes, bands, or
groups recognized by the Department of the Interior and that has an
ongoing relationship with such tribes, bands, or groups for other
purposes, and has contracted with them to administer the Program; or
the appropriate area office of the Indian Health Service. Because of
the FMNP, many of these entities--including all six of the Indian
tribal organizations currently participating in the SFMNP--already have
structures in place to administer the program.
Therefore, at proposed Sec. 249.2, the Department sets out a
specific definition of ``State agency'' for the SFMNP. We believe that
the entities included in this definition are the most appropriate
entities to administer the SFMNP. As appropriate, these entities may
subcontract with nonprofit or local level organizations to perform
specific functions, such as recipient outreach and certification,
nutrition education, coupon issuance, market management, and/or coupon
reconciliation.
The implications of the second question (Should current SFMNP
grantees be grandfathered into the permanent program as participating
State agencies?) are significant with respect to the future growth and/
or expansion of the SFMNP. Since the inception of the pilot program in
FY 2001, SFMNP grants have been awarded through a competitive grant
process. In FY 2002, funds were not sufficient to award grants to all
State agencies that operated the program in FY 2001 and applied in FY
2002. Therefore, State agencies that operated the program in FY 2001
and wanted to continue had to compete with new State agencies for
available program funds. Initially, given limited funds, some State
agencies that operated the program in FY 2001 were not chosen to
operate the SFMNP in FY 2002. However, through Section 4402 of the Farm
Bill (Pub. L. 107-171), Congress authorized the use of additional
Commodity Credit Corporation funds for the SFMNP. During a Senate floor
colloquy between Senators Kohl and Harkin on the day that the Farm Bill
was passed by the Senate (May 8, 2002), and later confirmed in a letter
to the Secretary of Agriculture, FNS was directed to provide funding to
State agencies that were not selected during the FY 2002 grant review
process, but who operated the SFMNP in FY 2001. For FY 2003 and FY
2004, current grantees were guaranteed a base level of funding.
Therefore, based on Congress' intent in FY 2002, the Department has set
a precedent of guaranteeing funding to State agencies that have
participated in the SFMNP in the prior year and who wish to continue
operating during the next year. The Department, therefore, will
grandfather all current SFMNP grantees into the permanent program as
participating SFMNP State agencies. This means that any State agency
that received an SFMNP grant award in FY 2005 will be guaranteed an
SFMNP grant in FY 2006. As proposed at Sec. 249.14, the actual amount
of each State agency's base grant would be equal to the total Federal
funds received in FY 2005, contingent upon the availability of
sufficient funds for the SFMNP and an approved State Plan. The National
Association of Farmers' Market Nutrition Programs (NAFMNP) supports
this provision.
New State agencies wishing to participate in the SFMNP will have
their State plans approved and ranked based on objective criteria
established by FNS. Such criteria may include: the amount of funding
requested (in proportion to the amount of funding available), the
number of recipients projected to be served, and the projected benefit
level.
6. Recipient Eligibility (Sec. 249.6)
a. Categorical Eligibility
Based primarily on other FNS programs that serve low-income elderly
persons, categorical eligibility was established for the SFMNP pilot
program in FY 2001 to refer to individuals 60 years of age and older,
unless grantees applying to operate the SFMNP could provide
justification to FNS for a lower age limit. Most State agencies have
used the age of 60 as the minimum age for SFMNP recipients, with a few
notable exceptions. FNS is proposing that all SFMNP State agencies
would have the option to establish a higher age limit, such as 62 or 65
years of age, at their discretion, based on the particular needs of the
elderly populations in their States.
Both the Food Stamp Program (7 CFR 271.2) and the Commodity
Supplemental Food Program (CSFP) (7 CFR 247.2) define ``elderly'' to
mean at least 60 years old. However, the Bureau of Indian Affairs
defines ``elders'' and ``elderly'' for the Native American population
as 55 years of age or older. Therefore, federally recognized Indian
tribal governments that receive SFMNP grants, and other State agencies
that serve Native American seniors, generally use 55 or older as the
minimum age for Native Americans and 60 years of age for all other
SFMNP recipients.
In Sec. Sec. 249.2 and 249.6(a)(1) of this proposal, the
Department defines a person categorically eligible for the SFMNP (a
``senior'') as an individual 60 years of age or older. Indian tribal
organizations administering the SFMNP are afforded the option to deem
Native Americans who are 55 years of age or older as categorically
eligible for SFMNP benefits. This position is consistent with existing
legislation, policy and practice in other FNS and Department of Health
and Human Services (HHS) programs serving elderly individuals, such as
congregate meals provided under the Older Americans Act, 42 U.S.C.
3001, et seq. Under Section 339 of the Older Americans Act, Pub. L. 86-
73, as amended by Section 313 of the Older Americans Act Amendments of
2000, Pub. L. 106-501, (42 U.S.C. 3030g.21(2)(h)), FNS has also
approved requests from some SFMNP grantees to provide benefits to
disabled individuals who live in senior housing facilities but have not
yet reached the age of 60. It is permissible, but not required, to
provide services to disabled individuals who reside in housing
facilities occupied primarily by older individuals where congregate
nutrition services are provided. HHS' Administration on Aging has
advised us that most States require service to disabled individuals in
these circumstances.
Therefore, in proposed Sec. 249.6(a)(1), the Department allows
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 recipients who are 60
years of age and older in the
[[Page 30566]]
same, or possibly another, service delivery area.
b. Residency Requirement
In this proposed rulemaking, the Department allows State agencies
to establish a residency requirement for SFMNP applicants, in Sec.
249.6(a)(2). Further, the Department allows State agencies the option
to determine a service area for any local agency, and may require an
applicant to reside within the service area at the time of application.
However, State agencies are not permitted to impose any durational or
fixed residency requirement. A ``fixed residency requirement'' is one
that would require an applicant to have a permanent domicile in order
to be eligible to receive SFMNP benefits.
c. Income Eligibility
In developing this proposed rulemaking, FNS identified and
considered three major aspects to the determination of income
eligibility for the SFMNP, as follows:
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?
Income eligibility guidelines. Since the inception of the SFMNP,
the maximum household income has been 185 percent of the annual poverty
income guidelines, consistent with the WIC Program (Section 17(d)(A)(i)
of the Child Nutrition Act of 1966, 42 U.S.C. 1786(d)(A)(i)), unless
the grant applicant could provide justification to FNS for a higher
limit. In FY 2004, 36 of the 47 participating SFMNP State agencies used
a maximum income level of 185 percent of the poverty guidelines to
determine income eligibility for the program. Seven 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)). Other variations existed, such as between 150 and 200
percent of the poverty income guidelines.
In Sec. 249.6(a)(3), the Department proposes to retain the maximum
income limit of 185 percent level for the SFMNP in this proposed
rulemaking. The NAFMNP supports this proposal.
Automatic income eligibility based on participation in other
programs. Many SFMNP grantees use participation in other means-tested
programs to determine eligibility for the SFMNP. The programs most
frequently used to establish automatic SFMNP income eligibility are, as
might be expected, the Food Stamp Program, the CSFP, and the Food
Distribution Program on Indian Reservations (FDPIR). As indicated
above, all of these programs use an income eligibility limit that is at
or below 130 percent of poverty. Allowing eligibility for the SFMNP to
be based on participation in another program for which income
eligibility has already been established enables SFMNP State agencies
to reduce their administrative burden significantly in terms of cost as
well as staffing resources. It also facilitates the certification
process for elderly recipients by minimizing the burden and amount of
time involved in establishing eligibility for the SFMNP.
Under this proposal, the Department will continue to allow State
agencies the option 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 (1) income eligibility is set at or below the SFMNP
maximum income, i.e., 185 percent of the annual poverty income
guidelines, and (2) some form of documentation is required to establish
income eligibility for that program.
Documentation of income eligibility. Currently, most SFMNP grantees
deem applicants automatically income eligible for the program based on
participation in (or certified eligibility to receive benefits in)
another means-tested program, such as the Food Stamp Program, CSFP, or
FDPIR. In general, the remaining grantees have applicants either
provide proof of participation in such a program, or sign an affidavit
affirming that their household income does not exceed the State
agency's maximum income limit for their individual household size.
While the burden on participants is significantly lessened by
allowing State agencies to deem seniors eligible for the SFMNP based on
a signed affidavit, the Department is concerned that such convenience
may be achieved at the expense of program integrity.
Therefore, proposed Sec. 249.6(b) requires 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.
State and local agencies have the option to verify reported income
further, in order to confirm an applicant's income eligibility for the
SFMNP.
d. Certification Periods
The Department proposes to establish in Sec. 249.6(c) a
certification period for SFMNP recipients. This is consistent with the
establishment of certification periods for other FNS programs.
Recipients may be certified only for the current fiscal year's SFMNP
period of operation. Prior fiscal year certifications may not be
carried over into subsequent fiscal years; however, the State agency
may use recipient enrollment listings from the prior fiscal year in its
outreach efforts for the current fiscal year. Certification for the
SFMNP must be performed at no cost to the applicant or the authorized
representative/proxy.
e. Rights and Responsibilities
In Sec. 249.6(d), the Department would require State/local
agencies to inform applicants or authorized representatives/proxies of
their SFMNP rights and responsibilities. This includes informing such
individuals of:
The illegality of dual participation, i.e., obtaining
SFMNP benefits from more than one service delivery area or from more
than one SFMNP program model within the same service delivery area;
Their rights and obligations under the program; and
Information about the use of SFMNP coupons and/or access
to produce under a CSA program.
This section also requires State/local agencies to notify applicants in
writing if they are ineligible for SFMNP benefits (including the
reasons for the determination of ineligibility), and of their right to
a fair hearing. In addition, State/local agencies must provide written
notification, including specified information, if a claim is assessed
against an individual for improperly issued SFMNP benefits.
f. Use of Authorized Representatives/Proxies
The Department allows State agencies in this proposal to permit
seniors to designate authorized representatives/proxies to act on their
behalf to apply for certification and/or redeem SFMNP coupons or pick
up eligible foods at distribution sites. This provision is intended to
accommodate those seniors who may be unable to apply in person or
travel to markets, roadside stands and/or pick up eligible foods at CSA
distribution sites. Currently, many SFMNP grantees authorize the use of
authorized representatives/proxies.
g. Processing Standards/Waiting Lists
SFMNP State agencies are required, in proposed Sec. 249.6(g), to
notify applicants
[[Page 30567]]
of their eligibility or ineligibility for benefits, or placement on a
waiting list, within 10 days from the date of application. Further, the
Department requires State agencies to keep a waiting list of
individuals who apply for benefits but cannot be served. This
information will enable State/local agencies to certify individuals if
funding within the State is reallocated based on need. The waiting list
must 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.
h. Limitations on Certification
As set forth in Sec. 249.6(h) of this proposed rule, State
agencies may impose other eligibility requirements or priorities for
receiving SFMNP benefits as may be deemed necessary. For instance, most
State agencies limit distribution to specific geographic areas, and
some give priority to homebound seniors.
7. Nondiscrimination (Sec. 249.7)
This section of the proposed rule describes the requirements of the
SFMNP related to compliance with existing civil rights provisions,
including racial/ethnic participation reporting and provisions for
handling complaints of alleged discrimination based on race, color,
national origin, age, sex, or disability.
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 recipients. This
requirement represents a departure not only from what has been required
of SFMNP State agencies as grantees under the competitive grant
process, but also from the data collection requirements of the FMNP.
Participants in the FMNP are by definition WIC participants, and as
such, the racial/ethnic information on these individuals is collected
and reported through the WIC Program. The necessary racial and ethnic
data for SFMNP recipients must be reported on a form provided by FNS,
according to the categories established by the Office of Management and
Budget's regulations at 62 FR 58781.
8. Level of Benefits and Eligible Foods (Sec. 249.8)
Unlike the FMNP, for which minimum and maximum benefit levels were
established by law, SFMNP State agencies have since the inception of
the program been permitted to choose their benefit levels without any
restriction on the amount provided to recipients. This has resulted in
variation from State to State in the total food benefit level per
person. In FY 2003, the total food benefit level per person in the
SFMNP ranged from $10 to $315, with an average annual benefit level of
$44. This variation occurred because State agencies had the flexibility
to experiment with the factors contributing to the determination of an
appropriate benefit level for their SFMNP recipients. Such factors
included but were not limited to: the locations of farmers? markets
relative to where seniors generally live and/or shop; the ability of
farmers to offer a variety of fruits and vegetables over the course of
a market season; the senior's physical ability to use the produce he/
she purchases effectively; and the length of the growing season.
However, as a permanent program, the Department believes that there
should be specific guidelines for a minimum and maximum benefit level
in the SFMNP. In FY 2003, even with a wide range of recipient benefit
levels, the majority (80 percent) of grantees had a benefit level of
$50 or below. Only 6 of the 40 grantees had a benefit level of less
than $20.
By law, Section 17(m)(5)(C) of the Child Nutrition Act of 1966 (42
U.S.C. 1786(m)(5)(C)), the total food benefit level per participant,
per year, in the FMNP is a minimum of $10, and a maximum of $30. This
level was not changed from the start of the program in 1989 until the
enactment of Public Law 108-265, the Child Nutrition and WIC
Reauthorization Act of 2004. When the original FMNP maximum benefit
level of $20 is adjusted for inflation over the past 13 years, the
benefit level increases to $40. Further, FMNP participants tend to
belong to multi-member households receiving multiple program benefits,
whereas the majority of SFMNP recipients tend to live alone or with
only one other person.
Based on these considerations, the Department proposes to set the
SFMNP minimum and maximum annual benefit levels at $20 and $50,
respectively, for all coupon issuance program models (farmers' markets,
roadside stands and/or CSA programs). These levels should accommodate
the majority of State agencies that already use a $20 benefit level,
and are consistent with the current average benefit level of SFMNP
benefits issued nationwide.
Another issue related to SFMNP benefit levels involves whether the
same benefit level should be required on a statewide basis. Currently,
a few SFMNP State agencies provide different benefit levels to eligible
recipients within their State. Their rationale for this disparity is
that there are more markets in some areas of the State; therefore, the
senior recipients in those areas are better able to utilize more
coupons. However, this policy penalizes senior recipients who live in a
different part of the State by assuming that they would not be able to
use the higher benefit level if it were provided to them. State
agencies have also justified the variation in SFMNP benefit levels by
expressing a concern that when the SFMNP is expanding into other areas
within that State, the recipients in the ``new'' area may not use some
or any of their benefits, resulting in a low redemption rate. Thus,
some State agencies provide a lower benefit level in order to determine
the level of interest in program participation by eligible seniors. The
Department is concerned that in program models such as this, all senior
recipients are not given an equal opportunity to spend an equivalent
value of benefits within the State. State agencies have the flexibility
to reallocate any unspent funds to other areas of the State where the
demand is greater if it becomes necessary at any time during the market
season. In order to ensure equitable treatment in and access to the
SFMNP, the Department proposes in Sec. 249.8(c) that all SFMNP
recipients served by the State agency must be offered the same level of
SFMNP benefits. Subsequently, the State agency may reallocate unspent
SFMNP funds within local agencies/areas served based on need.
However, the Department's experience with CSA programs as a benefit
delivery model in the SFMNP has shown that it may not be practical to
mandate exactly the same benefit level for CSA program recipients in
the same State as SFMNP recipients to whom coupons are issued for use
at farmers' markets and/or roadside stands. Therefore, the Department
has determined that the same statewide benefit level does not have to
be applied for SFMNP recipients who are receiving benefits through a
CSA program; such recipients are eligible to receive up to $50 in SFMNP
benefits, even if SFMNP recipients in that same State are issued only
$20 in coupons to use at farmers' markets or roadside stands.
Finally, the Department considered whether SFMNP benefits should be
issued only on an individual basis, or if a provision should be
included in the proposed rule to allow SFMNP benefits to be issued on a
household basis. State agencies currently have the option to issue
SFMNP benefits on an individual
[[Page 30568]]
or a household basis. For example, in a household of two seniors, each
person could receive an individual benefit of $30, equaling a combined
benefit of $60. Another option would be to limit the SFMNP benefits
allocated to a single household to only $30, enabling the State agency
to serve more eligible seniors with the $30 it has ``saved'' through a
limitation on household benefit issuance. A few SFMNP State agencies
that issue benefits on a household basis argue that this policy allows
them to provide benefits to more seniors because the household benefit
is more cost effective than the individual benefit level. FMNP
regulations also permit State agencies to issue program benefits on a
household basis rather than upon the number of persons in a household
that are individually eligible to receive such benefits. However, the
vast majority of SFMNP State agencies currently issue benefits on an
individual basis. Regardless of which system is used, all State
agencies are required to report recipient information on an individual
basis. In the interests of consistency with the FMNP and the
Department's desire to offer SFMNP State agencies flexibility, to the
extent possible, in their program design, proposed Sec. 249.8(c) would
allow 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 recipient information to FNS on an
individual basis. This option, if SFMNP State agencies choose to
implement it, also allows more recipients to be served with limited
funds.
While this proposed rule defines in Sec. Sec. 249.2 and 249.8(a)
eligible foods as fresh, nutritious, unprepared fruits, vegetables, and
herbs, States must specifically identify in their State Plans those
foods that may be purchased (Sec. 249.4(a)(4)(vii)). The value of the
Federal benefits received by any recipient under the SFMNP may not be
less than $20 or more than $50 per year, as discussed above. Most
States participating in the SFMNP competitive grant program found that
the most practical distribution of coupons for the SFMNP is in booklets
made up of small-denomination coupons--$1, $2, $3, or $5. If the SFMNP
coupon's face value exceeds the purchase price of the selected produce,
farmers are prohibited from giving cash change to recipients. Instead,
this difference may be made up by providing recipients with extra
eligible foods in the approximate value of the difference.
In the interest of enhancing local revenues, the Department
recognizes and proposes to establish in Sec. 249.8(a) a State agency's
option to allow only locally grown produce, as defined by the State
agency, to be purchased by SFMNP coupon recipients. Some States may
consider this an attractive option for ensuring that SFMNP benefits
remain in the State. State agencies also have the option to define what
they consider to be ``locally grown''. For instance, some State
agencies, for various reasons such as availability of an adequate
volume and variety of produce, may consider produce grown in adjacent
States as locally grown. At the same time, other State agencies may
define ``locally grown'' only to be produce grown within the State
boundaries. SFMNP State agencies other than State Departments of
Agriculture should remember to include their agriculture counterparts
in any discussions of how to define ``locally grown'' for purposes of
the SFMNP.
Section 249.8(c)(3) proposes to prohibit sharing of food purchased
through the SFMNP with non-participating household members. The
Department recognizes the difficulty of enforcing such a provision, but
maintains that it is nonetheless an extremely important one. SFMNP
benefits are, in the vast majority of instances, issued to individuals
with particular nutritional needs with the intention of improving that
individual's diet by increasing his/her consumption of fresh fruits and
vegetables. Therefore, program administrators can discuss this issue
when recipients are certified and/or provided basic information about
the SFMNP.
9. Nutrition Education (Sec. 249.9)
The Department believes nutrition education to be an integral
component of any effective nutrition assistance program. For this
reason, SFMNP State agencies have been required, since the inception of
the pilot program in FY 2001, to include nutrition education as part of
their program design in order to receive a Federal SFMNP grant.
Nutrition education has also long been the hallmark of several
other FNS-assisted nutrition assistance programs, particularly the WIC
Program and the FMNP, upon which the SFMNP is closely modeled. While
nutrition education is being made increasingly available in other FNS
programs, such as the Food Stamp Program, FDPIR, and CSFP, there is
still no guarantee that SFMNP recipients are also participating in any
of these programs, or that the focus of the nutrition education that is
offered is appropriate for the SFMNP recipient population.
This proposed rule, at Sec. 249.9, requires all participating
State agencies to describe the nutrition education that will be
provided to SFMNP recipients, including the agencies that will be
responsible for providing the nutrition education (e.g., Cooperative
Extension Service, local Area Agencies on Aging, etc.), the format(s)
in which the nutrition education will be provided (e.g., recipe cards,
cooking demonstrations, etc.), and the locations where the nutrition
education is likely to be offered (e.g., senior centers, farmers'
markets, common rooms in assisted living facilities). The content of
the nutrition education should be age- and circumstance-appropriate for
SFMNP recipients. FNS will continue to encourage State agencies to take
advantage wherever possible of existing nutrition education
opportunities for senior recipients.
10. Coupon, Market and CSA Program Management (Sec. 249.10)
a. General
The proposed requirements in Sec. 249.10 regarding coupon and
market management in the SFMNP are the same or similar to corresponding
requirements in the FMNP, 7 CFR 248.10, which are predicated on
legislative provisions contained in Section 17(m) of the Child
Nutrition Act of 1966 (42 U.S.C. 1786(m)). In those States where both
the SFMNP and the FMNP are operating, State agencies are encouraged to
consolidate and/or coordinate their policies and activities whenever
possible. State agencies may deem farmers, farmers' markets and/or
roadside stands as automatically authorized to operate the SFMNP based
on current authorization to operate the FMNP. This will not only save
time and money for both programs, but will also aid participating
farmers and market managers by establishing the same rules and
requirements for both programs.
The State agency is responsible for the fiscal management of, and
accountability for, all authorized SFMNP outlets (farmers, farmers'
markets, roadside stands and/or CSA programs). Farmers' markets are
authorized by the State agency, which may administer the SFMNP directly
or through a sub-agency such as a farmers' market association. Each
State agency may authorize individual farmers, farmers' markets, CSA
programs, or all three. Roadside stands are operated by individual
farmers, so State agencies authorizing such outlets will have to have
procedures for authorizing these individual farmers at a minimum. When
the State agency authorizes farmers'
[[Page 30569]]
markets, the farmers' markets may authorize the farmers within the
market to accept SFMNP coupons. Market managers often play an important
role in the day-to-day management of the SFMNP, such as in the receipt
of coupon batches from farmers and the reimbursement to farmers.
Experience with the FMNP demonstration project (1989-1991) shows that
the strongest markets were often those where the market manager had an
active role in farmer training, compliance monitoring, reimbursing
farmers, and redeeming coupons. Farmers at these markets were more
likely to have a sound understanding of the demonstration project and
to comply strictly with program guidelines. In contrast, where the
market manager's role in the FMNP demonstration project was limited,
there was usually greater misunderstanding among participating farmers
about FMNP operations. In addition, FMNP participation was typically
lower at markets with only minimal market manager involvement.
State agencies have broad discretion in developing systems for
SFMNP coupon, market, and CSA program management. They should keep in
mind, however, that it is the State agency that is ultimately
responsible for the fiscal management of, and accountability for, all
authorized outlets. The State agency is responsible for establishing
criteria for the authorization of farmers, farmers' markets, and/or
roadside stands, as well as the number of outlets that it plans to
authorize, as provided in Sec. 249.10 of this proposed rule. As
indicated earlier in this preamble, the Department believes that the
SFMNP is in significant part intended to help small, local farmers.
State agencies may limit the foods eligible for purchase under the
SFMNP to those locally grown, as defined by the State. To support this
objective further, individuals who exclusively sell produce grown by
someone else (such as wholesale distributors) are not eligible to
participate in the SFMNP. This requirement does not apply to
individuals who have been employed by an authorized farmer to sell his
produce at the farmers' market or roadside stand, to individuals hired
by a nonprofit organization to sell produce at urban farmstands on
behalf of local farmers, or to individuals hired by a CSA program to
represent the farm(s) offering shares in that season's harvest.
When SFMNP coupon reimbursement is delegated to farmers' market
managers, farmers' market associations or non-profit organizations, or
farmers' cooperatives (in the case of some CSA programs), State
agencies may establish appropriate bonding procedures for these
entities. The State agency may determine the best procedures to put in
place for bonding. Costs of such bonding are not reimbursable
administrative expenses. Additional criteria and requirements for
authorizing farmers, farmers' markets, and/or CSA programs are
identified in Sec. 249.10 of this proposed rule.
b. Agreements
Section 249.10(b) of this proposed rule outlines the contents of
the farmers' market/CSA program agreement. These agreements may be
between the State agency and an authorized farmer, an authorized
farmers' market, or an authorized CSA program, and may be no more than
3 years in duration. State agencies have the option to authorize
individual farmers, as long as written agreements with these
individuals are executed. State agencies that operate both the SFMNP
and the FMNP may execute a single agreement that includes both
programs, as long as any requirements specific to only one of the
programs, such as CSA programs for the SFMNP, are included either in
the body of or as an appendix to the agreement.
It is important that the agreement be signed by a representative
who has the legal authority to obligate the farmer, farmers' market,
roadside stand, and/or CSA program. The specific items that must be
included in these agreements are listed in proposed Sec. 249.10(b),
but the State agency may determine the exact wording to be used.
The proposed rule also stipulates that the farmer, farmers' market,
and/or roadside stand may neither seek restitution from SFMNP
recipients for coupons not paid by the State agency, nor issue cash
change for purchases that are in an amount less than the value of the
SFMNP coupon(s). Regarding the second proposed prohibition, the
Department recommends that SFMNP coupons be in small denominations,
preferably $1 or $2, to present less of a problem in this area. Based
on this recommendation, the difference between the purchase price and
the value of the coupon should be less than $2. The Department,
therefore, encourages farmers to adjust for any difference by adding
more eligible produce to the purchase, such as an extra ear of corn or
a small handful of cherries. Some State agencies, based on their
experience with the FMNP, also encourage participating farmers to offer
their produce for sale in units that are consistent with the coupon
denominations, e.g., $2 baskets of tomatoes rather than $3 ones that
would require the recipient to use $4 in coupons to make the $3
purchase.
Because they differ significantly from the traditional coupon model
of SFMNP operations, the agreement provisions for CSA programs are set
out separately under proposed Sec. 249.10(b)(3) and (b)(4).
c. Training
Pursuant to Sec. 249.10(d), FNS is proposing that State agencies
conduct annual training for farmers, farmers' market managers, and (as
appropriate) CSA program managers. State agencies have discretion in
determining the method used for training purposes. Training must
include, at a minimum, dissemination of information concerning eligible
foods, proper SFMNP coupon redemption procedures, including deadlines
for submission of coupons for payment, and/or receipt of payment for
CSA programs' distribution of eligible foods. Other points that must be
covered in training are listed at proposed Sec. 249.10(d).
Although these regulations would permit State agency discretion in
determining the method of annual training, the State agency would be
required to conduct a documented on-site visit. The visit could occur
prior to or at the time of authorization, and must include, at a
minimum, information concerning eligible foods, proper coupon
redemption procedures, and/or proper payment procedures for CSA
programs. For example, in a State with a 3-year agreement, a State
agency could conduct an in-person training prior to or at the time of
authorization, and if the agreement is renewed 3 years later, conduct
another in-person training at least once during the next 3-year period.
Other less comprehensive forms of training such as information handouts
may be more appropriate for State agencies in the second or third years
of operation under a SFMNP agreement. If a farmer or farmers' market is
authorized to participate in both the SFMNP and the FMNP, State
agencies are encouraged to consolidate the training offered to include
both programs in the same visit or other training activity. However,
State agencies must be careful to ensure that the differences between
the SFMNP and the FMNP, such as different-colored coupons or checks,
are highlighted in the training that is provided.
d. Monitoring
The SFMNP has not had specific monitoring requirements as a
competitive grant program, although grantees have been responsible for
ensuring that only authorized outlets
[[Page 30570]]
accepted SFMNP coupons. In the case of CSA programs, grantees have been
required to ensure that only authorized outlets accepted SFMNP funds;
that only eligible foods were purchased with SFMNP monies; that no cash
change was given for coupons. The monitoring requirements set out at
Sec. 249.10(e) of the proposed rule are identical to those required
under the FMNP, most of which have their basis in the experience
gleaned from the FMNP demonstration projects that were operated from
1989 through 1991.
Pursuant to the proposed rule, State agencies would be required to
conduct on-site monitoring visits to at least: 10 percent of authorized
farmers, starting with the highest risk farmers and working down; 10
percent of the highest risk farmers' markets and working down; and if
applicable, 10 percent of the highest risk CSA programs and working
down. Mandatory high-risk indicators are set out at Sec.
249.10(e)(2)(ii) of this proposed rule.
Participating State agencies have the option to conduct compliance
buys and the Department encourages such activity when possible. A State
agency may be required to conduct compliance buys as a follow-up
measure when a farmer/farmers' market in a State is found to be out of
compliance during an FNS management evaluation.
Compliance activity can provide an objective measure of whether
farmer training is adequate and whether farmers are following SFMNP
rules such as not providing change, selling or providing only eligible
foods to SFMNP recipients, and ensuring participation only by
authorized farmers. In addition, compliance buys can induce compliance
and provide a justification for sanctions and removal of noncompliant
farmers.
e. Coupon Control and Payment
Under proposed Sec. 249.10(f), State agencies would be responsible
for the overall control and accountability of the receipt and issuance
of SFMNP coupons. The State agency must also ensure that there is
secure transportation and storage of unissued SFMNP coupons, and must
design and implement a system of review of SFMNP coupons to detect
errors. At a minimum, such errors must include a missing recipient
signature (if required by the State agency), a missing farmer and/or
market identifier, and redemption by a farmer outside of the valid
date. The State agency must also implement procedures to reduce the
number of errors in transactions, where possible. Section 249.10(g) of
the proposed rule would require State agencies to ensure that farmers,
farmers' markets, roadside stands, and/or CSA programs are promptly
paid for all legitimate food costs.
f. Coupon Reconciliation
Section 249.10(h), as proposed, requires the State agency to
identify the disposition of all SFMNP coupons as validly redeemed, lost
or stolen, expired, or not matching issuance records. This
identification must be determined on a one-to-one reconciliation basis.
Validly redeemed coupons are those that are issued to a certified
recipient or his/her proxy, and redeemed by an authorized farmer,
farmers' market, or roadside stand before the expiration date. Coupons
that are redeemed but cannot be traced to a certified recipient/proxy
or authorized farmer will be subject to claims action in accordance
with Sec. 249.20 of this proposed rule. A State agency has the option
to replace lost, stolen, or damaged coupons (or proof of shareholder
status, for CSA programs), and must describe its system for doing so in
the State Plan of Operations. A State agency must use uniform SFMNP
coupons within its jurisdiction, which must include at a minimum, the
specific information as proposed at Sec. 249.10(h)(3).
Inclusion of individual farmer identifiers on all SFMNP coupons is
a requirement in the SFMNP in this proposed rule in order to trace
coupon redemption to an authorized farmer. This procedure is consistent
with the system currently in place for FMNP coupon reconciliation.
State agencies have the option to authorize either farmers' markets,
individual farmers, or both. However, if the State agency authorizes
farmers' markets and not farmers, an individual farmer identifier must
be included on the coupon and a farmers' market identifier included on
the batch set of coupons submitted by the farmers' market manager for
reimbursement. Those State agencies that have agreements directly with
individual farmers and not markets must include individual farmer
identifiers on each redeemed coupon. A farmer identifier will provide
protection for the farmers' market, because it is the individual farmer
who may be identified and penalized for abuse rather than the entire
market, if appropriate.
g. Instructions to Recipients
In order for the SFMNP to be fully successful, Sec. 249.10(i)
proposes that each SFMNP recipient receive instructions on the proper
use of coupons, or participation in a CSA program (where applicable).
Section 249.10(i) provides minimum standards for recipient education,
including where and when SFMNP coupons may be used; what foods can be
purchased with the checks or coupons; a reminder that cash change
cannot be given for SFMNP purchases; how to designate a proxy or
authorized representative if the recipient cannot do his/her own
shopping; and how to complain about any aspect of the SFMNP that may be
troublesome or unsatisfactory. SFMNP recipients who will be
participating in the program through a CSA will also need information
about the participating farmer(s) in the CSA; what foods will be
provided to them; how often the foods will be distributed; and where it
can be picked up.
h. Complaints and Sanctions
Consistent with requirements already in place for the FMNP,
proposed Sec. 249.10(j) requires that the State agency have procedures
in place to document the handling of complaints from recipients and
farmers/farmers' markets, roadside stands, and/or CSA programs.
Complaints and allegations of civil rights discrimination are to be
handled in accordance with Sec. 249.7(b) of this proposed rule.
Section 249.10(k) proposes a number of provisions related to
sanctions that would be applied in the SFMNP. The State agency would be
required to establish policies that determine the type and level of
sanctions to be applied against recipients and farmers, farmers'
markets, roadside stands, and/or CSA programs, based on the severity
and nature of the SFMNP violations observed, and such other factors as
the State agency may determine to be appropriate. Farmers, farmers'
markets, roadside stands, and/or CSA programs may be sanctioned,
disqualified, or both, when appropriate. Sanctions may include fines
for improper SFMNP coupon redemption procedures and the penalties
outlined in Sec. 249.20, in cases of deliberate fraud.
As mentioned earlier in this preamble, in those instances where
compliance purchases are conducted, the results of covert compliance
purchases can be a basis for farmer, farmers' market, and/or roadside
stand sanctions. Any authorized farmer or outlet committing fraud or
other unlawful activities is liable to prosecution under applicable
Federal, State or local laws.
State agency policies are required to ensure that a farmer who is
disqualified from the SFMNP at one market, roadside stand, or CSA
program may not participate in the SFMNP at any other
[[Page 30571]]
farmers' market, roadside stand, or CSA program within the State
agency's jurisdiction during the disqualification period. Finally,
State agency policies must require that a farmer, farmers' market,
roadside stand, and/or CSA program that is disqualified from
participating in the FMNP is also disqualified from participating in
the SFMNP under the State agency's jurisdiction during the
disqualification period. In those State agencies where different
agencies or offices administer the SFMNP and the FMNP, the respective
State agencies must develop a system for the prompt exchange of such
disqualification information, given the relatively short operating
timeframe for these programs.
i. Community Supported Agriculture (CSA) Programs
As proposed in this rulemaking, the most significant difference
between the FMNP and the SFMNP regarding market management procedures
falls in the area of CSA programs, which are not allowable outlets for
program funds in the FMNP. A detailed discussion of CSA programs and
their unique requirements is provided below.
Since its inception, the SFMNP was designed to permit recipients to
use program benefits to obtain fresh fruits and vegetables at farmers'
markets, roadside stands, and/or through CSAs. The use of CSA programs
is a different program model from the standard issuance of paper
coupons that are used at the more popular farmers' markets and roadside
stands. In this alternative program model for the SFMNP, shares of an
individual grower's or a group of growers' crops for that season are
purchased by the SFMNP State agency on behalf of a certain number of
eligible senior recipients, at the beginning of the planting season.
Once the crops are ready to be harvested, standard packages of eligible
foods, depending on the variety and types of fruits and vegetables that
are available, are assembled and delivered to a central location (such
as the local senior center) for distribution, or are delivered directly
to recipients' homes. The majority of State agencies that include a CSA
program component in their SFMNP operations only do so on a limited
basis, in combination with the more traditional coupon model. However,
at least two State agencies have operated their SFMNP programs
exclusively through the CSA program model since the SFMNP began in FY
2001.
A SFMNP State agency that operates exclusively through a CSA
program presents some unique challenges for effective Departmental
oversight of the program. When the SFMNP was initiated as a pilot
program, State agencies were given considerable latitude in their
program design. CSA-based program models help to promote innovative
ways to assist the small farmer who may not have the resources to
transport his harvest and set up a booth at an established market. They
may also work very well for programs that target homebound seniors who
cannot get to markets to select and purchase their own produce.
However, it is extremely difficult to ensure that program benefits
are provided equitably to all recipients when CSAs are included as a
component of the SFMNP. The actual value of the produce offered each
week, or every other week, is dependent on a number of factors, some of
which are entirely beyond the control of the farmer or the SFMNP State
or local agency--weather, success of the crop, soil conditions, etc. If
a SFMNP recipient is locked into a CSA program and one crop is
unsuccessful, the recipient does not have the latitude simply to
purchase another type of fruit or vegetable in its place or from an
alternate authorized farmer. Currently, the benefit levels issued to
coupon recipients may differ widely from the value of the shares
provided to CSA program recipients within the same State when both
program models are used.
These intrinsic uncertainties, combined with the fact that the
mission of FNS includes making sure that all of the programs
administered by this agency are focused on providing nutritional
benefits to as many eligible recipients as possible, have led the
Department to propose in this rulemaking at Sec. 249.10(a)(3) that a
State agency must limit the number of CSA programs to represent no more
than 50 percent of the total Federal SFMNP food grant. This limitation
is intended to allow the State agency the opportunity to work with its
small farmers toward the development and use of a creative program
operations model that also fulfills the expectations of programs funded
through the Commodity Credit Corporation, yet balances the mission of
FNS to ensure that recipients actually receive the food benefits in
exchange for the coupons. The only exception to this requirement is
allowed for SFMNP State agencies that are grandfathered into the SFMNP.
A State agency that received a SFMNP grant under the competitive grant
process and whose operations committed more than 50 percent of its
SFMNP grant to a CSA program model before the implementation of this
proposed rule may continue to use a larger portion of its grant for
CSA's, at its discretion. However, all State agencies, regardless of
grandfathered status, must abide by the requirements set forth in this
rulemaking regarding maximum individual recipient benefit levels and
accountability, as discussed at greater length later in this section of
the preamble. State agencies that begin participation in the SFMNP
after the publication of a final rule would not be permitted to use
more than 50 percent of their grants for CSA program operations. This
provision would also apply to current State agencies that under the
competitive grant process did not exceed this limit.
The Department proposes to establish at Sec. 249.8(b) one minimum
and one maximum benefit level in the SFMNP, regardless of the program
model used by the State agency. This requirement is likely to have a
direct (and possibly prohibitive) impact on the CSA program models in
use by SFMNP State agencies around the country. One of the difficulties
FNS has encountered in its oversight of SFMNP State agencies that make
extensive use of CSA programs to deliver program benefits to eligible
recipients is the grantee's limited ability to attribute a specific
benefit level to each individual recipient, and to ensure that the
specific benefit level is consistently provided to each recipient. When
crop shares are purchased at the beginning of the season, there is no
positive assurance of the total value of produce that each shareholder
will receive by the end of the season. Individual shares may be
purchased, for example, at $100 each, but if there is a drought, flood,
insect infestation or blight that adversely impacts the harvest, the
farmer holding the SFMNP contract(s) may not be able to provide the
full value of produce that was initially purchased by the State agency.
In the more traditional coupon issuance system, however, if one farmer
experiences a problem with his production, the SFMNP recipient still
has a negotiable currency that can be used at another authorized
farmer's booth and/or roadside stand.
Beyond the inherent risk of inequitable benefit distribution
systems among SFMNP recipients, CSA programs also present a challenge
in terms of general program accountability. Currently, State agencies
can only estimate the per-recipient benefit level when CSA program
shares are purchased. As the SFMNP matures, it becomes increasingly
important to be able to collect and compile aggregate data on specific
aspects of program operations. SFMNP State agencies have not been
required to provide data at this level of detail up to now; with the
[[Page 30572]]
implementation of the SFMNP as a permanent nutrition assistance
program, such information will be essential.
Therefore, in Sec. 249.10(b)(3)(vi), the Department proposes to
require State agencies to enter into written agreements with CSA
programs, to ensure that CSA programs track the value of program
benefits actually provided to individual recipients and the remaining
value owed, provide State agencies with access to such a tracking
system, and ensure that the value of program benefits provided is
consistent with program requirements addressing minimum and maximum
benefit levels for each recipient.
Finally, a few SFMNP State agencies have used a portion of their
grants to purchase CSA program shares that are then used to supplement
meals served at congregate feeding sites. While such a practice was
technically allowable under the SFMNP competitive grants, primarily
because there were no legislative or regulatory provisions to prevent
it and the grants provided an opportunity to look at various program
models, it is not consistent with the underlying intent of the SFMNP,
which is to provide individual low-income seniors with a resource that
benefits their diets directly, rather than through any type of
congregate feeding program. Therefore, at Sec. 249.12(a)(3), this
proposed rule specifically prohibits the use of any SFMNP funds to
supplement congregate meal programs.
11. Financial Management System (Sec. 249.11)
Based on the Department's experience with the SFMNP as a
competitive grant program, participating SFMNP State agencies have
financial management systems in place that provide accurate, current,
and complete disclosure of the financial status of the SFMNP. State
agencies have been cautioned expressly about the importance of
maintaining separate accounts for the SFMNP and the FMNP, when
applicable, and most State agencies are using a check system that
expedites payment to farmers for SFMNP purchases. In accordance with
the provisions of this proposed rulemaking, participating State
agencies will be required to implement procedures that ensure prompt
and accurate payment of allowable costs, and that ensure the
allowability and allocability of costs in accordance with the cost
provisions set forth in Sec. 249.11 of this proposed rule, 7 CFR Part
3016, and FNS guidelines and Instructions.
12. SFMNP Costs (Sec. 249.12)
a. Administrative Funding
Since the inception of the SFMNP as a pilot program in fiscal year
2001, funds provided to State agencies through the competitive grant
process have only been available to support the cost of the eligible
foods obtained by SFMNP recipients. SFMNP grant funds have not been
available to State agencies to cover any administrative costs
associated with the operation and administration of the program, such
as administrative oversight, printing coupons, coupon issuance, and/or
authorization of farmers, farmers' markets, roadside stands, and/or CSA
programs. Therefore, State agencies have heretofore been responsible
for 100 percent of the administrative costs necessary to operate the
SFMNP. In general, State agencies have indicated that their
administrative costs for the SFMNP have amounted to approximately 16
percent above the total Federal grant awards.
Once the SFMNP is no longer operated as a competitive grant program
and becomes one of the FNS' established nutrition assistance programs,
there is a greater expectation that administrative costs be allowed as
part of the Federal grant. Compensation for administrative costs is
generally an allowable cost under FNS grant programs. However, SFMNP
funds that are earmarked and used for administrative costs will reduce
available program funds to provide eligible foods to eligible SFMNP
recipients. The Department is willing, therefore, to allow a State
agency to use up to 8 percent of its total Federal grant to defray
administrative costs associated with the SFMNP, as described at Sec.
249.12(a)(1)(i). This position is consistent with OMB Circular A-87 and
the mission of this Agency to provide a level of administrative funding
to help reasonably offset the costs for administering the program. The
NAFMNP also supports allowing a portion of the Federal SFMNP grant
funds to be used for administrative expenses.
b. Food and Administrative Costs
In light of the preceding discussion, FNS is proposing that SFMNP
costs consist of both food and administrative costs. Food costs, as set
forth in Sec. 249.12(a)(1)(i) of this proposed rule, are the costs of
eligible foods provided to SFMNP recipients. As discussed in Section 10
of this preamble, SFMNP funds may not be used to supplement congregate
meal programs.
Administrative costs are those costs associated with providing
benefits and services to recipients. A list of allowable administrative
costs is set forth at proposed Sec. 249.12(b).
13. SFMNP Income (Sec. 249.13)
Program income, as defined and explained in this proposed rule at
Sec. 249.13, means gross income the State agency earns from grant
supported activities. It includes fees for services performed and
receipts from the use or rental of real or personal property acquired
with Federal grant funds, but does not include proceeds from the
disposition of such property. For example, if the SFMNP State agency,
in the process of authorizing farmers and farmers' markets, also agrees
to distribute an unrelated survey form to the farmers and markets
visited by SFMNP staff on behalf of another State agency, the second
State agency (who needs the survey form distributed) may agree to pay
the SFMNP State agency a fee for performing this service. Any SFMNP
income earned during the agreement period must be fully documented,
retained by the SFMNP State agency, and used for SFMNP purposes in
accordance with the addition method described in 7 CFR 3016.25(g)(2).
Fines, penalties, or assessments paid by local agencies or farmers,
farmers' markets, roadside stands, and/or CSA programs are also deemed
to be program income.
14. Distribution of Funds (Sec. 249.14)
a. Base Grants
In order to grandfather in those State agencies currently
participating in the SFMNP competitive grant program, as previously
discussed in Section 5 of this preamble, Selection of State Agencies,
it is necessary to establish some fundamental principles for the
allocation of SFMNP funds. In the grant program, the Department has
established a base grant level for the SFMNP. For FYs 2002, 2003, and
2004, SFMNP grants were based on each State agency's expenditure level
from the prior fiscal year. Using this process, grant awards could not
be announced until after closeout of the prior FY's operations in order
to determine each State agency's prior year expenditure level. Many
State agencies begin to plan program operations, print coupons, and
certify senior recipients in advance of the announcement of grant
awards. Basing SFMNP grants on expenditure levels from the prior year
presents challenges for State agencies in their ability to plan current
and future SFMNP operations effectively.
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Therefore, Sec. 249.14(b) proposes that the base grant levels will be
based on the prior fiscal year's grant levels, rather than on that
fiscal year's expenditure levels. Providing each State agency a base
grant level that consists of the total Federal funds received in the
prior year allows them to plan their program operations more
effectively and accurately. This procedure is also consistent with the
allocation of FMNP base grants, and many SFMNP State agencies
participate in both programs. Since the two programs are similar in
their operations and their missions, there is interest in making SFMNP
and FMNP requirements consistent wherever possible.
In proposed Sec. 249.14(c), the Department states that if amounts
appropriated for any fiscal year for the SFMNP are not sufficient to
maintain prior fiscal year funding levels for each State participating
in the SFMNP, each State's grant will be ratably reduced by FNS. For
example, a State agency whose prior fiscal year's final grant
represented 10 percent of the total SFMNP allocation in that fiscal
year would receive 10 percent of whatever amount of funding is
available for the SFMNP in the current fiscal year.
b. Expansion Funding
For FY 2003 and FY 2004, current SFMNP State agencies wanting to
expand, and new State agencies wanting to participate in the SFMNP for
the first time, competed equally for the money left over after funding
current States at their prior year's expenditure (base grant) levels.
Given that the SFMNP is relatively new and with the initial success of
the program, many current State agencies will likely want to expand
their programs, and new State agencies will want to participate in the
program. Additionally, in the first year of the SFMNP's operation as a
permanent program, currently participating State agencies may need to
request additional funds to replace those monies that may now be used
to defray administrative expenses. Other State agencies that have been
providing recipients with a benefit level lower than the minimum of $20
established in Sec. 249.8 of this proposed rule may need to request
additional SFMNP funds in order to bring their program fully into
compliance with the proposed requirements. Therefore, while the
Department in no way guarantees that State agencies in either of these
situations will be provided the additional funds they may need, a
funding structure is needed to accommodate growth in both areas. The
FMNP regulations at 7 CFR 248.14 provide a funding structure for
expansion of participating State agencies and new State agencies that
could be used in the SFMNP. Under this FMNP regulation, after
satisfying base grants, 75 percent of the remaining funding is
available to those State agencies that wish to serve additional
recipients, increase benefit levels, or offer program services in
additional areas within the State. The remaining 25 percent is
available to State agencies that have not previously participated in
the FMNP. If either amount is greater than that necessary to satisfy
requests for that category (e.g., current State agencies), the
unallocated amount is then applied toward satisfying any unmet need in
the other category (e.g., new State agencies). The Department describes
at proposed Sec. 249.14(d) through (f) its intention to adopt this
same process for the SFMNP. This will allow current State agencies to
expand, and still allow new State agencies to participate in the SFMNP.
Also, this process will provide consistency between the SFMNP and the
FMNP. FNS' proposal is consistent with the NAFMNP recommendations that
a funding structure and regulations be developed for the SFMNP that
allow for the addition of new SFMNP State agencies.
15. Closeout Procedures (Sec. 249.15)
This section of the proposed rule requires SFMNP State agencies to
submit to FNS a final closeout report for each fiscal year on a form
and by a date specified by FNS. It also establishes procedures to be
followed, in accordance with 7 CFR Part 3016, when SFMNP grants to
State agencies are terminated. All of the provisions proposed at Sec.
249.15 are identical to those currently in place for the FMNP under 7
CFR Part 248.
16. Administrative Appeal of State Agency Decisions (Sec. 249.16)
As proposed in Sec. 249.16 of this rulemaking, SFMNP State
agencies will be required to provide a hearing procedure whereby any
entity (applicants, recipients, local agencies and farmers, farmers'
markets, roadside stands, and/or CSA programs) adversely affected by
certain actions of the State agency may appeal those actions. This
section provides a list of the adverse actions that may be appealed. It
also sets out the procedures that must be followed when an appeal is
requested, and clarifies that appealing an adverse action does not
relieve the entity that has been permitted to continue in the SFMNP
while its appeal is pending from responsibility for continued
compliance with the terms of the written agreement or contract with the
State agency. Finally, Sec. 249.16 would require that the State agency
explain the appellant's right to judicial review of any State level
decision rendered against the appellant, and sets forth additional
proposed appeals procedures for State agencies that authorize farmers'
markets rather than individual farmers.
17. Management Evaluations and Reviews (Sec. 249.17)
This proposed rulemaking would require FNS and each SFMNP State
agency to establish a management evaluation system in order to assess
the accomplishment of SFMNP objectives, the State Plan, and the written
agreement with the Department. FNS will provide assistance to State
agencies in discharging this responsibility, will establish standards
and procedures to determine how well the objectives of this Part are
being accomplished, and will implement sanction procedures as warranted
by State SFMNP performance.
The monitoring responsibilities of the SFMNP State agency (set out
at proposed Sec. 249.17(c)) would be the same as those in place for
the FMNP. As in the FMNP, this proposed rule would mandate that an
authorized outlet's first year of operation in the SFMNP be considered
a high-risk indicator. Other indicators are to be defined by the State
agency. This section also proposes that all local SFMNP agencies within
the State agency's jurisdiction be reviewed at least once every two
years, and itemizes the aspects of program operation that should be
monitored. Monitoring activities for the SFMNP and the FMNP should be
coordinated and consolidated when a State agency administers both
programs.
18. Audits (Sec. 249.18)
SFMNP programs would be subject to audits under the same terms and
conditions as the FMNP. This section assures access to any books,
records, papers, and documents of the State agency and its contractors,
for the purpose of making surveys, audits, examinations, excerpts, and
transcripts, by the Secretary, the Comptroller General of the United
States, or any of their duly authorized representatives, or by duly
authorized State auditors. This section also describes the ability of
the State agency to take exception to particular audit findings and
recommendations, and the process to be used by FNS in obtaining
corrective action regarding any SFMNP deficiencies identified in an
audit. Finally, the Department requires State
[[Page 30574]]
and local SFMNP agencies to conduct independent audits in accordance
with 7 CFR part 3015, Sec. 3016.26, or part 3051, as applicable, and
allows a State or local agency to elect to obtain either an
organization-wide audit or an audit of the SFMNP if it qualifies to
make such an election under applicable regulations.
19. Investigations (Sec. 249.19)
The Department would be allowed under this proposal to make an
investigation of any allegation of noncompliance with this part and FNS
guidelines and instructions. Further, under this proposed rule, at
Sec. 249.19(b), the identity of every complainant must be kept
confidential except to the extent necessary to carry out the
investigation, or any related administrative hearing or judicial
proceeding.
20. Claims and penalties (Sec. 249.20)
This section identifies the circumstances under which the
Department could assess a claim against a State agency, and establishes
opportunity for the State agency to submit evidence, explanations, or
information challenging such claim. The proposed rule also stipulates
that interest must be charged on any outstanding claim or the unpaid
balance of such a claim, and sets forth the penalties that must be
applied in the event of embezzlement, willful misapplication, theft, or
the fraudulent acquisition of any funds, assets, or property associated
with the SFMNP. Such penalties may involve monetary restitution,
imprisonment, or both.
21. Procurement and Property Management (Sec. 249.21)
SFMNP State agencies would be required under this rule to comply
with the same requirements set forth for the FMNP, at 7 CFR 248.21, for
the procurement of supplies, equipment, and other services with SFMNP
funds. These requirements are proposed by FNS to ensure that such
materials and services are obtained for the SFMNP in an effective
manner and in compliance with the provisions of applicable law and
executive orders. The State agency is responsible for the settlement
and satisfaction of all contractual and administrative issues arising
out of procurements entered into in connection with the SFMNP. However,
the State agency may use its own procurement regulations that reflect
applicable State and local regulations, as long as procurements made
with SFMNP funds adhere to the standards set forth in 7 CFR part 3016.
22. Nonprocurement/Suspension, Drug-Free Workplace, and Lobbying
Restrictions (Sec. 249.22)
SFMNP State agencies, under this proposed rule, are required to
ensure compliance with the requirements of the Department's regulations
governing nonprocurement debarment and suspension (7 CFR 3017), drug-
free workplace (7 CFR 3021), and the Department's regulations governing
restrictions on lobbying (7 CFR part 3018), where applicable.
23. Records and Reports (Sec. 249.23)
The Department proposes to require each State agency to maintain
full and complete records concerning SFMNP operations. This section
sets forth the types of records that must be maintained, the retention
requirements for such records, and the requirements pertaining to
access and availability of such records. The Department also requires
State agencies to submit financial and SFMNP performance data on a
yearly basis as specified by FNS, and identifies the minimum data that
must be reported. Source documentation should be on file for all
financial and SFMNP performance reports. These reports will also need
to be certified as complete and accurate by the person given that
responsibility by the State agency. The Department intends to use State
agency reports to measure progress in achieving objectives set forth in
the State Plan, the SFMNP regulations, and/or other State agency
performance plans.
24. Confidentiality (Sec. 249.24)
Consistent with the FMNP regulations, 7 CFR 248.24(c), the
Department proposes that State agencies restrict the use or disclosure
of information obtained from SFMNP applicants and recipients and
generated by the program to certain individuals and/or entities. To
ensure confidentiality, SFMNP State agencies may execute a written
agreement to share certain information with other public organizations
designated by the chief State agency officer that administer food,
nutrition, or other assistance programs that serve persons
categorically eligible for the SFMNP. Proposed Sec. 249.24(b) sets
forth the specific terms of such a written agreement.
25. Other Provisions (Sec. 249.25)
SFMNP recipients are often eligible to receive benefits under other
Federal or State food or nutrition assistance programs, such as the
Food Stamp Program, CSFP, or Meals on Wheels. Proposed Sec. 249.25(a)
would clarify that participation in the SFMNP does not preclude a
recipient from participating in food or nutrition assistance programs
for which s/he may also be eligible. It also delineates, in proposed
Sec. 249.25(b), the circumstances and conditions under which FNS is
authorized to use information that is obtained from the SFMNP.
26. SFMNP Information (Sec. 249.26)
This section lists the seven Regional offices of FNS, provides
their contact information, and identifies the State agencies that are
covered by each one.
27. OMB Control Number (Sec. 249.27)
When provided, this section will identify the control number
assigned by the Office of Management and Budget indicating its approval
of the collection of information requirements for Part 249.
List of Subjects in 7 CFR Part 249
Aging, Community supported agriculture programs, Elderly, Farmers,
Farmers' Markets, Food assistance programs, Food donations, Grant
programs, Nutrition education, Public assistance programs, Seniors,
Social programs.
Accordingly, 7 CFR part 249 is added to read as follows:
PART 249--SENIOR FARMERS' MARKET NUTRITION PROGRAM (SFMNP)
Subpart A--General
Sec.
249.1 General purpose and scope.
249.2 Definitions.
249.3 Administration.
Subpart B--State Agency Eligibility
249.4 State Plan.
249.5 Selection of new State agencies.
Subpart C--Recipient Eligibility
249.6 Recipient eligibility.
249.7 Nondiscrimination.
Subpart D--Recipient Benefits
249.8 Level of benefits and eligible foods.
249.9 Nutrition education.
Subpart E--State Agency Provisions
249.10 Coupon, market, and CSA program management.
249.11 Financial management system.
249.12 SFMNP costs.
249.13 Program income.
249.14 Distribution of funds.
249.15 Closeout procedures.
249.16 Administrative appeal of State agency decisions.
Subpart F--Monitoring and Review of State Agencies
249.17 Management evaluations and reviews.
249.18 Audits.
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249.19 Investigations.
Subpart G--Miscellaneous Provisions
249.20 Claims and penalties.
249.21 Procurement and property management.
249.22 Nonprocurement debarment/suspension, drug-free workplace, and
lobbying restrictions.
249.23 Records and reports.
249.24 Confidentiality.
249.25 Other provisions.
249.26 SFMNP information.
249.27 OMB control number.
Authority: 7 U.S.C. 3007.
Subpart A--General
Sec. 249.1 General purpose and scope.
(a) This part announces regulations under which the Secretary of
Agriculture shall carry out the Senior Farmers' Market Nutrition
Program (SFMNP). The purposes of the SFMNP are to:
(1) Provide resources in the form of fresh, nutritious, unprepared,
locally grown fruits, vegetables and herbs from farmers' markets,
roadside stands, and community supported agriculture (CSA) programs to
low-income seniors;
(2) Increase the domestic consumption of agricultural commodities
by expanding or aiding in the expansion of domestic farmers' markets,
roadside stands, and CSAs; and
(3) Develop or aid in the development of new and additional
farmers' markets, roadside stands, and CSAs.
(b) These goals will be accomplished through payment of cash grants
to approved State agencies. The SFMNP shall be supplementary to the
food stamp program carried out under the Food Stamp Act of 1977 (7
U.S.C. 2011, et seq.), and to any other Federal or State food or
nutrition assistance program under which foods are distributed to needy
families in lieu of food stamps.
Sec. 249.2 Definitions.
For the purpose of this part and all contracts, guidelines,
instructions, forms and other documents related hereto, the term:
Administrative costs means those direct and indirect costs (as
defined in Sec. 249.12(a)(1)(ii)), exclusive of food costs, which
State agencies determine to be necessary to support SFMNP operations.
Administrative costs include, but are not limited to, the costs
associated with administration and start-up; the provision of nutrition
education; SFMNP coupon issuance; recipient education covering proposed
coupon redemption procedures; eligibility determinations; outreach
services; printing SFMNP coupons, processing redeemed coupons, and
training farmers, market managers, and/or farmers who operate CSA
programs on the food delivery system; monitoring and reviewing Program
operations; required reporting and recordkeeping; determining which
local sites will be utilized; recruiting and authorizing farmers,
farmers' markets, roadside stands, and/or CSA programs to participate
in the SFMNP; preparing contracts for farmers, farmers' markets,
roadside stands, and/or CSA programs; developing a data processing
system for redemption and reconciliation of coupons; designing program
training and informational materials; and coordinating SFMNP
implementation responsibilities between designated administering
agencies.
Community supported agriculture (CSA) program means a program under
which a farmer or group of farmers grows food for a group of
shareholders (or subscribers) who pledge to buy a portion of the
farmer's crop(s) for that season. State agencies may purchase shares or
subscribe to a community supported agriculture program on behalf of
individual SFMNP recipients.
Compliance buy means a covert, on-site investigation in which a
SFMNP representative poses as a SFMNP recipient or authorized
representative and attempts to transact one or more SFMNP coupons, or,
in the case of CSA programs, attempts to obtain eligible foods
purchased with SFMNP funds at a distribution site.
Coupon means a check or other negotiable financial instrument by
which benefits under the program are transferred to program recipients.
Days means calendar days.
Department means the U.S. Department of Agriculture.
Distribution site means the location where packages of eligible
foods are assembled for and/or distributed to SFMNP recipients who are
shareholders in CSA programs.
Eligible foods means fresh, nutritious, unprepared, locally grown
fruits, vegetables and herbs for human consumption. Eligible foods may
not be processed or prepared beyond their natural state except for
usual harvesting and cleaning processes. Dried fruits or vegetables,
such as prunes (dried plums), raisins (dried grapes), sun-dried
tomatoes, or dried chili peppers are not considered eligible foods.
Potted fruit or vegetable plants, potted or dried herbs, wild rice,
nuts of any kind (even raw), honey, maple syrup, cider, seeds, eggs,
meat, cheese and seafood are also not eligible foods for purposes of
the SFMNP.
Farmer means an individual authorized to sell eligible foods at
participating farmers' markets and/or roadside stands, and through
CSAs. Individuals who exclusively sell produce grown by someone else,
such as wholesale distributors, cannot be authorized to participate in
the SFMNP. A participating State agency has the option to authorize
individual farmers or farmers' markets, roadside stands, and/or CSA
programs.
Farmers' market means an association of local farmers who assemble
at a defined location for the purpose of selling their produce directly
to consumers.
Federally recognized Indian tribal government means the same as the
definition of that term found at 7 CFR 3016.3, i.e., the governing body
or a governmental agency of any Indian tribe, band, organization, or
other organized group or community (including any Native village as
defined in section 3 of the Alaska Native Claims Settlement Act, 85
Stat. 688) certified by the Secretary of the Interior as eligible for
the special programs and services provided by him through the Bureau of
Indian Affairs.
Fiscal year means the period of 12 calendar months beginning
October 1 of any calendar year and ending September 30 of the following
calendar year.
FNS means the Food and Nutrition Service of the U.S. Department of
Agriculture.
Food costs means the cost of eligible foods purchased at authorized
farmers' markets, roadside stands, and/or through CSA programs.
Household means a group of related or nonrelated individuals who
are living together as one economic unit.
Local agency means any nonprofit entity or local government agency
that certifies eligible recipients, issues SFMNP coupons, arranges for
distribution of eligible foods through CSA programs, and/or provides
nutrition education or information on operational aspects of the
Program to SFMNP recipients.
Locally grown means grown within the borders of the State that the
project serves. If the State agency chooses, ``locally grown'' may also
mean grown in areas of States adjacent to that State, as long as such
areas are part of the United States.
Nonprofit agency means a private agency that is exempt from the
payment of Federal income tax under the Internal Revenue Code of 1986,
as amended, (26 U.S.C. 1, et seq.).
Nutrition education means:
(1) Individual or group sessions; and
[[Page 30576]]
(2) The provision of relevant materials, in keeping with the
individual's personal, cultural, and socioeconomic preferences and the
Dietary Guidelines for Americans, that:
(i) Emphasize relationships between nutrition and health; and
(ii) Encourage participants to build healthful eating patterns, and
to take action for good health.
OIG means the Department's Office of Inspector General.
Program or SFMNP means the Senior Farmers' Market Nutrition Program
authorized by Section 4402 of the Farm Security and Rural Investment
Act of 2002, 7 U.S.C. 3007.
Proxy means an individual authorized by an eligible senior to act
on the senior's behalf, including application for certification,
receipt of SFMNP coupons or other benefits, use of SFMNP coupons at
authorized outlets, and/or acceptance of SFMNP foods provided through a
CSA program, as long as the SFMNP benefits are ultimately received by
the eligible senior. The terms ``proxy'' and ``authorized
representative'' may be used interchangeably for purposes of this
program.
Recipient means a person or household who meets the eligibility
requirements of the SFMNP and to whom coupons or equivalent benefits
have been issued.
Roadside stand means a location at which an individual farmer sells
his/her produce directly to consumers. This is in contrast to a group
or association of farmers selling their produce at a farmers' market or
through a CSA program. The term ``roadside stand'' may be used
interchangeably with the term ``farmstand'' as defined in Sec. 248.2
of this chapter.
Senior means an individual 60 years of age or older, or as defined
in Sec. 249.6(a)(1).
SFPD means the Supplemental Food Programs Division of the Food and
Nutrition Service of the U.S. Department of Agriculture.
Shareholder means a SFMNP recipient for whom a full or partial
share in a community supported agriculture program has been purchased
by the State agency, and who receives SFMNP benefits in the form of
actual eligible foods rather than coupons that must be exchanged for
eligible foods at farmers' markets and/or roadside stands.
State means any of the 50 States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and as
applicable, American Samoa or the Commonwealth of the Northern
Marianas.
State agency means the agriculture, aging, or health department, or
any other agency approved by the Chief Executive Officer of the State
that has administrative responsibility for the SFMNP; an intertribal
council or group that is an authorized representative of Indian tribes,
bands, or groups recognized by the Department of the Interior and that
has an ongoing relationship with such tribes, bands, or groups for
other purposes and has contracted with them to administer the Program;
or the appropriate area office of the Indian Health Service, a division
of the Department of Health and Human Services.
State Plan means a plan of SFMNP operation and administration that
describes the manner in which the State agency intends to implement,
operate and administer all aspects of the SFMNP within its jurisdiction
in accordance with Sec. 249.4.
WIC means the Special Supplemental Nutrition Program for Women,
Infants and Children authorized by Section 17 of the Child Nutrition
Act of 1966 (42 U.S.C. 1786).
WIC Farmers' Market Nutrition Program (FMNP) means the nutrition
assistance program authorized by Section 17(m) of the Child Nutrition
Act of 1966 (42 U.S.C. 1786(m)), to provide resources to women,
infants, and children who are nutritionally at risk, in the form of
fresh, nutritious, unprepared foods (such as fruits and vegetables)
from farmers' markets; to expand the awareness and use of farmers'
markets; and to increase sales at such markets.
Sec. 249.3 Administration.
(a) Delegation to FNS. Within the Department, FNS shall act on
behalf of the Department in the administration of the SFMNP. Within
FNS, SFPD and the FNS Regional Offices are responsible for SFMNP
administration. FNS shall provide assistance to State agencies and
evaluate all levels of SFMNP operations to ensure that the goals of the
SFMNP are achieved in the most effective and efficient manner possible.
(b) Delegation to State agency. The State agency is responsible for
the effective and efficient administration of the SFMNP in accordance
with the requirements of this Part; the requirements of the
Department's regulations governing nondiscrimination (7 CFR parts 15,
15a and 15b), administration of grants (7 CFR part 3016),
nonprocurement debarment/suspension (7 CFR part 3017), drug-free
workplace (7 CFR part 3021), and lobbying (7 CFR part 3018); FNS
guidelines; FNS Instructions issued under the FNS Directives Management
System; and Office of Management and Budget Circular A-130 (For
availability of OMB Circulars referenced in this section, see 5 CFR
1310.3). The State agency shall provide guidance to cooperating State
and local agencies on all aspects of SFMNP operations. State agencies
may operate the SFMNP locally through nonprofit organizations or local
government entities and must ensure coordination among the appropriate
agencies and organizations.
(c) Agreement and State Plan. Each State agency desiring to
administer the SFMNP shall annually submit a State Plan of Operations
and enter into a written agreement with the Department for
administration of the Program in the jurisdiction of the State agency
in accordance with the provisions of this Part. If the State agency
administers both the SFMNP and the WIC Farmers' Market Nutrition
Program (FMNP), one consolidated State Plan may be submitted for both
programs, in accordance with guidance provided by FNS.
(d) Coordination with other agencies. The Chief Executive Officer
of the State shall ensure coordination between the designated
administering State agency and any other State, local, or nonprofit
agencies or entities involved in administering any aspect of the SFMNP
by ensuring that the agencies enter into a written agreement. The
written agreement shall delineate the responsibilities of each agency,
describe any compensation for services, and shall be signed by the
designated representative of each agency.
This agreement shall be submitted each year along with the State
Plan.
(e) State staffing standards. Each State agency shall ensure that
sufficient staff is available to administer the SFMNP efficiently and
effectively. This shall include, but not be limited to, sufficient
staff to identify and certify eligible SFMNP recipients, provide
program information and nutrition education to recipients, and to
oversee coupon, market, and/or CSA program management, fiscal
reporting, monitoring, and training. The State agency shall provide in
its State Plan an outline of administrative staff and job descriptions
for staff whose salaries will be paid from program funds.
Subpart B--State Agency Eligibility
Sec. 249.4 State Plan.
(a) Requirements. By November 15 of each year, each applying or
participating State agency shall submit to FNS for approval a State
Plan for the following year as a prerequisite to receiving funds under
this section. If the
[[Page 30577]]
State agency administers both the SFMNP and the FMNP, one consolidated
State Plan may be submitted for both programs, in accordance with
guidance provided by FNS. The State Plan must be signed by the State-
designated official responsible for ensuring that the Program is
operated in accordance with the State Plan. FNS will provide written
approval or denial of a completed State Plan or amendment within 30
days of receipt. Portions of the State Plan that do not change annually
need not be resubmitted. However, the State agency shall provide the
title of the sections that remain unchanged, as well as the year of the
last Plan in which the sections were submitted. At a minimum, the Plan
must include the following items, which must include sufficient detail
to demonstrate the State agency's ability to meet the requirements of
the SFMNP:
(1) A copy of the agreement between the designated administering
State agency and any other cooperating State, local, or nonprofit
agencies or organizations for services such as certification of
eligible recipients, issuance of SFMNP coupons or benefits, and/or
nutrition education, as required in Sec. 249.3(d).
(2) A description of the State agency's procedures for identifying
and certifying eligible SFMNP recipients, including the specific age
and income criteria that will be used to determine SFMNP eligibility.
(3) An estimated number of recipients for the fiscal year, and
proposed months of operation.
(4) A detailed budget for the SFMNP, including:
(i) The minimum amount necessary to operate the SFMNP;
(ii) A description of the Federal and non-Federal funds that will
be used to operate the Program; and
(iii) An assurance that no more than 50 percent of the Federal
SFMNP grant will be used to support a CSA program model for the
delivery of SFMNP benefits.
(5) An outline of administrative staff and job descriptions.
(6) A detailed description of the SFMNP recordkeeping system
including, but not limited to, the system for maintaining separate
records for SFMNP funds pertaining to financial operations, coupon
issuance and redemption, authorization of farmers, markets, and/or CSA
programs, distribution of eligible foods through CSA programs, and
SFMNP participation.
(7) A detailed description of the State agency's financial
management system, including how the system will provide accurate,
current and complete disclosure of the program's financial status and
required reports.
(8) A detailed description of the service area, including:
(i) the number and addresses of authorized participating markets,
roadside stands, and community supported agriculture programs; and
(ii) SFMNP certification/issuance sites (such as senior centers or
senior housing facilities), including a map outlining the service area
and proximity of markets, roadside stands, and/or community supported
agriculture programs to certification/issuance or distribution sites.
(9) A description of the coupon issuance system including:
(i) A description of how the State agency will target areas with
the highest concentrations of eligible persons and greatest access to
farmers' markets and/or roadside stands;
(ii) The benefit level per recipient, or household if benefits are
issued on a household basis, including:
(A) How coupons will be issued;
(B) The value of benefits provided to each recipient or household
at each issuance during the year;
(C) The frequency of coupon issuance; and
(D) The total amount of SFMNP benefits issued to each recipient or
household during the year;
(iii) A method for instructing recipients on the proper use of
SFMNP coupons and the purpose of the SFMNP;
(iv) A method for ensuring that SFMNP coupons are issued only to
eligible recipients; and
(v) A method for preventing and identifying dual participation in
accordance with Sec. 249.6(d)(1).
(10) If the agency is using a ``paperless'' system, i.e., a system
that does not issue actual coupons, a complete description of how such
a system will be operated in a manner that ensures the integrity of
SFMNP funds and benefits.
(11) A detailed description of the SFMNP coupon redemption process
including:
(i) The procedures for ensuring the secure transportation and
storage of SFMNP coupons;
(ii) A system for identifying and reconciling SFMNP coupons; and
(iii) The timeframes for SFMNP coupon redemption by recipients,
submission for payment by farmers or authorized outlets (farmers'
markets and/or roadside stands), and payment by the State agency.
(12) A description of the State agency's CSA program, if
applicable, including:
(i) How the State agency will target and select community supported
agriculture programs designed to provide SFMNP benefits to eligible
recipients;
(ii) The annual benefit amount per recipient or household, if
benefits are issued on a household basis;
(iii) How CSA program contracts are developed, negotiated, and
executed by the State agency;
(iv) How CSA program shares are allocated to eligible SFMNP
recipients;
(v) A method for instructing recipients and farmers participating
in the CSA program on the purpose of the SFMNP, and the procedures for
delivery and distribution of eligible foods provided for the SFMNP
through the CSA;
(vi) A system to ensure receipt by eligible recipients of eligible
foods provided through a CSA program. Such a system should include a
written receipt or distribution log, with the recipient's signature (or
that of the eligible recipient's proxy, if proxies are allowed) and the
date of each distribution;
(vii) The payment procedures for the CSA program(s) used by the
State agency;
(viii) How the State agency ensures that the full value of eligible
foods for which it has contracted is provided regularly throughout the
SFMNP season;
(ix) A listing of delivery dates and distribution sites for CSA
program-provided eligible foods; and
(x) A system for ensuring that each SFMNP shareholder receives an
equitable amount of eligible foods at each delivery, and that the total
value of the eligible foods provided under the SFMNP falls within the
minimum and maximum Federal SFMNP benefit levels, as specified in Sec.
249.8(b).
(13) A complete description of age- and circumstance-appropriate
nutrition education to be provided to SFMNP recipients, including:
(i) The agencies that will provide the nutrition education;
(ii) The format(s) in which the nutrition education will be
provided; and
(iii) The locations where nutrition education is likely to be
provided.
(14) A detailed description of the State agency's system for
managing its coupon, market, and CSA program management systems,
including:
(i) The criteria for authorizing farmers' markets, roadside stands,
and/or community supported agriculture programs, including the agency
responsible for authorization;
(ii) The procedures for training farmers, market managers, and/or
CSA
[[Page 30578]]
program farmers at authorization, and annually thereafter;
(iii) The procedures for monitoring farmers' markets, roadside
stands, and/or community supported agriculture programs;
(iv) A description of the State agency's system for identifying
high-risk farmers and farmers' markets, roadside stands, and/or
community supported agriculture programs, as set forth at Sec.
249.10(e)(2)(ii);
(v) The procedures for sanctioning farmers, farmers' markets,
roadside stands, and/or community supported agriculture programs;
(vi) A facsimile of the SFMNP coupon, including the denominations
of coupons that will be issued, and a clear indication of where the
recipient/proxy and (if applicable) farmer are required to sign, stamp,
or otherwise endorse the coupon before it can be redeemed;
(vii) A complete listing of the fresh, nutritious, unprepared
fruits, vegetables, and herbs eligible for purchase under the SFMNP;
(viii) A description of SFMNP coupon replacement policy or
statement that coupons will not be replaced;
(ix) The State agency's procedures for handling recipient and
farmer/farmers' market, roadside stands, and CSA program complaints.
(15) A system for ensuring that SFMNP coupons are redeemed only by
authorized farmers/farmers' markets/roadside stands, and only for
eligible foods.
(16) A system for identifying SFMNP coupons that are redeemed or
submitted for payment outside valid dates or by unauthorized farmers/
farmers' markets/roadside stands.
(17) A copy of the written agreement to be used between the State
agency and authorized farmers/farmers' markets, roadside stands, and/or
community supported agriculture programs. In those States that
authorize farmers' markets, but not individual farmers, this agreement
shall specify in detail the role of and procedures to be used by
farmers' markets for monitoring and sanctioning farmers, and the
appropriate procedures to be used by a farmer to appeal a sanction or
disqualification imposed by a farmers' market.
(18) If available, information on the change in consumption of
fresh fruits, vegetables, and herbs by SFMNP recipients. This
information shall be submitted as an addendum to the State Plan and
shall be submitted at a date specified by the Secretary.
(19) If available, information on the effects of the program on
farmers' markets, roadside stands, and/or community supported
agriculture programs. This information shall be submitted as an
addendum to the State Plan and shall be submitted at a date specified
by the Secretary.
(20) A description of the procedures the State agency will use to
comply with the civil rights requirements described in Sec. 249.7(a),
including the processing of discrimination complaints.
(21) A copy of the State agency's fair hearing procedures for SFMNP
recipients and the administrative appeal procedures for local agencies,
farmers, farmers' markets, roadside stands, and/or CSA programs.
(22) State agencies that have not previously participated in the
SFMNP must provide:
(i) A description of the need for the SFMNP in that State agency;
(ii) The specific goals and objectives of the SFMNP, designed to
fulfill the purpose of the Program as set forth in Sec. 249.1; and
(iii) A capability statement that includes a summary description of
any prior experience with farmers' market projects or programs,
including information and data describing the attributes of such
projects or programs.
(23) For State agencies making expansion requests, documentation
that demonstrates:
(i) The need for an increase in funding;
(ii) That the use of the increased funding will be consistent with
serving eligible SFMNP recipients by expanding benefits to more
persons, by enhancing current benefits, or a combination of both, and
expanding the awareness and use of farmers' markets, roadside stands,
and CSA programs;
(iii) The ability of the State agency to operate the existing SFMNP
satisfactorily;
(iv) The management capabilities of the State agency to expand; and
(v) Whether, in the case of a State agency that intends to use the
funding to increase the value of the Federal benefits received by a
recipient, the funding provided will increase the rate of coupon
redemption.
(b) Amendments. At any time after approval, the State agency may
amend the State Plan to reflect changes. The State agency shall submit
such amendments to FNS for approval. The proposed amendments shall be
signed by the State-designated official responsible for ensuring that
the SFMNP is operated in accordance with the State Plan. The amendments
must be approved by FNS prior to implementation.
(c) Retention of copy. A copy of the approved State Plan shall be
kept on file at the State agency for public inspection.
Sec. 249.5 Selection of new State agencies.
In selecting new State agencies, the Department will use objective
criteria to rank and approve State plans submitted in accordance with
Sec. 249.4. In making this ranking, the Department will consider the
amount of funds necessary to operate the SFMNP successfully in the
State compared with other States and with the total amount of funds
available to the SFMNP, the number of recipients estimated to be
served, and the projected benefit level. Approval of a State Plan does
not equate to an obligation on the part of the Department to fund the
SFMNP within that State.
Subpart C--Recipient Eligibility
Sec. 249.6 Recipient eligibility.
(a) Eligibility for certification. Individuals who are eligible to
receive Federal benefits under the SFMNP are those who meet the
following criteria:
(1) Categorical eligibility. Recipients must be not less than 60
years of age, except that State agencies may exercise the option to
deem Native Americans who are 55 years of age or older as categorically
eligible for SFMNP benefits. State agencies may, at their discretion,
also deem disabled individuals less than 60 years of age who are
currently living in housing facilities occupied primarily by older
individuals where congregate nutrition services are provided, as
categorically eligible to receive SFMNP benefits.
(2) Residency requirement. The State agency may establish a
residency requirement for SFMNP applicants. The State agency may
determine a service area for any local agency, and may require that an
applicant be residing within the service area at the time of
application to be eligible for the Program. However, the State agency
may not impose any durational or fixed residency requirements.
(3) Income eligibility. The State agency must ensure that local
agencies determine income eligibility through the use of a clear and
simple application process approved by the State agency. Recipients
must have a maximum household income of not more than 185 percent of
the annual poverty income guidelines, or be determined automatically
income eligible based on current participation/eligibility to receive
benefits in another means-tested program, as designated by the State
agency, for which income eligibility is set at or below 185 percent of
the poverty income guidelines and for which documentation of family
income
[[Page 30579]]
is required. FNS will announce the income poverty guidelines annually.
(b) Documentation of income eligibility. (1) Automatically income
eligible applicants. The State or local agency must require applicants
determined to be automatically income eligible to provide documentation
of their eligibility to participate in another means-tested assistance
program, as designated by the State agency.
(2) Other applicants. The State or local agency must require all
other applicants to provide documentation of family income at
certification.
(c) Certification periods. Recipients may be certified only for the
current fiscal year's SFMNP period of operation. Eligibility must be
determined at the beginning of each period of operation. Prior fiscal
year certifications may not be carried over into subsequent fiscal
years, but the State agency may make use of its recipient enrollment
listings from the prior fiscal year in its outreach efforts for the
current fiscal year.
(d) Recipient rights and responsibilities. Where a significant
number or proportion of the population eligible to be served needs this
information in a language other than English, reasonable steps must be
taken to provide the information in the appropriate language(s) to such
persons, considering the scope of the Program and the size and
concentration of such population(s). In order to inform applicants and
participants or their authorized representatives/proxies of SFMNP
rights and responsibilities, State/local agencies must provide the
following information:
(1) During the certification process, every program applicant or
authorized representative must be informed of the illegality of dual
participation, i.e., obtaining SFMNP benefits from more than one
service delivery area or from more than one SFMNP program model (coupon
system and CSA program) within the same service delivery area.
(2) At the time of certification, each SFMNP applicant or
authorized representative must read or have read to him or her the
following statements or similar statements:
``I have been advised of my rights and obligations under the
SFMNP. I certify that the information I have provided for my
eligibility determination is correct, to the best of my knowledge.
This certification form is being submitted in connection with the
receipt of Federal assistance. Program officials may verify
information on this form. I understand that intentionally making a
false or misleading statement or intentionally misrepresenting,
concealing, or withholding facts may result in paying the State
agency, in cash, the value of the food benefits improperly issued to
me and may subject me to civil or criminal prosecution under State
and Federal law.
Standards for eligibility and participation in the SFMNP are the
same for everyone, regardless of race, color, national origin, age,
handicap, or sex.
I understand that I may appeal any decision made by the local
agency regarding my eligibility for the SFMNP.''
(3) At least during the initial certification visit, each recipient
or authorized representative must:
(i) Receive an explanation of how to use his/her SFMNP coupons at
farmers' markets and roadside stands, and/or how SFMNP foods will be
provided under the CSA program in that service delivery area; and
(ii) Be advised of the other types of services that are available
to SFMNP recipients, where such services are located, how they may be
obtained, and why they may be useful.
(4) Persons found ineligible for the SFMNP during a certification
visit must be advised in writing of their ineligibility, of the reasons
for their ineligibility, and of their right to a fair hearing. The
reasons for ineligibility must be properly documented and must be
retained on file at the local agency.
(5) When a State or local agency pursues collection of a claim
pursuant to Sec. 249.20(c) against an individual who has been issued
SFMNP benefits for which s/he is not eligible, the person must be
advised in writing of the reason(s) for the claim, the value of the
improperly issued benefits that must be repaid, and of his/her right to
a fair hearing.
(e) Certification without charge. Certification for the SFMNP must
be performed at no cost to the applicant or the authorized
representative.
(f) Use of proxies or authorized representatives. At the State
agency's discretion, a senior may designate an authorized
representative (proxy) to apply for certification, shop at the farmers'
market or roadside stands, and/or pick up their eligible foods from CSA
program distribution sites on his/her behalf if the senior is unable to
perform these actions. The State agency must obtain a signed statement
from the eligible senior designating another individual as his/her
authorized representative. A senior who has been certified to receive
SFMNP benefits may designate an authorized representative at any point
during the program's period of operation.
(g) Processing standards. (1) Applicants for the SFMNP must be
notified of their eligibility or ineligibility for benefits, or of
their placement on a waiting list, as described in paragraph (g)(2) of
this section, within 10 days from the date of application.
(2) When all available program benefits have been allocated to
eligible recipients, the local agency must maintain a waiting list of
individuals who contact the local agency to apply for the Program.
Individuals must be notified of their placement on a waiting list
within 10 days after they contact the local agency to request Program
benefits. To enable the local agency to contact these individuals when
caseload space becomes available, the waiting list must include the
name of the applicant, the date placed on the waiting list, and an
address or phone number of the applicant.
(h) Limitations on certification. If necessary to limit the number
of recipients, State agencies may impose additional eligibility
requirements, such as limiting recipient certification to certain
geographic areas. Each State agency must specifically identify these
limitations on certification in its State Plan.
Sec. 249.7 Nondiscrimination.
(a) Civil rights requirements. (1) The State agency must comply
with the following requirements to ensure that no person shall, on the
grounds of race, color, national origin, age, sex or disability, be
excluded from participation, be denied benefits, or be otherwise
subjected to discrimination, under the SFMNP:
(i) Title VI of the Civil Rights Act of 1964;
(ii) Title IX of the Education Amendments of 1972;
(iii) Section 504 of the Rehabilitation Act of 1973;
(iv) The Age Discrimination Act of 1975;
(v) Department of Agriculture regulations on nondiscrimination (7
CFR parts 15, 15a and 15b); and
(vi) Applicable FNS Instructions, including requirements for racial
and ethnic participation data collection, public notification of the
nondiscrimination policy, and annual reviews of each local agency's
racial and ethnic participation data (as required by title VI of the
Civil Rights Act of 1964).
(2) Compliance with Title VI of the Civil Rights Act of 1964, Title
IX of the Education Amendments of 1972, Section 504 of the
Rehabilitation Act of 1973, the Age Discrimination Act of 1975, and
regulations and instructions issued thereunder shall include, but not
be limited to:
(i) Notification to the public of the nondiscrimination policy and
complaint rights of recipients and potentially eligible persons, which
may be satisfied
[[Page 30580]]
through the Department's required nondiscrimination statement on
brochures and publications;
(ii) Review and monitoring activity to ensure SFMNP compliance with
the nondiscrimination laws and regulations; and
(iii) Establishment of grievance procedures for handling recipient
complaints based on sex and handicap.
(b) Complaints. Persons seeking to file discrimination complaints
may file them either with the Secretary of Agriculture, or the
Director, Office of Civil Rights, USDA, Washington, DC 20250 or with
the office established by the State agency to handle discrimination
grievances or complaints. All complaints received by State agencies
that allege discrimination based on race, color, national origin, or
age shall be referred to the Secretary of Agriculture or the Director
of the Office of Civil Rights, USDA. A State agency may process
complaints that allege discrimination based on sex or disability if
grievance procedures are in place.
Subpart D--Recipient Benefits
Sec. 249.8 Level of benefits and eligible foods.
(a) General. State agencies must identify in the State Plan the
fresh, nutritious, unprepared, locally grown fruits, vegetables and
herbs that are eligible for purchase under the SFMNP. Eligible foods
may not be processed or prepared beyond their natural state except for
usual harvesting and cleaning processes. Dried fruits or vegetables,
such as prunes (dried plums), raisins (dried grapes), sun-dried
tomatoes, or dried chili peppers are not considered eligible foods in
the SFMNP. Potted fruit or vegetable plants, potted or dried herbs,
wild rice, nuts of any kind (even raw), honey, maple syrup, cider,
seeds, eggs, meat, cheese, and seafood are also not eligible for
purposes of the SFMNP. ``Locally grown'' means produce grown only
within a State's borders but may be defined by State agencies to
include border areas in adjacent States. Under no circumstances may
produce grown outside of the United States and its territories be
considered eligible food.
(b) The value of the Federal benefits received. The Federal SFMNP
benefit level received by each recipient, whether individual or
household, may not be less than $20 per year or more than $50 per year,
except that recipients who are participating in the SFMNP through a CSA
program may receive a higher total benefit level than recipients
participating in a check or coupon program model, as long as that level
is consistent for all Senior CSA program participants and does not
exceed the $50 annual maximum per individual or household.
(c) Recipient or household benefit allocation. (1) All SFMNP
recipients living in the areas served by the State agency must be
offered the same amount of SFMNP benefits, regardless of the program
model(s) used by that State agency.
(2) Benefits may be allocated on an individual or on a household
basis.
(3) Foods provided are intended for the sole benefit of SFMNP
recipients and are not to be shared with other non-participating
household members.
(4) Recipients must receive SFMNP benefits free of charge.
Sec. 249.9 Nutrition education.
(a) Goal. Nutrition education shall emphasize the relationship of
proper nutrition to the total concept of good health, including the
importance of consuming fruits and vegetables.
(b) Requirement. The State agency shall integrate nutrition
education into SFMNP operations and may satisfy nutrition education
requirements through coordination with other agencies within the State.
State agencies wishing to coordinate nutrition education with another
State agency or organization must enter into a written cooperative
agreement with such agencies to offer nutrition education relevant to
the use and nutritional value of foods available to SFMNP recipients.
In cases where SFMNP recipients are receiving relevant nutrition
education from an agency other than the administering State agency, the
provision of nutrition education is an allowable administrative cost
under the SFMNP.
Subpart E--State Agency Provisions
Sec. 249.10 Coupon, market, and CSA program management.
(a) General. This section sets forth State agency responsibilities
regarding the authorization of farmers, farmers' markets, roadside
stands, and/or CSA programs. The State agency is responsible for the
fiscal management of and accountability for SFMNP-related activities
for farmers, farmers' markets, roadside stands, and CSA programs. Each
State agency may decide whether to authorize individual farmers and
farmers' markets separately, or to authorize only farmers' markets. In
addition, each State agency may decide whether to authorize roadside
stands and/or CSA programs. The State agency may authorize a farmer for
participation in a farmers' market, a roadside stand, and/or CSA
program simultaneously. All contracts or agreements entered into by the
State agency for the management or operation of farmers, farmers'
markets, roadside stands, and/or CSA programs shall conform with the
requirements of 7 CFR part 3016.
(1) Only farmers, farmers' markets, and/or roadside stands
authorized by the State agency may redeem SFMNP coupons. Only farmers
authorized by the State agency, or having a valid agreement with an
authorized farmers' market, may redeem coupons. Only CSA programs
authorized by the State agency may receive payment from the State
agency at the beginning of the planting season, in order to provide
eligible foods to senior recipients who are shareholders.
(2) The State agency must establish criteria for the authorization
of individual farmers and/or farmers' markets, roadside stands, and/or
CSA programs. Any authorized farmer, farmers' market, roadside stand
and/or CSA program must agree to sell recipients only those foods
identified as eligible by the State agency. State agencies may
determine farmers, farmers' markets and/or roadside stands as
automatically authorized to participate in the SFMNP based on current
authorization to operate in the FMNP under Part 248 of this chapter.
Individuals who exclusively sell produce grown by someone else, such as
wholesale distributors, cannot be authorized to participate in the
SFMNP, except individuals employed by a farmer otherwise qualified
under these regulations, or individuals hired by a nonprofit
organization to sell produce at roadside stands on behalf of local
farmers.
(3) The State agency must ensure that an appropriate number of
farmers, farmers' markets, roadside stands, and/or CSA programs are
authorized for adequate recipient access in the area(s) proposed to be
served and for effective management of the farmers, farmers' markets,
roadside stands, and/or CSA programs by the State agency. The State
agency may establish criteria to limit the number of authorized
farmers, farmers' markets, and/or roadside stands. The State agency
must limit the value of shares awarded to CSA programs to no more than
50 percent of their total Federal SFMNP food grant. The State agency
shall make efforts to select the CSA program(s) that provides the
greatest variety of eligible foods.
(4) The State agency shall ensure that face-to-face training is
conducted prior to start up of the first year of SFMNP participation of
an individual farmer, farmers' market, roadside stand, and/or
[[Page 30581]]
CSA program. The face-to-face training shall include at a minimum those
items listed in paragraph (d) of this section.
(5) Authorized farmers shall display a sign stating that they are
authorized to redeem SFMNP coupons.
(6) Authorized farmers, farmers' markets, roadside stands, and/or
CSA programs shall comply with the requirements of Title VI of the
Civil Rights Act of 1964, Title IX of the Education Amendments of 1972,
Section 504 of the Rehabilitation Act of 1973, the Age Discrimination
Act of 1975, Department of Agriculture regulations on nondiscrimination
(7 CFR parts 15, 15a and 15b), and FNS Instructions as outlined in
Sec. 249.7.
(7) The State agency shall ensure that there is no conflict of
interest between the State or local agency and any participating
farmer, farmers' market, roadside stand and/or CSA program.
(b) Farmer, farmers' market, roadside stand, and/or CSA program
agreements. The State agency shall ensure that all participating
farmers' markets, roadside stands, and/or CSA programs enter into
written agreements with the State agency. State agencies that authorize
individual farmers shall also enter into written agreements with the
individual farmers. The agreement must be signed by a representative
who has legal authority to obligate the farmer, farmers' market,
roadside stand, and/or CSA program. Agreements must include a
description of sanctions for noncompliance with SFMNP requirements and
shall contain, at a minimum, the following specifications, although the
State agency may determine the exact wording to be used:
(1) The farmer, farmers' market and/or roadside stand shall:
(i) Provide such information as the State agency may require for
its periodic reports to FNS;
(ii) Assure that SFMNP coupons are redeemed only for eligible
foods;
(iii) Provide eligible foods at or less than the price charged to
other customers;
(iv) Accept SFMNP coupons within the dates of their validity and
submit such coupons for payment within the allowable time period
established by the State agency;
(v) In accordance with a procedure established by the State agency,
mark each transacted coupon with a farmer identifier. In those cases
where the agreement is between the State agency and the farmer and/or
roadside stand, each transacted SFMNP coupon shall contain a farmer
identifier and shall be batched for reimbursement under that
identifier. In those cases where the agreement is between the State
agency and the farmers' market, each transacted SFMNP coupon shall
contain a farmer identifier and be batched for reimbursement under a
farmers' market identifier.
(vi) Accept training on SFMNP procedures and provide training to
farmers and any employees with SFMNP responsibilities on such
procedures;
(vii) Agree to be monitored for compliance with SFMNP requirements,
including both overt and covert monitoring;
(viii) Be accountable for actions of farmers or employees in the
provision of eligible foods and related activities;
(ix) Pay the State agency for any coupons transacted in violation
of this agreement;
(x) Offer SFMNP recipients the same courtesies as other customers;
(xi) Comply with the nondiscrimination provisions of USDA
regulations as provided in Sec. 249.7; and
(xii) Notify the State agency if any farmer, farmers' market or
roadside stand ceases operation prior to the end of the authorization
period.
(2) The farmer, farmers' market and/or roadside stand shall
neither:
(i) Seek restitution from SFMNP recipients for coupons not paid by
the State agency; nor
(ii) Issue cash change for purchases that are in an amount less
than the value of the SFMNP coupon(s).
(3) The CSA program shall:
(i) Provide such information as the State agency may require for
its periodic reports to FNS;
(ii) Assure that SFMNP recipients receive only eligible foods;
(iii) Provide eligible foods to their SFMNP shareholders at or less
than the price charged to other customers;
(iv) Assure that the shareholder receives eligible foods that are
of equitable value and quantity to their share;
(v) Assure that all funds from the State agency are used for
planting of crops for SFMNP shareholders;
(vi) Provide to the State agency access to a tracking system that
determines the value of the eligible foods provided and the remaining
value owed to each SFMNP shareholder;
(vii) Assure that SFMNP shareholders/authorized representatives
provide written acknowledgement of receipt of eligible foods;
(viii) Accept training on SFMNP procedures and provide training to
farmers and any employees with SFMNP responsibilities for such
procedures;
(ix) Agree to be monitored for compliance with SFMNP requirements,
including both overt and covert monitoring;
(x) Be accountable for actions of farmers or employees in the
provision of eligible foods and related activities;
(xi) Offer SFMNP shareholders the same courtesies as other
customers;
(xii) Notify the State agency immediately when the CSA program is
experiencing a problem with its crops, and may be unable to provide
SFMNP shareholders with the complete amount of eligible foods agreed
upon between the CSA program and the State agency;
(xiii) Comply with the nondiscrimination provisions of USDA
regulations as provided in Sec. 249.7; and
(xiv) Notify the State agency if any CSA program ceases operation
prior to the end of the authorization period.
(4) The CSA program shall not substitute ineligible produce when
eligible foods are not available.
(5) Neither the State agency nor the farmer, farmers' market,
roadside stand, and/or CSA program has an obligation to renew the
agreement. The State agency or the farmer, farmers' market, roadside
stand and/or CSA program may terminate the agreement for cause after
providing advance written notification.
(6) The State agency may deny payment to the farmer, farmers'
market and/or roadside stand for improperly redeemed SFMNP coupons and
may demand refunds for payments already made on improperly redeemed
coupons.
(7) The State agency may demand a refund from any CSA program that
fails to provide the full benefit to all SFMNP shareholders as
specified in its contract, or that provides ineligible foods as
substitutes for eligible foods.
(8) The State agency may disqualify a farmer, farmers' market,
roadside stand, and/or CSA program for SFMNP violations. The farmer,
farmers' market, roadside stand, and/or CSA program has the right to
appeal a denial of an application to participate, a disqualification,
or a SFMNP sanction by the State agency. Expiration of a contract or
agreement with a farmer, farmers' market, roadside stand, and/or CSA
program, and claims actions under Sec. 249.20, are not appealable.
(9) A farmer, farmers' market, roadside stand, and/or CSA program,
which commits fraud or engages in other illegal activity is liable to
prosecution under applicable Federal, State or local laws.
(10) Agreements may not exceed 3 years.
(c) Agreements with farmers' markets that do not authorize
individual farmers. Those State agencies that authorize farmers'
markets but not
[[Page 30582]]
individual farmers shall require authorized farmers' markets to enter
into a written agreement with each farmer within the market that is
participating in SFMNP. The State agency must set forth the required
terms for the agreement and provide a sample agreement that may be
used.
(d) Annual training for farmers, farmers' market managers and/or
farmers that operate a roadside stand or CSA program. State agencies
shall conduct annual training for farmers, farmers' market managers,
and/or farmers who operate a CSA program in the SFMNP. The State agency
must conduct a face-to-face training for all farmers and farmers'
market managers who have never previously participated in the SFMNP.
After a farmer/farmers' market manager's first year of SFMNP operation,
State agencies have discretion in determining the method used for
annual training purposes. At a minimum, annual training shall include
instruction emphasizing:
(1) Eligible food choices;
(2) Proper SFMNP coupon redemption procedures, including deadlines
for submission of coupons for payment, and/or receipt of payment for
CSA programs' distribution of eligible foods;
(3) Equitable treatment of SFMNP recipients, including the
availability of eligible foods to SFMNP recipients that are of the same
quality and cost as that sold to other customers;
(4) Civil rights compliance and guidelines;
(5) Guidelines for storing SFMNP coupons safely; and
(6) Guidelines for cancelling SFMNP coupons, such as punching holes
or rubber-stamping.
(e) Monitoring and review of farmers, farmers' markets, roadside
stands, CSA programs and local agencies. The State agency shall be
responsible for the monitoring of farmers, farmers' markets, roadside
stands, CSA programs and local agencies within its jurisdiction. This
shall include developing a system for identifying high risk farmers,
farmers' markets, roadside stands, and/or CSA programs, and ensuring
on-site monitoring, conducting further investigation, and sanctioning
of such farmers, farmers' markets, roadside stands, and/or CSA programs
as appropriate. In States where both the SFMNP and the FMNP are in
operation, these monitoring/review requirements may be coordinated to
avoid duplication. If the same farmers, farmers' markets, roadside
stands, and/or CSA programs are authorized for both programs, a review
conducted by one program may be counted toward the requirement for the
other program.
(1) Where coupon reimbursement responsibilities are delegated to
farmers' market managers, farmers' market associations, or nonprofit
organizations, the State agency may establish bonding requirements for
these entities. Costs of such bonding are not reimbursable
administrative expenses.
(2)(i) Each State agency shall rank participating farmers, farmers'
markets, roadside stands, and/or CSA programs by risk factors, and
shall conduct annual, on-site monitoring of at least 10 percent of
farmers, 10 percent of farmers' markets, 10 percent of roadside stands,
and 10 percent of the CSA programs or one of each program model,
whichever is greater, which shall include those farmers, farmers'
markets, roadside stands, and/or CSA programs identified as being the
highest-risk.
(ii) Mandatory high-risk indicators include:
(A) A proportionately high volume of SFMNP coupons redeemed by a
farmer within a farmers' market or at a single roadside stand (as
compared to other farmers within the farmers' market or within the
State);
(B) Recipient complaints;
(C) In the case of CSA programs, an extended or ongoing inability
to provide the full SFMNP benefit to each shareholder as contracted;
and
(D) Farmers, farmers' markets, roadside stands, and/or CSA programs
in their first year of SFMNP operation. States are encouraged to
formally establish other high-risk indicators for identifying potential
problems.
(iii) If additional high-risk indicators are established, they must
be set forth in the farmers, farmers' market, roadside stand, and/or
CSA program agreement and in the State Plan. If application of the
high-risk indicators results in fewer than 10 percent of farmers,
farmers' markets, roadside stands, and/or CSA programs being designated
as high-risk, the State agency shall randomly select additional
farmers, farmers' markets, roadside stands, and/or CSA programs to be
monitored in order to meet the 10 percent minimum. The high-risk
indicators listed above generally apply to a State agency already
participating in the SFMNP. A State agency participating in the SFMNP
for the first time shall, in lieu of applying the high-risk indicators,
randomly select 10 percent of its participating farmers, 10 percent of
its participating farmers' markets, 10 percent of its participating
roadside stands, and 10 percent of its participating CSA programs or at
least one farmers' market, roadside stand, and/or CSA program,
whichever is greater, for monitoring visits.
(3)(i) The following shall be documented for all on-site monitoring
visits to farmers, farmers' markets, roadside stands, and/or CSA
programs, at a minimum:
(A) Names of both the farmer, farmers' market, roadside stand, and/
or CSA program and the reviewer;
(B) Date of review;
(C) Nature of problem(s) detected or the observation that the
farmer, farmers' market, roadside stand, and/or CSA program appears to
be in compliance with SFMNP requirements;
(D) Record of interviews with recipients, market managers, farmers,
and/or farmers who operate a CSA program; and
(E) Signature of the reviewer.
(ii) Reviewers are not required to notify the farmer, farmers'
market, roadside stand, and/or CSA program of the monitoring visit
before, during, or immediately after the visit. The State agency shall
do so after a reasonable delay when necessary to protect the identity
of the reviewer(s) or the integrity of the investigation.
(iii) In instances where the farmer, farmers' market, roadside
stand, and/or CSA program will be permitted to continue participating
in the SFMNP after being informed of any deficiencies detected by the
monitoring visit, the farmer, farmers' market, roadside stand, and/or
CSA program shall provide plans as to how the deficiencies will be
corrected.
(4) At least every 2 years, the State agency must review all local
agencies within its jurisdiction.
(f) Control of SFMNP coupons. The State agency must:
(1) Control and provide accountability for the receipt and issuance
of SFMNP coupons;
(2) Ensure that there is secure transportation and storage of
unissued SFMNP coupons; and
(3) Design and implement a system of review of SFMNP coupons to
detect errors. At a minimum, the errors the system must detect are a
missing recipient signature (if such signature is required by the State
agency), a missing farmer and/or market identification, and redemption
by a farmer outside of the valid date. The State agency must implement
procedures to reduce the number of errors in transactions, where
possible.
(g) Payment to farmers, farmers' markets, roadside stands, and/or
CSA programs. The State agency must ensure that farmers, farmers'
markets, roadside stands, and/or CSA programs are promptly paid for
food costs.
[[Page 30583]]
(h) Reconciliation of SFMNP coupons. The State agency shall
identify the disposition of all SFMNP coupons as validly redeemed, lost
or stolen, expired, or not matching issuance records. Validly redeemed
SFMNP coupons are those that are issued to a valid recipient and
redeemed by an authorized farmer, farmers' market, and/or roadside
stand within valid dates. SFMNP coupons that were redeemed but cannot
be traced to a valid recipient or authorized farmer, farmers' market,
and/or roadside stand shall be subject to claims action in accordance
with Sec. 249.20.
(1) If the State agency elects to replace lost, stolen or damaged
SFMNP coupons, it must describe its system for doing so in the State
Plan.
(2) The State agency must use uniform SFMNP coupons within its
jurisdiction.
(3) SFMNP coupons must include, at a minimum, the following
information:
(i) The last date by which the recipient may use the coupon. This
date shall be no later than November 30 of each year.
(ii) A date by which the farmer or farmers' market must submit the
coupon for payment. When establishing this date, State agencies shall
take into consideration the date financial statements are due to the
FNS, and allow time for the corresponding coupon reconciliation that
must be done by the State agency prior to submission of financial
statements. Financial statements are due to FNS by January 30.
(iii) A unique and sequential serial number.
(iv) A denomination (dollar amount).
(v) A farmer identifier for the redeeming farmer when agreements
are between the State agency and the farmer.
(vi) In those instances where State agencies have agreements with
farmers' markets, there must be a farmer identifier on each coupon and
a market identifier on the cover of coupons that are batched by the
market manager for reimbursement.
(i) Instructions to recipients. Each recipient must receive
instruction on the redemption of the SFMNP coupons, or participation in
a CSA program (where applicable), including, but not limited to:
(1) A list of names and addresses of authorized farmers, farmers'
markets, and/or roadside stands at which SFMNP coupons may be redeemed,
or procedures on the home-delivery process;
(2) Procedures to designate a proxy;
(3) The name and address of the authorized farmer of the CSA
program, and locations of distribution sites;
(4) A description of eligible foods and the prohibition against
cash change for SFMNP purchases of eligible foods;
(5) A description of eligible foods that will be provided through
the CSA program;
(6) A schedule outlining a timeframe for distribution of the
eligible foods from the CSA program; and
(7) An explanation of his/her right to complain about improper
farmer, farmers' market, roadside stand, and/or CSA program practices
with regard to SFMNP responsibilities and the process for doing so.
(j) Recipient and farmer, farmers' market, roadside stand, and/or
CSA program complaints. The State agency must have procedures that
document the handling of complaints from recipients and farmers/
farmers' markets, roadside stands, and/or CSA programs. Complaints of
civil rights discrimination shall be handled in accordance with Sec.
249.7(b).
(k) Recipient and farmer, farmers' market, roadside stand, and/or
CSA program sanctions. (1) The State agency must establish policies
which determine the type and level of sanctions to be applied against
recipients and farmers, farmers' markets, roadside stands, and/or CSA
programs based upon the severity and nature of the SFMNP violations
observed, and such other factors as the State agency determines
appropriate, such as whether repeated offenses have occurred over a
period of time. Farmers, farmers' markets, roadside stands, and/or CSA
programs may be sanctioned, disqualified, or both, when appropriate.
Sanctions may include fines for improper SFMNP coupon redemption and
the penalties outlined in Sec. 249.20, in the case of deliberate
fraud.
(2) In those instances where compliance purchases are conducted,
the results of covert compliance purchases can be a basis for farmer,
farmers' market, and/or roadside stand sanctions.
(3) A farmer, farmers' market, roadside stand, and/or CSA program
committing fraud or other unlawful activities are liable to prosecution
under applicable Federal, State or local laws.
(4) State agency policies must ensure that a farmer that is
disqualified from the SFMNP at one market, roadside stand, or CSA
program shall not participate in the SFMNP at any other farmers'
market, roadside stand or CSA program in the State's jurisdiction
during the disqualification period.
(5) State agency policies must ensure that a farmer, farmers'
market, roadside stand, and/or CSA program that is disqualified from
participating in the WIC Farmers' Market Nutrition Program is also
disqualified from participating in the SFMNP in the State's
jurisdiction during the disqualification period.
Sec. 249.11 Financial management system.
(a) Disclosure of expenditures. The State agency must maintain a
financial management system that provides accurate, current and
complete disclosure of the financial status of the SFMNP. This must
include an accounting for all property and other assets and all SFMNP
funds received and expended each fiscal year.
(b) Internal controls. The State agency shall maintain effective
controls over and accountability for all SFMNP funds. The State agency
must have effective internal controls to ensure that expenditures
financed with SFMNP funds are authorized and properly chargeable to the
SFMNP.
(c) Record of expenditures. The State agency must maintain records
that adequately identify the source and use of funds expended for SFMNP
activities. These records must contain, but are not limited to,
information pertaining to authorization, receipt of funds, obligations,
unobligated balances, assets, liabilities, outlays, and income.
(d) Payment of costs. The State agency must implement procedures
that ensure prompt and accurate payment of allowable costs, and ensure
the allowability and allocability of costs in accordance with the cost
principles and standard provisions of this part, 7 CFR part 3016, and
FNS guidelines and Instructions.
(e) Identification of obligated funds. The State agency must
implement procedures that accurately identify obligated SFMNP funds at
the time the obligations are made.
(f) Resolution of audit findings. The State agency shall implement
procedures that ensure timely and appropriate resolution of claims and
other matters resulting from audit findings and recommendations.
(g) Reconciliation of food instruments. The State agency must
reconcile SFMNP coupons in accordance with Sec. 249.10(h).
(h) Transfer of cash. The State agency must establish the timing
and amounts of its cash draws against its Letter of Credit in
accordance with 31 CFR part 205.
Sec. 249.12 SFMNP costs.
(a) General. (1) Composition of allowable costs. In general, a cost
item will be deemed allowable if it is
[[Page 30584]]
reasonable and necessary for SFMNP purposes and otherwise satisfies
allowability criteria set forth in 7 CFR 3016.22 and this Part. SFMNP
purposes include the administration and operation of the SFMNP.
Allowable SFMNP costs may be classified as follows:
(i) Food costs and administrative costs. Food costs are the costs
of eligible foods provided to SFMNP recipients. Administrative costs
are the costs associated with providing SFMNP benefits and services to
recipients and generally administering the SFMNP. Specific examples of
allowable administrative costs are listed in paragraph (b) of this
section. A State agency may use up to 8 percent of its total Federal
SFMNP grant to cover administrative costs. Any costs incurred for food
and/or administration above the Federal grant level will be the State
agency's responsibility.
(ii) Direct and indirect costs. Direct costs are food and
administrative costs incurred specifically for the SFMNP. Indirect
costs are administrative costs that benefit multiple programs or
activities, and cannot be identified to any one program or activity
without effort disproportionate to the results achieved. In accordance
with the provisions of 7 CFR part 3016, a claim for reimbursement of
indirect costs shall be supported by an approved allocation plan for
the determination of such costs. An indirect cost rate developed
through such an allocation plan may not be applied to a base that
includes food costs.
(2) Costs allowable with prior approval. A State or local agency
must obtain prior approval in accordance with 7 CFR 3016.22 before
charging to the SFMNP any capital expenditures and other cost items
designated by 7 CFR 3016.22 as requiring such approval.
(3) Unallowable costs. Costs that are not reasonable and necessary
for SFMNP purposes, or that do not otherwise satisfy the cost
principles of 7 CFR 3016.22, are unallowable. Notwithstanding any other
provision of 7 CFR Part 3016 or this Part, the cost of constructing or
operating a farmers' market is unallowable. The use of SFMNP funds to
supplement congregate meal programs is prohibited. Unallowable costs
may never be claimed for Federal reimbursement.
(b) Specified allowable administrative costs. Allowable
administrative costs include the following:
(1) The costs associated with administration and start-up;
(2) The costs associated with the provision of nutrition education
that meets the requirements of Sec. 249.9;
(3) The costs of SFMNP coupon issuance, or recipient education
covering proper coupon redemption procedures;
(4) The cost of eligibility determinations and outreach services;
(5) The costs associated with the coupon and market management
process, such as printing SFMNP coupons, processing redeemed coupons,
and training farmers, market managers, and/or farmers who operate CSA
programs on SFMNP operations;
(6) The cost of monitoring and reviewing Program operations;
(7) The cost of SFMNP training;
(8) The cost of required reporting and recordkeeping;
(9) The cost of determining which local sites will be utilized;
(10) The cost of recruiting and authorizing farmers, farmers'
markets, roadside stands, and/or CSA programs to participate in the
SFMNP;
(11) The cost of preparing contracts for farmers, farmers' markets,
roadside stands, and/or CSA programs;
(12) The cost of developing a data processing system for redemption
and reconciliation of SFMNP coupons;
(13) The cost of designing program training and informational
materials; and
(14) The cost of coordinating SFMNP responsibilities between
designated administering agencies.
Sec. 249.13 Program income.
Program income means gross income the State agency earns from grant
supported activities. It includes fees for services performed and
receipts from the use or rental of real or personal property acquired
with Federal grant funds, but does not include proceeds from the
disposition of such property. The State agency must retain Program
income earned during the agreement period and use it for Program
purposes in accordance with the addition method described in 7 CFR
3016.25(g)(2). Fines, penalties or assessments paid by local agencies
or farmers, farmers' markets, roadside stands, and/or CSA program are
also deemed to be Program income. The State agency must ensure that the
sources and applications of Program income are fully documented.
Sec. 249.14 Distribution of funds.
(a) State Plan and agreement. As a prerequisite to the receipt of
Federal funds, a State agency must have its State Plan approved and
must execute an agreement with the Department in accordance with Sec.
249.3(c).
(b) Distribution of SFMNP funds to previously participating State
agencies. Provided that sufficient SFMNP funds are available, each
State agency that participated in the SFMNP in any prior fiscal year,
shall receive not less than the amount of funds the State agency
received in the most recent fiscal year in which it received funding,
if it otherwise complies with the requirements established in this
Part.
(c) Ratable reduction. If amounts appropriated for any fiscal year
for grants under the SFMNP are not sufficient to pay to each previously
participating State agency at least an amount as identified in
paragraph (b) of this section, each State agency's grant must be
ratably reduced. However, to the extent permitted by available funds,
each State agency shall receive at least $75,000 or the amount that the
State agency received for the most recent prior fiscal year in which
the State participated, if that amount is less than $75,000.
(d) Expansion of participating State agencies and establishment of
new State agencies. Any SFMNP funds remaining for allocation after
meeting the requirements of paragraph (b) of this section shall be
allocated in the following manner:
(1) Of the remaining funds, 75 percent shall be made available to
State agencies already participating in the SFMNP that wish to serve
additional recipients or increase the current benefit level. If this
amount is greater than that necessary to satisfy all State Plans
approved for expansion, the unallocated amount shall be applied toward
satisfying any unmet need in paragraph (d)(2) of this section.
(2) Of the remaining funds, 25 percent shall be made available to
State agencies that have not participated in the SFMNP in any prior
fiscal year. If this amount is greater than that necessary to satisfy
the approved State Plans for new States, the unallocated amount shall
be applied toward satisfying any unmet need in paragraph (d)(1) of this
section. The Department reserves the right not to fund every State
agency with an approved State Plan.
(e) Expansion for current State agencies. In providing funds to
State agencies that participated in the SFMNP in the previous fiscal
year, the Department must consider on a case-by-case basis, the
following factors:
(1) Whether the State agency utilized at least 80 percent of its
prior year food grant. States that did not spend at least 80 percent of
their prior year food grant may still be eligible for expansion funding
if, in the judgment of the Department, good cause existed which was
beyond the management control of the State, such as severe weather
conditions or unanticipated decreases in participant caseload;
[[Page 30585]]
(2) Documentation supporting the funds expansion request as
outlined in Sec. 249.4(a)(23).
(f) Funding of new State agencies. Funds will be awarded to new
SFMNP State agencies in accordance with Sec. 249.5.
(g) Administrative funding. A State agency will have available for
administrative costs an amount not greater than 8 percent of total
SFMNP funds.
(h) Recovery of unused funds. State agencies must return to FNS any
unexpended funds made available for a given fiscal year by February 1
of the following fiscal year.
Sec. 249.15 Closeout procedures.
(a) General. State agencies must submit to FNS a final closeout
report for the fiscal year on a form prescribed by FNS and on a date
specified by FNS.
(b) Grant closeout procedures. When grants to State agencies are
terminated, the following procedures shall be followed in accordance
with 7 CFR part 3016.
(1) FNS may disqualify a State agency's participation under the
SFMNP, in whole or in part, or take such remedies as may be
appropriate, whenever FNS determines that the State agency failed to
comply with the conditions prescribed in this part, in its Federal-
State Agreement, or in FNS guidelines and Instructions. FNS will
promptly notify the State agency in writing of the disqualification
together with the effective date.
(2) FNS may terminate a grant when both parties agree that
continuation under the SFMNP would not produce beneficial results
commensurate with the further expenditure of funds.
(3) Upon termination of a grant, the affected agency may not incur
new obligations after the effective date of the disqualification, and
must cancel as many outstanding obligations as possible. FNS will allow
full credit to the State agency for the Federal share of the
noncancellable obligations properly incurred by the State agency prior
to disqualification, and the State agency shall do the same for
farmers, farmers' markets, roadside stands, and/or CSA programs.
(4) A grant closeout shall not affect the retention period for, or
Federal rights of access to, SFMNP records as specified in Sec.
249.23(a). The closeout of a grant does not affect the responsibilities
of the State agency regarding property or with respect to any SFMNP
income for which the State agency is still accountable.
(5) A final audit is not a required part of the grant closeout and
should not be needed unless there are problems with the grant that
require attention. If FNS considers a final audit to be necessary, it
shall so inform OIG. OIG will be responsible for ensuring that
necessary final audits are performed and for any necessary coordination
with other Federal cognizant audit agencies or State or local auditors.
Audits performed in accordance with Sec. 249.18 may serve as final
audits providing such audits meet the needs of requesting agencies. If
the grant is closed out without an audit, FNS reserves the right to
disallow and recover an appropriate amount after fully considering any
recommended disallowances resulting from an audit which may be
conducted later.
Sec. 249.16 Administrative appeal of State agency decisions.
(a) Requirements. The State agency shall provide a hearing
procedure whereby applicants, recipients, local agencies and farmers,
farmers' markets, roadside stands, and/or CSA programs adversely
affected by certain actions of the State agency may appeal those
actions.
(1) What may be appealed.
(i) An applicant may appeal denial of certification of SFMNP
benefits.
(ii) A recipient may appeal disqualification/suspension of SFMNP
benefits.
(iii) A local agency may appeal an action of the State agency
disqualifying it from participating in the SFMNP.
(iv) A farmer, farmers' market, roadside stand, and/or CSA program
may appeal an action of the State agency denying its application to
participate, imposing a sanction, or disqualifying it from
participating in the SFMNP.
(2) What may not be appealed. Expiration of a contract or agreement
shall not be subject to appeal.
(b) Time limit for request. The State or local agency must provide
individuals, local agencies, farmers, farmers' markets, roadside
stands, and/or CSA programs a reasonable period of time to request a
fair hearing. Such time limit must not be less than 30 days from the
date the agency mails or otherwise issues the notice of adverse action.
(c) Postponement pending decision. An adverse action may, at the
State agency's option, be postponed until a decision in the appeal is
rendered.
(1) In a case where an adverse action affects a local agency or
farmer, farmers' market, roadside stand, and/or CSA program, a
postponement is appropriate where the State agency finds that
recipients would be unduly inconvenienced by the adverse action. In
addition, the State agency may determine other relevant criteria to be
considered in deciding whether or not to postpone an adverse action.
(2) Applicants who are denied benefits at initial certification may
appeal the denial, but must not receive SFMNP benefits while awaiting
the hearing. Recipients who appeal the termination of benefits within
the period of time provided under paragraph (b) of this section must
continue to receive Program benefits until the hearing official reaches
a decision or the certification period expires, whichever occurs first.
This does not apply to recipients whose certification period has
already expired or who become otherwise ineligible for SFMNP benefits.
Recipients who become ineligible during a certification, or whose
certification period expires, may appeal the termination, but must not
receive benefits while awaiting the hearing.
(d) Procedure. The State agency hearing procedure shall at a
minimum provide the recipient, local agency or farmer, farmers' market,
roadside stand, and/or CSA program with the following:
(1) Written notification of the adverse action, the cause(s) for
the action, and the effective date of the action, including the State
agency's determination of whether the action shall be postponed under
paragraph (c) of this section if it is appealed, and the opportunity
for a hearing. Such notification shall be provided within a reasonable
timeframe established by the State agency and in advance of the
effective date of the action.
(2) The opportunity to appeal the action within the time specified
by the State agency in its notification of adverse action.
(3) Adequate advance notice of the time and place of the hearing to
provide all parties involved sufficient time to prepare for the
hearing.
(4) The opportunity to present its case and at least one
opportunity to reschedule the hearing date upon specific request. The
State agency may set standards on how many hearing dates can be
scheduled, provided that a minimum of two hearing dates is allowed.
(5) The opportunity to confront and cross-examine adverse
witnesses.
(6) The opportunity to be represented by counsel or, in the case of
a recipient appeal, by a representative designated by the recipient, if
desired.
(7) The opportunity to review the case record prior to the hearing.
(8) An impartial decision maker, whose decision as to the validity
of the State agency's action shall rest solely on the evidence
presented at the hearing
[[Page 30586]]
and the statutory and regulatory provisions governing the SFMNP. The
basis for the decision shall be stated in writing, although it need not
amount to a full opinion or contain formal findings of fact and
conclusions of law.
(9) Written notification of the decision in the appeal, within 60
days from the date of receipt of the request for a hearing by the State
agency.
(e) Continuing responsibilities. When a farmer, farmers' market,
roadside stand, CSA program, and/or local agency appeals an adverse
action (and is permitted to continue in the SFMNP while its appeal is
pending), it continues to be responsible for compliance with the terms
of the written agreement or contract with the State agency.
(f) Judicial review. If a State level decision is rendered against
the recipient, local agency, farmer, farmers' market, roadside stand,
and/or CSA program and the appellant expresses an interest in pursuing
a further review of the decision, the State agency shall explain any
further State level review of the decision and any available State
level rehearing process. If neither is available or both have been
exhausted, the State agency shall explain the right to pursue judicial
review of the decision.
(g) Additional appeals procedures for State agencies that authorize
farmers' markets and not individual farmers. A State agency that
authorizes farmers' markets and not individual farmers shall ensure
that procedures are in place to be used when a farmer seeks to appeal
an action of a farmers' market or association denying the farmer's
application to participate, or sanctioning or disqualifying the farmer.
The procedures shall be set forth in the State Plan and in the
agreements entered into by the State agency and the farmers' market and
the farmers' market and the farmer.
Subpart F--Monitoring and Review of State Agencies
Sec. 249.17 Management evaluations and reviews.
(a) General. FNS and each State agency shall establish a management
evaluation system in order to assess the accomplishment of SFMNP
objectives as provided under these regulations, the State Plan, and the
written agreement with the Department. FNS will:
(1) Provide assistance to State agencies in discharging this
responsibility;
(2) Establish standards and procedures to determine how well the
objectives of this Part are being accomplished; and
(3) Implement sanction procedures as warranted by State SFMNP
performance.
(b) Responsibilities of FNS. FNS will establish evaluation
procedures to determine whether State agencies carry out the purposes
and provisions of this part, the State Plan, and the written agreement
with the Department. As a part of the evaluation procedure, FNS will
review audits to ensure that the SFMNP has been included in audit
examinations at a reasonable frequency. These evaluations shall also
include reviews of selected local agencies, and on-site reviews of
selected farmers, farmers' markets, roadside stands, and community
supported agriculture programs. These evaluations will measure the
State agency's progress toward meeting the objectives outlined in its
State Plan and the State agency's compliance with these regulations.
(1) FNS may withhold up to 8 percent of the State agency's total
SFMNP grant if FNS determines that the State agency has:
(i) Failed, without good cause, to demonstrate efficient and
effective administration of its SFMNP; or
(ii) Failed to comply with the requirements contained in this
section or the State Plan.
(2) Sanctions imposed upon a State agency by FNS in accordance with
this section (but not claims for repayment assessed against a State
agency) may be appealed in accordance with the procedures established
in Sec. 249.20(a). Before carrying out any sanction against a State
agency, the following procedures will be followed:
(i) FNS will notify the chief departmental officer of the
administering agency in writing of the deficiencies found and of FNS'
intention to withhold administrative funds unless an acceptable
corrective action plan is submitted by the State agency to FNS within
45 days after mailing of notification.
(ii) The State agency shall develop a corrective action plan,
including timeframes for implementation to address the deficiencies and
prevent their future recurrence.
(iii) If the corrective action plan is acceptable, FNS will notify
the chief departmental officer of the administering agency in writing
within 30 days of receipt of the plan. The letter will advise the State
agency of the sanctions to be imposed if the corrective action plan is
not implemented according to the schedule set forth in the approved
plan.
(iv) Upon notification from the State agency that corrective action
has been taken, FNS will assess such action and, if necessary, perform
a follow-up review to determine if the noted deficiencies have been
corrected. FNS will then advise the State agency of whether the actions
taken are in compliance with the corrective action plan, and whether
the deficiency is resolved or further corrective action is needed.
Compliance buys can be required if, during FNS management evaluations
by regional offices, a State agency is found to be out of compliance
with its responsibility to monitor and review farmers, farmers'
markets, roadside stands, and community supported agriculture programs.
(v) If an acceptable corrective action plan is not submitted within
45 days, or if corrective action is not completed according to the
schedule established in the corrective action plan, FNS may withhold
the award of SFMNP administrative funds. If the 45-day warning period
ends in the fourth quarter of a fiscal year, FNS may elect not to
withhold funds until the next fiscal year. In such an event, FNS will
notify the chief departmental officer of the administering State
agency.
(vi) If compliance is achieved before the end of the fiscal year in
which the SFMNP administrative funds are withheld, the funds withheld
may be restored to the State agency. FNS is not required to restore
funds withheld beyond the end of the fiscal year for which the funds
were initially awarded.
(c) Responsibilities of State agencies. The State agency is
responsible for meeting the following requirements:
(1) The State agency must establish evaluation and review
procedures and document the results of such procedures. The procedures
must include, but are not limited to:
(i) Conducting annual monitoring reviews of participating farmers'
markets, roadside stands, and community supported agriculture programs.
This includes on-site reviews of a minimum of 10 percent of farmers and
10 percent of each type of authorized outlet (farmers' markets,
roadside stands, and community supported agriculture programs), and
includes those farmers and authorized outlets identified as being at
the highest risk. The first year of operation in the SFMNP shall be
considered a high-risk indicator. More frequent reviews may be
performed, as the State agency deems necessary. In States where both
the SFMNP and the WIC Farmers' Market Nutrition Program are in
operation, these reviews may be coordinated to avoid duplication. A
review by one
[[Page 30587]]
program may be counted by the other program toward the monitoring
requirement, provided that appropriate sanction action is taken for all
violations found.
(ii) Conducting monitoring reviews of all local agencies within the
State agency's jurisdiction at least once every 2 years. Monitoring of
local agencies shall encompass, but not be limited to, evaluation of
management, accountability, certification, nutrition education,
financial management systems, and coupon and/or CSA program management
systems. When the State agency conducts a local agency review outside
of the SFMNP season, a review of documents and procedural plans of the
SFMNP, rather than actual SFMNP activities, is acceptable.
(iii) Instituting the necessary follow-up procedures to correct
identified problem areas.
(2) On its own initiative or when required by FNS, the State agency
must provide special reports on SFMNP activities, and take positive
action to correct deficiencies in SFMNP operations.
Sec. 249.18 Audits.
(a) Federal access to information. The Secretary of the U.S.
Department of Agriculture, the Comptroller General of the United
States, or any of their duly authorized representatives, or duly
authorized State auditors shall have access to any books, documents,
papers, and records of the State agency and their contractors, for the
purpose of making surveys, audits, examinations, excerpts, and
transcripts.
(b) State agency response. The State agency may take exception to
particular audit findings and recommendations. The State agency shall
submit a response or statement to FNS as to the action taken or planned
regarding the findings. A proposed corrective action plan developed and
submitted by the State agency must include specific time frames for its
implementation and for completion of the correction of deficiencies and
problems leading to the deficiencies.
(c) Corrective action. FNS will determine whether SFMNP
deficiencies identified in an audit have been adequately corrected. If
additional corrective action is necessary, FNS shall schedule a follow-
up review, allowing a reasonable time for such corrective action to be
taken.
(d) State sponsored audits. State and local agencies must conduct
independent audits in accordance with 7 CFR parts 3015, 3016 (Sec.
3016.26), or 3051, as applicable. A State or local agency may elect to
obtain either an organization-wide audit or an audit of the Program if
it qualifies to make such an election under applicable regulations.
Sec. 249.19 Investigations.
(a) Authority. The Department may make an investigation of any
allegation of noncompliance with this part and FNS guidelines and
instructions. The investigation may include, where appropriate, a
review of pertinent practices and policies of any State and local
agency, the circumstances under which the possible noncompliance with
this Part occurred, and other factors relevant to a determination as to
whether the State and local agency has failed to comply with the
requirements of this Part.
(b) Confidentiality. No State or local agency, recipient, or other
person shall intimidate, threaten, coerce, or discriminate against any
individual for the purpose of interfering with any right or privilege
under this Part because that person has made a complaint or formal
allegation, or has testified, assisted, or participated in any manner
in an investigation, proceeding, or hearing under this Part. The
identity of every complainant shall be kept confidential except to the
extent necessary to carry out the purposes of this Part, including the
conducting of any investigation, hearing, or judicial proceeding.
Subpart G--Miscellaneous Provisions
Sec. 249.20 Claims and penalties.
(a) Claims against State agencies. (1) If FNS determines through a
review of the State agency's reports, program or financial analysis,
monitoring, audit, or otherwise, that any SFMNP funds provided to a
State agency for food or administrative purposes were, through State
agency negligence or fraud, misused or otherwise diverted from SFMNP
purposes, a formal claim will be assessed by FNS against the State
agency. The State agency must pay promptly to FNS a sum equal to the
amount of the administrative funds or the value of coupons and/or
eligible foods so misused or diverted.
(2) If FNS determines that any part of the SFMNP funds received,
coupons printed, and/or eligible foods otherwise lost by a State agency
were lost as a result of theft, embezzlement, or unexplained causes,
the State agency must, on demand by FNS, pay to FNS a sum equal to the
amount of the money or the value of the SFMNP funds or coupons/eligible
foods so lost.
(3) The State agency will have full opportunity to submit evidence,
explanation or information concerning alleged instances of
noncompliance or diversion before a final determination is made in such
cases.
(4) FNS is authorized to establish claims against a State agency
for unreconciled SFMNP coupons, and/or for failure to comply with the
terms of duly executed CSA program contracts or agreements. When a
State agency can demonstrate that all reasonable management efforts
have been devoted to reconciliation and 99 percent or more of the SFMNP
coupons issued, or of the eligible foods contracted for delivery by the
CSA program, have been accounted for by the reconciliation process, FNS
may determine that the reconciliation process has been completed to
satisfaction.
(b) Interest charge on claims against State agencies. If an
agreement cannot be reached with the State agency for payment of its
debts or for offset of debts on its current Letter of Credit within 30
days from the date of the first demand letter from FNS, FNS will assess
an interest (late) charge against the State agency. Interest accrual
shall begin on the 31st day after the date of the first demand letter,
bill or claim, and shall be computed monthly on any unpaid balance as
long as the debt exists. From a source other than the SFMNP, the State
agency shall provide the funds necessary to maintain SFMNP operations
at the grant level authorized by FNS.
(c) Penalties. Penalties will be assessed on whoever embezzles,
willfully misapplies, steals or obtains by fraud funds, assets or
property (whether received directly or indirectly) provided under
Section 4402 of the Farm Security and Rural Investment Act of 2002
(Pub. L. 107-171). The same penalties apply to whoever receives,
conceals or retains such funds, assets or property for his or her own
interest, knowing that such funds, assets or property were obtained
illegally. For funds, assets or property valued at $100 or more, a fine
of not more than $25,000 or imprisonment of not more than five years
(or both) shall apply. For funds, assets or property valued at less
than $100, a fine not more than $1,000 or imprisonment for not more
than one year (or both) shall apply.
Sec. 249.21 Procurement and property management.
(a) Requirements. State agencies must comply with the requirements
of 7 CFR part 3016 for procurement of supplies, equipment and other
services with SFMNP funds. These requirements are adopted for use by
FNS to ensure that such materials and services are obtained for the
SFMNP in an effective manner
[[Page 30588]]
and in compliance with the provisions of applicable laws and executive
orders.
(b) Contractual responsibilities. The standards contained in 7 CFR
part 3016 do not relieve the State agency of the responsibilities
arising under its contracts. The State agency is the responsible
authority, without recourse to FNS, regarding the settlement and
satisfaction of all contractual and administrative issues arising out
of procurements entered into in connection with the SFMNP. This
includes, but is not limited to, disputes, claims, protests of award,
source evaluation, or other matters of a contractual nature. Matters
concerning violation of law are to be referred to such local, State or
Federal authority as may have proper jurisdiction.
(c) State regulations. The State agency may use its own procurement
regulations provided that:
(1) Such regulations reflect applicable State and local
regulations; and
(2) Any procurements made with SFMNP funds adhere to the standards
set forth in 7 CFR part 3016.
(d) Property acquired with program funds. State and local agencies
shall observe the standards prescribed in 7 CFR part 3016 in their
utilization and disposition of real property and equipment acquired in
whole or in part with SFMNP funds.
Sec. 249.22 Nonprocurement debarment/suspension, drug-free workplace,
and lobbying restrictions.
The State agency must ensure compliance with the requirements of
the Department's regulations governing nonprocurement debarment/
suspension (7 CFR part 3017) and drug-free workplace (7 CFR part 3021),
as well as the Department's regulations governing restrictions on
lobbying (7 CFR part 3018), where applicable.
Sec. 249.23 Records and reports.
(a) Recordkeeping requirements. Each State agency must maintain
full and complete records concerning SFMNP operations. Such records
must comply with 7 CFR part 3016 and the following requirements:
(1) Records must include, but not be limited to, information
pertaining to certification, financial operations, SFMNP coupon
issuance and redemption, CSA program agreements, invoices, delivery
receipts, equipment purchases and inventory, nutrition education, and
civil rights procedures.
(2) All records must be retained for a minimum of 3 years following
the date of submission of the final expenditure report for the period
to which the report pertains. If any litigation, claim, negotiation,
audit or other action involving the records has been started before the
end of the 3-year period, the records must be kept until all issues are
resolved, or until the end of the regular 3-year period, whichever is
later. If FNS deems any of the SFMNP records to be of historical
interest, it may require the State agency to forward such records to
FNS whenever the State agency is disposing of them.
(3) Records for nonexpendable property acquired in whole or in part
with SFMNP funds must be retained for three years after its final
disposition.
(4) All records must be available during normal business hours for
representatives of the Department of the Comptroller General of the
United States to inspect, audit, and copy. Any reports resulting from
such examinations shall not divulge names of individuals.
(b) Financial and recipient reports. State agencies must submit
financial and SFMNP performance data on a yearly basis as specified by
FNS. Such information must include, but shall not be limited to:
(1) Number and type of recipients served with Federal SFMNP funds;
(2) Value of coupons issued and/or eligible foods ordered under CSA
programs;
(3) Value of coupons redeemed and/or eligible foods provided to
recipients under CSA programs; and
(4) Number of authorized outlets by type; i.e., farmers, farmers'
markets, roadside stands, and CSA programs.
(c) Source documentation. To be acceptable for audit purposes, all
financial and SFMNP performance reports must be traceable to source
documentation.
(d) Certification of reports. Financial and SFMNP reports must be
certified as to their completeness and accuracy by the person given
that responsibility by the State agency.
(e) Use of reports. FNS will use State agency reports to measure
progress in achieving objectives set forth in the State Plan, and this
part, or other State agency performance plans. If it is determined,
through review of State agency reports, SFMNP or financial analysis, or
an audit, that a State agency is not meeting the objectives set forth
in its State Plan, FNS may request additional information including,
but not limited to, reasons for failure to achieve these objectives.
Sec. 249.24 Confidentiality.
The State agency must restrict the use or disclosure of information
obtained from SFMNP applicants and recipients to:
(a) Persons directly connected with the administration or
enforcement of the SFMNP, including persons investigating or
prosecuting violations in the SFMNP under Federal, State or local
authority;
(b) Representatives of public organizations designated by the chief
State agency officer (or, in the case of Indian Tribal governments
acting as SFMNP State agencies, the governing authority) that
administer food, nutrition, or other assistance programs that serve
persons categorically eligible for the SFMNP. The State agency must
execute a written agreement with each such designated organization:
(1) Specifying that the receiving organization may employ SFMNP
information only for the purpose of establishing the eligibility of
SFMNP applicants and recipients for food, nutrition, or other
assistance programs that it administers and conducts outreach to SFMNP
applicants and recipients for such programs; and
(2) Containing the receiving organization's assurance that it will
not, in turn, disclose the information to a third party.
(c) The Comptroller General of the United States for audit and
examination authorized by law.
Sec. 249.25 Other provisions.
(a) No aid reduction. Any programs for which a grant is received
under this part shall be supplementary to the food stamp program
carried out under the Food Stamp Act of 1977 as amended (7 U.S.C. 2011,
et seq.) and to any other Federal or State food or nutrition assistance
program.
(b) Statistical information. FNS reserves the right to use
information obtained under the SFMNP in a summary, statistical or other
form that does not identify particular individuals.
Sec. 249.26 SFMNP information.
(a) Any person who wishes information, assistance, records or other
public material must request such information from the State agency, or
from the FNS Regional Office serving the appropriate State as listed
below:
(1) Connecticut, Maine, Massachusetts, New Hampshire, New York,
Rhode Island, Vermont: U.S. Department of Agriculture, FNS, Northeast
Region, 10 Causeway Street, Room 501, Boston, Massachusetts 02222-1066.
(2) Delaware, District of Columbia, Maryland, New Jersey,
Pennsylvania, Puerto Rico, Virginia, Virgin Islands, West Virginia:
U.S. Department of Agriculture, FNS, Mid-Atlantic Region, Mercer
Corporate Park, 300 Corporate
[[Page 30589]]
Boulevard, Robbinsville, New Jersey, 08691-1598.
(3) Alabama, Florida, Georgia, Kentucky, Mississippi, North
Carolina, South Carolina, Tennessee: U.S. Department of Agriculture,
FNS, Southeast Region, 61 Forsyth Street, SW., Room 8T36, Atlanta,
Georgia 30303.
(4) Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin: U.S.
Department of Agriculture, FNS, Midwest Region, 77 West Jackson
Boulevard--20th floor, Chicago, Illinois 60604-3507.
(5) Arkansas, Louisiana, New Mexico, Oklahoma, Texas: U.S.
Department of Agriculture, FNS, Southwest Region, 1100 Commerce Street,
Room 555, Dallas, Texas 75242.
(6) Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North
Dakota, South Dakota, Utah, Wyoming: U.S. Department of Agriculture,
FNS, Mountain Plains Region, 1244 Speer Boulevard, Suite 903, Denver,
Colorado 80204.
(7) Alaska, American Samoa, Arizona, California, Guam, Hawaii,
Idaho, Nevada, Oregon, Trust Territory of the Pacific Islands, the
Northern Mariana Islands, Washington: U.S. Department of Agriculture,
FNS, Western Region, 550 Kearny Street, Room 400, San Francisco,
California 94108.
(b) Inquiries pertaining to the SFMNP administered by a federally
recognized Indian tribal organization (ITO) should be addressed to the
FNS Regional Office responsible for the geographic State in which that
ITO is located.
Sec. 249.27 OMB control number.
The information collection requirements for part 249 are under
review by the Office of Management and Budget. The OMB approval number
will be included in this section upon publication of the final rule.
Dated: May 17, 2005.
Eric M. Bost,
Under Secretary, Food, Nutrition, and Consumer Services.
[FR Doc. 05-10388 Filed 5-25-05; 8:45 am]
BILLING CODE 3410-30-P