[Federal Register Volume 76, Number 78 (Friday, April 22, 2011)]
[Rules and Regulations]
[Pages 22603-22608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9843]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 76, No. 78 / Friday, April 22, 2011 / Rules 
and Regulations

[[Page 22603]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 210, 215, 220, 225, and 226

RIN 0584-AE03


Geographic Preference Option for the Procurement of Unprocessed 
Agricultural Products in Child Nutrition Programs

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

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

SUMMARY: The 2008 Farm Bill amended the Richard B. Russell National 
School Lunch Act to direct that the Secretary of Agriculture encourage 
institutions operating Child Nutrition Programs to purchase unprocessed 
locally grown and locally raised agricultural products. Effective 
October 1, 2008, institutions receiving funds through the Child 
Nutrition Programs may apply an optional geographic preference in the 
procurement of unprocessed locally grown or locally raised agricultural 
products. This provision applies to institutions in all of the Child 
Nutrition Programs, including the National School Lunch Program, School 
Breakfast Program, Fresh Fruit and Vegetable Program, Special Milk 
Program for Children, Child and Adult Care Food Program and Summer Food 
Service Program, as well as to purchases made for these programs by the 
Department of Defense Fresh Program. The provision also applies to 
State agencies making purchases on behalf of any of the aforementioned 
Child Nutrition Programs. The purpose of this rule is to finalize the 
geographic preference option in Child Nutrition Programs.

DATES: This rule is effective May 23, 2011.

FOR FURTHER INFORMATION CONTACT: Julie Brewer, Chief, Policy and 
Program Development Branch, Child Nutrition Division, Food and 
Nutrition Service, 3101 Park Center Drive, Alexandria, Virginia 22302, 
or by telephone at (703) 305-2590.

SUPPLEMENTARY INFORMATION:

Background

    Section 4302 of Public Law 110-246, the Food, Conservation, and 
Energy Act of 2008, amended section 9(j) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1758(j)) to require the Secretary 
of Agriculture to encourage institutions operating Child Nutrition 
Programs to purchase unprocessed locally grown and locally raised 
agricultural products. Pursuant to section 4407 of Public Law 110-246, 
beginning October 1, 2008, institutions receiving funds as participants 
in the Child Nutrition Programs may apply an optional geographic 
preference in the procurement of unprocessed locally grown or locally 
raised agricultural products. This provision applies to institutions 
operating all of the Child Nutrition Programs, including the National 
School Lunch Program, School Breakfast Program, Fresh Fruit and 
Vegetable Program, Special Milk Program, Child and Adult Care Food 
Program and Summer Food Service Program, as well as to purchases made 
for these programs by the Department of Defense Fresh Program. The 
provision does not apply to purchases made by the Department. However, 
the provision does also apply to State agencies making purchases on 
behalf of any of the aforementioned Child Nutrition Programs. The 
provisions were initially implemented through policy memoranda and 
explanatory question and answer communications dated January 9, 2009, 
July 22, 2009, and October 9, 2009.
    The Department published a proposed rule on April 19, 2010, at 75 
FR 20316 to solicit comments on the incorporation of this procurement 
option in Child Nutrition Program regulations. The rule also served to 
define the term ``unprocessed locally grown or locally raised 
agricultural products'' to ensure that both the intent of Congress in 
providing for such a procurement option was met and that any such 
definition would facilitate ease of implementation for institutions 
participating in the Child Nutrition Programs. The comment period ended 
on June 18, 2010. The Department received 77 comments on the proposed 
rule. The following discussion provides information on the comments as 
well as a discussion of the clarifications and changes made to the 
proposal based on the comments received.

General Comments

    In general, the comments received by the Department were very 
supportive of the regulation as proposed. Fifty-eight comments 
commended the Department for clarifying previous interpretations of the 
geographic preference option for procurement. Forty-four commentors 
stated that they believed the updated language of the rule more closely 
complied with the Congressional Conference Report language that 
indicated that there is no intent to preclude ``de minimus handling and 
preparation such as necessary to present an agricultural product to a 
school food authority in a useable form.'' Forty-seven comments 
supported the provision of the rule allowing the purchasing entity, 
such as local school food authorities, to determine the local area to 
which a geographic preference will be applied, indicating that they 
agreed with the Department's view that individual circumstances and 
product availability leads to the most successful local and regional 
procurement programs.

Procurement Issues

    As indicated in the proposed rule, traditionally, a geographic 
preference established for procurements provides bidders located in a 
specified geographic area additional points or credit calculated during 
the evaluation of the proposals or bids received in response to a 
solicitation. A geographic preference is not a procurement set-aside 
for bidders located in the specified geographic area, guaranteeing them 
a certain level or percentage of business. In addition, including a 
geographic preference in a procurement does not preclude a bidder from 
outside the specified geographic area from competing for, and possibly 
being awarded, the contract subject to the geographic preference. 
Rather, a geographic preference is a tool that gives bidders in a 
specified geographic area a specific, defined advantage in the 
procurement process. We received a number of comments specifically

[[Page 22604]]

requesting guidance on how to apply the geographic preference option in 
procurement specifications and procedures as well as questions on 
procurement processes in general. The Department published a policy 
memorandum for program cooperators on general procurement and 
geographic preference issues on February 1, 2011 and will be publishing 
additional guidance on procurement provisions associated with 
implementation of the geographic preference option included in this 
final rule as needed. Therefore, no changes have been made to the 
procurement-specific provisions included in the proposed rule and those 
procurement provisions are finalized as proposed.

Geographic Area

    By utilizing the statutorily established geographic preference 
option in Child Nutrition Programs, purchasing institutions, such as 
States, school food authorities, child care institutions and Summer 
Food Service Program (SFSP) sponsors, may specifically identify the 
geographic area within which unprocessed locally raised and locally 
grown agricultural products will originate. As indicated in the 
proposed rule, a responsive bidder would offer to provide unprocessed 
locally raised and locally grown agricultural products from the 
specifically identified geographic area. In most cases, we would expect 
that a bidder would be located in the identified geographic area, 
though it is possible for a responsive bidder to be located outside of 
that area. These procurements may be accomplished through informal or 
formal procurement procedures, as required by respective Child 
Nutrition Program regulations.
    The proposed rule provided for allowing institutions operating the 
Child Nutrition Programs to specifically define geographic areas from 
which they will seek to procure unprocessed local agricultural 
products. It was proposed that each institution, whether it be a school 
food authority, a child care institution or an SFSP sponsor, determine 
how to define the geographic area. As indicated previously, 47 comments 
supported allowing the purchasing entity to define the local area in 
which the geographic preference option will be applied. No objections 
to this provision were received, therefore it is finalized in this rule 
as proposed.
    One comment specifically recommended that the ``Buy American'' 
provisions of Sec.  210.21 and Sec.  220.16 of the National School 
Lunch Program and School Breakfast Program regulations be specifically 
noted in this amendment to those programs regulations. In response to 
that comment, the Department reiterates that all other regulatory 
requirements of the Child Nutrition Programs must be complied with when 
implementing the geographic preference option. When specifying the 
local area from which items will be purchased using the geographic 
procurement option, purchasing entities must ensure that the ``Buy 
American'' requirements of the regulations are complied with and 
included in the procurement specifications. No change, however, has 
been made in the regulatory language of this final rule.

Definition of Unprocessed Agricultural Products

    As provided in the Joint Explanatory Statement of the Committee of 
Conference in House Report 110-627, the term ``unprocessed'' precludes 
the use of geographic preference in procuring agricultural products 
that have significant value added components. The Conference report 
also noted the acceptability of de minimus handling and preparation 
``such as may be necessary to present an agricultural product to a 
school food authority in a useable form, such as washing vegetables, 
bagging greens, butchering livestock and poultry, pasteurizing milk, 
and putting eggs in a carton.''
    For the purpose of implementing the geographic preference 
procurement option in the Child Nutrition Programs, the Department 
proposed a definition of ``unprocessed agricultural products.'' The 
guiding principles in developing the definition were that the 
definition should:
    (1) Comply with the language and reflect the intent of the statute;
    (2) Ensure that any processing of agricultural products results in 
only minimal value added to such products; and
    (3) Facilitate ease of use of such products for institutions.
    The definition of ``unprocessed agricultural products'' included in 
the proposed rule specifically prohibited any processing method that 
alters the inherent character of the agricultural product. To that end, 
we included in the proposed definition a list of acceptable food 
handling and preservation techniques for purposes of applying the 
geographic preference procurement option. Such techniques included: 
General heat transfer methods such as cooling, refrigerating and 
freezing; size adjustment through size reduction (peeling, slicing, 
dicing, cutting and grinding); drying/dehydration; washing; vacuum 
packing and bagging; pasteurization for milk; the application of high 
water pressure (``cold pasteurization''); butchering of livestock and 
poultry and the cleaning of fish. The Department asserted that these 
handling and preservation techniques both complied with the intent of 
the statute and did not alter the inherent character of agricultural 
products subjected to them.
    While two commentors supported the definition as proposed, a number 
of comments regarding the food handling and preservation techniques 
included in the definition were received. The following discussion 
outlines those comments by issue and the decisions made by the 
Department in response to the comments in this final rule.

Combination Packages of Vegetables and Fruits

    Fifty comments were received expressing support for the addition of 
combination packages of local, frozen, bagged vegetables such as 
zucchini and summer squash or fresh vegetable roast packages such as 
winter squash, turnips and beets. The commentors indicated that the 
``inherent character'' of the vegetables is not being altered in any 
way when packaged in such a manner and fits within the ``de minimus'' 
handling and preparation requirements intended by Congress. In 
addition, such packaging conforms with the language of the statute with 
regard to presenting the product in usable form. The Department agrees 
with the comments and, therefore, has revised the definition of 
``unprocessed agricultural products'' to include such combination 
packaged items in this final rule.

Frozen Products

    One commentor indicated that frozen products should be included in 
the definition. The proposed rule included frozen products and the 
final rule retains frozen products as acceptable as a preservation 
technique. Two comments were received requesting that, in order to 
ensure that flash frozen products are included in the definition, the 
Department specify Individually Quick Frozen (IQF) as an acceptable 
preservation technique. The final rule retains inclusion of frozen 
products as acceptable but the Department does not wish to include 
specific techniques for freezing since technology changes over time and 
such specific references to technique may necessitate future amendments 
to the regulation in response to changes in technology.

Canned and Other Heat Preserved Products

    Three comments were received requesting that canned products be 
included in the definition of

[[Page 22605]]

``unprocessed agricultural products.'' One commentor wanted to allow 
pasteurized cider and pickled products to be considered ``unprocessed'' 
for purposes of specifying a geographic preference for procurement. 
While canned, pickled and pasteurized products are acceptable for 
service in the Child Nutrition Programs, such products would not be 
considered to be subject to a geographic procurement preference because 
heat processing does not meet the ``de minimus'' standard of processing 
established by Congress as assessed by the Department. Therefore, no 
change in this regulation has been made in response to these comments.

Formed Products

    Fifty comments were received supporting allowing foods such as 
ground beef and other meat patties to be included in the definition of 
``unprocessed agricultural products''. Those comments assert that such 
products have been handled in a manner consistent with ``de minimus'' 
exceptions in that they are ground then formed similar to cutting 
carrots into sticks or coin shapes. The commentors indicated that 
contracting separately for further processing of ground meat products 
which does not change the inherent character of that product would be 
costly and time consuming for the purchasing entities. Five other 
commentors recommended allowing meat patties made with pure meat and 
containing no fillers or additives as meeting the criteria for 
geographic preference procurement. The Department agrees with these 
commentors and has revised the definition to include formed products 
that contain no additives or fillers as acceptable for purchase using 
the geographic preference procurement option.

Other Products

    Forty-one comments were received recommending that cutting chicken 
or other meat into fajita strips and filleting fish be allowed as 
acceptable as meeting the definition of ``unprocessed agricultural 
products''. The Department wishes to point out that fish filets would 
be considered to be ``cleaned'' and cut, and slicing products into 
strips would be considered to be ``cut'', both of which are included in 
the definition as proposed. One commentor requested that ground flour 
be allowed to be considered as acceptable. The Department wishes to 
clarify that ground products are allowed and that the grinding of grain 
into flour would be considered to be acceptable as a ground product 
subject to the geographic preference procurement option. Therefore, 
there is no change to the definition in response to these comments.

Preservatives

    Forty-six comments were received requesting clarification as to 
whether or not preservatives were allowed in products subject to the 
geographic preference procurement option. Specifically, they requested 
clarification as to whether or not ascorbic acid to hold color or 
prevent oxidation once a fruit or vegetable product was cut or chopped 
was acceptable. The Department agrees that this should be addressed and 
has provided for the addition of ascorbic acid and/or other 
preservatives that retain the color of a product or prevent oxidation 
to the definition of ``unprocessed agricultural products''. However, no 
other preservatives used for any other purpose are considered to be 
acceptable.

Packaging

    One commentor requested that portion packaging be explicitly 
recognized as meeting the requirements of the rule. The Department 
wishes to point out that packaging is recognized as allowable with 
regard to the definition of ``unprocessed agricultural products''. The 
size of such packaging included in the procurement specifications is 
made at the discretion of the purchasing entity. Therefore, no change 
in response to this comment has been made in this final rule.

High Water Pressure Cold Pasteurization

    One commentor expressed concern that the term ``high water pressure 
cold pasteurization'' included in the definition of ``unprocessed 
agricultural product'' could be interpreted to mean irradiation. The 
Department's intent was to use this term in the definition to reference 
a washing technique. Since ``washing'' is already included in the 
definition of ``unprocessed locally grown or locally raised 
agricultural products'' and in response to this comment, the term 
``high water pressure (cold pasteurization)'' is removed from the 
definition.
    This final rule prohibits the application of the geographic 
preference procurement option for products subjected to processing 
methods not included in the definition of ``unprocessed agricultural 
products''.
    This final rule adds new paragraphs to Sec. Sec.  210.21, 215.14a, 
220.16, 225.17 and 226.22 of Title 7, CFR, to include the geographic 
preference procurement option and define the term ``unprocessed locally 
grown or locally raised agricultural products''.

Applicability to the Fresh Fruit and Vegetable Program

    The geographic preference procurement option is applicable to 
purchases made in the Fresh Fruit and Vegetable Program, 42 U.S.C. 
1769a (FFVP). However, this provision shall only be applied within the 
context of the FFVP's requirement that produce utilized in the program 
be fresh. The definition of ``unprocessed locally grown or locally 
raised agricultural products'' does not change the basic statutory 
requirement that only fresh produce may be purchased using funds for 
the Fresh Fruit and Vegetable Program. Development of regulations 
pertaining to the requirements for the Fresh Fruit and Vegetable 
Program are currently in process and the provisions relating to the 
geographic preference procurement option will be included in that 
proposed rule, as appropriate.

Executive Order 12866

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

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). It has been 
certified that this rule will not have a significant economic impact on 
a substantial number of small entities.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and Tribal 
governments and the private sector. Under Section 202 of the UMRA, the 
Department generally must prepare a written statement, including a 
cost/benefit analysis, for proposed and final rules with Federal 
mandates that may result in expenditures to State, local, or Tribal 
governments, in the aggregate, or to the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires the Department to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, more cost-effective or least burdensome 
alternative that achieves the objectives of the rule. This rule does 
not contain Federal mandates (under the regulatory provisions of Title 
II of the UMRA) that

[[Page 22606]]

impose costs on State, local, or Tribal governments or to the private 
sector of $100 million or more in any one year. This rule is, 
therefore, not subject to the requirements of sections 202 and 205 of 
the UMRA.

Executive Order 12372

    The National School Lunch Program and the School Breakfast Program 
are listed in the Catalog of Federal Domestic Assistance under No. 
10.555 and 10.553, respectively. The Special Milk Program is listed 
under No. 10.556. The Child and Adult Care Food Program is listed under 
No. 10.558 and the Summer Food Service Program for Children is listed 
under No. 10.559. For the reasons set forth in the final rule in 7 CFR 
Part 3015, Subpart V and related Notice (48 FR 29115, June 24, 1983), 
these programs are included in the scope of Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials.

Executive Order 13132

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

Executive Order 12988

    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 which 
conflict with its provisions or which would otherwise impede its full 
implementation. This rule is not intended to have retroactive effect 
unless specified in the DATES section of the final rule. Prior to any 
judicial challenge to the provisions of this rule or the application of 
its provisions, all applicable administrative procedures must be 
exhausted.

Civil Rights Impact Analysis

    FNS has reviewed this rule in accordance with Departmental 
Regulations 4300-4, ``Civil Rights Impact Analysis,'' and 1512-1, 
``Regulatory Decision Making Requirements.'' After a careful review of 
the rule's intent and provisions, FNS has determined that this rule is 
not intended to limit or reduce in any way the ability of protected 
classes of individuals to receive benefits on the basis of their race, 
color, national origin, sex, age or disability nor is it intended to 
have a differential impact on minority owned or operated business 
establishments, and woman- owned or operated business establishments 
that participate in the Child Nutrition Programs. This rule simply 
allows institutions that participate in the Child Nutrition Programs 
the option to apply a geographic preference should such institutions 
wish to procure unprocessed locally grown or locally raised 
agricultural products.

Paperwork Reduction Act

    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 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 rule does not contain information collection 
requirements subject to approval by OMB under the Paperwork Reduction 
Act of 1995.

E-Government Act Compliance

    The Food and Nutrition Service is committed to complying with the 
E-Government Act of 2002, to promote the use of the Internet and other 
information technologies to provide increased opportunities for citizen 
access to Government information and services, and for other purposes.

Executive Order 13175

    E.O. 13175 requires Federal agencies to consult and coordinate with 
Tribes on a government-to-government basis on policies that have Tribal 
implications, including regulations, legislative comments or proposed 
legislation, and other policy statements or actions that have 
substantial direct effects on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. In late 2010 and early 2011, USDA engaged 
in a series of consultative sessions to obtain input by Tribal 
officials or their designees concerning the impact of this rule on the 
Tribe or Indian Tribal governments, or whether this rule may preempt 
Tribal law. Reports from these consultations will be made part of the 
USDA annual reporting on Tribal Consultation and Collaboration. USDA 
will respond in a timely and meaningful manner to all Tribal government 
requests for consultation concerning this rule and will provide 
additional venues, such as webinars and teleconferences, to 
periodically host collaborative conversations with Tribal officials or 
their designees concerning ways to improve this rule in Indian country.
    We are unaware of any current Tribal laws that could be in conflict 
with this final rule.

List of Subjects

7 CFR Part 210

    Grant programs--education, Grant programs--health, Infants and 
children, Nutrition, Penalties, Reporting and recordkeeping 
requirements, School breakfast and lunch programs, Surplus agricultural 
commodities.

7 CFR Part 215

    Food assistance programs, Grant programs--education, Grant 
programs--health, Infants and children, Milk, Reporting and 
recordkeeping requirements.

7 CFR Part 220

    Grant programs--education, Grant programs--health, Infants and 
children, Nutrition, Reporting and recordkeeping requirements, School 
breakfast and lunch programs.

7 CFR Part 225

    Food assistance programs, Grant programs--health, Infants and 
children, Labeling, Reporting and recordkeeping requirements.

7 CFR Part 226

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

    Accordingly, 7 CFR Parts 210, 215, 220, 225, and 226 are amended as 
follows:

PART 210--NATIONAL SCHOOL LUNCH PROGRAM

0
1. The authority citation for 7 CFR Part 210 continues to read as 
follows:


[[Page 22607]]


    Authority:  42 U.S.C. 1751-1760, 1779.

Subpart E--State Agency and School Food Authority Responsibilities

0
2. In Sec.  210.21, paragraph (g) is added to read as follows:


Sec.  210.21  Procurement.

* * * * *
    (g) Geographic preference. (1) A school food authority 
participating in the Program, as well as State agencies making 
purchases on behalf of such school food authorities, may apply a 
geographic preference when procuring unprocessed locally grown or 
locally raised agricultural products. When utilizing the geographic 
preference to procure such products, the school food authority making 
the purchase or the State agency making purchases on behalf of such 
school food authorities have the discretion to determine the local area 
to which the geographic preference option will be applied;
    (2) For the purpose of applying the optional geographic procurement 
preference in paragraph (g)(1) of this section, ``unprocessed locally 
grown or locally raised agricultural products'' means only those 
agricultural products that retain their inherent character. The effects 
of the following food handling and preservation techniques shall not be 
considered as changing an agricultural product into a product of a 
different kind or character: Cooling; refrigerating; freezing; size 
adjustment made by peeling, slicing, dicing, cutting, chopping, 
shucking, and grinding; forming ground products into patties without 
any additives or fillers; drying/dehydration; washing; packaging (such 
as placing eggs in cartons), vacuum packing and bagging (such as 
placing vegetables in bags or combining two or more types of vegetables 
or fruits in a single package); the addition of ascorbic acid or other 
preservatives to prevent oxidation of produce; butchering livestock and 
poultry; cleaning fish; and the pasteurization of milk.

PART 215--SPECIAL MILK PROGRAM FOR CHILDREN

0
3. The authority citation for 7 CFR Part 215 continues to read as 
follows:

    Authority:  42 U.S.C. 1772 and 1779.


0
4. In Sec.  215.14a, paragraph (e) is added to read as follows:


Sec.  215.14a  Procurement standards.

* * * * *
    (e) Geographic preference. A school food authority participating in 
the Program may apply a geographic preference when procuring milk. When 
utilizing the geographic preference to procure milk, the school food 
authority making the purchase has the discretion to determine the local 
area to which the geographic preference option will be applied.
* * * * *

PART 220--SCHOOL BREAKFAST PROGRAM

0
5. The authority citation for 7 CFR Part 220 continues to read as 
follows:

    Authority:  42 U.S.C. 1773, 1779, unless otherwise noted.


0
6. In Sec.  220.16, paragraph (f) is added to read as follows:


Sec.  220.16  Procurement.

* * * * *
    (f) Geographic preference. (1) School food authorities 
participating in the Program, as well as State agencies making 
purchases on behalf of such school food authorities, may apply a 
geographic preference when procuring unprocessed locally grown or 
locally raised agricultural products. When utilizing the geographic 
preference to procure such products, the school food authority making 
the purchase or the State agency making purchases on behalf of such 
school food authorities have the discretion to determine the local area 
to which the geographic preference option will be applied;
    (2) For the purpose of applying the optional geographic preference 
in paragraph (f)(1) of this section, ``unprocessed locally grown or 
locally raised agricultural products'' means only those agricultural 
products that retain their inherent character. The effects of the 
following food handling and preservation techniques shall not be 
considered as changing an agricultural product into a product of a 
different kind or character: Cooling; refrigerating; freezing; size 
adjustment made by peeling, slicing, dicing, cutting, chopping, 
shucking, and grinding; forming ground products into patties without 
any additives or fillers; drying/dehydration; washing; packaging (such 
as placing eggs in cartons), vacuum packing and bagging (such as 
placing vegetables in bags or combining two or more types of vegetables 
or fruits in a single package); addition of ascorbic acid or other 
preservatives to prevent oxidation of produce; butchering livestock and 
poultry; cleaning fish; and the pasteurization of milk.
* * * * *

PART 225--SUMMER FOOD SERVICE PROGRAM

0
7. The authority citation for 7 CFR Part 225 continues to read as 
follows:

    Authority:  Secs. 9, 13 and 14, Richard B. Russell National 
School Lunch Act, as amended, (42 U.S.C. 1758, 1761 and 1762a).


0
8. In Sec.  225.17, paragraph (e) is added to read as follows:


Sec.  225.17  Procurement standards.

* * * * *
    (e) Geographic preference. (1) Sponsors participating in the 
Program may apply a geographic preference when procuring unprocessed 
locally grown or locally raised agricultural products. When utilizing 
the geographic preference to procure such products, the sponsor making 
the purchase has the discretion to determine the local area to which 
the geographic preference option will be applied;
    (2) For the purpose of applying the optional geographic preference 
in paragraph (e)(1) of this section, ``unprocessed locally grown or 
locally raised agricultural products'' means only those agricultural 
products that retain their inherent character. The effects of the 
following food handling and preservation techniques shall not be 
considered as changing an agricultural product into a product of a 
different kind or character: Cooling; refrigerating; freezing; size 
adjustment made by peeling, slicing, dicing, cutting, chopping, 
shucking, and grinding; forming ground products into patties without 
any additives or fillers; drying/dehydration; washing; packaging (such 
as placing eggs in cartons), vacuum packing and bagging (such as 
placing vegetables in bags or combining two or more types of vegetables 
or fruits in a single package); addition of ascorbic acid or other 
preservatives to prevent oxidation of produce; butchering livestock and 
poultry; cleaning fish; and the pasteurization of milk.

PART 226--CHILD AND ADULT CARE FOOD PROGRAM

0
9. The authority citation for 7 CFR Part 226 continues to read as 
follows:

    Authority:  Secs. 9, 11, 14, 16, 17, Richard B. Russell National 
School Lunch Act, as amended (42 U.S.C. 1758, 1759a, 1762a, 1765 and 
1766).


0
10. In Sec.  226.22, paragraph (n) is added to read as follows:


Sec.  226.22  Procurement standards.

* * * * *
    (n) Geographic preference. (1) Institutions participating in the 
Program

[[Page 22608]]

may apply a geographic preference when procuring unprocessed locally 
grown or locally raised agricultural products. When utilizing the 
geographic preference to procure such products, the institution making 
the purchase has the discretion to determine the local area to which 
the geographic preference option will be applied;
    (2) For the purpose of applying the optional geographic preference 
in paragraph (n)(1) of this section, ``unprocessed locally grown or 
locally raised agricultural products'' means only those agricultural 
products that retain their inherent character. The effects of the 
following food handling and preservation techniques shall not be 
considered as changing an agricultural product into a product of a 
different kind or character: Cooling; refrigerating; freezing; size 
adjustment made by peeling, slicing, dicing, cutting, chopping, 
shucking, and grinding; forming ground products into patties without 
any additives or fillers; drying/dehydration; washing; packaging (such 
as placing eggs in cartons), vacuum packing and bagging (such as 
placing vegetables in bags or combining two or more types of vegetables 
or fruits in a single package); addition of ascorbic acid or other 
preservatives to prevent oxidation of produce; butchering livestock and 
poultry; cleaning fish; and the pasteurization of milk.

    Dated: April 18, 2011.
Audrey Rowe,
Administrator, Food and Nutrition Service.
[FR Doc. 2011-9843 Filed 4-21-11; 8:45 am]
BILLING CODE 3410-30-P