[Federal Register Volume 63, Number 127 (Thursday, July 2, 1998)]
[Notices]
[Pages 36205-36206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17674]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service


Child and Adult Care Food Program: National Average Payment 
Rates, Day Care Home Food Service Payment Rates, and Administrative 
Reimbursement Rates for Sponsors of Day Care Homes for the Period July 
1, 1998-June 30, 1999

AGENCY: Food and Nutrition Service, USDA.

ACTION: Notice.

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SUMMARY: This notice announces the annual adjustments to the national 
average payment rates for meals served in child care, outside-school-
hours care and adult day care centers; the food service payment rates 
for meals served in day care homes; and the administrative 
reimbursement rates for sponsors of day care homes to reflect changes 
in the Consumer Price Index. Further adjustments are made to these 
rates to reflect the higher costs of providing meals in the States of 
Alaska and Hawaii. The adjustments contained in this notice are 
required by the statutes and regulations governing the Child and Adult 
Care Food Program (CACFP).

EFFECTIVE DATE: July 1, 1998.

FOR FURTHER INFORMATION CONTACT: Robert M. Eadie, Branch Chief, Policy 
and Program Development Branch, Child Nutrition Division, Food and 
Nutrition Service, USDA, Alexandria, Virginia, 22302, (703) 305-2620.

SUPPLEMENTARY INFORMATION: This program is listed in the Catalog of 
Federal Domestic Assistance under No. 10.558 and is subject to the 
provisions of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials. (See 7 CFR Part 3015, 
Subpart V, and final rule related notice published at 48 FR 29114, June 
24, 1983.)
    This notice imposes no new reporting or recordkeeping provisions 
that are subject to Office of Management and Budget review in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3518).
    This action is not a rule as defined by the Regulatory Flexibility 
Act (5 U.S.C. 601-612) and thus is exempt from the provisions of that 
Act. This notice has been determined to be exempt under Executive Order 
12866.

Definitions

    The terms used in this notice shall have the meanings ascribed to 
them in the regulations governing the CACFP (7 CFR Part 226).

Background

    Pursuant to sections 4, 11 and 17 of the National School Lunch Act 
(NSLA) (42 U.S.C. 1753, 1759a and 1766), section 4 of the Child 
Nutrition Act of 1966 (CNA) (42 U.S.C. 1773) and sections 226.4, 226.12 
and 226.13 of the regulations governing the CACFP (7 CFR Part 226), 
notice is hereby given of the new payment rates for participating 
institutions. These rates shall be in effect during the period July 1, 
1998 through June 30, 1999.
    As provided for under the NSLA and the CNA of 1966, all rates in 
the CACFP must be revised annually on July 1 to reflect changes in the 
Consumer Price Index (CPI) for the most recent 12-month period. In 
accordance with this mandate, the Department last published the 
adjusted national average payment rates for centers, the food service 
payment rates for day care homes and the administrative reimbursement 
rates for sponsors of day care homes on July 14, 1997 at 62 FR 37702 
(for the period July 1, 1997-June 30, 1998).
    Section 704(b) of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996, Pub. L. 104-193, amended section 11a(3)(B) 
of the NSLA (42 U.S.C. 1759a(a)(3)(B)) and changed the method for 
computing the annual adjustments to the national average payment rates 
for meals and supplements served to non-needy children in day care 
centers. Beginning July 1, 1997, the annual adjustments to the payment 
rates for paid meals and paid supplements were rounded down to the 
nearest whole cent. The annual adjustments to the payments for free and 
reduced price meals and to the payments for free and reduced price 
supplements were unchanged by Pub. L. 104-193 and continue to be 
rounded up or down to the nearest one fourth cent.
    Section 708(e)(1) of Pub. L. 104-193 also amended section 
17(f)(3)(A) of the NSLA to establish two ``tiers'' of day care homes 
and reimbursement rates. Tier I homes are homes located in low-income 
areas or homes in which the provider's household income is at or below 
185 percent of the Federal income poverty guidelines. Tier II homes are 
those homes which do not meet the location or provider income criteria 
for a tier I home. However, tier II homes may receive the tier I rates 
for meals served to identified income-eligible children (i.e. children 
from households with incomes at or below 185 percent of the Federal 
income poverty guidelines).
    Pub. L. 104-193 further specified in section 17(f)(3)(A)(ii) (III) 
and (IV) the reimbursement factors for meals served in tier I day care 
homes as the factors in effect on July 1, 1996, with adjustments made 
to the factors on July 1, 1997, and each July 1 thereafter. Pub. L. 
104-193 further provided in section 17(f)(3)(A) (ii)(IV) and 
(iii)(I)(bb) (42 U.S.C. 1766(f)(3)(A) (ii)(IV) and (iii)(I)(bb)) of the 
NSLA that the factors paid to tier I and tier II homes be rounded down 
to the nearest whole cent, instead of rounding the factors up or down 
to the nearest quarter-cent increment as previously required. 
Subsequent adjustments must be based on the unrounded rate from the 
preceding school year. In addition, annual adjustments, which were 
previously based on changes in the CPI for food away from home, must 
now be made based on the CPI for food at home.
    Please note that reimbursement rates for tier II family day care 
homes are set forth in section 17(f)(3)(A)(iii)(I)(aa) of the NSLA (42 
U.S.C. 1766(f)(3)(A)(iii)(I)(aa)), as amended by section 708(e)(1) of 
Pub.L. 104-193. After these reimbursement rates were adjusted and 
rounded down to the nearest whole cent as required under the law, an 
additional six cents was added to the breakfast rate as required by 
section 4(b)(3) of the CNA of 1966, as amended (42 U.S.C. 1773(b)(3)). 
The CNA requires that all reimbursement rates for breakfasts served 
under the School Breakfast Program and the CACFP be adjusted upward by 
six cents. As background, this addition was first made in 1986, under 
Pub. L. 99-500, the School Lunch and Child Nutrition Amendments of 
1986, which added three cents to adjusted breakfast rates to assist 
States in improving the nutritional quality of the breakfasts. This 
adjustment was raised from three cents to six cents in 1989 under Pub. 
L. 101-147, the Child Nutrition and WIC Reauthorization Act of 1989, 
for the same reason.
    The payment rates for the period July 1, 1998-June 30, 1999 are:

[[Page 36206]]



                   All States Except Alaska and Hawaii                  
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Meals Served in Centers--Per Meal Rates in Dollars or                   
 Fractions thereof:                                                     
  Breakfasts:                                                           
    Paid.....................................................    $0.20  
    Free.....................................................     1.0725
    Reduced..................................................     0.7725
  Lunches and Suppers:\1\....................................           
    Paid.....................................................    $0.18  
    Free.....................................................     1.9425
    Reduced..................................................     1.5425
            Supplements:                                                
    Paid.....................................................    $0.04  
    Free.....................................................      .5325
    Reduced..................................................      .2675
------------------------------------------------------------------------
\1\ These rates do not include the value of commodities (or cash-in-lieu
  of commodities) which institutions receive as additional assistance   
  for each lunch or supper served to participants under the program. A  
  notice announcing the value of commodities and cash-in-lieu of        
  commodities is published separately in the Federal Register.          


------------------------------------------------------------------------
                                                       Tier I    Tier II
------------------------------------------------------------------------
Meals Served in Day Care Homes--Per Meal Rates in                       
 Dollars or Fractions thereof:                                          
  Breakfasts........................................     $0.90     $0.34
  Lunches and Suppers...............................      1.65      1.00
  Supplements.......................................      0.49      0.13
Administrative Reimbursement Rates for Sponsoring                       
 Organizations of Day Care Homes-Per Home/Per Month                     
 Rates in Dollars:                                                      
  Initial 50 day care homes.........................  ........       $76
    Next 150 day care homes.........................  ........       $58
    Next 800 day care homes.........................  ........       $45
    Additional day care homes.......................  ........       $40
------------------------------------------------------------------------

    Pursuant to section 12(f) of the NSLA (42 U.S.C 1760(f)), the 
Department adjusts the payment rates for participating institutions in 
the States of Alaska and Hawaii. The new payment rates for Alaska are 
as follows:

                                 Alaska                                 
------------------------------------------------------------------------
                                                                        
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Meals Served in Centers--Per Meals Rates in Dollars or                  
 Fractions thereof:                                                     
  Breakfasts:                                                           
    Paid.....................................................    $0.29  
    Free.....................................................     1.70  
    Reduced..................................................     1.40  
  Lunches and Suppers:\1\                                               
    Paid.....................................................    $0.30  
    Free.....................................................     3.1450
    Reduced..................................................     2.7450
  Supplements:                                                          
    Paid.....................................................    $0.07  
    Free.....................................................     0.8625
    Reduced..................................................     0.4325 
------------------------------------------------------------------------
\1\ These rates do not include the value of commodities (or cash-in-lieu
  of commodities) which institutions receive as additional assistance   
  for each lunch or supper served to participants under the program. A  
  notice announcing the value of commodities and cash-in-lieu of        
  commodities is published separately in the Federal Register.          


------------------------------------------------------------------------
                                                       Tier I    Tier II
------------------------------------------------------------------------
Meals Served in Day Care Homes--Per Meal Rates in                       
 Dollars or Fractions thereof:                                          
  Breakfasts........................................     $1.42     $0.52
  Lunches and Suppers...............................      2.68      1.62
  Supplements.......................................      0.80      0.22
Administrative Reimbursement Rates for Sponsoring                       
 Organizations of Day Care Homes--                                      
  Per Home/Per Month Rates in Dollars:                                  
    Initial 50 day care homes.......................       123  ........
    Next 150 day care homes.........................  ........        94
    Next 800 day care homes.........................  ........        73
    Additional day care homes.......................  ........        65
------------------------------------------------------------------------

    The new payment rates for Hawaii are as follows:

                                 Hawaii                                 
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Meals Served in Centers--Per Meal Rates in Dollars or                   
 Fractions thereof:                                                     
  Breakfasts:                                                           
    Paid.....................................................    $0.23  
    Free.....................................................     1.2450
    Reduced..................................................     0.9450
  Lunches and Suppers: \1\                                              
    Paid.....................................................    $0.21  
    Free.....................................................     2.27  
    Reduced..................................................     1.87  
  Supplements:                                                          
    Paid.....................................................    $0.05  
    Free.....................................................     0.6225
    Reduced..................................................     0.3125 
------------------------------------------------------------------------
\1\ These rates do not include the value of commodities (or cash-in-lieu
  of commodities) which institutions receive as additional assistance   
  for each lunch or supper served to participants under the program. A  
  notice announcing the value of commodities and cash-in-lieu of        
  commodities is published separately in the Federal Register.          


------------------------------------------------------------------------
                                                       Tier I    Tier II
------------------------------------------------------------------------
Meals Served in Day Care Homes--Per Meal Rates in                       
 Dollars or Fractions thereof:                                          
  Breakfasts........................................     $1.04     $0.39
  Lunches and Suppers...............................      1.93      1.17
  Supplements.......................................      0.57      0.16
Administrative Reimbursement Rates for Sponsoring                       
 Organizations of Day Care Homes--Per Home/Per Month                    
 Rates in Dollars:                                                      
  Initial 50 day care homes.........................       $89          
  Next 150 day care homes...........................        68          
  Next 800 day care homes...........................        53          
  Additional day care homes.........................        47          
------------------------------------------------------------------------

    The changes in the national average payment rates for centers 
reflect a 2.75 percent increase during the 12-month period May 1997 to 
May 1998 (from 156.3 in May 1997 to 160.6 in May 1998) in the food away 
from home series of the CPI for All Urban Consumers, published by the 
Bureau of Labor Statistics of the Department of Labor.
    The changes in the food service payment rates for day care homes 
reflect 2.03 percent increase during the 12-month period May 1997 to 
May 1998 (from 157.5 in May 1997 to 160.7 in May 1998) in the food at 
home series of the CPI for All Urban Consumers.
    The changes in the administrative reimbursement rates for 
sponsoring organizations of day care homes reflect a 1.68 percent 
increase during the 12-month period May 1997 to May 1998 (from 160.1 in 
May 1997 to 162.8 in May 1998) in the series for all items of the CPI 
for All Urban Consumers, published by the Bureau of Labor Statistics of 
the Department of Labor.
    The total amount of payments available to each State agency for 
distribution to institutions participating in the program is based on 
the rates contained in this notice.

    Authority: Sections 4(b)(2), 11a, 17(c) and 17(f)(3)(B) of the 
National School Lunch Act, as amended (42 U.S.C. 1753(b)(2), 1759a, 
1766(f)(3)(B)) and section 4(b)(1)(B) of the Child Nutrition Act of 
1966, as amended (42 U.S.C. 1773(b)(1)(B)).

    Dated June 26, 1998.
George A. Braley,
Acting Administrator.
[FR Doc. 98-17674 Filed 7-1-98; 8:45 am]
BILLING CODE 3410-30-U