63224 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Proposed Rules 

DEPARTMENT OF AGRICULTURE 

Food and Nutrition Service 

7 CFR Parts 250 and 251 

RIN 0584–AE29 

Requirements for the Distribution and 

Control of Donated Foods 

AGENCY: Food and Nutrition Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This rule proposes to revise 

and clarify requirements to ensure that 

USDA donated foods are distributed, 

stored, and managed in the safest, most 

efficient, and cost-effective manner, at 

State and recipient agency levels. The 

rule would also reduce administrative 

and reporting requirements for State 

distributing agencies, revise or clarify 

regulatory provisions relating to 

accountability for donated foods, and 

rewrite much of the regulations in a 

more user-friendly, ‘‘plain language,’’ 

format. Lastly, the rule proposes to 

revise and clarify specific requirements 

to conform more closely to related 

requirements elsewhere in the Code of 

Federal Regulations. In formulating the 

proposals, the Food and Nutrition 

Service (FNS) has utilized input 

received from program administrators, 

industry representatives, and other 

organizations at national conferences 

and other meetings, and through email 

or other routine communications with 

such parties. 

DATES: To be assured of consideration, 

comments must be received on or before 

January 20, 2015. 

ADDRESSES: The Food and Nutrition 

Service invites interested persons to 

submit comments on this proposed rule. 

You may submit comments, identified 

by RIN number 0584–AE29, by any of 

the following methods: 

Email: Send written comments to 

Dana.Rasmussen@fns.usda.gov. Include 

RIN number 0584–AE29 in the subject 

line of the message. 

Mail: Send written comments to Dana 

Rasmussen, Branch Chief, Policy 

Branch, Food Distribution Division, 

Food and Nutrition Service, U.S. 

Department of Agriculture, Room 500, 

3101 Park Center Drive, Alexandria, 

Virginia 22302–1594. 

Hand Delivery or Courier: Deliver 

written comments to the above address. 

Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instructions for submitting 

comments. 

Further information on the 

submission of comments or the review 

of comments submitted may be found 

under Part III, Procedural Matters, under 

SUPPLEMENTARY INFORMATION. 

FOR FURTHER INFORMATION CONTACT: 

Dana Rasmussen at the above address or 

telephone (703) 305–2662, or by email 

at Dana.Rasmussen@fns.usda.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Department of Agriculture’s (the 

Department or USDA) Food and 

Nutrition Service (FNS) provides food to 

State distributing agencies for use in 

food assistance programs as authorized 

in the Richard B. Russell National 

School Lunch Act (42 U.S.C. 1751 et 

seq.), the Emergency Food Assistance 

Act of 1983 (7 U.S.C. 7501, et seq.), the 

Food and Nutrition Act of 2008 (7 

U.S.C. 2011, et seq.), the Agriculture 

and Consumer Protection Act of 1973 (7 

U.S.C. 612c note), the Older Americans 

Act of 1965 (42 U.S.C. 3001, et seq.), 

and the Robert T. Stafford Disaster 

Relief and Emergency Assistance Act 

(42 U.S.C. 5121, et seq.). State 

distributing agencies, in turn, distribute 

the donated foods (which are also 

referred to as USDA Foods) to recipient 

agencies (such as school food 

authorities, food banks, and food 

pantries) which provide assistance to 

eligible persons or households in 

specific food assistance programs, to 

needy persons served by charitable 

institutions, or to persons victimized by 

a disaster or situation of distress. The 

general regulations for the storage, 

distribution, and control of donated 

foods by State distributing agencies and 

recipient agencies are included in 7 CFR 

part 250. Other Federal regulations 

include requirements specific to 

particular food assistance programs that 

receive donated foods—e.g., 7 CFR part 

251 for The Emergency Food Assistance 

Program (TEFAP) and 7 CFR part 210 

for the National School Lunch Program 

(NSLP). 

Following the enactment of the 

Commodity Distribution Reform Act 

and WIC Amendments of 1987, (7 

U.S.C. 612c note), hereinafter referred to 

as the Commodity Distribution Reform 

Act, a final rule was issued in October 

1989 amending 7 CFR part 250 to 

require State distributing agencies to 

evaluate the efficiency and costeffectiveness of their method of 

distribution of donated foods to 

recipient agencies (54 FR 42476). The 

amended regulations required 

distributing agencies to utilize a 

commercial storage and distribution 

system, if such system was determined 

to be more cost-effective. As a result, 

most State distributing agencies 

currently procure the services of 

commercial storage facilities to store 

donated foods and distribute them to 

recipient agencies, or permit direct 

shipments from vendors of donated 

foods to recipient agencies, the 

contracted commercial storage facilities 

of such agencies, or to processors for 

processing of donated foods into end 

products. However, for donated foods 

distributed in NSLP, most school food 

authorities must pay a charge to help 

meet storage and distribution costs for 

donated foods. The charge imposed on 

school food authorities varies widely 

from State to State. This rule proposes 

to revise current requirements in 7 CFR 

part 250 to ensure that State distribution 

systems provide the most efficient and 

cost-effective service for school food 

authorities in provision of donated 

foods, while reducing the administrative 

burden on distributing agencies in 

providing such service. 

In 2002, the Department, in 

collaboration with State agencies and 

school food authorities, developed 

procedures and instructions for 

responding to donated foods subject to 

a food recall. Such procedures and 

instructions ensure that donated foods 

subject to a food recall are isolated, 

inspected, and recovered in an 

expeditious manner. This rule proposes 

to include a section on donated food 

safety and disposition, and to require 

that State distributing agency 

agreements and contracts include 

provisions to ensure compliance with 

all applicable Federal, State or local 

requirements relating to food safety and 

food recalls. 

In October 2002, 7 CFR part 250 was 

amended to permit school food 

authorities in NSLP, as well as other 

recipient agencies that use donated 

foods, to provide meals to recipients, 

store donated foods together with 

commercially purchased foods, and 

maintain a single inventory record of 

the donated and purchased foods (67 FR 

65015). The single inventory 

management option reduced the 

workload for school food authorities in 

control and monitoring of their food 

inventories. In August 2008, 7 CFR part 

250 was amended to further clarify the 

single inventory management option for 

school food authorities, and to revise 

other requirements to ensure that such 

entities receive the full benefit of the 

donated foods provided in NSLP (73 FR 

46189). However, some confusion still 

exists regarding the application of the 

single inventory management option. 

This rule proposes to further clarify 

storage and inventory management 

requirements at the distributing and 

recipient agency levels. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Proposed Rules 63225 

In order to ensure compliance with 

requirements for the processing of 

donated foods, the State distributing 

agency must currently conduct an onsite review of in-State processors at least 

once every two years. This rule 

proposes to remove this requirement, 

which is burdensome and costly for 

distributing agencies, and to require 

instead that in-State processors obtain 

independent Certified Public 

Accountant (CPA) audits, as currently 

required of multi-State processors. The 

rule would also remove requirements 

for the distributing agency in 

verification of sales of processed end 

products, and in reporting acceptability 

of donated foods to FNS. 

The Department has developed 

instructions and guidance in areas of 

donated food distribution related to 

food recalls, the use of donated foods in 

disaster situations, ensuring that 

restitution is made for donated food 

losses, shipment and receipt of donated 

foods, and options in the processing of 

donated foods. This rule proposes to 

include references to these materials to 

help the reader better understand 

standards and procedures relating to 

specific aspects of the distribution and 

control of donated foods. This rule also 

proposes to provide references to other 

applicable Federal regulations to help 

the reader identify Federal requirements 

affecting the distribution and control of 

donated foods that are beyond the scope 

of this proposed rule. Lastly, the rule 

proposes to rewrite and restructure 

much of 7 CFR part 250 in a more userfriendly, ‘‘plain language,’’ format. 

Specific proposals for change or 

clarification are discussed more fully in 

the next section of the preamble. 

II. Discussion of the Rule’s Provisions 

7 CFR Part 250 

A. Subpart A—General Purpose and 

Administration 

We propose to completely revise 

current Subpart A of 7 CFR part 250 to 

more clearly present the general 

purpose and use of donated foods, the 

definitions applicable to 7 CFR part 250, 

the responsible administrative agencies 

in the distribution and control of 

donated foods at Federal and State 

levels, and civil rights requirements. 

Some of these requirements are located 

in current Subpart B. Accordingly, we 

propose to change the heading of 

Subpart A to General Purpose and 

Administration, with new sections as 

described in the following paragraphs. 

1. Purpose and Use of Donated Foods, 

§ 250.1 

In § 250.1, we propose to describe the 

purpose of donated foods, the general 

requirements for their use, and the 

legislative sanctions that apply in the 

event that they are used improperly. In 

§ 250.1(a), we indicate that the 

Department purchases foods for 

donation in specific food assistance 

programs or to provide assistance to 

needy persons, in accordance with 

legislation authorizing such assistance 

in specific programs or providing for 

removal of market surpluses and 

support of food prices. 

In § 250.1(b), we propose to include 

the stipulation, in current § 250.13(a)(1), 

that donated foods must be distributed 

and used in accordance with the 

requirements of 7 CFR part 250. We 

propose to indicate that other Federal 

regulations also apply to specific 

programs (e.g., 7 CFR part 251 includes 

requirements for donated foods 

provided in TEFAP). We propose to 

include the provision, in current 

§ 250.13(a)(7), that permits donated 

foods to be used in activities designed 

to test their effective use in specific 

programs (e.g., in nutrition classes or 

cooking demonstrations). However, we 

propose to remove the need for prior 

approval to permit such use. 

In accordance with current 

§ 250.13(a)(1)(ii), donated foods may not 

be sold, exchanged, or otherwise 

disposed of without prior approval of 

the Department. And, in accordance 

with current § 250.15(a)(3), recipients 

may not be required to make any 

payments, or perform any services, in 

connection with the receipt of donated 

foods. We propose to include these 

requirements in § 250.1(b) of this 

proposed rule, with some clarification. 

We propose to prohibit the sale, 

exchange, or other disposition of 

donated foods, or their use to require 

recipients to make any payments, or 

perform any services, except as 

specifically permitted in 7 CFR part 250, 

or in other Federal regulations. We also 

propose to include the requirement, in 

current § 250.15(a)(3), that donated 

foods may not be used to solicit 

voluntary contributions, except for 

donated foods provided in the Nutrition 

Services Incentive Program (NSIP), 

which was formerly called the Nutrition 

Program for the Elderly. 

In § 250.1(c), we propose to include, 

in streamlined form, the sanctions 

established under the Richard B. Russell 

National School Lunch Act (42 U.S.C. 

1760) and the Agriculture and 

Consumer Protection Act of 1973 (7 

U.S.C. 612c note) for persons who 

embezzle, willfully misapply, steal, or 

obtain by fraud, donated foods, or funds 

deriving from donated foods. These 

sanctions are included in current 

§ 250.13(i). 

2. Definitions, § 250.2 

In § 250.2, we propose to include the 

definitions applicable to 7 CFR part 250, 

which are included in current § 250.3. 

Although most of the definitions are 

included without change, we have 

chosen to set out all definitions in this 

rule, in the interest of clarity. However, 

this preamble addresses only those 

current definitions that we are 

proposing to remove or revise and the 

definitions that we are proposing to add. 

We propose to remove the definitions 

of ‘‘Commodities’’, ‘‘Disaster victims’’, 

‘‘Discount system’’, ‘‘FNSRO’’, 

‘‘Nonprofit school food service 

account’’, ‘‘Refund application’’, 

‘‘Refund system’’, ‘‘School’’, 

‘‘Secretary’’, ‘‘State and United States’’, 

‘‘Substituted food’’, and ‘‘Welfare 

agency’’. The term ‘‘commodities’’ is no 

longer commonly used, as it has been 

replaced by ‘‘donated foods’’ or ‘‘USDA 

Foods,’’ both of which are included in 

§ 250.2 of this proposed rule. The 

Federal Emergency Management Agency 

(FEMA) now commonly refers to 

survivors of a disaster or emergency, 

rather than to disaster victims, and we 

propose to use the same reference in 7 

CFR part 250. In this proposed rule, we 

refer simply to FNS actions or 

requirements, without specifying 

FNSRO (i.e., FNS Regional Offices) or 

FNS Headquarters. FNS guidance 

indicates which FNS office is 

responsible for specific procedures. The 

definitions of ‘‘Discount system’’, 

‘‘Refund’’, ‘‘Refund application’’, 

‘‘Refund system’’, and ‘‘Substituted 

food’’, are unnecessary, as their meaning 

is clear in current Subpart C of 7 CFR 

part 250, which includes requirements 

in the processing of donated foods. The 

definition of ‘‘Nonprofit school food 

service account’’ is included in 7 CFR 

part 210, and we propose to include 

references to that part, as appropriate, 

rather than repeat the definition in 7 

CFR part 250. Similarly, the definition 

of ‘‘School’’ is included in § 210.2, and 

we refer invariably to the school food 

authority, rather than to individual 

schools, in 7 CFR part 250. In this 

proposed rule, we refer to the 

Department or USDA, rather than to the 

Secretary. The term ‘‘Welfare agency’’ is 

no longer in use, and such agencies 

would fall under the term ‘‘Recipient 

agencies’’ in this proposed rule. The 

current definition of ‘‘State and United 

States’’ would be replaced by a new 

definition of ‘‘State’’. 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
63226 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Proposed Rules 

We propose to revise current 

definitions of ‘‘Adult care institution’’, 

‘‘CACFP’’, ‘‘Charitable institutions’’, 

‘‘Department’’, ‘‘Disaster’’, ‘‘Disaster 

organizations’’, ‘‘Distributing agency’’, 

‘‘Donated foods’’, ‘‘Elderly nutrition 

project’’, ‘‘Household’’, ‘‘In-kind 

replacement’’, ‘‘Multi-State processor’’, 

‘‘National per-meal value’’, ‘‘Needy 

persons’’, ‘‘NSIP’’, ‘‘NSLP’’, ‘‘Recipient 

agencies’’, ‘‘SBP’’, ‘‘Section 4(a)’’, 

‘‘Section 6’’, ‘‘Section 14’’, ‘‘Section 32’’, 

‘‘Section 311’’, ‘‘Section 416’’, ‘‘Section 

709’’, ‘‘SFSP’’, ‘‘Similar replacement’’, 

‘‘Situation of distress’’, ‘‘Storage 

facility’’, ‘‘State Agency on Aging’’, and 

‘‘Subdistributing agency’’. 

The proposed revisions of ‘‘Adult care 

institution’’, ‘‘CACFP’’, ‘‘Charitable 

institutions’’, ‘‘Department’’, ‘‘Donated 

foods’’, ‘‘Elderly nutrition project’’, 

‘‘Multi-State processor’’, ‘‘National permeal value’’, ‘‘Needy persons’’, ‘‘NSIP’’, 

‘‘NSLP’’, ‘‘SBP’’, ‘‘Section 4(a)’’, 

‘‘Section 6’’, ‘‘Section 14’’, ‘‘Section 32’’, 

‘‘Section 311’’, ‘‘Section 416’’, ‘‘Section 

709’’, ‘‘SFSP’’, ‘‘State Agency on 

Aging’’, and ‘‘Storage facility’’ would 

simply streamline the current 

definitions. 

The proposed revision of ‘‘Disaster’’ 

would also streamline the current 

definition, and would include the 

Presidential declaration of a disaster or 

emergency (e.g., a pandemic), as either 

event would trigger the provision of 

donated foods, in accordance with 

section 413 of the Robert T. Stafford 

Disaster Relief and Emergency 

Assistance Act, as amended (42 U.S.C. 

5180). The proposed revision of 

‘‘Situation of distress’’ would simply 

indicate that it is a natural catastrophe 

or other event that does not meet the 

definition of disaster, but that, in the 

determination of the distributing agency 

or FNS, warrants the use of donated 

foods to assist persons in need of food 

assistance as a result of such catastrophe 

or event. Further explanation relating to 

contingencies for the provision of 

donated food assistance in such an 

event is included in § 250.70 of this 

proposed rule. The proposed revision of 

‘‘Disaster organizations’’ would include 

reference to such organizations 

authorized to provide assistance to 

survivors of a disaster or a situation of 

distress, rather than to disaster victims. 

The proposed revision of 

‘‘Distributing agency’’ would clarify the 

current definition by indicating that it is 

a State agency selected by the 

appropriate authorities in the State to 

distribute donated foods in the State, in 

accordance with 7 CFR part 250 and 

other Federal regulations, as applicable. 

We also propose to clarify that Indian 

Tribal Organizations may act as 

distributing agencies in the 

administration of the Food Distribution 

Program on Indian Reservations (FDPIR) 

or other programs on, or near, Indian 

reservations, as currently provided for 

in Federal regulations. We propose to 

remove the inclusion of a Federal 

agency or private agency under the 

definition. A Federal agency may 

distribute donated foods in a State, but 

would not do so as a distributing agency 

subject to the requirements in this part. 

A private nonprofit agency may 

distribute donated foods in the State, 

but only as a subdistributing agency, 

under an agreement with the 

distributing agency. A private for-profit 

entity (i.e., commercial enterprise) may 

also distribute donated foods in the 

State, but only under contract with the 

distributing agency (or subdistributing 

agency), and subject to Federal 

procurement requirements. The 

proposed revision of ‘‘Recipient 

agencies’’ would clarify their function 

in providing assistance directly to needy 

persons. It would also clarify that local 

agencies in the Commodity 

Supplemental Food Program (CSFP), 

and Indian Tribal Organizations 

distributing donated foods to needy 

persons through FDPIR in a State in 

which the State government administers 

FDPIR, are considered recipient 

agencies in 7 CFR part 250. 

The proposed revision of 

‘‘Subdistributing agency’’ would clarify 

that it is a State agency, public agency, 

or a nonprofit organization selected by 

the distributing agency to perform one 

or more donated food activities required 

of the distributing agency. It would 

remove the current designation of State 

agencies, local agencies, and Indian 

Tribal Organizations that administer 

TEFAP, FDPIR, or CSFP as 

subdistributing agencies. State agencies 

and Indian Tribal Organizations 

administering such programs meet the 

definition of distributing agency. Local 

agencies in CSFP may function as 

subdistributing agencies if they receive 

donated foods for further distribution to 

other recipient agencies. However, in 

most cases, they function only as 

recipient agencies in that they provide 

assistance directly to needy persons. 

The proposed revisions of ‘‘In-kind 

replacement’’ and ‘‘Similar 

replacement’’ would clarify that such 

replacement must be with the same (i.e., 

in-kind) or similar foods of a quality and 

value at least equal to the lost donated 

foods. The proposed revision of 

‘‘Similar replacement’’ also clarifies that 

the replacement food must be from the 

same food category (e.g., meat, 

vegetable, grains) as the lost donated 

food. The proposed revision of 

‘‘Household’’ clarifies the individuals or 

the groups of individuals which may be 

considered a household in this part. 

We propose to add definitions of ‘‘7 

CFR Part 3052’’, ‘‘Administering 

agency’’, ‘‘Carrier’’, ‘‘Consignee’’, 

‘‘CSFP’’, ‘‘Distribution charge’’, 

‘‘FDPIR’’, ‘‘Food recall’’, ‘‘Household 

programs’’, ‘‘In-State processor’’, 

‘‘Multi-food shipment’’, ‘‘Out-ofcondition donated foods’’, ‘‘SAE funds’’, 

‘‘Section 27’’, ‘‘SNAP’’, ‘‘Split 

shipment’’, ‘‘State’’, ‘‘TEFAP’’, ‘‘USDA 

foods’’, and ‘‘Vendor’’. 

The addition of ‘‘Administering 

agency’’ would clarify its function in the 

overall administration of a food 

assistance program in the State, rather 

than just the distribution of donated 

foods, which is the function of the 

distributing agency. While the 

administering agency may also be the 

distributing agency in a State, that is not 

always the case. The addition of 

‘‘CSFP’’, ‘‘FDPIR’’, ‘‘Household 

programs’’, ‘‘SNAP’’, and ‘‘TEFAP’’ 

would help the reader identify food 

assistance programs referred to in 7 CFR 

part 250. The addition of ‘‘7 CFR Part 

3052’’ would alert the reader to the 

Departmental regulations relating to 

audits of public and nonprofit agencies 

receiving Federal grants. The additions 

of ‘‘Carrier’’ and ‘‘Consignee’’ would 

identify entities that transport donated 

foods from one location to another, and 

that receive shipments of donated foods, 

respectively. The addition of 

‘‘Distribution charge’’ would identify 

the total charge or fee that the 

distributing agency may impose on 

recipient agencies in child nutrition 

programs to help defray costs of storing 

and distributing donated foods, and 

associated administrative costs. The 

addition of ‘‘Multi-food shipment’’ 

would identify shipments of donated 

foods from a Federal storage facility, 

rather than directly from a vendor. 

The addition of ‘‘Food recall’’ would 

identify an action necessary to protect 

public health, which is further 

addressed in § 250.15(c) of this 

proposed rule. The addition of ‘‘In-State 

processor’’ would help the reader 

distinguish such an entity from a multiState processor. The addition of ‘‘Outof-condition donated foods’’ would 

identify those donated foods that are no 

longer fit for human consumption. The 

addition of ‘‘SAE funds’’ would identify 

the Federal funds provided to State 

agencies to pay for administrative 

expenses in NSLP and other child 

nutrition programs, in accordance with 

7 CFR part 235. The addition of 

‘‘Section 27’’ would identify the section 

of the Food and Nutrition Act of 2008 

that authorizes funds for food purchases 


tkelley on DSK3SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Proposed Rules 63227 

in TEFAP. The addition of ‘‘Split 

shipment’’ would identify a shipment of 

donated food that is divided among two 

or more distributing or recipient 

agencies. The addition of ‘‘State’’ would 

streamline the current definition of 

‘‘State and United States’’, which we are 

proposing to remove. It would also 

exclude the Trust Territory of the 

Pacific Islands, which is no longer a 

recipient of donated foods. The addition 

of ‘‘USDA Foods’’ would alert the reader 

to another commonly-used term for 

donated foods. The addition of 

‘‘Vendor’’ would identify a commercial 

enterprise from which the Department 

purchases food for donation. 

3. Administration at the Federal Level, 

§ 250.3 

In § 250.3, we propose to include the 

actions that may be undertaken by FNS, 

as the Federal administering agency for 

USDA food assistance programs, in 

ensuring the effective distribution and 

control of donated foods. In § 250.3(a), 

we propose to describe the role of FNS 

in administering USDA food assistance 

programs at the Federal level, including 

the distribution of donated foods to 

State distributing agencies for further 

distribution and use, in accordance with 

the requirements in this part. 

In § 250.3(b), we propose to include 

the authority, in current § 250.18(a), for 

the Department, Comptroller General, or 

any of their authorized representatives, 

to conduct audits or inspections of any 

agency, or contracted commercial entity, 

in order to determine compliance with 

the requirements of this part, or with 

other applicable Federal regulations. 

In § 250.3(c), we propose to include 

FNS’s authority, in current § 250.20, to 

terminate the distribution of donated 

foods, or the provision of administrative 

funds, to a distributing agency for its 

failure to comply with the requirements 

of 7 CFR part 250, or with other 

applicable Federal regulations. 

However, we propose to clarify that FNS 

may also choose to suspend such 

activities, rather than terminate them, as 

provided for in 7 CFR 3016.43. We also 

propose to clarify that FNS must 

provide written notification to the 

distributing agency of such termination 

or suspension of assistance, and that 

such action is subject to an appeal if 

recourse to an appeal is provided for in 

Federal regulations applicable to 

specific programs (e.g., as provided for 

in FDPIR, in accordance with 7 CFR part 

253) . Lastly, we include the stipulation 

that FNS may also take other actions, as 

appropriate, including prosecution 

under applicable Federal statutes. 

4. Administration at the State Level, 

§ 250.4 

In § 250.4, we propose to include the 

responsibility of the distributing agency 

in administering the distribution of 

donated foods at the State level. In 

§ 250.4(a), we propose to require the 

distributing agency to ensure 

compliance with requirements in 7 CFR 

part 250, and in other Federal 

regulations referenced in this part. We 

propose to include the requirement, in 

current § 250.12(a), that the distributing 

agency enter into a written agreement 

with FNS (i.e., the Federal-State 

agreement) to receive, store, and 

distribute donated foods in the State. 

We propose to retain the current 

provision that makes the agreement 

permanent, but to permit it to be 

amended or terminated with the 

concurrence of both parties. We also 

indicate that FNS may terminate the 

Federal-State agreement for the 

distributing agency’s failure to ensure 

compliance with requirements. Lastly, 

we propose to retain the provision, in 

current § 250.2(b), that the distributing 

agency may impose additional 

requirements relating to the distribution 

and control of donated foods in the 

State, as long as such requirements are 

not inconsistent with the requirements 

of 7 CFR part 250 or other Federal 

regulations referenced in this part. We 

propose to remove the provision, in 

current § 250.2(c), that the distributing 

agency must provide adequate 

personnel to administer the program, as 

the need to comply with requirements 

for effective administration would 

necessitate the employment of adequate 

personnel to do so. 

In § 250.4(b), we propose to include 

the option, in current §§ 250.3 and 

250.12(b), for the distributing agency to 

select a subdistributing agency (as 

defined in this proposed rule) to 

perform specific activities relating to 

donated foods for which the distributing 

agency is responsible, in accordance 

with a written agreement between the 

parties. We propose to retain the 

provision, in current § 250.10(c), that 

prohibits the distributing agency from 

delegating its overall responsibility to 

ensure compliance with requirements in 

7 CFR part 250 to a subdistributing 

agency or to any other organization. We 

also propose to prohibit the distributing 

agency from delegating its responsibility 

to ensure compliance with the 

performance standards included in 

§ 250.22 of this proposed rule. 

In § 250.4(c), we propose to include 

the requirement, in current §§ 250.11(b) 

and 250.13(d)(1), that the distributing 

agency select recipient agencies to 

receive donated foods for distribution to 

needy persons, or for inclusion in meals 

provided to needy persons. We propose 

to clarify that such selection must be in 

accordance with eligibility criteria 

applicable to specific programs or 

outlets. We also propose to retain the 

requirement, in current § 250.12(b), that 

the distributing agency enter into a 

written agreement with a recipient 

agency prior to distribution of donated 

foods to it. We propose to clarify that, 

for child nutrition programs, the 

distributing agency must enter into 

agreements with recipient agencies 

selected by the State administering 

agency (which may be different from the 

distributing agency) for participation in 

such programs, before distribution of 

donated foods to such recipient 

agencies. The distributing agency must 

verify such recipient agencies’ 

participation in child nutrition 

programs with the State administering 

agency. We propose to include the 

requirement in current § 250.11(b) that 

the distributing agency consider past 

performance in selecting recipient 

agencies to receive donated foods, but 

specify that this requirement only 

applies to household programs. We 

propose to remove the current provision 

that the distributing agency ensure that 

welfare agencies determine the 

eligibility of program participants. 

Requirements relating to the 

determination by recipient agencies of 

participant eligibility are included in 

regulations appropriate to specific 

programs or outlets. 

We also propose to include the 

required provisions of agreements with 

recipient agencies and subdistributing 

agencies in § 250.4(c) of this proposed 

rule. We propose to retain the provision, 

in current § 250.12(b)(1), that ensures 

compliance with the requirements of 7 

CFR part 250, and propose to also 

include assurance of compliance with 

other Federal regulations, as referenced 

in 7 CFR part 250 and with the 

distributing agency’s written agreement 

with FNS. We propose to include a 

provision for compliance with all 

Federal, State or local requirements 

relating to food safety and food recalls. 

In § 250.15(c) of this proposed rule, we 

are proposing to require distributing and 

recipient agencies to follow all 

applicable Federal, State or local 

requirements for donated foods subject 

to a food recall. As discussed in Section 

I of this proposed rule, in 2002, the 

Department, in collaboration with State 

agencies and school food authorities, 

developed procedures and instructions 

for responding to donated foods subject 

to a food recall. These procedures and 


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instructions are provided to assist 

distributing and recipient agencies in 

ensuring that donated foods subject to a 

food recall are isolated, inspected, and 

recovered in an expeditious manner. 

In accordance with current 

§ 250.12(c), distributing agency 

agreements with recipient agencies are 

permanent, with amendments to be 

made as necessary. However, the 

distributing agency’s agreement with a 

subdistributing agency is limited to one 

year, and may be extended for two 

additional one-year periods. We propose 

to require that the duration of 

agreements with recipient agencies and 

subdistributing agencies be included in 

provisions of such agreements, but 

propose to remove the current 

durational requirements in order to 

allow distributing agencies to determine 

the duration that will best meet the 

needs of the program. The distributing 

agency may choose to enter into 

permanent agreements with recipient 

agencies or subdistributing agencies, 

unless other regulations applicable to 

specific programs limit such duration. 

In accordance with current 

§ 250.12(c)(3), agreements may be 

terminated for cause by either party 

upon 30 days notice. We propose to 

revise this provision to permit 

termination of the agreement by the 

distributing agency for noncompliance 

with its provisions or with other 

applicable requirements, upon written 

notification to the applicable party, but 

without specifying a notification period. 

This will permit the distributing agency 

to take immediate action in the event 

that noncompliance on the part of a 

recipient agency or subdistributing 

agency would result in interruption of 

services to program participants or other 

serious program disruptions. We also 

propose to include a provision that 

permits termination of the agreement by 

either party, upon written notification to 

the other party at least 60 days prior to 

the effective date of termination. This 

change will allow distributing agencies 

the time needed to secure new 

contracts, alter distribution schedules, 

and move existing inventories, as 

necessary, without negatively impacting 

program operations. 

We propose to remove agreement 

provisions in current § 250.12(b) that 

specifically address the responsibility 

for donated food losses and claims 

against other parties. Responsibility of 

each party in such instance is provided 

for in 7 CFR part 250 and FNS 

instructions and guidance, and the 

agreement must provide for adherence 

to all such requirements. Lastly, we 

propose to remove the requirement, in 

current § 250.11(a), that the distributing 

agency verify registration of recipient 

agencies to participate in the National 

Commodity Processing Program, as this 

program is no longer active. 

Recipients of Federal grants must 

ensure compliance with Departmental 

procurement requirements in 7 CFR 

parts 3016 or 3019, as applicable, in 

obtaining the services of a commercial 

enterprise to conduct activities under 

the grant. In § 250.4(d), we propose to 

clarify that such procurement 

requirements are applicable to 

distributing and recipient agencies in 

obtaining such services. We also 

propose to indicate that such 

procurement must also ensure 

compliance with other applicable 

Departmental requirements—e.g., a 

school food authority must ensure 

compliance with requirements in 7 CFR 

part 210, and in Subpart D of 7 CFR part 

250, in obtaining the services of a food 

service management company to 

manage the school food service. 

5. Civil Rights, § 250.5 

In § 250.5, we propose to include civil 

rights requirements. In accordance with 

current § 250.21, distributing, 

subdistributing, and recipient agencies 

must comply with the Department’s 

regulations pertaining to 

nondiscrimination, as well as with FNS 

civil rights instructions. Such 

regulations and instructions ensure that 

no person is discriminated against in 

the receipt or distribution of donated 

foods. We propose to include such 

requirements in § 250.5. 

B. Subpart B—Delivery, Distribution, 

and Control of Donated Foods 

We propose to completely revise 

current Subpart B of 7 CFR part 250 to 

more clearly present the specific 

requirements in the ordering and 

delivery of donated foods, the 

distribution of donated foods to 

recipient agencies, and the control of 

donated foods at the distributing and 

recipient agency levels. To this end, we 

propose to restructure this subpart into 

13 new sections, and to change the 

heading to Delivery, Distribution, and 

Control of Donated Foods, with new 

sections as described in the following 

paragraphs. 

1. Availability and Ordering of Donated 

Foods, § 250.10 

In § 250.10, we propose to include 

requirements to ensure that recipient 

agencies may order donated foods that 

are most useful to them, and that may 

be utilized efficiently and without 

waste. We also propose to assure that 

recipient agencies have the information 

necessary to order and utilize such 

foods effectively. FNS offers a wide 

variety of donated foods and continually 

updates the foods offered to ensure that 

distributing and recipient agencies are 

able to order the products which will 

best meet the needs of their programs. 

As new foods become available, and as 

needs of an individual program or 

recipient agency change, it is important 

that distributing agencies facilitate 

ordering and use of the foods which will 

be most advantageous to recipient 

agencies. In § 250.10(a), we propose to 

require the distributing agency to utilize 

a request-driven ordering system in 

submitting orders for donated foods to 

FNS, which must provide recipient 

agencies the opportunity to provide 

input at least annually in determining 

the donated foods from the full list that 

are made available to them for ordering. 

We propose to require that the 

distributing agency use the input 

provided to ensure that the types and 

forms of donated foods that recipient 

agencies may best utilize are made 

available to them for ordering. FNS has 

developed guidance to assist 

distributing agencies in implementing a 

request-driven ordering system that 

meets the requirements of this section. 

Lastly, we propose to include the 

requirement, in current § 250.13(a), that 

the distributing agency ensure donated 

foods are ordered and distributed in 

quantities that may be utilized 

efficiently and without waste. However, 

we propose to remove the specific 

stipulation, in current § 250.13(d)(2), 

that Section 416 bonus foods may not be 

distributed to recipient agencies if 

normal food expenditures would be 

reduced. The provision of donated foods 

is meant, in part, to assist recipient 

agencies in meeting their food 

assistance needs in a cost-effective 

manner. 

In § 250.10(b), we propose to require 

the distributing agency to ensure that 

recipient agencies have information on 

the types and quantities of donated 

foods that may be ordered, donated food 

specifications and nutritional value, and 

procedures for the disposition of 

donated foods that are out-of-condition 

or that are subject to a food recall. 

2. Delivery and Receipt of Donated Food 

Shipments, § 250.11 

In § 250.11, we propose to include 

requirements for the receipt of donated 

food shipments from USDA vendors or 

from a Federal storage facility, and the 

conditions for the replacement of 

donated foods that have been delivered 

unsafe or out-of-condition by such 

entities. In § 250.11(a), we propose to 

indicate that the Department arranges 

for the delivery of donated foods from 


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vendors or Federal storage facilities to 

distributing or recipient agencies or 

other entities designated by such 

agencies (i.e., the consignee). However, 

we propose to remove the provision, in 

current § 250.13(a), that refers to the 

Department’s responsibility to conform 

to scheduled delivery periods. While 

the Department strives to ensure timely 

deliveries to distributing and recipient 

agencies, such deliveries are subject to 

vendor and storage facility contracts and 

performance. 

In § 250.11(b), we propose to require 

that the distributing or recipient agency, 

or other consignee, comply with all 

applicable Federal requirements in the 

receipt of donated food shipments. 

Procedures are contained in FNS 

Instruction 709–5, Shipment and 

Receipt of Donated Foods, which 

include those for donated foods that 

have been delivered out-of-condition. 

We also propose to require that the 

distributing or recipient agency, or other 

consignee, provide notification of 

receipt of donated food shipments to 

FNS through electronic means, and 

retain an electronic record of receipt of 

all donated food shipments. 

Implementation of an electronic 

donated foods ordering system has 

allowed distributing or recipient 

agencies to notify FNS of receipt of 

donated foods more efficiently than 

through previous ordering systems, 

resulting in faster payment for vendors, 

and more efficient tracking of donated 

foods, which is important in the event 

of food recalls or product complaint 

investigations. 

In § 250.11(c), we propose to include 

requirements for the replacement of 

donated foods that are delivered out-ofcondition by the vendor. In accordance 

with current § 250.13(g), the Department 

arranges for vendor replacement of 

donated foods that are delivered out-ofcondition. Vendor responsibility for 

replacement of such foods may extend 

up to six months after their delivery, if 

there is documentation indicating that 

the foods were out-of-condition at the 

time of delivery. We propose to retain 

the current requirement for vendor 

replacement of donated foods that are 

delivered out-of-condition. However, we 

propose to require that vendor 

responsibility for such replacement 

extend up until the time of expiration of 

the product use-by or best-if-used-by 

date or, if no such date is included on 

the product label, until expiration of the 

vendor warranty period. The warranty 

period is the minimum acceptable shelf 

life established in the USDA contract 

with the vendor. In all cases, 

responsibility for such replacement is 

contingent on determination that the 

foods were out-of-condition at the time 

of delivery. The proposed time periods 

would be more practical than the 

current ones, as they bear a closer 

relationship to the actual shelf life of the 

foods. 

In accordance with current 

§ 250.13(g)(3), the vendor must provide 

for in-kind replacement of donated 

foods, unless FNS approves replacement 

with another type of food in the same 

food category (i.e., similar replacement). 

We propose to retain this requirement, 

and to indicate that the terms in-kind 

and similar replacement are defined in 

§ 250.2 of this proposed rule. In 

accordance with current § 250.13(g), if 

physical replacement of donated foods 

would not be cost-effective or efficient, 

FNS may approve payment by the 

vendor to the distributing or recipient 

agency, or may credit the distributing 

agency’s entitlement or assistance level. 

We propose to retain these options in 

§ 250.11(c). 

In § 250.11(d), we propose to include 

the information, in current § 250.13(b), 

that the Department is responsible for 

payment of the cost of delivering 

donated foods from vendors or Federal 

storage facilities to consignees, as well 

as any processing or handling costs 

incurred up to the time of delivery, as 

is deemed in the best interest of the 

Department. In accordance with current 

§ 250.15(d), the distributing agency is 

responsible for payment of any charges 

accruing as a result of a delay in 

unloading a donated food shipment 

after arrival at the designated location, 

unless the Department is responsible for 

such delay. We propose to retain such 

obligation, but to clarify that the 

distributing agency, recipient agency, or 

other consignee, as appropriate, is 

responsible for the payment of any 

delivery charges that accrue as a result 

of such consignee’s failure to comply 

with procedures in FNS instructions. 

We propose to include the failure to 

provide for the unloading of a shipment 

of donated foods within a designated 

time period as an example of such 

noncompliance. 

In § 250.11(e), we propose to include 

the provisions, in current § 250.13(c), 

relating to transfer of title to donated 

foods. However, we propose to clarify 

that title transfers to the distributing or 

recipient agency, as appropriate (i.e., 

whichever agency receives the donated 

food shipment). We also propose to 

clarify that, notwithstanding transfer of 

title, distributing and recipient agencies 

must ensure compliance with the 

requirements of 7 CFR part 250 in the 

control and use of donated foods. 

3. Storage and Inventory Management at 

the Distributing Agency Level, § 250.12 

In § 250.12, we propose to describe 

the requirements for the storage and 

management of donated food 

inventories at storage facilities used by 

the distributing agency or 

subdistributing agency, which may 

include commercial storage facilities 

under contract with either the 

distributing or the subdistributing 

agency. In § 250.12(a), we propose to 

essentially retain the requirements in 

current § 250.14(b), which require that 

distributing agency facilities for the 

storage and control of donated foods 

protect against theft, spoilage, damage, 

or other loss, and obtain the required 

Federal, State, or local health 

inspections. However, we propose to 

revise this latter provision to require 

that the distributing agency ensure that 

storage facilities comply with all 

Federal, State, or local requirements 

relating to food safety and health, as 

applicable, and obtain all required 

health inspections. 

In § 250.12(b), we propose to include 

the requirement, in current § 250.14(b), 

that the distributing agency ensure that 

donated foods at any storage facility 

used by the distributing or 

subdistributing agency are stored in a 

manner that permits them to be 

distinguished from other foods, and 

must ensure that a separate inventory 

record of such donated foods is 

maintained. Such requirements ensure 

distribution of donated foods to the 

appropriate recipient agencies. We also 

propose to require that the distributing 

agency’s system of inventory 

management ensure that donated foods 

are distributed in a timely manner and 

in optimal condition. FNS offers 

guidance that includes further direction 

on effective inventory management 

practices and the need to consider 

product dates in distribution of donated 

foods. We propose to retain the 

requirement, in current § 250.14(e), that 

the distributing agency conduct a 

physical review of such donated food 

inventories, and reconcile physical and 

book inventories, on an annual basis. 

We propose to include the requirement 

in current § 250.15(c) that the 

distributing agency report donated food 

losses to FNS, and ensure restitution for 

such losses. FNS provides guidance for 

complying with these requirements in 

FNS Instruction 410–1, Claims for 

Losses of Donated Foods and Related 

Administrative Losses—Procedures for 

the State Distributing Agency, and in 

FNS Instruction 420–1, Managing 

Agency Debts. 


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In § 250.12(c), we propose to include 

the limitations on the amount of 

donated food inventories on-hand. In 

accordance with current § 250.14(f)(2), 

donated food inventories at the 

distributing agency level may not 

exceed a six-month supply, unless 

justification is submitted, and FNS 

approval obtained, to maintain larger 

inventories. The inventory amount must 

be based on the amount of food that the 

distributing agency can reasonably 

utilize for the six-month period. We 

propose to retain the current inventory 

limitation for donated foods received in 

NSLP or other child nutrition programs, 

and in TEFAP. However, for donated 

foods received in CSFP or FDPIR, which 

offer defined food packages, we propose 

to limit inventory on-hand for each food 

category to an amount needed for a 

three-month period. The more 

restrictive inventory amounts would 

allow for more efficient use of limited 

program resources, and permit FNS to 

provide, to the greatest extent practical 

within available resources, a full variety 

of foods needed to meet monthly food 

package benefit levels in CSFP and 

FDPIR. In addition, implementation of 

more frequent deliveries in recent years 

has allowed distributing agencies in 

CSFP and FDPIR to more effectively 

manage donated food inventories. We 

propose to retain the option for the 

distributing agency to request FNS 

approval to maintain donated food 

inventories in excess of the established 

limits. 

In § 250.12(d), we propose to require 

that the distributing agency obtain 

insurance to protect the value of 

donated food inventories at its storage 

facilities. Many distributing agencies 

currently have such protection, which 

better ensures that restitution can be 

made for donated food losses, in the 

event of a disaster or management error, 

and that recipients continue to receive 

program benefits. We also propose to 

require the distributing agency to ensure 

that subdistributing agencies, and 

recipient agencies in household 

programs that have agreements with the 

distributing agency or subdistributing 

agency, obtain such insurance for 

donated foods at their storage facilities. 

Lastly, we propose to require the 

distributing agency to ensure that 

commercial storage facilities under 

contract with the distributing agency, 

the subdistributing agency, or with the 

recipient agencies cited above, obtain 

insurance to protect the value of 

donated food inventories. We propose to 

require that, in all cases, the amount of 

the required insurance be at least equal 

to the average monthly value of donated 

food inventories at such facilities in the 

previous fiscal year. These minimum 

insurance requirements will help ensure 

that distributing agencies and recipient 

agencies receive the full benefit of the 

donated foods entitled to them in the 

event that donated foods are lost or 

damaged. The above entities are those 

that are most likely to have large 

inventories of donated foods, as well as 

the means to obtain protection for such 

foods. Smaller recipient agencies that do 

not have direct agreements with a 

distributing or subdistributing agency, 

but provide food packages directly to 

recipients, such as food pantries or 

community action agencies, would not 

be required to obtain insurance. 

In § 250.12(e), we propose to include 

requirements for the transfer of donated 

foods from the distributing agency to 

another distributing agency or to 

another program. In accordance with 

current § 250.13(h), the distributing 

agency must request FNS approval to 

‘‘redonate’’ donated foods that it cannot 

efficiently utilize. Additionally, current 

§ 250.13(a)(1) includes requirements for 

the ‘‘transfer’’ of donated foods from one 

recipient agency to another. In practice, 

the terms ‘‘redonation’’ and ‘‘transfer’’ 

are often used interchangeably. To 

clarify, we propose to use the term 

‘‘transfer’’ to refer to any redistribution 

of donated foods from one agency to 

another, or from one program to 

another, at the distributing or recipient 

agency level, and to cease using the 

term ‘‘redonation’’. We propose to 

clarify that the distributing agency may 

transfer donated foods from its 

inventories to another distributing 

agency or to another program, in order 

to ensure that such foods may be 

utilized in a timely manner and while 

in optimal condition. We propose to 

permit the distributing agency to 

transfer donated foods to another agency 

within the same program without FNS 

approval. However, we propose to 

require that the distributing agency 

request FNS approval to transfer 

donated foods from one program to 

another—e.g., from NSLP to TEFAP— 

whether the transfer is in the same or a 

different State, as these foods would be 

used in a program other than the 

program for which they were originally 

intended. We propose to stipulate that 

FNS may also require a distributing 

agency to transfer donated foods at the 

distributing agency’s storage facilities or 

at a processor’s facility, if inventories of 

donated foods are excessive or may not 

be efficiently utilized, so that such foods 

may be used to the benefit of recipients 

receiving donated foods through another 

agency or program. 

We propose to require the distributing 

agency to obtain an inspection of 

donated foods by State or local health 

officials before transferring them, if 

there is a question of food safety, or at 

the direction of FNS, to ensure that only 

foods that are still safe and not out-ofcondition are transferred. We also 

propose to retain the requirement in 

current § 250.15(e) that the distributing 

agency is responsible for meeting any 

transportation or inspection costs in 

transferring donated foods, unless the 

transfer is clearly not the result of 

negligence or improper action of the 

distributing agency. Lastly, we propose 

to require that the distributing agency 

maintain a record of all transfers and 

inspections of donated foods from its 

inventories. Transfer of donated foods at 

the recipient agency level is discussed 

in section II.B.5, Storage and Inventory 

Management at the Recipient Agency 

Level, § 250.14, of this preamble. 

In § 250.12(f), we propose to indicate 

that the distributing agency may obtain 

the services of a commercial storage 

facility to store and distribute donated 

foods, or a carrier to transport such 

foods, but must ensure compliance with 

Departmental procurement 

requirements in 7 CFR part 3016. We 

propose to retain the requirement, in 

current § 250.14(d), that the distributing 

agency also enter into a written contract 

with such commercial storage facility, 

and that such contract not exceed five 

years in duration, including option 

years for extension or renewal. Because 

carriers assume similar responsibility 

for donated foods under their control, 

we propose to include the same 

requirements in contracting with a 

carrier. We also propose to retain the 

required contract provisions in current 

§ 250.14(d) relating to safe and secure 

storage conditions, inventory 

management, insurance, reviews, 

contract duration and extension, and 

termination for noncompliance. We 

propose to add provisions to assure 

compliance with Federal, State or local 

requirements relative to food safety and 

health. We also propose to add a 

provision to assure that donated foods 

will be distributed to eligible recipient 

agencies in a timely manner and in 

optimal condition, and in amounts for 

which such recipient agencies are 

eligible. Lastly, we propose to revise the 

current provision providing for 

termination of the contract by either 

party (except as a result of 

noncompliance with regulatory 

provisions) by requiring notification of 

such termination at least 60 days in 

advance, rather than the current 30 

days. This change will allow 


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distributing agencies the time needed to 

secure new contracts, alter distribution 

schedules, and move existing 

inventories, as necessary, without 

negatively impacting program 

operations. We propose to require the 

same provisions in a contract with a 

carrier, as such provisions are necessary 

to ensure the safe and effective transport 

of foods from one location to another. 

4. Efficient and Cost-Effective 

Distribution of Donated Foods, § 250.13 

In § 250.13, we propose to include 

requirements to ensure the distribution 

of donated foods to recipient agencies in 

the most efficient and cost-effective 

manner. In § 250.13(a), we propose to 

retain the requirements, in current 

§§ 250.14(a) and 250.24(e), that the 

distributing agency distribute donated 

foods to recipient agencies in the most 

efficient and cost-effective manner, and 

that such distribution is responsive to 

the needs of recipient agencies, as 

feasible. In meeting this requirement, 

we propose to require the distributing 

agency, to the extent practical, to 

provide for shipment of donated foods 

directly from the USDA vendor to the 

recipient agency, or (at the recipient 

agency’s request) directly to a processor 

for processing into end products. We 

also propose to require that the 

distributing agency provide for split 

shipments between two or more 

recipient agencies, if such agencies are 

unable to accept a full truckload. Split 

shipments allow recipient agencies, 

particularly small recipient agencies, to 

receive donated foods in the forms and 

quantities that are most useful to them 

and on a schedule that will permit them 

to store and distribute the foods in the 

most efficient and cost-effective manner 

possible. 

In § 250.13(b), we propose to require 

that, if the distributing agency 

determines that direct shipments are 

impractical (even after taking into 

account split shipments), it must 

provide for storage of donated foods at 

the distributing agency level, and 

subsequent distribution to recipient 

agencies. Such storage and distribution 

must be provided in the most efficient 

and cost-effective manner possible in 

order to minimize the cost to the 

recipient agency of receiving donated 

foods. We propose to clarify that the 

distributing agency must use State 

Administrative Expense (SAE) funds, as 

available, to meet costs of storing and 

distributing donated foods, or related 

administrative costs, for school food 

authorities or other recipient agencies in 

child nutrition programs, or must use 

other Federal or State administrative 

funds received for such purpose. SAE 

funds are provided to State agencies 

administering NSLP or other child 

nutrition programs, in accordance with 

7 CFR part 235, and distributing 

agencies receive SAE funds specifically 

to cover the costs of storing and 

distributing donated foods and related 

administrative costs for such programs. 

However, as SAE funds, or State funds, 

are limited, distributing agencies may 

also assess fees on school food 

authorities to help defray such costs. 

Under 7 CFR part 250, such fees are 

included under the term ‘‘Distribution 

charge’’. 

We propose to retain the provision, in 

current § 250.15(a)(1), that permits the 

distributing agency to impose a 

distribution charge on school food 

authorities, but with the clarification 

that such charge may be imposed only 

if SAE funds, or other funds available 

from State or local sources, are 

insufficient to fully meet the costs of 

storing donated foods and distributing 

them to such agencies, and of 

administrative costs relating to such 

activities. We also propose to clarify 

that the distribution charge may cover 

only allowable costs, in accordance with 

7 CFR part 3016 and with OMB 

guidance. The Departmental and OMB 

guidance provide for allowable costs for 

Federal grant expenditures. Lastly, we 

propose to require that the distributing 

agency maintain a record of costs 

incurred in storing and distributing 

donated foods and related 

administrative costs, and the source of 

funds used to pay such costs. 

We propose to retain the requirement 

in current § 250.14 that the distributing 

agency use a commercial storage facility 

to store and distribute donated foods, in 

accordance with requirements in 

§ 250.12(f) of this proposed rule, if a 

commercial system is determined to be 

the most efficient and cost-effective. 

However, we propose to remove the 

requirement, in current § 250.14(a)(2), 

that a distributing agency utilizing a 

noncommercial system of storage and 

distribution evaluate such system by 

comparing its costs with the cost of 

obtaining a commercial system, at 3- 

year intervals, and submit such cost 

evaluation to FNS. State distributing 

agencies performed such an evaluation 

and cost comparison, as directed in the 

Commodity Distribution Reform Act 

and, as a result, either changed to a 

commercially contracted distribution 

system, or determined that other storage 

and distribution options were more 

cost-effective. Subsequent periodic 

evaluations have been required, 

however, only through the regulations. 

We have determined that the use of 

such evaluations is no longer necessary 

for Program integrity. Consequently, we 

also propose to remove the requirement, 

in current § 250.14(a)(5), that the 

distributing agency request a waiver to 

continue using a noncommercial 

system. 

In § 250.13(c), we propose to retain 

the requirement, in current 

§ 250.14(a)(7), that the distributing 

agency obtain FNS approval to increase 

the distribution charge beyond normal 

inflationary adjustments or to change 

the level of service provided under a 

distribution charge. We also propose to 

require FNS approval of the amount of 

a newly established distribution charge 

(some States do not currently impose a 

distribution charge on school food 

authorities). We propose to clarify that 

such requirement also applies to any 

charge imposed on school food 

authorities by a distributing agency’s 

commercially contracted storage facility. 

We propose to retain the current 

requirement that such request be 

submitted for approval at least 90 days 

in advance of its projected 

implementation. We also propose to 

retain the requirement, in current 

§ 250.15(a)(1), that the request include 

justification for the new or increased 

amount, and the specific costs to be 

covered by the distribution charge. 

However, we propose to add a 

requirement that the request include 

justification for any change in the level 

of service provided under an existing 

distribution charge. Distributing 

agencies may use SAE funds to meet the 

costs of storing and distributing donated 

foods, and other Federal or State funds 

may also be available for this purpose. 

The use of such funds should allow 

distributing agencies to provide for 

storage and distribution costs of donated 

foods with minimal, if any, charge to 

recipient agencies. Therefore, any new 

or increased charge, or change in the 

level of services associated with a 

charge, must be necessary to provide 

recipient agencies with donated foods in 

the most efficient and cost-effective 

manner possible, as determined by FNS. 

In § 250.13(d), we propose to indicate 

that FNS may disapprove the 

distributing agency’s proposed new 

distribution charge or changes to an 

existing distribution charge, if FNS 

determines that such amount would not 

provide for the most cost-effective 

distribution of donated foods, or would 

otherwise impact recipient agencies 

negatively. We propose to clarify that, in 

such case, the distributing agency 

would be required to adjust the 

distribution charge or the level of 

service provided under the distribution 

charge, or to consider other storage and 

distribution options. We also propose to 


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retain the provision, in current 

§ 250.14(a)(6)(ii), that FNS may, at any 

time, require the distributing agency to 

submit documentation to justify the 

cost-effectiveness of its distribution 

system, and to re-evaluate such system, 

if it is determined to be out of 

compliance with the requirements in 

this section, as proposed. We propose to 

remove the requirement, in current 

§ 250.15(a), that the distributing agency 

submit to FNS a description of its 

system for assessing its distribution 

charge every three years. However, FNS 

may require the distributing agency to 

submit information relating to its 

assessment of the distribution charge, or 

to any other aspect of its distribution 

system, in accordance with § 250.18(d) 

of this proposed rule. 

5. Storage and Inventory Management at 

the Recipient Agency Level, § 250.14 

In § 250.14, we propose to include 

requirements for the storage and 

management of donated foods at the 

recipient agency level, including 

commercial storage facilities or other 

entities under contract with the 

recipient agency. In § 250.14(a), we 

propose to require recipient agencies to 

meet the same requirements for food 

safety and health at their storage 

facilities as those proposed for the 

distributing agency in § 250.12(a) of this 

rule. 

In § 250.14(b), we propose to require 

that recipient agencies in household 

programs store donated foods in a 

manner that permits them to be 

distinguished from other foods at their 

storage facilities, and to maintain a 

separate inventory record of donated 

foods. Recipient agencies in household 

programs are currently subject to the 

requirement to maintain storage and 

inventories of donated foods separately 

from other foods in accordance with 

their designation as ‘‘subdistributing 

agencies’’, in current § 250.3. However, 

as described in section II.A.2 of the 

preamble, we are proposing to remove 

the current designation of such recipient 

agencies as subdistributing agencies. We 

also propose to require that such 

recipient agencies’ system of inventory 

management ensure that donated foods 

are distributed to recipients in a timely 

manner that permits use of such foods 

while still in optimal condition. Lastly, 

we propose to clarify that recipient 

agencies in household programs must 

notify the distributing agency of any 

donated food losses, and take further 

actions with respect to such donated 

foods, as directed by the distributing 

agency. 

In § 250.14(c), we propose to clarify 

the requirement in current § 250.59(c) 

that recipient agencies in child nutrition 

programs, and those receiving donated 

foods as charitable institutions (in 

accordance with current § 250.67), are 

not required to store donated foods in a 

manner that distinguishes them from 

purchased foods or other foods, or to 

maintain a separate inventory record of 

donated foods. Such recipient agencies 

may utilize single inventory 

management, in which donated foods 

are commingled with purchased foods 

or other foods in storage, and a single 

inventory record is maintained. Under 

single inventory management, all foods 

are subject to the same safeguards 

regarding food safety and health. As a 

result, we propose to clarify that all 

recipient agencies in child nutrition 

programs, and those receiving donated 

foods as charitable institutions, are not 

required to separately monitor and 

report donated food use, distribution, or 

loss to the distributing agency, unless 

there is evidence indicating that 

donated food loss has occurred as a 

result of theft or fraud. This is true 

regardless of the inventory management 

system actually utilized by such 

recipient agencies. 

In § 250.14(d), we propose to include 

requirements in current 

§ 250.13(a)(1)(iii) for the transfer of 

donated foods from one recipient 

agency to another recipient agency and 

to clarify the types of transfers to which 

these requirements apply. We propose 

to clarify that a recipient agency 

operating a household program request 

approval from the distributing agency to 

transfer donated foods to another 

recipient agency in the same program. 

We propose to clarify that transfer of 

donated foods from such recipient 

agency to a recipient agency in another 

program receive FNS approval (i.e., 

through the distributing agency). We 

propose to indicate that a recipient 

agency operating a child nutrition 

program, or one receiving donated foods 

as a charitable institution (in accordance 

with current § 250.67), may transfer 

donated foods to another recipient 

agency or charitable organization 

without prior approval from the 

distributing agency or FNS. This is in 

accordance with single inventory 

management, in which donated foods 

are commingled with other foods, and 

often may not be distinguished from 

them. 

In § 250.14(e), we propose to indicate 

that recipient agencies may obtain the 

services of a commercial storage facility 

to store and distribute donated foods, 

but must ensure compliance with 

Departmental procurement 

requirements in 7 CFR parts 3016 or 

3019, as applicable. We also propose to 

clarify that recipient agencies must 

ensure that such commercial storage 

facilities comply with the applicable 

requirements in 7 CFR part 250 for the 

storage and inventory management of 

donated foods. 

6. Out-of-Condition Donated Foods, 

Food Recalls, and Complaints, § 250.15 

In § 250.15, we propose to include 

requirements for the disposition of 

donated foods that are out-of-condition, 

or that are subject to a food recall, and 

requirements for the resolution of 

recipient complaints relating to donated 

foods. In § 250.15(a), we propose to 

require the distributing agency to ensure 

that out-of-condition donated foods at 

its storage facilities are destroyed, or 

otherwise disposed of, in accordance 

with State or local requirements 

pertaining to food safety and health. We 

propose to retain the contingency for 

sale of out-of-condition donated foods 

(e.g., to a salvage company) in 

accordance with current § 250.13(f), if 

such sale is permitted by State laws or 

regulations, rather than contingent on 

FNS approval. We also propose to 

require the distributing agency to obtain 

an inspection of donated foods by State 

or local health authorities to determine 

their safety and condition, as necessary, 

or as directed by FNS. 

In § 250.15(b), we propose to require 

that recipient agencies in household 

programs report out-of-condition 

donated foods at their storage facilities 

to the distributing agency, and ensure 

that such donated foods are destroyed, 

or otherwise disposed of, in accordance 

with State or local requirements 

pertaining to food safety and health. We 

propose to require the distributing 

agency to ensure that such recipient 

agencies obtain an inspection of 

donated foods by State or local health 

authorities to determine their safety and 

condition, as necessary, or as directed 

by FNS. We propose to indicate that, for 

recipient agencies in child nutrition 

programs, and those receiving donated 

foods as charitable institutions (in 

accordance with § 250.67), donated 

foods must be treated as other foods 

when safety is in question. 

Consequently, such recipient agencies 

must comply with State or local 

requirements in determining the safety 

of donated foods and other foods, and 

in their destruction or other disposition, 

but are not required to report such 

actions to the distributing agency. 

In § 250.15(c), we propose to require 

that the distributing agency or recipient 

agency, as appropriate, follow all 

applicable Federal, State or local 

requirements for donated foods subject 

to a food recall. Departmental guidance 


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is also provided to assist distributing 

and recipient agencies in ensuring that 

donated foods subject to a food recall 

are isolated, inspected, and recovered in 

an expeditious manner, and that the 

appropriate parties are reimbursed for 

costs associated with such actions. 

In § 250.15(d), we propose to indicate 

that the distributing agency must inform 

recipient agencies of the preferred 

method for receiving donated food 

complaints and resolve complaints 

received from recipients, recipient 

agencies, or other entities relating to 

donated foods in an expeditious 

manner, and in accordance with 

applicable requirements in 7 CFR part 

250. We propose to require the 

distributing agency to submit any 

complaints regarding product quality or 

specifications, or suggested products 

improvements, to FNS through the 

established FNS donated foods 

complaint system for tracking and 

evaluation purposes. If resolution of the 

complaint at the State level is not 

feasible, we propose to indicate that the 

distributing agency must provide 

information regarding the complaint to 

FNS for resolution. Guidance on 

meeting these requirements is included 

on the FNS Web site. We also propose 

to prohibit the distributing agency from 

disposing of any donated food that is 

the subject of a complaint prior to 

guidance and authorization from FNS. 

Lastly, we propose to include the 

requirement, in current § 250.22, that 

the distributing agency maintain a 

record of its investigations and other 

actions with respect to any complaints 

relating to donated foods. Resolving and 

tracking product complaints, either at 

the Federal or State level, is critical to 

ensuring that recipient agencies are 

receiving replacement products, as 

appropriate, and that donated foods 

meet the standards established by the 

Department. 

7. Claims and Restitution for Donated 

Food Losses, § 250.16 

In § 250.16, we propose to include 

requirements to ensure that restitution 

is made for donated food losses, 

including claims against parties 

responsible for such losses. In 

§ 250.16(a), we propose to require that 

the distributing agency ensure that 

restitution is made for donated food 

losses, and for the loss or improper use 

of funds provided for, or obtained 

incidental to donated food distribution 

(e.g., in salvage of donated foods or sale 

of pallets). We propose to clarify that, in 

making restitution for losses, the 

distributing agency must identify, and 

seek restitution from, parties 

responsible for the loss, and implement 

corrective actions to prevent future 

losses. Guidance for distributing 

agencies is included in FNS Instruction 

410–1, Claims for Losses of Donated 

Foods and Related Administrative 

Losses—Procedures for the State 

Distributing Agency. 

We propose to remove the actions 

required of the distributing agency in 

making restitution for donated food 

losses in current § 250.15(c). We also 

propose to remove the provision, in 

current § 250.15(c)(2), that inventory 

loss of a donated food that does not 

exceed one percent of the total 

inventory of that food may, under 

certain conditions, be exempt from 

recovery through claims. Although some 

losses that meet such conditions may be 

exempted with FNS approval, as 

indicated above, a blanket exemption 

for inventory loss does not encourage 

efficient inventory management. Current 

provisions in § 250.15(c)(2) also exempt 

losses in amounts that do not exceed 

thresholds established in State laws or 

regulations. We propose to remove this 

exemption as well, as all distributing 

agencies should be held to the same 

standards with respect to accountability 

for Federal resources provided. 

In § 250.16(b), we propose to clarify 

that FNS may initiate and pursue a 

claim against the distributing agency or 

other entities for the loss of donated 

foods, and for the loss or improper use 

of funds provided, or obtained 

incidental to donated food distribution. 

We also propose to clarify that FNS may 

initiate and pursue a claim if the 

distributing agency fails to take required 

claim actions against other parties. 

These requirements incorporate 

requirements in current § 250.15(c). FNS 

guidance on taking action on a claim is 

included in FNS Instruction 420–1, 

Managing Agency Debts. Lastly, we 

propose to clarify that FNS may, on 

behalf of the Department, compromise, 

forgive, suspend, or waive a claim. Such 

actions would also be taken in 

accordance with FNS Instruction 420–1. 

8. Use of Funds Obtained Incidental to 

Donated Food Distribution, § 250.17 

In § 250.17, we propose to include 

requirements for the use of funds 

obtained incidental to donated food 

distribution—e.g., through the 

distribution charge, the salvage of outof-condition donated foods, the sale of 

pallets used for donated foods, or 

rebates from processors for the value of 

donated foods processed into end 

products. In § 250.17(a), we propose to 

clarify requirements in current 

§ 250.15(f)(2) relating to the use of funds 

obtained from the distribution charge 

imposed on recipient agencies in child 

nutrition programs, in accordance with 

§ 250.13(b) of this proposed rule. We 

propose to require that such funds be 

used to meet costs of storing and 

distributing donated foods or related 

administrative costs, consistent with 

limitations on the use of Federal grant 

funds in 7 CFR part 3016, and with 

OMB guidance. We also propose to 

specifically prohibit the use of such 

funds to purchase foods to replace 

donated food losses or to pay claims 

resulting from donated food losses. 

We also propose to include in 

§ 250.17(a) the requirement, in current 

§ 250.15(f)(3), that the distributing 

agency maintain funds obtained from 

the distribution charge in an operating 

account, separate from other funds, as 

well as the current limitation on the 

amount of funds that may be maintained 

in such account. We also propose to 

retain the current requirement that, 

unless FNS approval is requested and 

granted, funds in excess of this amount 

must be used to reduce the distribution 

charge imposed on recipient agencies, 

or to provide appropriate 

reimbursement to such agencies. 

However, we propose to remove the 

contingency in current § 250.15(f)(2) 

that such funds be returned to the 

Department. 

In § 250.17(b), we propose to require 

that school food authorities use funds 

obtained from processors in the 

processing of donated foods into end 

products (e.g., through rebates for the 

value of such processed donated foods, 

in accordance with Subpart C of 7 CFR 

part 250), or from food service 

management companies in crediting for 

the value of donated foods (in 

accordance with Subpart D of 7 CFR 

part 250), in support of the nonprofit 

school food service. This aligns 7 CFR 

part 250 with § 210.14 which provides 

that school food authorities must use 

revenues received in the operation of 

the nonprofit school food service, as 

defined in § 210.2 and in § 250.2 of this 

proposed rule, only for that food 

service. We propose to require that other 

recipient agencies use such funds to 

meet the costs of storing and 

distributing donated foods or related 

administrative costs, as proposed in 

§ 250.17(c) of this rule. 

In § 250.17(c), we propose to clarify 

requirements in current §§ 250.15(f)(1) 

and (f)(2) relating to funds collected in 

claims for donated food losses, and 

funds obtained from other sources 

incidental to donated food distribution. 

Donated foods are made available to 

distributing agencies to support the 

participants of each respective program. 

Any loss of donated foods means fewer 

foods will be available through the 


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affected program unless replacement 

foods are purchased. Therefore, we 

propose to require that funds collected 

in payment of claims for donated food 

losses be used to purchase replacement 

foods for use in the program in which 

the losses occurred unless the 

distributing agencies receives FNS 

approval to use the funds for other 

program purposes. Guidance for use of 

funds collected in payment of a claim 

are included in FNS Instruction 410–1, 

Claims for Losses of Donated Foods and 

Related Administrative Losses— 

Procedures for the State Distributing 

Agency, and in FNS Instruction 420–1, 

Managing Agency Debts. We propose to 

require that funds obtained from other 

sources, except as otherwise indicated 

in this section, be used to pay 

administrative costs of storing and 

distributing donated foods, consistent 

with the limitations on the use of funds 

provided under a Federal grant in 7 CFR 

parts 3016 or 3019, as applicable, and 

OMB guidance, as applicable. Using 

such funds in this manner will permit 

distributing agencies to reduce or 

eliminate the charges imposed on 

recipient agencies for storage, 

distribution and administration related 

to donated foods. Sources of such funds 

may include, for example, the sale of 

donated food containers or pallets, the 

salvage of out-of-condition donated 

foods, or payments by processors for 

failure to meet processing yields. The 

Departmental and OMB regulations 

provide guidance for allowable costs in 

Federal grant expenditures for State and 

local government entities, and for 

private nonprofit organizations. We 

propose to remove the contingency, in 

current § 250.15(f)(2), that such funds be 

returned to the Department. 

We propose to retain the requirement, 

in current § 250.15(f)(3), that the 

distributing agency maintain funds 

obtained from claims or other sources 

indicated in this section in a separate 

salvage account. However, we propose 

to rename this account the ‘‘donated 

food account.’’ We also propose to 

revise upward the threshold for which 

deposits into, and expenditures from, 

such account must receive FNS 

approval. We propose to require that the 

distributing agency receive FNS 

approval for a deposit into, or 

expenditure from, the donated food 

account in excess of $25,000, instead of 

the $2,500 threshold in current 

§ 250.15(f)(4). Regardless, such funds 

must be used in accordance with the 

requirements in proposed 250.17(c). 

Lastly, we propose to require that the 

distributing or recipient agency 

maintain a record of all funds obtained 

and expended in accordance with this 

proposed § 250.17(c). 

In § 250.17(d), we propose to clarify 

that the distributing agency is 

prohibited from using funds obtained 

incidental to donated food distribution 

to meet State matching requirements for 

other Federal grants received—e.g., for 

FDPIR or TEFAP. We also propose to 

clarify that such funds may not be used 

in place of State Administrative 

Expense (SAE) funds available to meet 

costs relating to storage and distribution 

of donated foods. 

In § 250.17(e), we propose to clarify 

the ‘‘Buy American’’ requirement, in 

current § 250.23, for the purchase of 

foods with funds obtained incidental to 

donated food distribution. In 

accordance with the current 

requirement, recipient agencies must 

use Federal funds to purchase only 

foods that are produced, or processed, 

in the United States, with certain 

exceptions. We propose to clarify that, 

when funds obtained in accordance 

with this section, as proposed, are used 

to purchase foods in the commercial 

market, a distributing or recipient 

agency in the continental United States, 

and in Hawaii, must, to the maximum 

extent practical, purchase only domestic 

foods or food products. This 

clarification of the ‘‘Buy American’’ 

requirement is consistent with the 

requirement for school food authority 

purchases in § 210.21(d), and in Section 

12(n) of the Richard B. Russell National 

School Lunch Act (42 U.S.C. 1760). We 

also propose to include the definition of 

domestic foods or food products used in 

§ 210.21(d). Lastly, we propose to clarify 

that the ‘‘Buy American’’ requirement is 

also applicable to the cash-in-lieu-ofdonated foods provided to school food 

authorities in NSLP and to child and 

adult care institutions in CACFP, in 

accordance with §§ 250.56(e) and 

250.61(c), respectively. 

9. Reporting Requirements, § 250.18 

In § 250.18, we propose to include 

requirements for submission of reports 

relating to the distribution and control 

of donated foods. In § 250.18(a), we 

propose to retain the requirement, in 

current § 250.17(a), that the distributing 

agency submit form FNS–152, Monthly 

Distribution of Donated Foods to Family 

Units, to report donated food 

inventories and distribution in FDPIR. 

However, we propose to remove 

reference to form FNS–153, Monthly 

Report of the Commodity Supplemental 

Food Program and Quarterly 

Administrative Financial Status Report, 

as the requirement for submission of 

this report is included in 7 CFR part 

247. We propose instead to indicate that 

the distributing agency must submit 

reports included in regulations for 

specific food assistance programs. We 

also propose to indicate that such 

reports must be submitted in accordance 

with the timeframes established for each 

respective report, rather than include 

specific timeframes for submission in 7 

CFR part 250. 

We propose to retain the requirement, 

in current § 250.17(a), that the 

distributing agency report excessive 

donated food inventories in TEFAP, 

NSLP, and other child nutrition 

programs to FNS, on a semiannual basis, 

utilizing form FNS–155, the Inventory 

Management Register. We propose to 

remove the requirement, in current 

§§ 250.13(k) and 250.17(d), that the 

distributing agency report commodity 

acceptability information to FNS, 

utilizing information collected from 

recipient agencies in NSLP, CACFP, 

NSIP, CSFP, and FDPIR, and submitted 

on form FNS–663, the Commodity 

Acceptability Report. Technological 

advances, including the evolution of 

request-driven ordering systems, over 

the last several years have made the 

collection and reporting of such 

information by the distributing agency 

unnecessary. FNS now receives 

information on donated food 

acceptability from diverse parties on a 

routine basis, through electronic 

communication, national conferences 

and other meetings with program 

operators, as well as through periodic 

reviews of its donated food offerings. 

In § 250.18(b), we propose to include 

the requirement, in current § 250.30(m), 

that processors submit monthly 

performance reports to the distributing 

agency to report donated food 

inventories, processing of donated 

foods, and sale and delivery of end 

products. However, we propose to 

remove the requirement that the 

distributing agency submit a report of 

processors’ inventories to the FNS 

Regional Office, in current § 250.17(b). 

Processors are required to submit 

monthly performance reports to FNS, 

eliminating the need for distributing 

agencies to submit such information to 

FNS. 

In § 250.18(c), we propose to include 

the requirement, in §§ 250.69(f) and 

250.70(f) of this proposed rule, that the 

distributing agency submit to FNS a 

report of the amounts of donated foods 

used in disasters and situations of 

distress, utilizing electronic form FNS– 

292A, Report of Commodity Distribution 

for Disaster Relief. This form is also 

used to request replacement of donated 

foods used in disasters and situations of 

distress. 


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In § 250.18(d), we propose to retain 

the requirement, in current § 250.17(e), 

that the distributing agency submit 

other information relating to the 

distribution of donated foods that may 

be requested by FNS on a periodic basis. 

For example, FNS may require that the 

distributing agency provide information 

relating to the distribution charge, or to 

support the efficiency and costeffectiveness of its storage and 

distribution system, in accordance with 

§ 250.13 of this proposed rule. 

10. Recordkeeping Requirements, 

§ 250.19 

In § 250.19, we propose to include 

recordkeeping requirements relating to 

the distribution and control of donated 

foods. In § 250.19(a), we propose to 

require that distributing and recipient 

agencies, and other entities, maintain 

records of agreements and contracts, 

reports, audits, and claim actions, funds 

obtained incidental to donated food 

distribution, and other records required 

in this part or in other Departmental 

regulations, as applicable. In addition to 

these requirements, we propose to 

require distributing agencies to keep a 

record of the value of donated foods 

received by each of its school food 

authorities in order to assist in 

monitoring distributing agency 

compliance with the requirement that 

school food authorities in NSLP are 

offered, at a minimum, the commodity 

offer value of donated foods, in 

accordance with § 250.58; and records 

to demonstrate compliance with the 

professional standards for State 

directors of distributing agencies in 

§ 235.11(g) of the proposed rule 

Professional Standards for State and 

Local School Nutrition Programs 

Personnel as Required by the Healthy, 

Hunger-Free Kids Act of 2010 (79 FR 

6503 (Feb. 4, 2014)). We also propose to 

require that processors maintain records 

documenting the sale of end products to 

recipient agencies, including the sale of 

such end products by distributors. 

Specific recordkeeping requirements 

relating to the use of donated foods in 

contracts with food service management 

companies are included in § 250.54. 

Lastly, we propose to include the 

provision, in current § 250.16(a)(6), that 

failure to maintain required records 

must be considered prima facie 

evidence of improper distribution or 

loss of donated foods and may result in 

a claim against the responsible party for 

the loss of donated foods, or may result 

in other sanctions or corrective actions. 

We propose to remove the 

requirement, in current § 250.16(a)(3), 

that the distributing agency maintain 

records of refusal of donated foods by 

school food authorities. In accordance 

with a final rule published in the 

Federal Register on August 8, 2008 at 

73 FR 46169, the ‘‘offer and refusal’’ 

system of ordering donated foods was 

removed. We also propose to remove the 

requirement, in current § 250.16(a)(5), 

that recipient agencies maintain records 

of the data and method used to 

determine the number of eligible 

persons served. Recordkeeping 

requirements relating to the 

determination of eligibility, or the 

number of eligible persons served, are 

included in regulations applicable to 

specific programs (e.g., 7 CFR part 247 

for CSFP). 

In § 250.19(b), we propose to retain, 

without change, requirements in current 

§ 250.16(b) relating to the length of time 

that records must be retained. 

11. Audit Requirements, § 250.20 

In § 250.20, we propose to include 

reference to Federal audit requirements 

for distributing and recipient agencies, 

and audit requirements for processors. 

In § 250.20(a), we propose to reference 

audit requirements in 7 CFR part 3052 

for State or local government agencies 

and nonprofit organizations that receive 

Federal grants, as such requirements 

apply to distributing and recipient 

agencies. In accordance with such 

requirements, the value of Federal 

grants or awards expended in a fiscal 

year determine if the distributing or 

recipient agency must obtain an audit in 

that year. We propose to clarify that the 

value of donated foods must be 

considered as part of the total value of 

the Federal grant, and to reference FNS 

guidance in valuing donated foods for 

audit purposes, and in determining if an 

audit is required. 

In § 250.20(b), we propose to include 

requirements for processors to obtain an 

independent CPA audit to determine 

compliance with processing 

requirements for donated foods. In 

accordance with current § 250.18(b), 

multi-State processors must obtain an 

independent CPA audit at a frequency 

determined by the value of the donated 

foods they receive for processing in a 

year. Currently, a multi-State processor 

must obtain an independent CPA audit 

for any year in which it receives more 

than $250,000 in donated foods; every 

two years, if it receives $75,000 to 

$250,000 in donated foods each year; 

and every three years, if it receives less 

than $75,000 in donated foods each 

year. Such audits must be paid for by 

the processor. 

We propose to amend the current 

audit requirement for multi-State 

processors by requiring that a multiState processor obtain an independent 

CPA audit in each of the first two years 

that it receives donated foods for 

processing, regardless of the value of 

donated foods received, to ensure that 

new processors receive appropriate 

oversight as they establish their 

processing programs. After the first two 

years, we propose to require a multiState processor to obtain such an audit 

at a frequency determined by the 

average value of donated foods received 

for processing per year, as currently 

required. However, we propose to revise 

upward the current thresholds for 

determining the required frequency of 

such audits to reflect the much larger 

volume of donated foods provided to 

such processors for processing over the 

last several years. Hence, we propose to 

require a multi-State processor to obtain 

an independent CPA audit: 

(1) Annually, if it receives, on average, 

more than $5,000,000 in donated foods for 

processing per year; 

(2) Every two years, if it receives, on 

average, between $1,000,000 and $5,000,000 

in donated foods for processing per year; and 

(3) Every three years, if it receives, on 

average, less than $1,000,000 in donated 

foods for processing per year. 

In-State processors are not currently 

required to obtain an independent CPA 

audit. In order to ensure compliance 

with program requirements, the 

distributing agency must conduct an onsite review of in-State processors at least 

once every two years, in accordance 

with current § 250.19(b)(1)(iii). 

However, the performance of on-site 

reviews is a costly and time-consuming 

exercise for distributing agencies, and 

we are proposing to remove this 

requirement, as discussed in section 

II.B.13 of the preamble. We propose, 

instead, to require that an in-State 

processor obtain an independent CPA 

audit to determine compliance with 

processing requirements for donated 

foods in the first year that it receives 

donated foods for processing. After the 

first year, we propose to require an inState processor to obtain such an audit 

at a frequency determined by the 

average value of donated foods received 

for processing per year, using the same 

thresholds for determining such 

frequency as we are proposing for multiState processors. Due to the lower 

volume of donated foods received by inState processors, we expect that, after 

the first year, in-State processors would 

be subject to the audit requirement 

every three years. As currently required 

for multi-State processors, we propose 

to require that in-State processors pay 

the cost of the audit. 

We propose to require that the 

donated food value utilized must be the 

contract value of the donated foods, as 


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63236 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Proposed Rules 

defined in § 250.2 of this proposed rule. 

We also propose to clarify that audits 

must determine processor compliance 

with the requirements in this part, and 

must be conducted in accordance with 

the FNS Audit Guide for Processors. 

However, we propose to remove the 

current stipulation that FNS may 

require auditors to attend training 

sessions conducted by the Department. 

Although training may still be provided, 

FNS provides written guidance and 

technical assistance for auditors on an 

ongoing basis. 

In § 250.20(c), we propose to include 

the actions required of processors 

resulting from the audits. We propose to 

require that in-State processors submit a 

copy of the audit to the distributing 

agency for review by December 31 of 

each year in which an audit is required. 

We propose to require the distributing 

agency to ensure that in-State processors 

provide a corrective action plan with 

timelines for correcting deficiencies 

identified in the audit, and that such 

deficiencies are corrected. We propose 

to include the requirement in current 

§ 250.18(b) that multi-State processors 

submit a copy of the audit, and a 

corrective action plan with timelines to 

correct deficiencies identified in the 

audit, as appropriate, to FNS for review 

by December 31 of each year in which 

an audit is required. This will permit 

FNS and distributing agencies to review 

audit findings, follow up on required 

corrective actions, and monitor 

noncompliance issues for the purpose of 

identifying trends and implementing 

program improvements. 

In § 250.20(d), we propose to indicate 

that a distributing or recipient agency is 

subject to sanctions for failure to obtain 

the required audit, or for failure to 

correct deficiencies identified in audits. 

Such sanctions may include the 

withholding, suspension, or termination 

of a Federal award. We propose to 

indicate that, if a processor fails to 

obtain the required audit, or to correct 

deficiencies identified in audits, a 

distributing or recipient agency may 

terminate the processing contract or 

agreement, and may not extend or 

renew such a contract or agreement. We 

also propose to include the stipulation, 

in current § 250.18(b)(5), that FNS may 

prohibit the further distribution of 

donated foods to a processor for its 

failure to comply with audit 

requirements. 

12. Distributing Agency Reviews, 

§ 250.21 

In § 250.21, we propose to include the 

requirements for the distributing agency 

to review subdistributing agencies, 

recipient agencies, and other entities to 

ensure compliance with requirements 

relating to the distribution and control 

of donated foods. In § 250.21(a), we 

propose to clarify and streamline review 

requirements in current § 250.19. We 

propose to require that the distributing 

agency ensure compliance with 

requirements in 7 CFR part 250, and in 

other Federal regulations as applicable, 

through its review of required reports, 

and through on-site reviews of the 

recipient agencies and other entities 

indicated in § 250.21(b) of this proposed 

rule. The required reports for review 

may include audit reports, processors’ 

monthly performance reports, and 

inventory reports submitted in CSFP 

and FDPIR. We also propose to clarify 

that the distributing agency is not 

required to review school food 

authorities and other recipient agencies 

in child nutrition programs. The State 

administering agency (which may be 

different from the distributing agency) is 

responsible for the review of such 

recipient agencies in accordance with 

review requirements of Part 210. Lastly, 

we propose to remove specific review 

procedures included in current 

§ 250.19(b)(1), such as the review of 

recipient agency eligibility and civil 

rights requirements, as they do not 

apply to all programs, and are included 

in Federal regulations for specific 

programs in which they do apply. 

We propose to include current on-site 

review requirements of charitable 

institutions, and of storage facilities at 

the distributing agency level, in 

§ 250.21(b), and to add a reference to the 

distributing agency’s requirement to 

perform on-site reviews of 

subdistributing and recipient agencies 

in CSFP, TEFAP, and FDPIR, in 

accordance with 7 CFR parts 247, 251, 

and 253, respectively. However, we 

propose to remove the requirement, in 

current § 250.19(b)(1)(iii), that the 

distributing agency perform on-site 

reviews of in-State processors. The onsite review would be replaced by review 

of the audits required of such 

processors, in accordance with § 250.20 

of this proposed rule. 

We propose to remove the 

requirement in current § 250.19(b)(2), 

that the distributing agency develop a 

system to verify sales of end products 

when a processor delivers end products 

to a distributor for sale to recipient 

agencies under a discount method of 

sales. Processors receive notification of 

such end product sales from the 

distributor, usually by electronic means, 

and the processor must maintain 

records of such sales, in accordance 

with current § 250.30(k)(2), and with 

§ 250.19(a) of this proposed rule. Such 

records would be reviewed by auditors, 

in conducting the audits required in 

accordance with § 250.20(b) of this 

proposed rule. Consequently, all end 

product sales may be verified through 

the review of audit reports, as well as 

through the distributing agency’s review 

of the processor’s monthly performance 

reports. The distributing agency may 

also require, at its option, that the 

processor submit documentation to 

support information included in the 

processor’s performance report, 

including sales of end products to 

recipient agencies. The State 

administering agency may also review 

school food authorities’ records, in 

order to ensure receipt of the requisite 

quantity of end products, in accordance 

with the administrative review required 

in 7 CFR part 210. 

In § 250.21(c), we propose to include 

the requirement, in current 

§ 250.19(b)(3) and (b)(4), that the 

distributing agency report deficiencies 

identified in its review to recipient 

agencies or other entities, recommend 

corrective actions, and ensure that such 

actions are completed. We propose to 

remove the requirement in current 

§ 250.19(b)(6) that the distributing 

agency require that subdistributing 

agencies monitor and review their own 

operations. Such responsibility must 

reside with the distributing agency, in 

accordance with § 250.4(a) of this 

proposed rule. 

13. Distributing Agency Performance 

Standards, § 250.22 

In § 250.22, we propose to include the 

performance standards that the 

distributing agency must meet, most of 

which are included in current § 250.24. 

Performance standards are meant to 

highlight the most important areas of 

oversight for distributing agencies 

relating to donated foods; however, the 

current standards cover a wide area. In 

§ 250.22(a), we propose to revise the 

performance standards to include only 

those relating to oversight of 

requirements in the ordering, 

distribution, processing, and control of 

donated foods, as such requirements are 

proposed in this rule. We propose to 

revise the performance standard relating 

to the provision for processing of 

donated foods to clarify that the 

distributing agency must provide for 

such processing, at the request of school 

food authorities, in accordance with the 

processing requirements in Subpart C of 

7 CFR part 250. Most distributing 

agencies already provide for processing 

of donated foods into end products, 

which permit school food authorities to 

more easily prepare and serve meals in 

NSLP. We propose to include 

clarification that some performance 


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standards are applicable only to 

distributing agencies that distribute 

donated foods in NSLP or other child 

nutrition programs. We propose an 

additional performance standard, 

ensuring distributing agencies provide 

recipient agencies information regarding 

the preferred method for the submission 

of donated food complaints to the 

distributing agency and that distributing 

agencies act expeditiously to resolve 

submitted complaints. Lastly, we 

propose to clarify that the identification 

of specific performance standards does 

not relieve the distributing agency of the 

responsibility to meet other 

requirements in 7 CFR part 250. 

In § 250.22(b), we propose to include 

the requirement, in current § 250.19(c), 

that the distributing agency submit a 

corrective action plan to FNS if it is 

found to be substantially out of 

compliance with the performance 

standards. We propose to retain the 

current requirements that the plan 

identify the corrective actions to be 

taken, the timeframe for completion of 

such actions, and that the distributing 

agency must submit the plan to FNS 

within 60 days after receiving 

notification of a deficiency. Failure of a 

distributing agency to submit a timely 

corrective action plan to FNS may be 

considered a violation of this part, and 

therefore subject to suspension or 

termination under § 250.3(c). 

In § 250.22(c), we propose to include 

the provision, in current § 250.20, that 

FNS may terminate the distributing 

agency’s participation in the 

distribution of donated foods, or in a 

food distribution program, for failure to 

comply with requirements in 7 CFR part 

250, with other applicable Federal 

regulations, or with its written 

agreement with FNS. We propose to 

indicate that FNS may also choose to 

suspend, rather than terminate, such 

participation, or may terminate or 

suspend some, but not all, activities. In 

certain situations, suspending all or part 

of a program rather than terminating the 

program in its entirety will allow FNS 

to continue serving program 

participants while pursuing corrective 

actions. Lastly, we propose to include 

the stipulation, in current § 250.20, that 

FNS may also take other actions, as 

appropriate, including prosecution 

under applicable Federal statutes. 

C. Subpart C—Processing and Labeling 

of Donated Foods 

We propose to amend current Subpart 

C of 7 CFR part 250 to reduce reporting 

requirements relating to the processing 

of donated foods, and to remove the 

requirement that the processor make a 

payment to the distributing agency for 

the value of excessive donated food 

inventories at the annual reconciliation. 

We also propose to update regulatory 

references to conform to other changes 

proposed in this rule, and to replace 

reference to ‘‘FNSRO’’ with ‘‘FNS 

Regional Office’’ given that the rule 

proposes to remove the definition of 

‘‘FNSRO’’ from the definitions section 

of the rule, in proposed § 250.2. 

We propose to remove the 

requirement, in current § 250.30(k)(3), 

that the processor submit copies of 

requests for refunds and refund 

payments to the distributing agency. We 

also propose to remove the 

requirements, in current § 250.30(n)(4) 

and § 250.30(o), that the distributing 

agency submit monthly performance 

reports, or information from such 

reports, to FNS on a periodic basis. 

In accordance with the proposal to 

remove the requirement that the 

distributing agency develop a sales 

verification system for end product 

sales, as described in section II.B.12 of 

the preamble, we propose to remove the 

requirement, in current 

§ 250.30(m)(1)(viii), that the processor 

report sales verification findings to the 

distributing agency. We also propose to 

remove current § 250.30(m)(1)(vii), 

which is reserved. Accordingly, we 

propose to redesignate 

§ 250.30(m)(1)(ix) as § 250.30(m)(1)(vii). 

In accordance with current 

§ 250.30(n)(3), as part of the annual 

reconciliation, a processor that has 

contracted with the distributing agency 

for the following year must first reduce 

any excessive donated food inventories 

by paying the distributing agency for the 

value of such donated foods. While such 

cash-out of donated food inventories 

may be the best option in certain 

instances, in other cases a transfer of 

such inventories to another distributing 

agency or processor may be the better 

option. Therefore, we propose to revise 

current § 250.30(n)(3) to instead require 

such processor to reduce excessive 

donated food inventories. Policy 

Memorandum FD–064, Management of 

Donated Food Inventories at Processors, 

which was implemented in revised form 

on March 20, 2012, provides several 

options for reduction of excessive 

donated food inventories at processors. 

We propose to remove requirements 

in current § 250.30(q) that the FNS 

Regional Office review processing 

contracts and inventory reports, and in 

current § 250.30(r), which indicates that 

FNS will provide copies of contracts 

upon request. Such contracts and 

inventory reports are currently reviewed 

by FNS Headquarters staff. In 

accordance with the removal of 

paragraphs (o), (q), and (r) of this 

section, paragraphs (p), (s), and (t) 

would be redesignated as paragraphs 

(o), (p), and (q) of this section, 

respectively. 

D. Subpart D—Donated Foods in 

Contracts With Food Service 

Management Companies 

We propose to amend current Subpart 

D of 7 CFR part 250 to clarify 

requirements in the storage, control, and 

use of donated foods in contracts with 

food service management companies. In 

current § 250.50(a), we propose to 

clarify that the food service management 

company must use all donated foods 

received in the recipient agency’s food 

service, or must use commercial 

substitutes in place of such donated 

foods only as permitted in § 250.51(d). 

We propose to revise current § 250.52(a) 

to clarify that the food service 

management company must meet the 

requirements in § 250.14(a) of this 

proposed rule for the safe storage and 

control of donated foods. 

E. Subpart E—National School Lunch 

Program (NSLP) and Other Child 

Nutrition Programs 

We propose to amend current Subpart 

E of 7 CFR part 250 to ensure that 

school food authorities are able to order 

and receive the donated foods that they 

may best utilize in the school food 

service, and to clarify requirements for 

school food authorities in the storage, 

inventory management, and use of 

donated foods. In order to accomplish 

this, we propose to revise current 

paragraphs § 250.58(a) and (e), and to 

consolidate current §§ 250.59 and 

250.60 into a revised § 250.59. Current 

§§ 250.61 and 250.62 would be 

redesignated as §§ 250.60 and 250.61, 

respectively. 

In § 250.58(a), we propose to remove 

reference to the Electronic Commodity 

Ordering System (ECOS), as donated 

food orders are now placed through a 

new FNS electronic donated foods 

ordering system, currently named Web 

Based Supply Chain Management 

(WBSCM). Although all distributing 

agencies currently submit orders and 

other information to FNS through the 

FNS electronic donated foods ordering 

system, not all States have rolled down 

such system to their school food 

authorities. Nevertheless, we propose to 

require that the distributing agency 

ensure that all school food authorities 

are able to submit orders for donated 

foods through the FNS electronic 

donated foods ordering system, or 

through a comparable electronic 

ordering system. Direct submission of 

orders by school food authorities better 

ensures that they receive the preferred 


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types and forms of donated foods, and 

at a time when they may best utilize 

such foods in the school food service. 

We propose to require that the 

distributing agency ensure that all 

school food authorities have the 

opportunity to provide input on at least 

an annual basis in determining which 

donated foods, from the full list of 

donated foods, will be made available to 

them for ordering electronically through 

the FNS electronic donated foods 

ordering system or another system. 

Providing school food authorities with 

the opportunity to order the types and 

forms of foods that they have expressed 

a preference for will help them to 

maximize their use of donated foods to 

meet the nutrition standards in the 

National School Lunch Program and to 

prevent waste. Lastly, we propose to 

require that the distributing agency 

ensure distribution to school food 

authorities of all such ordered donated 

foods that may be distributed to them in 

a cost-effective manner (including the 

use of split shipments, as necessary), 

and that they may efficiently utilize so 

as to minimize the cost to school food 

authorities of receiving donated foods. 

In § 250.58(e), we propose to require 

that the distributing agency use either 

the donated food cost-per-pound prices 

posted annually by USDA or the most 

recently published cost-per-pound in 

the USDA donated foods catalog in 

offering the school food authority the 

commodity offer value of donated foods, 

as required in § 250.58(b). In crediting 

the school food authority’s donated food 

assistance level, currently the 

distributing agency may choose among 

three options in valuing donated foods, 

including the commodity file cost as of 

a specified date and the estimated costper-pound data included in commodity 

survey memoranda. Instead, we propose 

that the distributing agency use the 

USDA purchase price (cost-per-pound) 

in crediting the school food authority’s 

donated food assistance level, and that 

the distributing agency update this price 

at least semi-annually to reflect the most 

recent purchase price. This will better 

reflect the actual benefit received by the 

school food authority. 

In § 250.59(a), we propose to reference 

the storage and inventory requirements 

in Subpart B of 7 CFR part 250 

applicable to distributing agencies to 

ensure the safe and effective storage and 

control of donated foods. We propose to 

indicate that the school food authority 

must ensure the safe and sanitary 

storage, inventory management, and use 

of donated foods and purchased foods, 

in accordance with requirements in 

current § 210.13. In accordance with 

§ 250.14(c) of this proposed rule, the 

school food authority may commingle 

donated foods and purchased foods in a 

single inventory management system. 

We propose to remove the current 

provision that permits the distributing 

agency to determine if the school food 

authority may exercise the single 

inventory option, or must continue to 

maintain and track donated food 

inventories separately from its 

purchased foods. Separate inventory 

tracking of donated foods would be an 

unnecessary burden for school food 

authorities, and it is important that 

single inventory management be 

implemented consistently in all States. 

In § 250.59(b), we propose to include 

the requirements in current § 250.60(a) 

for the use of donated foods in the 

nonprofit school food service, with only 

minor clarifications. In § 250.59(c), we 

propose to include contingencies and 

requirements in current § 250.60(b) for 

the use of donated foods outside of the 

nonprofit school food service, again 

with only minor clarifications. In 

§ 250.59(d), we propose to include 

requirements in current § 250.60(c) for 

donated foods in contracts with food 

service management companies in a 

more streamlined form, but without 

substantive changes. 

In § 250.59(e), we propose to clarify 

requirements for two or more school 

food authorities acting as a collective 

unit in conducting activities relating to 

donated foods. School food authorities 

often perform activities in a 

collaborative manner through school coops or consortia, in order to minimize 

costs and improve efficiency of 

operations. We propose to clarify that 

the school collective unit is subject to 

the same requirements pertaining to 

such donated food activities as a single 

school food authority. For example, the 

school collective unit may commingle 

donated foods and purchased foods in a 

single inventory management system. 

F. Subpart F—Household Programs 

We propose to revise current Subpart 

F to streamline and clarify current 

descriptions of, and requirements for, 

the distribution of donated foods in 

CSFP and FDPIR, and to include such 

information for TEFAP. We propose to 

remove reference to the Food 

Distribution Program in the Trust 

Territory of the Pacific Islands, as all 

distribution of donated foods in this 

program has been cashed out. We also 

propose to remove reference to the 

Special Supplemental Nutrition 

Program for Women, Infants, and 

Children (i.e., the WIC Program), as 

donated food distribution in that 

program was discontinued several years 

ago. Accordingly, we propose to include 

the following new sections in the 

revised Subpart F. 

1. Commodity Supplemental Food 

Program (CSFP), § 250.63 

In § 250.63(a), we propose to clarify 

that the Department distributes donated 

foods in CSFP to the distributing agency 

for further distribution in the State, in 

accordance with 7 CFR part 247. We 

also propose to clarify that State and 

recipient agencies must comply with the 

requirements of 7 CFR part 250 in the 

distribution, control, and use of donated 

foods in CSFP, to the extent that such 

requirements are not inconsistent with 

the requirements in 7 CFR part 247. In 

§ 250.63(b), we propose to clarify the 

types of donated foods distributed in 

CSFP, in accordance with the legislation 

authorizing the purchase of such foods. 

2. The Emergency Food Assistance 

Program (TEFAP), § 250.64 

In § 250.64, we propose to include a 

description of the distribution of 

donated foods in TEFAP. In § 250.64(a), 

we propose to clarify that the 

Department distributes donated foods in 

TEFAP to the distributing agency for 

further distribution in the State, in 

accordance with 7 CFR part 251. We 

also propose to clarify that State and 

recipient agencies must comply with the 

requirements of 7 CFR part 250 in the 

distribution, control, and use of donated 

foods in TEFAP, to the extent that such 

requirements are not inconsistent with 

the requirements in 7 CFR part 251. In 

§ 250.64(b), we propose to clarify the 

types of donated foods distributed in 

TEFAP, in accordance with the 

legislation authorizing the purchase of 

such foods. 

3. Food Distribution Program on Indian 

Reservations (FDPIR), § 250.65 

In § 250.65(a), we propose to clarify 

that the Department distributes donated 

foods in FDPIR to the distributing 

agency for further distribution, in 

accordance with 7 CFR parts 253 and 

254. We also propose to clarify that the 

distributing agency may be a State 

agency or Indian Tribal Organization, 

and must comply with the requirements 

of 7 CFR part 250 in the distribution, 

control, and use of donated foods in 

FDPIR, to the extent that such 

requirements are not inconsistent with 

the requirements in 7 CFR parts 253 and 

254. In § 250.65(b), we propose to clarify 

the types of donated foods distributed in 

FDPIR, in accordance with the 

legislation authorizing the purchase of 

such foods. 


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G. Subpart G—Additional Provisions 

We propose to amend current Subpart 

G of 7 CFR part 250 by revising the 

Subpart heading to read Additional 

Provisions, by clarifying requirements 

for the distribution of donated foods in 

disasters and situations of distress, and 

by adding a provision which identifies 

the OMB assigned information 

collection and recordkeeping control 

numbers. In order to accomplish this, 

we propose to revise the heading of 

Subpart G, as well as current §§ 250.69 

and 250.70, and we propose to add 

§ 250.71. 

1. Disasters, § 250.69 

We propose to revise current § 250.69 

to clarify requirements for the 

distribution and use of donated foods in 

a disaster, contingencies for 

replacement of such foods, and 

reporting requirements. In accordance 

with § 250.2 of this proposed rule, the 

term ‘‘disaster’’ includes a 

Presidentially declared disaster or 

emergency (e.g., a pandemic); therefore, 

we refer simply to a disaster in this 

section. In § 250.69(a), we propose to 

retain the current provision that the 

distributing agency may provide 

donated foods from current inventories, 

at the distributing or recipient agency 

level, to approved disaster organizations 

for use in providing congregate meal 

assistance to persons in need of food 

assistance as a result of a disaster. We 

propose to retain the current authority 

for the distributing agency to provide 

such assistance without FNS approval. 

However, we propose to clarify that the 

distributing agency must notify FNS 

that donated foods will be provided, 

and the period of time that they are 

expected to be needed. If such period of 

time is extended, the distributing 

agency must notify FNS of the 

extension. 

In § 250.69(b), we propose to retain 

the current provision that the 

distributing agency may provide 

donated foods to disaster organizations 

for distribution to households in need of 

food assistance once FNS approval has 

been obtained for such distribution. We 

propose to clarify that such assistance 

may continue for the period of time that 

FNS determines necessary to meet the 

needs of such households. We propose 

to retain the prohibition for households 

to simultaneously receive disaster 

Supplemental Nutrition Assistance 

Program (D–SNAP) benefits (formerly 

disaster food stamps) and donated food 

assistance. 

In § 250.69(c), we propose to retain 

the current requirement that the 

distributing agency review and approve 

a disaster organization’s application to 

provide donated food disaster 

assistance, before distributing donated 

foods to such organization. We also 

propose to retain the current 

requirement that, for distribution of 

donated foods to households, the 

application must also be forwarded to 

FNS for approval. We propose to retain 

the current required elements of such 

applications, including those additional 

elements required for distribution of 

donated foods to households. 

In § 250.69(d), we propose to include 

the current requirement that disaster 

organizations collect information from 

households receiving donated foods, if 

issuance of D–SNAP benefits has also 

been approved, in order to ensure that 

households receiving D–SNAP benefits 

do not also receive donated foods. We 

propose to retain the current 

information that must be collected from 

such households. We also propose to 

include the current requirements that 

such household information be reported 

to the distributing agency, and that the 

distributing agency maintain a record of 

such information. 

In § 250.69(e), we propose to include 

the provision, in current § 250.13(d)(1), 

that permits disaster relief workers to 

receive meals containing donated foods 

as an incident of their service to eligible 

recipients. However, we propose to 

clarify that any emergency relief 

workers at the congregate feeding site 

who are directly engaged in providing 

relief assistance may be served 

congregate meals containing donated 

foods. 

In § 250.69(f), we propose to include 

the current requirement that the 

distributing agency report to FNS the 

number and location of sites where 

donated foods are used in congregate 

meals or household distribution, as 

these sites are established. We also 

propose to retain the requirement that 

the distributing agency provide a report 

of the types and amounts of donated 

foods used in disaster assistance. 

However, we propose to require this 

information to be reported 

electronically, utilizing form FNS– 

292A, Report of Commodity Distribution 

for Disaster Relief. 

In § 250.69(g), we propose to include 

the current provision for FNS 

replacement of donated foods used in 

disasters, as requested by the 

distributing agency. However, we 

propose to require that such information 

must be reported within 45 days of 

termination of disaster assistance, rather 

than the current 30 day period. Also, we 

propose to require that such 

replacement be requested electronically, 

utilizing form FNS–292A, Report of 

Commodity Distribution for Disaster 

Relief, along with the report of the 

donated foods used in the disaster. 

Lastly, we propose to clarify that, for 

food diverted from inventories of 

recipient agencies in child nutrition 

programs, FNS will replace such food if 

the recipient agency received the same 

types of donated food during the year 

preceding the onset of the disaster 

assistance. Such recipient agencies may 

commingle donated foods and 

commercially purchased foods in a 

single inventory management system, 

which makes it difficult to ascertain 

which foods are actually used. We 

propose to clarify that such replacement 

will be in the amount of food used, but 

not to exceed the amount of like 

donated food received during the 

preceding year. 

In § 250.69(h), we propose to indicate 

that FNS will, upon receiving a 

distributing agency request via public 

voucher, reimburse the distributing 

agency for any costs incurred in 

transporting donated foods within the 

State, or from one State to another, for 

use in disasters. 

2. Situations of Distress, § 250.70 

We propose to revise current § 250.70 

to clarify requirements for the 

distribution and use of donated foods in 

a situation of distress (as defined in 

§ 250.2 of this proposed rule), 

contingencies for replacement of such 

foods, and reporting requirements. As in 

a disaster, donated foods may be used 

to provide assistance in a situation of 

distress, but requirements for the use of 

such foods, and conditions for their 

replacement, are somewhat different. In 

§ 250.70(a), we propose to retain the 

current conditions for the distributing 

agency to provide donated foods to 

approved disaster organizations for use 

in providing congregate meals to 

persons in need of food assistance as a 

result of a situation of distress. In 

accordance with current requirements, 

FNS approval is not required for such 

use if the situation of distress is the 

result of a natural event—e.g., a 

hurricane, flood, or snowstorm—and if 

its duration will not exceed 30 days. 

However, we propose to clarify that the 

distributing agency must notify FNS 

that donated food assistance is to be 

provided. FNS approval is required to 

permit such donated food assistance for 

a period exceeding 30 days. We propose 

to clarify that FNS approval is required 

to permit donated food assistance in 

providing congregate meals in a 

situation of distress that is not the result 

of a natural event (e.g., an explosion), 

for any period of time. As with 

disasters, the distributing agency may 


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63240 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Proposed Rules 

use donated foods from current 

inventories at the distributing or 

recipient agency level. 

In § 250.70(b), we propose to retain 

the current requirement that the 

distributing agency obtain FNS approval 

to provide donated foods to approved 

disaster organizations for distribution to 

households in a situation of distress. We 

propose to clarify that such assistance 

may continue for the period of time that 

FNS determines necessary to meet the 

needs of such households. In 

accordance with current restrictions, 

households receiving D–SNAP benefits 

are not eligible to also receive donated 

foods. 

In § 250.70(c), we propose to retain 

the current requirement that the disaster 

organization submit an application to 

the distributing agency, for its review 

and approval, to receive donated foods 

to provide assistance in a situation of 

distress. For distribution of donated 

foods in a situation of distress that is not 

the result of a natural event, or for any 

distribution of donated foods to 

households, we propose to clarify that, 

once the distributing agency approves 

the application, it must submit the 

application to FNS for approval. We 

propose to require the same elements for 

all such applications as we propose to 

be included for applications in a 

disaster, in accordance with § 250.69(c) 

of this proposed rule. 

In § 250.70(d), we propose to retain 

the current requirement that disaster 

organizations collect specific 

information from households receiving 

donated foods in a situation of distress, 

if issuance of D–SNAP benefits has also 

been approved. We propose to include 

the same information that is required to 

be collected from households in a 

disaster, to require that such 

information be reported to the 

distributing agency, and that the 

distributing agency maintain a record of 

such information. In § 250.70(e), we 

propose to clarify that emergency relief 

workers may receive meals containing 

donated foods at a congregate feeding 

site in a situation of distress in 

accordance with the same conditions 

that apply in a disaster in § 250.69(e) of 

this proposed rule. 

In § 250.70(f), we propose to include 

the current requirement that the 

distributing agency report to FNS the 

number and location of sites where 

donated foods are used in congregate 

meals or household distribution, as 

these sites are established. We also 

propose to require the distributing 

agency to report the types and amounts 

of donated foods used in the situation 

of distress electronically, utilizing form 

FNS–292A, Report of Commodity 

Distribution for Disaster Relief, within 

the same 45-day time period as required 

for disasters. 

In § 250.70(g), we propose to include 

the current contingencies for the 

replacement of donated foods used in 

situations of distress. FNS will replace 

such foods to the extent that funds are 

available to purchase replacement 

foods, and if the distributing agency 

requests such replacement within 45 

days following the termination of such 

assistance. This is longer than the 30 

days that distributing agencies currently 

have to request replacement of these 

foods. However, we propose to require 

that such replacement be requested 

electronically, utilizing form FNS– 

292A, Report of Commodity Distribution 

for Disaster Relief, along with the report 

of the donated foods used in the 

situation of distress. We also propose to 

clarify that, subject to the above 

conditions, FNS will replace foods 

diverted from inventories of recipient 

agencies in child nutrition programs if 

the recipient agency received the same 

types of donated food during the year 

preceding the onset of the assistance. 

Such replacement will be in the amount 

of food used, but not to exceed the 

amount of like donated food received 

during the preceding year. 

In § 250.70(h), we propose to indicate 

that FNS will, upon receiving a 

distributing agency request via public 

voucher, reimburse the distributing 

agency, to the extent that funds are 

available, for any costs incurred in 

transporting donated foods within the 

State, or from one State to another, for 

use in a situation of distress. 

In § 250.71 we propose to add a 

provision providing the current OMB 

assigned control numbers for the 

information collection and 

recordkeeping provisions in 7 CFR part 

250. 

7 CFR Part 251 

We propose to amend 7 CFR part 251 

to conform certain requirements for 

distribution of donated foods in TEFAP 

to requirements for such distribution in 

other programs, or with changes to 7 

CFR part 250 proposed in this rule. We 

propose to remove current § 251.4(f)(4), 

which requires that the external 

shipping containers and product labels 

of processed end products distributed in 

TEFAP identify them as USDA donated 

food products. The removal of this 

requirement would conform to 

requirements for unprocessed donated 

foods distributed in TEFAP, as well as 

other programs, which do not require 

such identification. In accordance with 

this proposal, we propose to redesignate 

current § 251.4(f)(5) as § 251.4(f)(4). 

We propose to revise current 

§ 251.4(g) to require TEFAP donated 

foods to be distributed and used in 

accordance with the requirements in 7 

CFR part 251, and with the 

requirements in 7 CFR part 250, to the 

extent that such requirements are not 

inconsistent with the requirements in 7 

CFR part 251. We propose to align 

requirements in the transfer of TEFAP 

foods, and in ensuring restitution for 

losses of TEFAP foods, with such 

requirements for other donated foods, as 

proposed in this rule. 

We propose to require that transfers of 

TEFAP donated foods comply with 

requirements in §§ 250.12(d) and 

250.14(d) of this proposed rule, as 

applicable. We propose to clarify that 

the State agency must ensure that 

restitution is made for the loss of TEFAP 

donated foods, or for the loss or 

improper use of funds provided for, or 

obtained as an incident of, the 

distribution of such foods, in 

accordance with § 250.16 of this 

proposed rule. Lastly, we propose to 

indicate that the State agency is subject 

to claims for such losses for which it is 

responsible, as well as for its failure to 

initiate or pursue claims against other 

parties responsible for such losses. We 

propose to remove current § 251.4(l), as 

the requirements for ensuring restitution 

for losses of donated foods are included 

in proposed § 250.16. 

III. Procedural Matters 

A. Public Comment Procedures 

Your written comments on this 

proposed rule should be specific, 

confined to issues pertinent to the 

proposed rule, and should explain your 

reasons for any change recommended. 

Where possible, you should reference 

the specific section or paragraph of the 

proposal you are addressing. Comments 

received after the close of the comment 

period (see DATES) will not be 

considered or included in the 

Administrative Record for the final rule. 

The comments, including names, 

street addresses, and other contact 

information of commenters, will be 

available for public review at FNS, 

Room 500, 3101 Park Center Drive, 

Alexandria, Virginia, during regular 

business hours (8:30 a.m. to 5 p.m.), 

Mondays through Fridays, except 

Federal holidays. 

Executive Order 12866 requires each 

agency to write regulations that are 

simple and easy to understand. We 

invite your comments on how to make 

these regulations easier to understand, 

including answers to questions such as 

the following: 


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(1) Are the requirements in the rule 

clearly stated? 

(2) Does the rule contain technical 

language or jargon that interferes with 

its clarity? 

(3) Does the format of the rule 

(grouping and order of sections, use of 

headings, paragraphs, etc.) make it more 

or less clear? 

(4) Would the rule be easier to 

understand if it were divided into more 

(but shorter) sections? 

(5) Is the description of the rule in the 

preamble section entitled ‘‘Background 

and Discussion of the Proposed Rule’’ 

helpful in understanding the rule? How 

could this description be more helpful? 

B. Executive Order 12866 and 13563 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This 

proposed rule has been determined to 

be not significant and was not reviewed 

by the Office of Management and 

Budget (OMB) under Executive Order 

12866. 

C. Regulatory Flexibility Act 

This proposed rule has been reviewed 

with regard to the requirements of the 

Regulatory Flexibility Act (5 U.S.C. 

601–612). Pursuant to that review, it has 

been certified that this action will not 

have a significant impact on a 

substantial number of small entities. 

Although the rule would require 

specific procedures for distributing and 

recipient agencies to follow in the 

distribution and control of donated 

foods, USDA does not expect them to 

have a significant impact on such 

entities. 

D. Public Law 104–4, Unfunded 

Mandates Reform Act of 1995 

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, 

FNS generally must prepare a written 

statement, including a cost-benefit 

analysis, for proposed and final rules 

with ‘‘Federal mandates’’ that may 

result in expenditures to State, local, or 

Tribal governments, in the aggregate, or 

to the private sector, of $100 million or 

more in any one year. When such a 

statement is needed for a rule, section 

205 of the UMRA generally requires 

FNS to identify and consider a 

reasonable number of regulatory 

alternatives and adopt the least costly, 

more cost-effective or least burdensome 

alternative that achieves the objectives 

of the rule. This rule contains no 

Federal mandates (under the regulatory 

provisions of Title II of the UMRA) for 

State, local, and Tribal governments or 

the private sector of $100 million or 

more in any one year. This rule is, 

therefore, not subject to the 

requirements of sections 202 and 205 of 

the UMRA. 

E. Executive Order 12372 

The donation of foods in USDA food 

distribution and child nutrition 

programs is included in the Catalog of 

Federal Domestic Assistance under 

10.555, 10.558, 10.559, 10.565, 10.567, 

and 10.569. 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), the donation of 

foods in such programs is included in 

the scope of Executive Order 12372, 

which requires intergovernmental 

consultation with State and local 

officials. 

F. 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. 

FNS has considered the impact of this 

rule on State and local governments and 

has determined that this rule does have 

Federalism implications. 

1. Prior Consultation With State 

Officials 

The programs affected by the 

regulatory proposals in this rule are all 

State-administered, Federally-funded 

programs. Hence, our national 

headquarters office has formal and 

informal discussions with State and 

local officials, as well as commercial 

contractors, on an ongoing basis 

regarding issues relating to the 

distribution and control of donated 

foods. FNS attends annual conferences 

of the American Commodity 

Distribution Association, a national 

group with State, local, and industry 

representation, and the School Nutrition 

Association, as well as other 

conferences. 

2. Nature of Concerns and the Need to 

Issue This Rule 

The rule addresses the concerns of 

program operators that distribute and 

use donated foods in food distribution 

and child nutrition programs. The rule 

would reduce the reporting and 

administrative workload for distributing 

and recipient agencies involved in the 

distribution and control of donated 

foods. 

3. Extent to Which We Meet Those 

Concerns 

FNS has considered the impact of the 

proposed rule on State and local 

agencies. The overall effect of this rule 

is to ensure that such agencies are able 

to utilize and distribute donated foods 

safely and efficiently, with a minimal 

reporting and recordkeeping burden. 

FNS is not aware of any case in which 

the provisions of the rule would 

preempt State law. 

G. Executive Order 12988 

This proposed rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. This proposed rule, 

when finalized, would 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 proposed rule 

would not have retroactive effect. Prior 

to any judicial challenge to the 

provisions of this rule or the application 

of its provisions, all applicable 

administrative procedures must be 

exhausted. 

H. Civil Rights Impact Analysis 

FNS has reviewed this rule in 

accordance with the Department 

Regulation 4300–4, ‘‘Civil Rights Impact 

Analysis’’, to identify and address any 

major civil rights impacts the rule might 

have on minorities, women, and persons 

with disabilities. After a careful review 

of the rule’s intent and provisions, FNS 

has determined that this rule will not in 

any way limit or reduce the ability of 

participants to receive the benefits of 

donated foods in food distribution or 

child nutrition programs on the basis of 

an individual’s or group’s race, color, 

national origin, sex, age, or disability. 

FNS found no factors that would 

negatively and disproportionately affect 

any group of individuals. 

I. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995, this notice 


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63242 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Proposed Rules 

invites the general public and other 

public agencies to comment on this 

proposed information collection. This 

collection is a revision of a currently 

approved collection, OMB#0584–0293. 

Written comments must be received 

on or before January 20, 2015. 

Comments are invited on: (a) Whether 

the proposed collection of information 

is necessary for the proper performance 

of the functions of the agency, including 

whether the information shall 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 that were 

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. 

Comments may be sent to Dana 

Rasmussen, at the address listed in the 

ADDRESSES section of this preamble. 

Comments may also be submitted via 

email to Dana.Rasmussen@fns.usda.gov. 

Comments will also be accepted through 

the Federal eRulemaking Portal. Go to 

http://www.regulations.gov, and follow 

the online instructions for submitting 

comments electronically. Commenters 

are asked to separate their comments on 

the information collection requirements 

from their comments on the remainder 

of the proposed rule. 

Title: Food Distribution Forms. 

OMB Number: 0584–0293. 

Expiration Date: 09/30/2016. 

Type of Request: Revision of a 

currently approved collection. 

Abstract: This is a revision of an 

existing information collection based on 

a proposed rule titled Proposed Changes 

to the Requirements for the Distribution 

and Control of Donated Foods, which 

substantially re-writes 7 CFR part 250. 

The rule proposes to revise and clarify 

requirements in 7 CFR part 250 to 

ensure that USDA donated foods are 

distributed, stored, and managed in the 

safest, most efficient, and cost-effective 

manner, at State and recipient agency 

levels. The rule would also reduce 

administrative and reporting 

requirements for State distributing 

agencies, revise or clarify regulatory 

provisions relating to accountability for 

donated foods, and rewrite much of 7 

CFR part 250 in a more user-friendly, 

‘‘plain language,’’ format. Lastly, the 

rule proposes to revise and clarify 

specific requirements in 7 CFR part 251 

to conform more closely to related 

requirements in 7 CFR part 250. This 

revision also includes provisions 

inadvertently omitted in the currently 

approved information collection, 

substantially revises other provisions 

which were inaccurate, and updates all 

relevant aspects of information 

collection requirements in the package. 

Affected Public: Respondent groups 

include: (1) Individuals and households; 

(2) businesses or other for-profit 

agencies; (3) not for profit organizations; 

and (4) State, local, and Tribal 

governments. 

Estimated Number of Respondents: 

The total estimated number of 

respondents is 636,478. This includes 

611,200 individuals and households, 

2,812 businesses and other for-profit 

companies, 1,600 private not-for-profit 

organizations, and 20,866 State, Local, 

and Tribal governments. 

Estimated Number of Responses per 

Respondent: The total estimated average 

number of responses is 6.10 per 

respondent. 

Estimated Total Annual Responses: 

3,879,952. 

Estimated Time per Response: The 

average response time is 0.30 hours per 

response. 

Estimated Total Annual Burden on 

Respondents: See the table below for 

estimated total annual burden for each 

type of respondent. 

Affected public Estimated number 

of respondents 

Number of 

responses per 

respondent 

Total annual 

responses 

Estimated total 

hours per 

response 

Estimated total 

burden 

Reporting 

State, Local, and Tribal Governments ........... 20,866 11.16 232,774.24 0.26 59,589.50 

Private for Profit ............................................. 2,812 305.10 857,949.00 0.03 24,566.72 

Private Not for Profit ...................................... 1,600 2.03 3,240.00 0.19 614.50 

Individual ........................................................ 611,200 .00 1.96 1,199,200.00 0.25 304,400.00 

Total Estimated Reporting Burden ......... 636,478 .00 3.60 2,293,163.24 0.17 389,170.72 

Recordkeeping 

State, Local, and Tribal Governments ........... 20,866 .00 24.22 505,305.46 0.07 37,129.57 

Private for Profit ............................................. 2,812 367.99 1,034,786.00 0.06 62,790.72 

Private Not for Profit ...................................... 1,600 29.19 46,697.00 14.44 674,358.04 

Individual ........................................................ 0 0.00 0.00 0.00 0.00 

Total Estimated Recordkeeping Burden 25,278 .00 62.77 1,586,788.46 0.49 774,278.33 

Total of Reporting and Recordkeeping 

Reporting ........................................................ 636,478 .00 3.60 2,293,163.24 0.17 389,170.72 

Recordkeeping ............................................... 25,278 .00 62.77 1,586,788.46 0.49 774,278.33 

Total ........................................................ 636,478 .00 6.10 3,879,951.70 0.30 1,163,449.05 

Note: A detailed table is included in the supplemental documents to this rule. 

J. Regulatory Impact Analysis 

This rule has been designated as Not 

Significant by the Office of Management 

and Budget, therefore, no Regulatory 

Impact Analysis is required. 

K. Executive Order 13175—Consultation 

and Coordination With Indian Tribal 

Governments 

Executive Order 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 


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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. 

On February 13, 2013, as part of its 

regular quarterly Tribal consultation 

schedule, USDA engaged in a 

consultative session to obtain input by 

Tribal officials, or their designees, and 

Tribal members concerning the effect of 

this and other rules on the Tribes or 

Indian Tribal governments. In regard to 

the provisions of this rule, at the 

consultative session a Tribal member 

requested, and FNS provided, 

clarification regarding the purpose of 

this rule. No concerns regarding the 

provisions of the rule were expressed. 

We are unaware of any current Tribal 

laws that could be in conflict with the 

proposed rule. 

L. E-Government Act Compliance 

The Department is committed to 

complying with the E-Government Act, 

to promote the use of the Internet and 

other information technologies to 

provide increased opportunities for 

citizen access to Government 

information and services, and for other 

purposes. 

List of Subjects 

7 CFR Part 250 

Disaster assistance, Food assistance 

programs, Grant programs-social 

programs, Reporting and recordkeeping 

requirements. 

7 CFR Part 251 

Food assistance programs, Grant 

programs-social programs, Reporting 

and recordkeeping requirements, 

Surplus agricultural commodities. 

Accordingly, 7 CFR parts 250 and 251 

are proposed to be amended as follows: 

PART 250—DONATION OF FOODS 

FOR USE IN THE UNITED STATES, ITS 

TERRITIORIES AND POSSESSIONS 

AND AREAS UNDER ITS 

JURISDICTION 

■ 1. The authority citation for part 250 

continues to read as follows: 

Authority: 5 U.S.C. 301; 7 U.S.C. 612c, 

612c note, 1431, 1431b, 1431e, 1431 note, 

1446a–1, 1859, 2014, 2025; 15 U.S.C. 713c; 

22 U.S.C. 1922; 42 U.S.C. 1751, 1755, 1758, 

1760, 1761, 1762a, 1766, 3030a, 5179, 5180. 

■ 2. Revise Subpart A to read as follows: 

Subpart A—General Purpose and 

Administration 

Sec. 

250.1 Purpose and use of donated foods. 

250.2 Definitions. 

250.3 Administration at the Federal level. 

250.4 Administration at the State level. 

250.5 Civil rights. 

§ 250.1 Purpose and use of donated foods. 

(a) Purpose. The Department 

purchases foods and donates them to 

State distributing agencies for further 

distribution and use in food assistance 

programs, or to provide assistance to 

needy persons, in accordance with 

legislation: 

(1) Authorizing donated food 

assistance in specific programs (e.g., the 

Richard B. Russell National School 

Lunch Act for the National School 

Lunch Program (NSLP)); or 

(2) Authorizing the removal of surplus 

foods from the market or the support of 

food prices (i.e., in accordance with 

Section 32, Section 416, and Section 

709, as defined in § 250.2). 

(b) Use of donated foods. Donated 

foods must be used in accordance with 

the requirements of this part and with 

other Federal regulations applicable to 

specific food assistance programs (e.g., 7 

CFR part 251 includes requirements for 

the use of donated foods in The 

Emergency Food Assistance Program 

(TEFAP)). Such use may include 

activities designed to demonstrate or 

test the effective use of donated foods 

(e.g., in nutrition classes or cooking 

demonstrations) in any programs. 

However, donated foods may not be: 

(1) Sold or exchanged, or otherwise 

disposed of, unless approved by FNS, or 

specifically permitted elsewhere in this 

part or in other Federal regulations (e.g., 

donated foods may be used in meals 

sold in NSLP); 

(2) Used to require recipients to make 

any payments or perform any services in 

exchange for their receipt, unless 

approved by FNS, or specifically 

permitted elsewhere in this part or in 

other Federal regulations; or 

(3) Used to solicit voluntary 

contributions in connection with their 

receipt, except for donated foods 

provided in the Nutrition Services 

Incentive Program (NSIP). 

(c) Legislative sanctions. In 

accordance with the Richard B. Russell 

National School Lunch Act (42 U.S.C. 

1760) and the Agriculture and 

Consumer Protection Act of 1973 (7 

U.S.C. 612c note), any person who 

embezzles, willfully misapplies, steals, 

or obtains by fraud any donated foods 

(or funds, assets, or property deriving 

from such donated foods) will be subject 

to Federal criminal prosecution and 

other penalties. Any person who 

receives, conceals, or retains such 

donated foods or funds, assets, or 

property deriving from such foods, with 

the knowledge that they were 

embezzled, willfully misapplied, stolen, 

or obtained by fraud, will also be subject 

to Federal criminal prosecution and 

other penalties. The distributing agency, 

or other parties, as applicable, must 

immediately notify FNS of any such 

violations. 

§ 250.2 Definitions. 

7 CFR Part 3016 means the 

Department’s regulations establishing 

uniform administrative requirements for 

Federal grants and cooperative 

agreements and subawards to State, 

local, and Indian Tribal governments. 

7 CFR Part 3019 means the 

Department’s regulations establishing 

uniform administrative requirements for 

Federal grants and cooperative 

agreements awarded to institutions of 

higher education, hospitals, and other 

nonprofit organizations. 

7 CFR Part 3052 means the 

Department’s regulations establishing 

audit requirements for State and local 

governments and nonprofit 

organizations that receive Federal 

grants. 

Administering agency means a State 

agency that has been approved by the 

Department to administer a food 

assistance program. If such agency is 

also responsible for the distribution of 

donated foods, it is referred to as the 

distributing agency in this part. 

Adult care institution means a 

nonresidential adult day care center that 

participates independently in CACFP, 

or that participates as a sponsoring 

organization, and that may receive 

donated foods or cash-in-lieu of donated 

foods, in accordance with an agreement 

with the distributing agency. 

AoA means the Administration on 

Aging, which is the DHHS agency that 

administers NSIP. 

Bonus foods means Section 32, 

Section 416, and Section 709 donated 

foods, as defined in this section, which 

are purchased under surplus removal or 

price support authority, and provided to 

distributing agencies in addition to 

legislatively authorized levels of 

assistance. 

CACFP means the Child and Adult 

Care Food Program. 

Carrier means a commercial 

enterprise that transports donated foods 

from one location to another, but does 

not store such foods. 

Charitable institutions means public 

institutions or private nonprofit 

organizations that provide a meal 


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service on a regular basis to 

predominantly needy persons in the 

same place without marked changes. 

Some types of charitable institutions are 

included in § 250.67. 

Child care institution means a 

nonresidential child care center that 

participates independently in CACFP, 

or that participates as a sponsoring 

organization, in accordance with an 

agreement with the distributing agency. 

Child nutrition program means NSLP, 

CACFP, SFSP, or SBP. 

Commodity offer value means the 

minimum value of donated foods that 

the distributing agency must offer to a 

school food authority participating in 

NSLP each school year. The commodity 

offer value is equal to the national permeal value of donated food assistance 

multiplied by the number of 

reimbursable lunches served by the 

school food authority in the previous 

school year. 

Commodity school means a school 

that operates a nonprofit food service, in 

accordance with 7 CFR part 210, but 

that receives additional donated food 

assistance rather than the cash 

assistance available to it under Section 

4 of the Richard B. Russell National 

School Lunch Act (42 U.S.C. 1753). 

Consignee means an entity (e.g., the 

distributing or recipient agency, a 

commercial storage facility, or a 

processor) that receives a shipment of 

donated foods from a vendor or Federal 

storage facility. 

Contract value of the donated foods 

means the price assigned by the 

Department to a donated food which 

shall reflect the Department’s current 

acquisition price, transportation and, if 

applicable, processing costs related to 

the food. 

Contracting agency means the 

distributing agency, subdistributing 

agency, or recipient agency which 

enters into a processing contract. 

CSFP means the Commodity 

Supplemental Food Program. 

Department means the United States 

Department of Agriculture (USDA). 

DHHS means the United States 

Department of Health and Human 

Services. 

Disaster means a Presidentially 

declared disaster or emergency, in 

accordance with the Robert T. Stafford 

Disaster Relief and Emergency 

Assistance Act, in which Federal 

assistance, including donated food 

assistance, may be provided to persons 

in need of such assistance as a result of 

the disaster or emergency. 

Disaster organization means an 

organization authorized by FNS or a 

distributing agency, when appropriate, 

to provide assistance to survivors of a 

disaster or a situation of distress. 

Distributing agency means a State 

agency selected by the Governor of the 

State or the State legislature to 

distribute donated foods in the State, in 

accordance with an agreement with 

FNS, and with the requirements in this 

part and other Federal regulations, as 

applicable (e.g., a State agency 

distributing donated foods in CSFP 

must comply with requirements in 7 

CFR part 247). Indian Tribal 

Organizations may act as a distributing 

agency in the distribution of donated 

foods on, or near, Indian reservations, as 

provided for in applicable Federal 

regulations (e.g., 7 CFR parts 253 or 254 

for FDPIR). 

Distribution charge means the 

cumulative charge imposed by 

distributing agencies on school food 

authorities to help meet the costs of 

storing and distributing donated foods, 

and administrative costs related to such 

activities. 

Distributor means a commercial food 

purveyor or handler who is independent 

of a processor and both sells and bills 

for the end products delivered to 

recipient agencies. 

Donated foods means foods 

purchased by USDA for donation in 

food assistance programs, or for 

donation to entities assisting needy 

persons, in accordance with legislation 

authorizing such purchase and 

donation. Donated foods are also 

referred to as USDA Foods. 

Elderly nutrition project means a 

recipient agency selected by the State or 

Area Agency on Aging to receive 

assistance in NSIP, which may include 

donated food assistance. 

End product means a food product 

that contains processed donated foods. 

Entitlement means the value of 

donated foods a distributing agency is 

authorized to receive in a specific 

program, in accordance with program 

legislation. 

Entitlement foods means donated 

foods that USDA purchases and 

provides in accordance with levels of 

assistance mandated by program 

legislation. 

FDPIR means the Food Distribution 

Program on Indian Reservations and the 

Food Distribution Program for Indian 

Households in Oklahoma. 

Federal acceptance service means the 

acceptance service provided by: 

(1) The applicable grading branches of 

the Department’s Agricultural Marketing 

Service (AMS); 

(2) The Department’s Federal Grain 

Inspection Service; and 

(3) The National Marine Fisheries 

Service of the U.S. Department of 

Commerce. 

Fee-for-service means the price by 

pound or case representing a processor’s 

cost of ingredients (other than donated 

foods), labor, packaging, overhead, and 

other costs incurred in the conversion of 

the donated food into the specified end 

product. 

Fiscal year means the period of 12 

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 Department of 

Agriculture. 

Food recall means an action to 

remove food products from commerce 

when there is reason to believe the 

products may be unsafe, adulterated, or 

mislabeled. The action is taken to 

protect the public from products that 

may cause health problems or possible 

death. 

Food service management company 

means a commercial enterprise, 

nonprofit organization, or public 

institution that is, or may be, contracted 

with by a recipient agency to manage 

any aspect of a recipient agency’s food 

service, in accordance with 7 CFR parts 

210, 225, or 226, or, with respect to 

charitable institutions, in accordance 

with this part. To the extent that such 

management includes the use of 

donated foods, the food service 

management company is subject to the 

applicable requirements in this part. 

However, a school food authority 

participating in NSLP that performs 

such functions is not considered a food 

service management company. Also, a 

commercial enterprise that uses donated 

foods to prepare meals at a commercial 

facility, or to perform other activities 

that meet the definition of processing in 

this section, is considered a processor in 

this part, and is subject to the 

requirements in subpart C, and not 

subpart D, of this part. 

Household means any of the 

following individuals or groups of 

individuals, exclusive of boarders or 

residents of an institution: 

(1) An individual living alone; 

(2) An individual living with others, 

but customarily purchasing food and 

preparing meals for home consumption 

separate and apart from the others; 

(3) A group of individuals living 

together who customarily purchase and 

prepare meals in common for home 

consumption; and 

(4) Other individuals or groups of 

individuals, as provided in FNS 

regulations specific to particular food 

assistance programs. 


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Household programs means CSFP, 

FDPIR, and TEFAP. 

In-kind replacement means the 

replacement of a loss of donated food 

with the same type of food of U.S. 

origin, of equal or better quality as the 

donated food, and at least equal in value 

to the lost donated food. 

In-State processor means a processor 

that has entered into agreements with 

distributing or recipient agencies that 

are located only in the State in which 

all of the processor’s processing 

facilities are located. 

Multi-food shipment means a 

shipment from a Federal storage facility 

that usually includes more than one 

type of donated food. 

Multi-State processor means a 

processor that has entered into 

agreements with distributing or 

recipient agencies in more than one 

State, or that has entered into one or 

more agreements with distributing or 

recipient agencies that are located in a 

State other than the State in which the 

processor’s processing facilities or 

business office is located. 

National per-meal value means the 

value of donated foods provided for 

each reimbursable lunch served in 

NSLP in the previous school year, and 

for each reimbursable lunch and supper 

served in CACFP in the previous school 

year, as established in section 6(c) of the 

Richard B. Russell National School 

Lunch Act (42 U.S.C. 1755(c)). 

Needy persons means persons in need 

of food assistance as a result of their: 

(1) Economic status; 

(2) Eligibility for a specific food 

assistance program; or 

(3) Eligibility as survivors of a disaster 

or a situation of distress. 

Nonprofit organization means a 

private organization with tax-exempt 

status under the Internal Revenue Code. 

Nonprofit organizations operated 

exclusively for religious purposes are 

automatically tax-exempt under the 

Internal Revenue Code. 

Nonprofit school food service means 

all food service operations conducted by 

the school food authority principally for 

the benefit of schoolchildren, all of the 

revenue from which is used solely for 

the operation or improvement of such 

food services. 

NSIP means the Nutrition Services 

Incentive Program. 

NSLP means the National School 

Lunch Program. 

Out-of-condition donated foods 

means donated foods that are no longer 

fit for human consumption as a result of 

spoilage, contamination, infestation, 

adulteration, or damage. 

Performance supply and surety bond 

means a written instrument issued by a 

surety company which guarantees 

performance and supply of end 

products by a processor under the terms 

of a processing contract. 

Processing means a commercial 

enterprise’s use of a commercial facility 

to: 

(1) Convert donated foods into an end 

product; 

(2) Repackage donated foods; or 

(3) Use donated foods in the 

preparation of meals. 

Processor means a commercial 

enterprise that processes donated foods 

at a commercial facility. 

Recipient agencies means agencies or 

organizations that receive donated foods 

for distribution to needy persons or for 

use in meals provided to needy persons, 

in accordance with agreements with a 

distributing or subdistributing agency, 

or with another recipient agency. Local 

agencies in CSFP, and Indian Tribal 

Organizations distributing donated 

foods to needy persons through FDPIR 

in a State in which the State government 

administers FDPIR, are considered 

recipient agencies in this part. 

Recipients means persons receiving 

donated foods, or a meal containing 

donated foods, provided by recipient 

agencies. 

Reimbursable meals means meals that 

meet the nutritional standards 

established in Federal regulations 

pertaining to NSLP, SFSP, or CACFP, 

and that are served to eligible recipients. 

SAE funds means Federal funds 

provided to State agencies for State 

administrative expenses, in accordance 

with 7 CFR part 235. 

SBP means the School Breakfast 

Program. 

School food authority means the 

governing body responsible for the 

administration of one or more schools, 

and that has the legal authority to 

operate NSLP or be otherwise approved 

by FNS to operate NSLP. 

School year means the period of 12 

months beginning July 1 of any calendar 

year and ending June 30 of the following 

calendar year. 

Section 4(a) means section 4(a) of the 

Agriculture and Consumer Protection 

Act of 1973, as amended (7 U.S.C. 612c 

note), which authorizes the Department 

to purchase donated foods to maintain 

the traditional level of assistance for 

food assistance programs authorized by 

law, including, but not limited to, CSFP, 

FDPIR, and disaster assistance. 

Section 6 means section 6 of the 

Richard B. Russell National School 

Lunch Act, as amended (42 U.S.C. 

1755), which authorizes the Department 

to provide a specified value of donated 

food assistance in NSLP. 

Section 14 means section 14 of the 

Richard B. Russell National School 

Lunch Act, as amended (42 U.S.C. 

1762a), which authorizes the 

Department to use Section 32 or Section 

416 funds to maintain the annually 

programmed levels of donated food 

assistance in child nutrition programs. 

Section 27 means section 27 of the 

Food and Nutrition Act of 2008, as 

amended (7 U.S.C. 2036), which 

authorizes the purchase of donated 

foods for distribution in TEFAP. 

Section 32 means section 32 of Public 

Law 74–320, as amended (7 U.S.C. 

612c), which authorizes the Department 

to purchase primarily perishable foods 

to remove market surpluses, and to 

donate them for use in domestic food 

assistance programs or by charitable 

institutions. 

Section 311 means section 311 of the 

Older Americans Act of 1965, as 

amended (42 U.S.C. 3030a), which 

permits State Agencies on Aging to 

receive all or part of their NSIP grant as 

USDA donated foods. 

Section 416 means section 416 of the 

Agricultural Act of 1949, as amended (7 

U.S.C. 1431), which authorizes the 

Department to purchase nonperishable 

foods to support market prices, and to 

donate them for use in domestic food 

assistance programs or by charitable 

institutions. 

Section 709 means section 709 of the 

Food and Agricultural Act of 1965, as 

amended (7 U.S.C. 1446a-1), which 

authorizes the Department to purchase 

dairy products to meet authorized levels 

of assistance in domestic food assistance 

programs when such assistance cannot 

be met by Section 416 food purchases. 

Service institution means recipient 

agencies that participate in SFSP. 

SFSP means the Summer Food 

Service Program. 

Similar replacement means the 

replacement of a loss of donated food 

with another type of food from the same 

food category (i.e., dairy, grain, meat/

meat alternate, vegetable, fruit, etc.) that 

is of U.S. origin, of equal or better 

quality than that type of donated food, 

and at least equal in value to the lost 

donated food. 

Single inventory management means 

the commingling in storage of donated 

foods and foods from other sources, and 

the maintenance of a single inventory 

record of such commingled foods. 

Situation of distress means a natural 

catastrophe or other event that does not 

meet the definition of disaster in this 

section, but that, in the determination of 

the distributing agency, or of FNS, as 

applicable, warrants the use of donated 

foods to assist survivors of such 

catastrophe or other event. A situation 


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of distress may include, for example, a 

hurricane, flood, snowstorm, or 

explosion. 

SNAP means the Supplemental 

Nutrition Assistance Program. 

Split shipment means a shipment of 

donated foods from a vendor that is split 

between two or more distributing or 

recipient agencies, and that usually 

includes more than one stop-off or 

delivery location. 

State means any State of the United 

States, the District of Columbia, Puerto 

Rico, the Virgin Islands, Guam, and 

American Samoa. 

State Agency on Aging means: 

(1) The State agency that has been 

approved by DHHS to administer NSIP; 

or 

(2) The Indian Tribal Organization 

that has been approved by DHHS to 

administer NSIP. 

Storage facility means a publiclyowned or nonprofit facility or a 

commercial enterprise that stores 

donated foods or end products, and that 

may also transport such foods to another 

location. 

Subdistributing agency means a State 

agency, a public agency, or a nonprofit 

organization selected by the distributing 

agency to perform one or more activities 

required of the distributing agency in 

this part, in accordance with a written 

agreement between the parties. A 

subdistributing agency may also be a 

recipient agency. 

Substitution means: 

(1) The replacement of donated foods 

with like quantities of domestically 

produced commercial foods of the same 

generic identity and of equal or better 

quality (i.e., cheddar cheese for cheddar 

cheese, nonfat dry milk for nonfat dry 

milk, etc.). 

(2) In the case of donated nonfat dry 

milk, substitution as defined under 

paragraph (1) of this definition or 

replacement with an equivalent amount, 

based on milk solids content, of 

domestically produced concentrated 

skim milk. 

(3) A processor can substitute 

commercial product for donated 

commodity, as described in paragraph 

(1) of this definition, without 

restrictions under full substitution. The 

processor must return to the contracting 

agency, in finished end products, the 

same number of pounds of commodity 

that the processor originally received for 

processing under full substitution. This 

is the 100-percent yield requirement. 

(4) A processor can substitute 

commercial product for donated 

commodity product, as described in 

paragraph (1) of this definition, with 

some restrictions under limited 

substitution. Restrictions include, but 

are not limited to, the prohibition 

against substituting for backhauled 

poultry commodity product. FNS may 

also prohibit substitution of certain 

types of the same generic commodity. 

(For example, FNS may decide to permit 

substitution for bulk chicken but not for 

canned chicken.) 

Summer camp means a nonprofit or 

public camp for children aged 18 and 

under. 

TEFAP means The Emergency Food 

Assistance Program. 

USDA Foods means donated foods. 

Vendor means a commercial food 

company from which the Department 

purchases foods for donation. 

§ 250.3 Administration at the Federal level. 

(a) Food and Nutrition Service. 

Within the Department, the Food and 

Nutrition Service (FNS) shall act on 

behalf of the Department to administer 

the distribution of donated foods to 

distributing agencies for further 

distribution and use at the State level, 

in accordance with the requirements of 

this part. 

(b) Audits or inspections. The 

Department, the Comptroller General of 

the United States, or any of their 

authorized representatives, may conduct 

audits or inspections of distributing, 

subdistributing, or recipient agencies, or 

the commercial enterprises with which 

they have contracts or agreements, in 

order to determine compliance with the 

requirements of this part, or with other 

applicable Federal regulations. 

(c) Suspension or termination. 

Whenever it is determined that a 

distributing agency has materially failed 

to comply with the provisions of this 

part, or with other applicable Federal 

regulations, FNS may suspend or 

terminate the distribution of donated 

foods, or the provision of administrative 

funds, to the distributing agency. FNS 

must provide written notification of 

such suspension or termination of 

assistance, including the reasons for the 

action and the effective date. The 

distributing agency may appeal a 

suspension or termination of assistance 

if such appeal is provided for in Federal 

regulations applicable to a specific food 

assistance program (e.g., as provided for 

in § 253.5(l) for FDPIR). FNS may also 

take other actions, as appropriate, 

including prosecution under applicable 

Federal statutes. 

§ 250.4 Administration at the State level. 

(a) Distributing agency. The 

distributing agency, as defined in 

§ 250.2, is responsible for ensuring 

compliance with the requirements in 

this part, and in other Federal 

regulations referenced in this part, in 

the distribution and control of donated 

foods. In order to receive, store, and 

distribute donated foods, the 

distributing agency shall enter into a 

written agreement with FNS (the 

Federal-State Agreement, form FNS–74) 

for the distribution of donated foods in 

accordance with the provisions of this 

part and other applicable Federal 

regulations. The Federal-State 

agreement is permanent, but may be 

amended with the concurrence of both 

parties. FNS may terminate the FederalState agreement if the distributing 

agency fails to meet its obligations, in 

accordance with § 250.3(c). The 

distributing agency may impose 

additional requirements relating to the 

distribution and control of donated 

foods in the State, as long as such 

requirements are not inconsistent with 

the requirements in this part or other 

Federal regulations referenced in this 

part. 

(b) Subdistributing agency. The 

distributing agency may enter into a 

written agreement with a 

subdistributing agency, as defined in 

§ 250.2, to perform specific activities 

required of the distributing agency in 

this part. However, the distributing 

agency may not assign its overall 

responsibility for donated food 

distribution and control to a 

subdistributing agency or to any other 

organization, and may not delegate its 

responsibility to ensure compliance 

with the performance standards in 

§ 250.22. The agreement entered into 

with the subdistributing agency must 

include the provisions in paragraph (c) 

of this section, and must indicate the 

specific activities for which the 

subdistributing agency is responsible. 

(c) Recipient agencies. The 

distributing agency must select recipient 

agencies, as defined in § 250.2, to 

receive donated foods for distribution to 

needy persons, or for use in meals 

provided to needy persons, in 

accordance with eligibility criteria for 

specific programs or outlets, and must 

enter into a written agreement with a 

recipient agency prior to distribution of 

donated foods to it. However, for child 

nutrition programs, the distributing 

agency must enter into agreements with 

those recipient agencies selected by the 

State administering agency to 

participate in such programs, prior to 

distribution of donated foods to such 

recipient agencies. The distributing 

agency must confirm such recipient 

agencies’ approval for participation in 

the appropriate child nutrition program 

with the State administering agency. For 

household programs, distributing 

agencies must consider the past 

performance of recipient agencies when 


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approving applications for participation. 

Agreements with recipient agencies 

must include the provisions in this 

paragraph (c), as well as provisions 

required in Federal regulations 

applicable to specific programs (e.g., 

agreements with local agencies in CSFP 

must include the provisions in 

§ 247.4(b)). The agreements with 

recipient agencies and subdistributing 

agencies must: 

(1) Ensure compliance with the 

applicable requirements in this part, 

with other Federal regulations 

referenced in this part, and with the 

distributing agency’s written agreement 

with FNS; 

(2) Ensure compliance with all 

requirements relating to food safety and 

food recalls; 

(3) Establish the duration of the 

agreement; 

(4) Permit termination of the 

agreement by the distributing agency for 

failure of the recipient agency (or 

subdistributing agency, as applicable) to 

comply with its provisions or applicable 

requirements, upon written notification 

to the applicable party; and 

(5) Permit termination of the 

agreement by either party, upon written 

notification to the other party, at least 

60 days prior to the effective date of 

termination. 

(d) Procurement of services of 

commercial enterprises. The 

distributing agency, or a recipient 

agency, must ensure compliance with 

Departmental procurement 

requirements in 7 CFR part 3016 or 

3019, as applicable, to obtain the 

services of a commercial enterprise to 

conduct activities relating to donated 

foods. The distributing agency, or a 

recipient agency, must also ensure 

compliance with other applicable 

Departmental regulations in such 

procurements—for example, a school 

food authority must ensure compliance 

with requirements in §§ 210.16 and 

210.21, and in subpart D of this part, in 

procuring the services of a food service 

management company. 

§ 250.5 Civil rights. 

Distributing agencies, subdistributing 

agencies and recipient agencies shall 

comply with the Department’s 

nondiscrimination regulations (7 CFR 

parts 15, 15a, and 15b) and the FNS 

civil rights instructions to ensure that in 

the operation of the program no person 

is discriminated against on a protected 

bases as it applies to each program. 

■ 3. Revise Subpart B to read as follows: 

Subpart B—Delivery, Distribution, and 

Control of Donated Foods 

Sec. 

250.10 Availability and ordering of donated 

foods. 

250.11 Delivery and receipt of donated food 

shipments. 

250.12 Storage and inventory management 

at the distributing agency level. 

250.13 Efficient and cost-effective 

distribution of donated foods. 

250.14 Storage and inventory management 

at the recipient agency level. 

250.15 Out-of-condition donated foods, 

food recalls, and complaints. 

250.16 Claims and restitution for donated 

food losses. 

250.17 Use of funds obtained incidental to 

donated food distribution. 

250.18 Reporting requirements. 

250.19 Recordkeeping requirements. 

250.20 Audit requirements. 

250.21 Distributing agency reviews. 

250.22 Distributing agency performance 

standards. 

§ 250.10 Availability and ordering of 

donated foods. 

(a) Ordering donated foods. The 

distributing agency must utilize a 

request-driven ordering system in 

submitting orders for donated foods to 

FNS. As part of such system, the 

distributing agency must provide 

recipient agencies with the opportunity 

to submit input, on at least an annual 

basis, in determining the donated foods 

from the full list that are made available 

to them for ordering. Based on the input 

received, the distributing agency must 

ensure that the types and forms of 

donated foods that recipient agencies 

may best utilize are made available to 

them for ordering. The distributing 

agency must also ensure that donated 

foods are ordered and distributed only 

in amounts that may be utilized 

efficiently and without waste. 

(b) Provision of information on 

donated foods. The distributing agency 

must provide recipient agencies, at their 

request, information that will assist 

them in ordering or utilization of 

donated foods, including: 

(1) The types and quantities of 

donated foods that they may order; 

(2) Donated food specifications and 

nutritional value; and 

(3) Procedures for the disposition of 

donated foods that are out-of-condition 

or that are subject to a food recall. 

§ 250.11 Delivery and receipt of donated 

food shipments. 

(a) Delivery. The Department arranges 

for delivery of donated foods from the 

vendor or Federal storage facility to the 

distributing agency’s storage facility, or 

to a processor with which the 

distributing agency has entered into a 

contract or agreement. The Department 

may also deliver donated foods directly 

to a recipient agency, or to a storage 

facility or processor with which the 

recipient agency has entered into a 

contract or agreement, with the approval 

of the distributing agency. In accordance 

with § 250.2, an entity that receives a 

shipment of donated foods directly from 

a USDA vendor or a Federal storage 

facility is referred to as the consignee. 

Consignees must provide a delivery 

address, and other information as 

required by FNS, as well as update this 

information as necessary, to ensure 

foods are delivered to the correct 

location. 

(b) Receipt of shipments. The 

distributing or recipient agency, or other 

consignee, must comply with all 

applicable Federal requirements in 

receiving shipments of donated foods, 

including procedures for the disposition 

of any donated foods in a shipment that 

are out-of-condition (as this term is 

defined in § 250.2), or are not in 

accordance with ordered amounts. The 

distributing or recipient agency, or other 

consignee, must provide notification of 

the receipt of donated food shipments to 

FNS, through electronic means, and 

must maintain an electronic record of 

receipt of all donated food shipments. 

(c) Replacement of donated foods. 

The vendor is responsible for the 

replacement of donated foods that are 

delivered out-of-condition. Such 

responsibility extends until expiration 

of the use-by or best-if-used-by date on 

the food label, or, if no such date is 

included on the food label, until 

expiration of the vendor warranty 

period included in the vendor contract 

with USDA. In all cases, responsibility 

for replacement is contingent on the 

determination that the foods were outof-condition at the time of delivery. 

Replacement must be in-kind, unless 

FNS approves similar replacement (the 

terms in-kind and similar replacement 

are defined in § 250.2). If FNS 

determines that physical replacement of 

donated foods is not cost-effective or 

efficient, FNS may: 

(1) Approve payment by the vendor to 

the distributing or recipient agency, as 

appropriate, for the value of the donated 

foods at time of delivery (or at another 

value determined by FNS); or 

(2) Credit the distributing agency’s 

entitlement, as feasible. 

(d) Payment of costs relating to 

shipments. The Department is 

responsible for payment of processing, 

transportation, handling, or other costs 

incurred up to the time of delivery of 

donated foods to a distributing or 

recipient agency, or other consignee, as 

the Department deems in its best 

interest. However, the distributing or 


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recipient agency, or other consignee, is 

responsible for payment of any delivery 

charges that accrue as a result of such 

consignee’s failure to comply with 

procedures in FNS instructions—e.g., 

failure to provide for the unloading of 

a shipment of donated foods within a 

designated time period. 

(e) Transfer of title. Title to donated 

foods transfers to the distributing or 

recipient agency, as appropriate, upon 

acceptance of the donated foods at the 

time and place of delivery. 

Notwithstanding transfer of title, 

distributing and recipient agencies must 

ensure compliance with the 

requirements of this part in the 

distribution, control, and use of donated 

foods. 

§ 250.12 Storage and inventory 

management at the distributing agency 

level. 

(a) Safe storage and control. The 

distributing agency (or subdistributing 

agency, as applicable) must provide 

facilities for the storage and control of 

donated foods that protect against theft, 

spoilage, damage, or other loss. 

Accordingly, such storage facilities must 

maintain donated foods in sanitary 

conditions, at the proper temperature 

and humidity, and with adequate air 

circulation. The distributing agency 

must ensure that storage facilities 

comply with all Federal, State, or local 

requirements relative to food safety and 

health, as applicable, and obtain all 

required health inspections. 

(b) Inventory management. The 

distributing agency must ensure that 

donated foods at all storage facilities 

used by the distributing agency (or by a 

subdistributing agency) are stored in a 

manner that permits them to be 

distinguished from other foods, and 

must ensure that a separate inventory 

record of donated foods is maintained. 

The distributing agency’s system of 

inventory management must ensure that 

donated foods are distributed in a 

timely manner and in optimal 

condition. On an annual basis, the 

distributing agency must conduct a 

physical review of donated food 

inventories at all storage facilities used 

by the distributing agency (or by a 

subdistributing agency), and must 

reconcile physical and book inventories 

of donated foods. The distributing 

agency must report donated food losses 

to FNS, and ensure that restitution is 

made for such losses. 

(c) Inventory limitations. The 

distributing agency is subject to the 

following limitations in the amount of 

donated food inventories on-hand, 

unless FNS approval is obtained to 

maintain larger inventories: 

(1) For TEFAP, NSLP and other child 

nutrition programs, inventories may not 

exceed an amount needed for a sixmonth period, based on an average 

amount of donated foods utilized in that 

period; and 

(2) For CSFP and FDPIR, inventories 

of each category of donated food in the 

food package may not exceed an amount 

needed for a three-month period, based 

on an average amount of donated food 

that the distributing agency can 

reasonably utilize in that period to meet 

CSFP caseload or FDPIR average 

participation. 

(d) Inventory protection. The 

distributing agency must obtain 

insurance to protect the value of 

donated foods at its storage facilities. 

The amount of such insurance must be 

at least equal to the average monthly 

value of donated food inventories at 

such facilities in the previous fiscal 

year. The distributing agency must also 

ensure that the following entities obtain 

insurance to protect the value of their 

donated food inventories, in the same 

amount required of the distributing 

agency in this paragraph (d): 

(1) Subdistributing agencies; 

(2) Recipient agencies in household 

programs that have an agreement with 

the distributing agency or 

subdistributing agency to store and 

distribute foods; and 

(3) Commercial storage facilities 

under contract with the distributing 

agency or with an agency identified in 

paragraph (d)(1) or (2) of this section. 

(e) Transfer of donated foods. The 

distributing agency may transfer 

donated foods from its inventories to 

another distributing agency, or to 

another program, in order to ensure that 

such foods may be utilized in a timely 

manner and in optimal condition, in 

accordance with this part. However, the 

distributing agency must request FNS 

approval to transfer donated foods from 

one program to another (e.g., from NSLP 

to TEFAP). FNS may also require a 

distributing agency to transfer donated 

foods at the distributing agency’s storage 

facilities or at a processor’s facility, if 

inventories of donated foods are 

excessive or may not be efficiently 

utilized. If there is a question of food 

safety, or if directed by FNS, the 

distributing agency must obtain an 

inspection of donated foods by State or 

local health authorities to ensure that 

the donated foods are still safe and not 

out-of-condition before transferring 

them. The distributing agency is 

responsible for meeting any 

transportation or inspection costs 

incurred, unless it is determined by FNS 

that the transfer is not the result of 

negligence or improper action on the 

part of the distributing agency. The 

distributing agency must maintain a 

record of all transfers from its 

inventories, and of any inspections 

related to such transfers. 

(f) Commercial storage facilities or 

carriers. The distributing agency may 

obtain the services of a commercial 

storage facility to store and distribute 

donated foods, or a carrier to transport 

donated foods, but must ensure 

compliance with Departmental 

procurement requirements in 7 CFR part 

3016. The distributing agency must 

enter into a written contract with a 

commercial storage facility or carrier, 

which may not exceed five years in 

duration, including any extensions or 

renewals. The contract must include 

applicable provisions required by 

Federal statutes and executive orders 

listed in 7 CFR 3016.36(i). The contract 

must also include, as applicable to a 

storage facility or carrier, provisions 

that: 

(1) Assure storage, management, and 

transportation of donated foods in a 

manner that properly safeguards them 

against theft, spoilage, damage, or other 

loss, in accordance with the 

requirements in this part; 

(2) Assure compliance with all 

Federal, State, or local requirements 

relative to food safety and health, 

including required health inspections, 

and procedures for responding to a food 

recall; 

(3) Assure storage of donated foods in 

a manner that distinguishes them from 

other foods, and assure separate 

inventory recordkeeping of donated 

foods; 

(4) Assure distribution of donated 

foods to eligible recipient agencies in a 

timely manner, in optimal condition, 

and in amounts for which such 

recipient agencies are eligible; 

(5) Include the amount of insurance 

coverage obtained to protect the value of 

donated foods; 

(6) Permit the performance of on-site 

reviews of the storage facility by the 

distributing agency, the Comptroller 

General, the Department of Agriculture, 

or any of its duly authorized 

representatives, in order to determine 

compliance with requirements in this 

part; 

(7) Establish the duration of the 

contract, and provide for extension or 

renewal of the contract only upon 

fulfillment of all contract provisions; 

(8) Provide for expeditious 

termination of the contract for 

noncompliance with its provisions; and 

(9) Provide for termination of the 

contract by either party for other cause, 

after written notification of such intent 


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at least 60 days prior to the effective 

date of such action. 

§ 250.13 Efficient and cost-effective 

distribution of donated foods. 

(a) Direct shipments. The distributing 

agency must ensure that the distribution 

of donated foods is conducted in the 

most efficient and cost-effective manner, 

and, to the extent practical, in 

accordance with the specific needs and 

preferences of recipient agencies. In 

meeting this requirement, the 

distributing agency must, to the extent 

practical, provide for: 

(1) Shipments of donated foods 

directly from USDA vendors to recipient 

agencies, including two or more 

recipient agencies acting as a collective 

unit (such as a school co-op), or to the 

commercial storage facilities of such 

agencies; 

(2) Shipments of donated foods 

directly from USDA vendors to 

processors for processing of donated 

foods and sale of end products to 

recipient agencies, in accordance with 

Subpart C of this part; and 

(3) The use of split shipments, as 

defined in § 250.2, in arranging for 

delivery of donated foods to recipient 

agencies that cannot accept a full 

truckload. 

(b) Distributing agency storage and 

distribution charge. If a distributing 

agency determines that direct shipments 

of donated foods, as described in 

paragraph (a) of this section, are 

impractical, it must provide for the 

storage of donated foods at the 

distributing agency level, and 

subsequent distribution to recipient 

agencies, in the most efficient and costeffective manner. The distributing 

agency must use a commercial storage 

facility, in accordance with § 250.12(f), 

if such system is determined to be more 

efficient and cost-effective. The 

distributing agency must utilize State 

Administrative Expense (SAE) funds, as 

available, to meet the costs of storing 

and distributing donated foods for 

school food authorities or other 

recipient agencies in child nutrition 

programs, and administrative costs 

related to such activities, in accordance 

with 7 CFR part 235. If SAE funds, or 

any other Federal or State funds 

received for such purpose, are 

insufficient to fully meet the 

distributing agency’s costs of storing 

and distributing donated foods, and 

related administrative costs (e.g., 

salaries of employees engaged in such 

activities), the distributing agency may 

require school food authorities or other 

recipient agencies in child nutrition 

programs to pay a distribution charge, as 

defined in § 250.2, to help meet such 

costs. The distribution charge may cover 

only allowable costs, in accordance with 

7 CFR part 3016 and with OMB 

guidance. The distributing agency must 

maintain a record of costs incurred in 

storing and distributing donated foods 

and related administrative costs, and the 

source of funds used to pay such costs. 

(c) FNS approval of amount of 

distribution charge. In determining the 

amount of a new distribution charge, or 

in increasing the amount (except for 

normal inflationary adjustments) or 

reducing the level of service provided 

once a distribution charge is 

established, the distributing agency 

must request FNS approval prior to 

implementation. Such requirement also 

applies to the distribution charge 

imposed by a commercial storage 

facility under contract with the 

distributing agency. The request for 

approval must be submitted to FNS at 

least 90 days in advance of its projected 

implementation, and must include 

justification of the newly established 

amount, or any increased charge or 

reduction in the level of service 

provided under an established 

distribution charge, and the specific 

costs covered under the distribution 

charge (e.g., storage, delivery, or 

administrative costs). 

(d) FNS review authority. FNS may 

reject the distributing agency’s proposed 

new, or changes to an existing, 

distribution charge if it determines that 

the charge would not provide for 

distribution of donated foods in the 

most efficient and cost-effective manner, 

or may otherwise impact recipient 

agencies negatively. In such case, the 

distributing agency would be required 

to adjust the proposed amount or the 

level of service provided in its 

distribution charge, or consider other 

distribution options. FNS may also 

require the distributing agency to 

submit documentation to justify the 

efficiency and cost-effectiveness of its 

storage and distribution system at other 

times, and may require the distributing 

agency to re-evaluate such system in 

order to ensure compliance with the 

requirements in this part. 

§ 250.14 Storage and inventory 

management at the recipient agency level. 

(a) Safe storage and control. Recipient 

agencies must provide facilities for the 

storage and control of donated foods 

that protect against theft, spoilage, 

damage, or other loss. Accordingly, such 

storage facilities must maintain donated 

foods in sanitary conditions, at the 

proper temperature and humidity, and 

with adequate air circulation. Recipient 

agencies must ensure that storage 

facilities comply with all Federal, State, 

or local requirements relative to food 

safety and health, as applicable, and 

obtain all required health inspections. 

(b) Inventory management— 

household programs. Recipient agencies 

in household programs must store 

donated foods in a manner that permits 

them to be distinguished from other 

foods in storage, and must maintain a 

separate inventory record of donated 

foods. Such recipient agencies’ system 

of inventory management must ensure 

that donated foods are distributed to 

recipients in a timely manner that 

permits use of such foods while still in 

optimal condition. Such recipient 

agencies must notify the distributing 

agency of donated food losses and take 

further actions with respect to such food 

losses, as directed by the distributing 

agency. 

(c) Inventory management—child 

nutrition programs and charitable 

institutions. Recipient agencies in child 

nutrition programs, and those receiving 

donated foods as charitable institutions, 

in accordance with § 250.67, are not 

required to store donated foods in a 

manner that distinguishes them from 

purchased foods or other foods, or to 

maintain a separate inventory record of 

donated foods—i.e., they may utilize 

single inventory management, as 

defined in § 250.2. For such recipient 

agencies, donated foods are subject to 

the same safeguards and effective 

management practices as other foods. 

Accordingly, recipient agencies in child 

nutrition programs and those receiving 

donated foods as charitable institutions 

(regardless of the inventory management 

system utilized), are not required to 

separately monitor and report donated 

food use, distribution, or loss to the 

distributing agency, unless there is 

evidence indicating that donated food 

loss has occurred as a result of theft or 

fraud. 

(d) Transfer of donated foods to 

another recipient agency. A recipient 

agency operating a household program 

must request approval from the 

distributing agency to transfer donated 

foods at its storage facilities to another 

recipient agency. The distributing 

agency may approve such transfer to 

another recipient agency in the same 

household program (e.g., the transfer of 

TEFAP foods from one food pantry to 

another) without FNS approval. 

However, the distributing agency must 

receive FNS approval to permit a 

recipient agency in a household 

program to transfer donated foods to a 

recipient agency in a different program 

(e.g., the transfer of TEFAP foods from 

a food pantry to a CSFP local agency), 

even if the same recipient agency 

administers both programs. A recipient 


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agency operating a child nutrition 

program, or receiving donated foods as 

a charitable institution, in accordance 

with § 250.67, may transfer donated 

foods to another recipient agency or 

charitable organization without 

approval from the distributing agency or 

FNS. 

(e) Commercial storage facilities. 

Recipient agencies may obtain the 

services of commercial storage facilities 

to store and distribute donated foods, 

but must ensure compliance with 

Departmental procurement 

requirements in 7 CFR parts 3016 or 

3019, as applicable. Recipient agencies 

must ensure that commercial storage 

facilities comply with all of the 

applicable requirements in this section 

regarding the storage and inventory 

management of donated foods. 

§ 250.15 Out-of-condition donated foods, 

food recalls, and complaints. 

(a) Out-of-condition donated foods at 

the distributing agency level. The 

distributing agency must ensure that 

donated foods that are out-of-condition, 

as defined in § 250.2, at any of its 

storage facilities are destroyed, or 

otherwise disposed of, in accordance 

with State or local requirements 

pertaining to food safety and health. The 

distributing agency must obtain an 

inspection of donated foods by State or 

local health authorities to determine 

their safety and condition, as necessary, 

or as directed by FNS. Out-of-condition 

donated foods may be sold (e.g., to a 

salvage company), if permitted by State 

or local laws or regulations. 

(b) Out-of-condition donated foods at 

the recipient agency level. Recipient 

agencies in household programs must 

report out-of-condition donated foods at 

their storage facilities to the distributing 

agency, in accordance with § 250.14(b), 

and must ensure that such donated 

foods are destroyed, or otherwise 

disposed of, in accordance with State or 

local requirements pertaining to food 

safety and health. The distributing 

agency must ensure that such recipient 

agencies obtain an inspection of 

donated foods by State or local health 

authorities to determine their safety and 

condition, as necessary, or as directed 

by FNS. For charitable institutions, in 

accordance with § 250.67, and recipient 

agencies in child nutrition programs, 

donated foods must be treated as other 

foods when safety is in question. 

Consequently, such recipient agencies 

must comply with State or local 

requirements in determining the safety 

of foods (including donated foods), and 

in their destruction or other disposition. 

However, they are not required to report 

such actions to the distributing agency. 

(c) Food recalls. The distributing or 

recipient agency, as appropriate, must 

follow all applicable Federal, State or 

local requirements for donated foods 

subject to a food recall, as this term is 

defined in § 250.2. Further, in the event 

of a recall, Departmental guidance is 

provided, including procedures or 

instructions for all parties in responding 

to a food recall, replacement of recalled 

donated foods, and reimbursement of 

specific costs incurred as a result of 

such actions. 

(d) Complaints relating to donated 

foods. The distributing agency must 

inform recipient agencies of the 

preferred method of receiving 

complaints regarding donated foods. 

Complaints received from recipients, 

recipient agencies, or other entities 

relating to donated foods must be 

resolved in an expeditious manner, and 

in accordance with applicable 

requirements in this part. However, the 

distributing agency may not dispose of 

any donated food that is the subject of 

a complaint prior to guidance and 

authorization from FNS. Any 

complaints regarding product quality or 

specifications, or suggested product 

improvements, must be submitted to 

FNS through the established FNS 

donated foods complaint system for 

tracking purposes. If complaints may 

not be resolved at the State level, the 

distributing agency must provide 

information regarding the complaint to 

FNS. The distributing agency must 

maintain a record of its investigations 

and other actions with respect to 

complaints relating to donated foods. 

§ 250.16 Claims and restitution for 

donated food losses. 

(a) Distributing agency 

responsibilities. The distributing agency 

must ensure that restitution is made for 

the loss of donated foods, or for the loss 

or improper use of funds provided for, 

or obtained as an incident of, the 

distribution of donated foods. The 

distributing agency must identify, and 

seek restitution from, parties 

responsible for the loss, and implement 

corrective actions to prevent future 

losses. 

(b) FNS claim actions. FNS may 

initiate and pursue claims against the 

distributing agency or other entities for 

the loss of donated foods, or for the loss 

or improper use of funds provided for, 

or obtained as an incident of, the 

distribution of donated foods. FNS may 

also initiate and pursue claims against 

the distributing agency for failure to 

take required claim actions against other 

parties. FNS may, on behalf of the 

Department, compromise, forgive, 

suspend, or waive a claim. FNS may, at 

its option, require assignment to it of 

any claim arising from the distribution 

of donated foods. 

§ 250.17 Use of funds obtained incidental 

to donated food distribution. 

(a) Distribution charge. The 

distributing agency must use funds 

obtained from the distribution charge 

imposed on recipient agencies in child 

nutrition programs, in accordance with 

§ 250.13(b), to meet the costs of storing 

and distributing donated foods or 

related administrative costs, consistent 

with the limitations on the use of funds 

provided under a Federal grant in 7 CFR 

part 3016 and OMB guidance. The 

distributing agency must maintain such 

funds in an operating account, separate 

from other funds obtained incidental to 

donated food distribution. The amount 

of funds maintained at any time in the 

operating account may not exceed the 

distributing agency’s highest 

expenditure from that account over any 

three-month period in the previous 

school or fiscal year, unless the 

distributing agency receives FNS 

approval to maintain a larger amount of 

funds in such account. Unless such 

approval is granted, funds in excess of 

the established limit must be used to 

reduce the distribution charge imposed 

on recipient agencies, or to provide 

appropriate reimbursement to such 

agencies. The distributing agency may 

not use funds obtained from the 

distribution charge to purchase foods to 

replace donated food losses or to pay 

claims to make restitution for donated 

food losses. 

(b) Processing and food service 

management company contracts. 

School food authorities must use funds 

obtained from processors in processing 

of donated foods into end products (e.g., 

through rebates for the value of such 

donated foods), or from food service 

management companies in crediting for 

the value of donated foods received, in 

support of the nonprofit school food 

service, in accordance with 7 CFR 

210.14 of this chapter. Other recipient 

agencies must use such funds in 

accordance with the requirements in 

paragraph (c) of this section. 

(c) Claims and other sources. The 

distributing agency must ensure that 

funds collected in payment of claims for 

donated food losses are used only for 

the payment of expenses of the food 

distribution program. The first priority 

for the use of funds collected in a claim 

for the loss of donated foods is the 

purchase of replacement foods for use in 

the program in which the loss occurred. 

If the purchase of replacement foods is 

not feasible, funds collected in a claim 

for the loss of donated foods must be 


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used to pay allowable administrative 

costs incurred in the storage and 

distribution of donated foods. The 

distributing agency, or recipient agency, 

must use funds obtained from sources 

incidental to donated food distribution 

(except as otherwise indicated in this 

section) to pay administrative costs 

incurred in the storage and distribution 

of donated foods, consistent with the 

limitations on the use of funds provided 

under a Federal grant in 7 CFR parts 

3016 or 3019, and OMB guidance, as 

applicable. The distributing agency 

must maintain funds obtained from 

claims and other sources included in 

this paragraph (c) in a donated food 

account (separate from the operating 

account maintained in accordance with 

paragraph (a) of this section), and must 

obtain FNS approval for any single 

deposit into, or expenditure from, such 

account in excess of $25,000. 

Distributing and recipient agencies must 

maintain records of funds obtained and 

expended in accordance with this 

paragraph (c). Examples of funds 

applicable to the provisions in this 

paragraph (c) include funds accrued 

from: 

(1) The salvage of out-of-condition 

donated foods. 

(2) The sale of donated food 

containers, pallets, or packing materials. 

(3) Payments by processors for failure 

to meet processing yields or other cause. 

(d) Prohibitions. The distributing 

agency may not use funds obtained 

incidental to donated food distribution 

to meet State matching requirements for 

Federal administrative funds provided 

in household programs, or in place of 

State Administrative Expense (SAE) 

funds provided in accordance with 7 

CFR part 235. 

(e) Buy American. When funds 

obtained in accordance with this section 

are used to purchase foods in the 

commercial market, a distributing or 

recipient agency in the continental 

United States, and in Hawaii, must, to 

the maximum extent practical, purchase 

only domestic foods or food products. 

Such requirement is also applicable to 

food purchases made with the cash-inlieu-of-donated foods provided in NSLP 

and CACFP, in accordance with 

§§ 250.56(e) and 250.61(c). For the 

purposes of this section, domestic foods 

or food products are: 

(1) Agricultural commodities that are 

produced in the United States; or 

(2) Food products that are processed 

in the United States substantially using 

agricultural commodities that are 

produced in the United States. 

§ 250.18 Reporting requirements. 

(a) Inventory and distribution of 

donated foods. The distributing agency 

must submit to FNS reports relating to 

the inventory and distribution of 

donated foods in this paragraph (a) or in 

other regulations applicable to specific 

programs. Such reports must be 

submitted in accordance with the time 

frames established for each respective 

form. For donated foods received in 

FDPIR, the distributing agency must 

submit form FNS–152, Monthly 

Distribution of Donated Foods to Family 

Units. For donated foods received in 

TEFAP, NSLP, or other child nutrition 

programs, the distributing agency must 

submit form FNS–155, the Inventory 

Management Register. 

(b) Processor performance reports. 

Processors must submit monthly 

performance reports to the distributing 

agency, in accordance with § 250.30(m). 

Such reports must include the 

information listed in § 250.30(m). 

(c) Disasters and situations of distress. 

The distributing agency must submit to 

FNS a report of the types and amounts 

of donated foods used from distributing 

or recipient agency storage facilities in 

disasters and situations of distress, and 

a request for replacement of such foods, 

using electronic form FNS–292A, Report 

of Commodity Distribution for Disaster 

Relief, in accordance with §§ 250.69 and 

250.70. The report must be submitted 

within 45 days of the termination of 

such assistance. 

(d) Other information. The 

distributing agency must submit other 

information, as requested by FNS, in 

order to ensure compliance with 

requirements in this part. For example, 

FNS may require the distributing agency 

to submit information with respect to its 

assessment of the distribution charge, or 

to justify the efficiency and costeffectiveness of its distribution system, 

in accordance with § 250.13(c) and (d). 

§ 250.19 Recordkeeping requirements. 

(a) Required records. Distributing 

agencies, recipient agencies, and other 

entities must maintain records of 

agreements and contracts, reports, 

audits, and claim actions, funds 

obtained as an incident of donated food 

distribution, and other records 

specifically required in this part or in 

other Departmental regulations, as 

applicable. In addition, distributing 

agencies must keep a record of the value 

of donated foods each of its school food 

authorities receives, and records to 

demonstrate compliance with the 

professional standards for distributing 

agency directors established in 

235.11(g). Processors must also maintain 

records documenting the sale of end 

products to recipient agencies, 

including the sale of such end products 

by distributors. Specific recordkeeping 

requirements relating to the use of 

donated foods in contracts with food 

service management companies are 

included in § 250.54. Failure of the 

distributing agency, recipient agency, or 

other entity to comply with 

recordkeeping requirements shall be 

considered prima facie evidence of 

improper distribution or loss of donated 

foods and may result in a claim against 

such party for the loss or misuse of 

donated foods, in accordance with 

§ 250.16, or in other sanctions or 

corrective actions. 

(b) Retention of records. Records 

relating to requirements for donated 

foods must be retained for a period of 

three years from the close of the fiscal 

or school year to which they pertain. 

However, records pertaining to claims 

or audits that remain unresolved in this 

period of time must be retained until 

such actions have been resolved. 

§ 250.20 Audit requirements. 

(a) Requirements for distributing and 

recipient agencies. Audit requirements 

for State or local government agencies 

and nonprofit organizations that receive 

Federal awards or grants (including 

distributing and recipient agencies 

under this part) are included in 

Departmental regulations in 7 CFR part 

3052 (which codifies audit requirements 

in OMB Circular A–133). In accordance 

with such regulations, the value of 

Federal grants or awards expended in a 

fiscal year determine if the distributing 

or recipient agency is required to obtain 

an audit in that year. The value of 

donated foods must be considered as 

part of the Federal grants or awards in 

determining if an audit is required. FNS 

provides guidance for distributing and 

recipient agencies in valuing donated 

foods for audit purposes, and in 

determining whether an audit must be 

obtained. (For availability of the OMB 

circular mentioned in this paragraph, 

please refer to 5 CFR 1310.3). 

(b) Requirements for processors. InState processors must obtain an 

independent certified public accountant 

(CPA) audit in the first year that they 

receive donated foods for processing, 

while multi-State processors must 

obtain such an audit in each of the first 

two years that they receive donated 

foods for processing. After this initial 

requirement period, in-State and multiState processors must obtain an 

independent CPA audit at a frequency 

determined by the average value of 

donated foods received for processing 

per year, as indicated in this paragraph 

(b). The value of donated foods used in 


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determining if an audit is required must 

be the contract value of the donated 

foods, as defined in § 250.2. The audit 

must determine that the processor’s 

performance is in compliance with the 

requirements in this part, and must be 

conducted in accordance with 

procedures in the FNS Audit Guide for 

Processors. All processors must pay for 

audits required in this paragraph (b). An 

in-State or multi-State processor must 

obtain an audit: 

(1) Annually, if it receives, on 

average, more than $5,000,000 in 

donated foods for processing per year; 

(2) Every two years, if it receives, on 

average, between $1,000,000 and 

$5,000,000 in donated foods for 

processing per year; or 

(3) Every three years, if it receives, on 

average, less than $1,000,000 in donated 

foods for processing per year. 

(c) Post-audit actions required of 

processors. In-State processors must 

submit a copy of the audit to the 

distributing agency for review by 

December 31st of each year in which an 

audit is required. The distributing 

agency must ensure that in-State 

processors provide a corrective action 

plan with timelines for correcting 

deficiencies identified in the audit, and 

must ensure that such deficiencies are 

corrected. Multi-State processors must 

submit a copy of the audit, and a 

corrective action plan with timelines for 

correcting deficiencies identified in the 

audit, as appropriate, to FNS for review 

by December 31st of each year in which 

an audit is required. FNS may conduct 

an audit or investigation of a processor 

to ensure correction of deficiencies, in 

accordance with § 250.3(b). 

(d) Failure to meet audit 

requirements. If a distributing agency or 

recipient agency fails to obtain the 

required audit, or fails to correct 

deficiencies identified in the audit, FNS 

may withhold, suspend, or terminate 

the Federal award. If a processor fails to 

obtain the required audit, or fails to 

correct deficiencies identified in the 

audit, a distributing or recipient agency 

may terminate the processing 

agreement, and may not extend or 

renew such an agreement. Additionally, 

FNS may prohibit the further 

distribution of donated foods to such 

processor. 

§ 250.21 Distributing agency reviews. 

(a) Scope of review requirements. The 

distributing agency must ensure that 

subdistributing agencies, recipient 

agencies, and other entities comply with 

applicable requirements in this part, 

and in other Federal regulations, 

through the on-site reviews required in 

paragraph (b) of this section, and the 

review of required reports or audits. 

However, the distributing agency is not 

responsible for the review of school 

food authorities and other recipient 

agencies in child nutrition programs. 

The State administering agency is 

responsible for the review of such 

recipient agencies, in accordance with 

review requirements of part 210. 

(b) On-site reviews. The distributing 

agency must conduct an on-site review 

of: 

(1) Charitable institutions, whenever 

the distributing agency identifies actual 

or probable deficiencies in the use of 

donated foods by such institutions, 

through audits, investigations, 

complaints, or any other information; 

(2) Storage facilities at the distributing 

agency level (including commercial 

storage facilities under contract with the 

distributing or subdistributing agency), 

on an annual basis; and 

(3) Subdistributing and recipient 

agencies in CSFP, TEFAP, and FDPIR, 

in accordance with 7 CFR parts 247, 

251, and 253, respectively. 

(c) Identification and correction of 

deficiencies. The distributing agency 

must inform each subdistributing 

agency, recipient agency, or other entity 

of any deficiencies identified in its 

reviews, and recommend specific 

actions to correct such deficiencies. The 

distributing agency must ensure that 

such agencies or entities implement 

corrective actions to correct deficiencies 

in a timely manner. 

§ 250.22 Distributing agency performance 

standards. 

(a) Performance standards. The 

distributing agency must meet the basic 

performance standards included in this 

paragraph in the ordering, distribution, 

processing, if applicable, and control of 

donated foods. Some of the performance 

standards apply only to distributing 

agencies that distribute donated foods in 

NSLP or other child nutrition programs, 

as indicated. However, the 

identification of specific performance 

standards does not diminish the 

responsibility of the distributing agency 

to meet other requirements in this part. 

In meeting basic performance standards, 

the distributing agency must: 

(1) Provide recipient agencies with 

information on donated food 

availability, assistance levels, values, 

product specifications, and processing 

options, as requested; 

(2) Implement a request-driven 

ordering system, in accordance with 

§ 250.10(a), and, for child nutrition 

programs, § 250.58(a); 

(3) Offer school food authorities in 

NSLP, at a minimum, the commodity 

offer value of donated foods, in 

accordance with § 250.58; 

(4) Provide for the storage, 

distribution, and control of donated 

foods in accordance with all Federal, 

State, or local requirements relating to 

food safety and health; 

(5) Provide for the distribution of 

donated foods in the most efficient and 

cost-effective manner, including, to the 

extent practical, direct shipments from 

vendors to recipient agencies or 

processors, and the use of split 

shipments; 

(6) Use SAE funds, or other Federal or 

State funds, as available, in paying State 

storage and distribution costs for child 

nutrition programs, and impose a 

distribution charge on recipient 

agencies in child nutrition programs 

only to extent that such funds are 

insufficient to meet applicable costs; 

(7) Provide for the processing of 

donated foods, at the request of school 

food authorities, in accordance with 

Subpart C of this part, including the 

testing of end products with school food 

authorities, and the solicitation of 

acceptability input, when procuring end 

products on behalf of school food 

authorities or otherwise limiting the 

procurement of end products; and 

(8) Provide recipient agencies 

information regarding the preferred 

method for submission of donated foods 

complaints to the distributing agency 

and act expeditiously to resolve 

submitted complaints. 

(b) Corrective action plan. The 

distributing agency must submit a 

corrective action plan to FNS whenever 

it is found to be substantially out of 

compliance with the performance 

standards in paragraph (a) of this 

section, or with other requirements in 

this part. The plan must identify the 

corrective actions to be taken, and the 

timeframe for completion of such 

actions. The plan must be submitted to 

FNS within 60 days after the 

distributing agency receives notification 

from FNS of a deficiency. 

(c) Termination or suspension. FNS 

may terminate or suspend all, or part, of 

the distributing agency’s participation 

in the distribution of donated foods, or 

in a food distribution program, for 

failure to comply with requirements in 

this part, with other applicable Federal 

regulations, or with its written 

agreement with FNS. FNS may also take 

other actions, as appropriate, including 

prosecution under applicable Federal 

statutes. 

Subpart C—Processing and Labeling 

of Donated Foods 

■ 4. In Subpart C, § 250.30: 


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■ a. Revise all references to ‘‘FNSRO’’ to 

read ‘‘FNS Regional Office’’. 

■ b. Amend paragraph (b)(2) 

introductory text by removing the 

reference, ‘‘§ 250.12(b)’’, and adding in 

its place the reference, ‘‘§ 250.4(c)’’. 

■ c. Amend paragraph (b)(2)(i) by 

removing the words, ‘‘as defined in 

§ 250.3’’, and adding in their place the 

words, ‘‘in accordance with paragraph 

(d) of this section’’. 

■ d. Amend paragraph (c) as follows: 

■ i. Redesignate paragraphs (c)(1)(i) 

through (vi) as paragraphs (c)(1)(i)(A) 

through (F). 

■ ii. Redesignate paragraph (c)(1) 

introductory text as (c)(1)(i) 

introductory text. 

■ iii. Designate the undesignated 

paragraph following paragraph 

(c)(1)(i)(F), beginning with the words 

‘‘These criteria will be reviewed’’, as 

paragraph (c)(1)(ii). 

■ e. Amend newly designated paragraph 

(c)(1)(ii) by removing the references, 

‘‘Attachment O to OMB Circular A–102’’ 

and ‘‘Attachment O of OMB Circular A– 

102’’, and adding in their place the 

reference, ‘‘7 CFR parts 3016 or 3019, as 

applicable’’. 

■ f. Amend paragraph (c)(4)(iii) by 

removing the reference, ‘‘§ 250.3’’, and 

adding in its place the reference, 

‘‘§ 250.2’’. 

■ g. Revise paragraphs (c)(4)(viii)(G) and 

(c)(4)(xi). 

■ h. Remove paragraph (c)(4)(xiv), and 

redesignate paragraphs (c)(4)(xv) 

through (xviii) as paragraphs (c)(4)(xiv) 

through (xvii). 

■ i. Revise paragraph (d)(1)(i). 

■ j. Remove the second and third 

sentences of paragraph (d)(1)(iii). 

■ k. Revise paragraph (e)(1)(i). 

■ l. Amend paragraph (f)(1) introductory 

text by removing the reference, 

‘‘§ 250.3’’, and adding in its place the 

reference, ‘‘§ 250.2’’. 

■ m. Amend paragraph (f)(2) by 

removing the reference, ‘‘§ 250.16’’, and 

adding in its place the reference, 

‘‘§ 250.19’’. 

■ n. Amend paragraph (f)(3)(vii) by 

removing the reference, ‘‘§ 250.16(a)(4)’’, 

and adding in its place the reference, 

‘‘§ 250.19(a)’’. 

■ o. Amend paragraph (j)(3) by 

removing the reference, ‘‘FNS 

Instruction 410–1, Non-Audit Claims, 

Food Distribution Program’’, and adding 

in its place the reference, ‘‘§ 250.17(c)’’. 

■ p. Remove the last sentence of 

paragraph (k)(3). 

■ q. Remove paragraphs (m)(1)(vii) and 

(viii), and redesignate paragraph 

(m)(1)(ix) as paragraph (m)(1)(vii). 

■ r. Revise the second sentence of 

paragraph (n)(3). 

■ s. Remove paragraph (n)(4), and 

redesignate paragraph (n)(5) as 

paragraph (n)(4). 

■ t. Remove paragraphs (o), (q), and (r), 

and redesignate paragraphs (p), (s), and 

(t) as paragraphs (o), (p), and (q), 

respectively. 

The revisions read as follows: 

§ 250.30 State processing of donated 

foods. 

* * * * * 

(c) * * * 

(4) * * * 

(viii) * * * 

(G) Meet the requirements of § 250.19 

in maintaining records pertaining to the 

receipt, distribution, and control of 

donated foods, and the sale of end 

products; 

* * * * * 

(xi) Meet the requirements in 

§ 250.20(b) and (c) in obtaining an 

independent certified public accountant 

audit, and in performing post-audit 

actions; 

* * * * * 

(d) * * * 

(1) * * * 

(i) A refund system in which the 

processor provides a payment to the 

recipient agency in the amount of the 

contract value of the donated food 

contained in the end product; 

* * * * * 

(e) * * * 

(1) * * * 

(i) A refund system in which the 

processor provides a payment to the 

recipient agency in the amount of the 

contract value of the donated food 

contained in the end product; 

* * * * * 

(n) * * * 

(3) * * * As a part of the annual 

reconciliation, the distributing agency 

must ensure that a processor with 

excessive inventories of donated foods 

reduces such inventories. * * * 

* * * * * 

Subpart D—Donated Foods in 

Contracts With Food Service 

Management Companies 

■ 5. In § 250.50, revise the second 

sentence of paragraph (a) to read as 

follows: 

§ 250.50 Contract requirements and 

procurement. 

(a) * * * The contract must ensure 

that all donated foods received for use 

by the recipient agency in the school or 

fiscal year, as applicable, are used in the 

recipient agency’s food service, or that 

commercially purchased foods are used 

in place of such donated foods only in 

accordance with the requirements in 

§ 250.51(d). * * * 

* * * * * 

■ 6. In § 250.52, revise paragraph (a) to 

read as follows: 

§ 250.52 Storage and inventory 

management of donated foods. 

(a) General requirements. The food 

service management company must 

meet the requirements for the safe 

storage and control of donated foods in 

§ 250.14(a). 

* * * * * 

Subpart E—National School Lunch 

Program (NSLP) and Other Child 

Nutrition Programs 

■ 7. In § 250.58, revise paragraphs (a) 

and (e) to read as follows: 

§ 250.58 Ordering donated foods and their 

provision to school food authorities. 

(a) Ordering and distribution of 

donated foods. The distributing agency 

must ensure that school food authorities 

are able to submit donated food orders 

through the FNS electronic donated 

foods ordering system, or through a 

comparable electronic food ordering 

system. The distributing agency must 

ensure that all school food authorities 

have the opportunity to provide input at 

least annually in determining the 

donated foods from the full list that are 

made available to them for ordering in 

the FNS electronic donated foods 

ordering system or other comparable 

electronic ordering system. The 

distributing agency must ensure 

distribution to school food authorities of 

all such ordered donated foods that may 

be distributed to them in a cost-effective 

manner (including the use of split 

shipments, as necessary), and that they 

may utilize efficiently and without 

waste. 

* * * * * 

(e) Donated food value in offer and 

crediting. In offering the school food 

authority the commodity offer value of 

donated foods, the distributing agency 

must use either the cost-per-pound 

donated food prices posted annually by 

USDA or the most recently published 

cost-per-pound price in the USDA 

donated foods catalog. The distributing 

agency must credit the school food 

authority using the USDA purchase 

price (cost-per-pound), and update the 

price at least semi-annually to reflect 

the most recent USDA purchase price. 

■ 8. Revise § 250.59 to read as follows: 

§ 250.59 Storage, control, and use of 

donated foods. 

(a) Storage and inventory 

management. The distributing agency 

must ensure compliance with 


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requirements in §§ 250.12 and 250.13 in 

order to ensure the safe and effective 

storage and inventory management of 

donated foods, and their efficient and 

cost-effective distribution to school food 

authorities. The school food authority 

must ensure compliance with 

requirements in § 210.13 to ensure the 

safe and sanitary storage, inventory 

management, and use of donated foods 

and purchased foods. In accordance 

with § 250.14(c), the school food 

authority may commingle donated foods 

and purchased foods in storage and 

maintain a single inventory record of 

such commingled foods, in a single 

inventory management system. 

(b) Use of donated foods in the 

nonprofit school food service. The 

school food authority must use donated 

foods, as much as is practical, in the 

lunches served to schoolchildren, for 

which they receive an established permeal value of donated food assistance 

each school year. However, the school 

food authority may also use donated 

foods in other activities of the nonprofit 

school food service. Revenues received 

from such activities must accrue to the 

school food authority’s nonprofit school 

food service account, in accordance 

with § 210.14. Some examples of such 

activities in which donated foods may 

be used include: 

(1) School breakfasts or other meals 

served in child nutrition programs; 

(2) A la carte foods sold to 

schoolchildren; 

(3) Meals served to adults directly 

involved in the operation and 

administration of the nonprofit school 

food service, and to other school staff; 

and 

(4) Training in nutrition, health, food 

service, or general home economics 

instruction for students. 

(c) Use of donated foods outside of the 

nonprofit school food service. The 

school food authority should not use 

donated foods in meals or other 

activities that do not benefit primarily 

schoolchildren, such as banquets or 

catered events. However, as their use in 

such activities may not always be 

avoided (e.g., if donated foods are 

commingled with purchased foods in a 

single inventory management system), 

the school food authority must ensure 

reimbursement to the nonprofit school 

food service for the value of donated 

foods used in such activities. When 

such reimbursement may not be based 

on actual usage of donated foods (e.g., 

in a single inventory management 

system), the school food authority must 

establish an alternate method of 

reimbursement—e.g., by including the 

current per-meal value of donated food 

assistance in the price charged for the 

meal or other activity. 

(d) Use of donated foods in a contract 

with a food service management 

company. When the school food 

authority contracts with a food service 

management company to conduct the 

food service, in accordance with 

§ 210.16, it must ensure compliance 

with requirements in Subpart D of this 

part, which address the treatment of 

donated foods under such contract. The 

school food authority must also ensure 

compliance with the use of donated 

foods in paragraphs (b) and (c) of this 

section under its contract with a food 

service management company. 

(e) School food authorities acting as a 

collective unit. Two or more school food 

authorities may conduct activities of the 

nonprofit school food service as a 

collective unit (e.g., in a school co-op or 

consortium), including activities 

relating to donated foods. Such 

activities must be conducted in 

accordance with a written agreement or 

contract between the parties. The school 

food authority collective unit is subject 

to the same requirements as a single 

school food authority in conducting 

such activities. For example, the school 

food authority collective unit may use a 

single inventory management system in 

its storage and control of purchased and 

donated foods. 

§ 250.60 [Removed] 

■ 9. Remove § 250.60. 

§§ 250.61 and 250.62 [Redesignated as 

§§ 250.60 and 250.61] 

■ 10. Redesignate §§ 250.61 and 250.62 

as §§ 250.60 and 250.61, respectively. 

■ 11. Revise Subpart F to read as 

follows: 

Subpart F—Household Programs 

Sec. 

250.63 Commodity Supplemental Food 

Program (CSFP). 

250.64 The Emergency Food Assistance 

Program (TEFAP). 

250.65 Food Distribution Program on 

Indian Reservations (FDPIR). 

250.66 [Reserved] 

§ 250.63 Commodity Supplemental Food 

Program (CSFP). 

(a) Distribution of donated foods in 

CSFP. The Department provides 

donated foods in CSFP to the 

distributing agency (i.e., the State 

agency, in accordance with 7 CFR part 

247) for further distribution in the State, 

in accordance with 7 CFR part 247. 

State agencies and recipient agencies 

(i.e., local agencies in 7 CFR part 247) 

must comply with the requirements of 

this part in the distribution, control, and 

use of donated foods in CSFP, to the 

extent that such requirements are not 

inconsistent with the requirements in 7 

CFR part 247. 

(b) Types of donated foods 

distributed. Donated foods distributed 

in CSFP include Section 4(a) foods, and 

donated foods provided under Section 

32, Section 416, or Section 709, as 

available. 

§ 250.64 The Emergency Food Assistance 

Program (TEFAP). 

(a) Distribution of donated foods in 

TEFAP. The Department provides 

donated foods in TEFAP to the 

distributing agency (i.e., the State 

agency, in accordance with 7 CFR part 

251) for further distribution in the State, 

in accordance with 7 CFR part 251. 

State agencies and recipient agencies 

must comply with the requirements of 

this part in the distribution, control, and 

use of donated foods, to the extent that 

such requirements are not inconsistent 

with the requirements in 7 CFR part 

251. 

(b) Types of donated foods 

distributed. Donated foods distributed 

in TEFAP include Section 27 foods, and 

donated foods provided under Section 

32, Section 416, or Section 709, as 

available. 

§ 250.65 Food Distribution Program on 

Indian Reservations (FDPIR). 

(a) Distribution of donated foods in 

FDPIR. The Department provides 

donated foods in FDPIR to the 

distributing agency (i.e., the State 

agency, in accordance with 7 CFR parts 

253 and 254, which may be an Indian 

Tribal Organization) for further 

distribution, in accordance with 7 CFR 

parts 253 and 254. The State agency 

must comply with the requirements of 

this part in the distribution, control, and 

use of donated foods, to the extent that 

such requirements are not inconsistent 

with the requirements in 7 CFR parts 

253 and 254. 

(b) Types of donated foods 

distributed. Donated foods distributed 

in FDPIR include Section 4(a) foods, 

and donated foods provided under 

Section 32, Section 416, or Section 709, 

as available. 

250.66 [Reserved] 

Subpart G—Additional Provisions 

■ 12. Revise the heading for subpart G 

to read as set forth above. 

■ 13. Revise § 250.69 to read as follows: 

§ 250.69 Disasters. 

(a) Use of donated foods to provide 

congregate meals. The distributing 

agency may provide donated foods from 

current inventories, either at the 

distributing or recipient agency level, to 


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a disaster organization (as defined in 

§ 250.2), for use in providing congregate 

meals to persons in need of food 

assistance as a result of a Presidentially 

declared disaster or emergency 

(hereinafter referred to collectively as a 

‘‘disaster’’). FNS approval is not 

required for such use. However, the 

distributing agency must notify FNS 

that such assistance is to be provided, 

and the period of time that it is expected 

to be needed. The distributing agency 

may extend such period of assistance as 

needs dictate, but must notify FNS of 

such extension. 

(b) Use of donated foods for 

distribution to households. Subject to 

FNS approval, the distributing agency 

may provide donated foods from current 

inventories, either at the distributing or 

recipient agency level, to a disaster 

organization, for distribution to 

households in need of food assistance 

because of a disaster. Such distribution 

may continue for the period that FNS 

has determined to be necessary to meet 

the needs of such households. However, 

households receiving disaster SNAP (D– 

SNAP) benefits are not eligible to 

receive such donated food assistance. 

(c) Approval of disaster organization. 

Before distribution of donated foods to 

a disaster organization, the distributing 

agency must review and approve such 

organization’s application, which must 

be submitted to the distributing agency 

either electronically or in written form. 

The distributing agency must also 

submit such application to FNS for 

review and approval before permitting 

distribution of donated foods to 

households. 

(1) The disaster organization’s 

application must, to the extent possible, 

include the following information: 

(i) A description of the disaster 

situation; 

(ii) The number of people requiring 

assistance; 

(iii) The period of time for which 

donated foods are requested; 

(iv) The quantity and types of food 

needed; and 

(v) The number and location of sites 

where donated foods are to be used, to 

the extent that such information is 

known. 

(2) In addition to the information 

required above, disaster organizations 

applying to distribute donated foods to 

households must include the following 

information in their application: 

(i) An explanation as to why such 

distribution is needed; 

(ii) The method(s) of distribution 

available; and 

(iii) A statement assuring that D– 

SNAP benefits and donated food 

assistance will not be provided 

simultaneously to individual 

households, and a description of the 

system that will be implemented to 

prevent such dual participation. 

(d) Information from households. If 

the issuance of D–SNAP benefits has 

been approved, the distributing agency 

must ensure that the disaster 

organization obtains the following 

information from households receiving 

donated foods, and reports such 

information to the distributing agency: 

(1) The name and address of the 

household members applying for 

assistance; 

(2) The number of household 

members; and 

(3) A statement from the head of the 

household certifying that the household 

is in need of food assistance, is not 

receiving D–SNAP benefits, and 

understands that the sale or exchange of 

donated foods is prohibited. 

(e) Eligibility of emergency relief 

workers for congregate meals. The 

disaster organization may use donated 

foods to provide meals to any 

emergency relief workers at the 

congregate feeding site who are directly 

engaged in providing relief assistance. 

(f) Reporting and recordkeeping 

requirements. The distributing agency 

must report to FNS the number and 

location of sites where donated foods 

are used in congregate meals or 

household distribution as these sites are 

established. The distributing agency 

must also report the types and amounts 

of donated foods from distributing or 

recipient agency storage facilities used 

in disaster assistance, utilizing form 

FNS–292A, Report of Commodity 

Distribution for Disaster Relief, which 

must be submitted electronically, within 

45 days from the termination of disaster 

assistance. This form must also be used 

to request replacement of donated foods, 

in accordance with paragraph (g) of this 

section. The distributing agency must 

maintain records of reports and other 

information relating to disasters. 

(g) Replacement of donated foods. In 

order to ensure replacement of donated 

foods used in disasters, the distributing 

agency must submit to FNS a request for 

such replacement, utilizing form FNS– 

292A, Report of Commodity Distribution 

for Disaster Relief, within 45 days 

following the termination of disaster 

assistance. The distributing agency may 

request replacement of foods used from 

inventories in which donated foods are 

commingled with other foods (i.e., at 

storage facilities of recipient agencies 

utilizing single inventory management), 

if the recipient agency received donated 

foods of the same type as the foods used 

during the year preceding the onset of 

the disaster assistance. FNS will replace 

such foods in the amounts used, or in 

the amount of like donated foods 

received during the preceding year, 

whichever is less. 

(h) Reimbursement of transportation 

costs. In order to receive reimbursement 

for any costs incurred in transporting 

donated foods within the State, or from 

one State to another, for use in disasters, 

the distributing agency must submit a 

public voucher to FNS with 

documentation of such costs. FNS will 

review the request and reimburse the 

distributing agency. 

■ 14. Revise § 250.70 to read as follows: 

§ 250.70 Situations of distress. 

(a) Use of donated foods to provide 

congregate meals. The distributing 

agency may provide donated foods from 

current inventories, either at the 

distributing or recipient agency level, to 

a disaster organization, for use in 

providing congregate meals to persons 

in need of food assistance because of a 

situation of distress, as this term is 

defined in § 250.2. If the situation of 

distress results from a natural event 

(e.g., a hurricane, flood, or snowstorm), 

such donated food assistance may be 

provided for a period not to exceed 30 

days, without the need for FNS 

approval. However, the distributing 

agency must notify FNS that such 

assistance is to be provided. FNS 

approval must be obtained to permit 

such donated food assistance for a 

period exceeding 30 days. If the 

situation of distress results from other 

than a natural event (e.g., an explosion), 

FNS approval is required to permit 

donated food assistance for use in 

providing congregate meals for any 

period of time. 

(b) Use of donated foods for 

distribution to households. The 

distributing agency must receive FNS 

approval to provide donated foods from 

current inventories, either at the 

distributing or recipient agency level, to 

a disaster organization for distribution 

to households in need of food assistance 

because of a situation of distress. Such 

distribution may continue for the period 

of time that FNS determines necessary 

to meet the needs of such households. 

However, households receiving D– 

SNAP benefits are not eligible to receive 

such donated food assistance. 

(c) Approval of disaster organizations. 

Before distribution of donated foods to 

a disaster organization, the distributing 

agency must review and approve such 

organization’s application, which must 

be submitted to the distributing agency 

either electronically or in written form. 

The distributing agency must also 

submit such application to FNS for 

review and approval before permitting 


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63256 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Proposed Rules 

distribution of donated foods in a 

situation of distress that is not the result 

of a natural event, or for any 

distribution of donated foods to 

households. The disaster organization’s 

application must, to the extent possible, 

include the information required in 

§ 250.69(c). 

(d) Information from households. If 

the issuance of D–SNAP benefits has 

been approved, the distributing agency 

must ensure that the disaster 

organization obtains the information in 

§ 250.69(d) from households receiving 

donated foods, and reports such 

information to the distributing agency. 

(e) Eligibility of emergency relief 

workers for congregate meals. The 

disaster organization may use donated 

foods to provide meals to any 

emergency relief workers at the 

congregate feeding site that are directly 

engaged in providing relief assistance. 

(f) Reporting and recordkeeping 

requirements. The distributing agency 

must report to FNS the number and 

location of sites where donated foods 

are used in congregate meals or 

household distribution as these sites are 

established. The distributing agency 

must also report the types and amounts 

of donated foods from distributing or 

recipient agency storage facilities used 

in the situation of distress, utilizing 

form FNS–292A, Report of Commodity 

Distribution for Disaster Relief, which 

must be submitted electronically, within 

45 days from the termination of 

assistance. This form must also be used 

to request replacement of donated foods, 

in accordance with paragraph (g) of this 

section. The distributing agency must 

maintain records of reports and other 

information relating to situations of 

distress. 

(g) Replacement of donated foods. 

FNS will replace donated foods used in 

a situation of distress only to the extent 

that funds to provide for such 

replacement are available. The 

distributing agency must submit to FNS 

a request for replacement of such foods, 

utilizing form FNS–292A, Report of 

Commodity Distribution for Disaster 

Relief, which must be submitted 

electronically, within 45 days from the 

termination of assistance. The 

distributing agency may request 

replacement of foods used from 

inventories in which donated foods are 

commingled with other foods (i.e., at 

storage facilities of recipient agencies 

utilizing single inventory management), 

if the recipient agency received donated 

foods of the same type as the foods used 

during the year preceding the onset of 

the situation of distress. Subject to the 

availability of funds, FNS will replace 

such foods in the amounts used, or in 

the amount of like donated foods 

received during the preceding year, 

whichever is less. 

(h) Reimbursement of transportation 

costs. In order to receive reimbursement 

for any costs incurred in transporting 

donated foods within the State, or from 

one State to another, for use in a 

situation of distress, the distributing 

agency must submit a public voucher to 

FNS with documentation of such costs. 

FNS will review the request and 

reimburse the distributing agency to the 

extent that funds are available. 

■ 15. Add § 250.71 to read as follows: 

§ 250.71 OMB control numbers. 

Unless as otherwise specified in the 

table below, the information collection 

reporting and recordkeeping 

requirements in 7 CFR part 250 are 

accounted for in OMB control number 

0584–0293. 

CFR cite OMB control No. 

250.4(a) ..................... 0584–0067 

250.19(a) ................... 0584–0067, 0584– 

0293 

250.69(f)–(g) & 

250.70(f)–(g).

0584–0067, 0584– 

0293 

PART 251—THE EMERGENCY FOOD 

ASSISTANCE PROGRAM 

■ 16. The authority citation for part 251 

continues to read as follows: 

Authority: 7 U.S.C. 7501–7516. 

■ 17. In § 251.4: 

■ a. Remove paragraph (f)(4) and 

redesignate paragraph (f)(5) as 

paragraph (f)(4). 

■ b. Revise paragraph (g). 

■ c. Remove paragraph (l). 

The revision reads as follows: 

§ 251.4 Availability of commodities. 

* * * * * 

(g) Distribution and control of 

donated commodities. The State agency 

must ensure that the distribution, 

control, and use of donated 

commodities are in accordance with the 

requirements in this part, and with the 

requirements in 7 CFR part 250, to the 

extent that requirements in 7 CFR part 

250 are not inconsistent with the 

requirements in this part. Transfers of 

donated commodities must comply with 

requirements in §§ 250.12(e) and 

250.14(d), as applicable. In accordance 

with § 250.16, the State agency must 

ensure that restitution is made for the 

loss of donated commodities, or for the 

loss or improper use of funds provided 

for, or obtained as an incidence of, the 

distribution of donated commodities. 

The State agency is also subject to 

claims for such losses for which it is 

responsible, or for its failure to initiate 

or pursue claims against other parties 

responsible for such losses. 

* * * * * 

Dated: October 8, 2014. 

Jeffrey J. Tribiano, 

Acting Administrator, Food and Nutrition 

Service. 

[FR Doc. 2014–24613 Filed 10–21–14; 8:45 am] 

BILLING CODE 3410–30–P 


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