(a) The quantities of commodities to be made available for donation under (3) and (4) of section 416 will be determined with regard to other statutory and program obligations of the CCC, and will be such as can be effectively distributed in furtherance of the objectives of section 416 without interference with domestic or foreign trade. Proration, if necessary, of available commodities among eligible agencies and intergovernmental organizations will be made so as to avoid duplicate donations in particular countries, and to effect distribution on as broad and equitable a basis as is possible compatible with efficient operations.

(b) Dispositions under (1), (2), and (3) of section 416 will have priority over donations for use in the assistance of needy persons outside the United States.

(c) Agencies and intergovernmental organizations receiving food commodities under (3) and (4) of section 416 will be required to agree to such terms and conditions as AMS specifies in announcements of availability and formal agreements governing their disposition. As a minimum, such terms and conditions will include the following:

(1) Agencies and intergovernmental organizations will not diminish their normal expenditures for food because of the receipt of donated commodities and will distribute the donated foods in a manner which will assure that the recipients thereof will not diminish their normal expenditures for food by reason of such donation.

(2) Agencies and intergovernmental organizations will provide or cause to be provided proper facilities for the handling, storage and disposal of donated commodities.

(3) Agencies and intergovernmental organizations will be responsible for noncommercial distribution of food commodities free of cost only to eligible recipients. In the case of donations for use outside the United States, distribution will be made only in nations agreed upon in the respective contracts of donation and only in friendly nations as defined in the Agricultural Trade Development and Assistance Act of 1954, and will be supervised by United States citizens representing the agency and residing in the country of distribution at the time the program is in operation.

(4) Agencies and intergovernmental organizations will maintain adequate

less otherwise agreed upon in the contract of donation, all reprocessing, packaging, handling, transportation and other charges accruing prior to delivery will be for the account of the CCC and all charges accruing subsequent to delivery will be for the account of the agency or intergovernmental organization.

(e) The recipients named under subparagraphs (1), (2), and (3) of this paragraph will be eligible to receive foods under (3) of section 416; recipients named under (2) will be eligible under (4) of section 416:

(1) Nonprofit school lunch programs. School lunch programs, which are operated without profit by public or nonprofit private schools of high school grade or under for the purpose of serving lunches to children attending such schools, are eligible.

(2) Needy persons. Needy persons are those who by virtue of their personal economic status are in need of food assistance, and may include the following:

(i) Public assistance recipients. Persons who are the recipients of, or have been declared eligible to receive financial or other assistance provided for the needy by any governmental agency, and persons receiving assistance or benefits under programs of old-age assistance, aid to dependent children, aid to the blind, aid to the permanently and totally disabled, or similar programs provided for in the Social Security Act or similar acts of foreign governments.

(ii) Private assistance recipients. Persons who are the recipients of, or have been declared eligible to receive, financial or other assistance provided for the needy by private charitable agencies and institutions.

(iii) Other needy persons. Unemployed, part-time employed or other persons, including Indians, whose incomes are so low as to result in their

having need for additional assistance in obtaining food.

In the case of donations of food commodities for use within the United States, needy persons must be certified as such by a state or local public welfare agency (including the Bureau of Indian Affairs). In the case of donations of food commodities for use outside the United States, needy persons will be determined by a qualified agency of the foreign nation or by the nonprofit voluntary agency or intergovernmental organization making distribution.

(3) Charitable Institutions and Hospitals. Nonpenal, public or private charitable institutions, including hospitals, are eligible to the extent of the needy persons served who are unable to pay the full charge for services provided to them.

(f) The terms "State" and "United States" include the District of Columbia and any Territory or Possession of the United States.

§ 501.106 Disqualification clause.

Any agency or intergovernmental organization receiving food commodities under (3) and (4) of section 416, may be disqualified from future participation if it fails to comply with the provisions of this part or of any notices, instructions, announcements, or contracts issued pursuant to this part. This shall not preclude USDA from taking other action through other available means when considered necessary. Fraud in the acquisition, handling, or disposition of food commodities under section 416 will be subject to prosecution under applicable Federal statutes.

§ 501.107 Saving clause.

Any or all of the provisions of this part may be waived, withdrawn or amended at any time.

Sec.

502.211 Claims against schools and childcare institutions.

502.212 Administrative analyses and audits. 502.213 Miscellaneous provisions. 502.214 Program information.

AUTHORITY: §§ 502.200 to 502.214 issued under sec. 4, 62 Stat. 1070; 15 U.S.C. 714b. Interpret or apply 72 Stat. 276; 73 Stat. 363; 74 Stat. 84; 7 U.S.C. 1446 note.

SOURCE: §§ 502.200 to 502 214 appear at 25 F.R. 5172, June 10, 1960, except as otherwise noted.

§ 502.200 General purpose and scope.

This part announces the policies and prescribes the general regulations with respect to the Special Milk Program for Children, under Public Law 85-478, as amended, and sets forth the general requirements for participation in the Program. The Act reads in pertinent part as follows:

for the fiscal year beginning July 1, 1961, not to exceed $105,000,000 of the funds of the Commodity Credit Corporation shall be used to increase the consumption of fluid milk by children (1) in nonprofit schools of high school grade and under; and (2) in nonprofit nursery schools, child care centers, settlement houses, summer camps, and similar nonprofit institutions devoted to the care and training of children. [26 FR. 9155, Sept. 29, 1961]

For the purpose of this part, the term: (a) “Adults” means all staff members and employees of participating schools and child-care institutions including administrative and supervisory personnel, and high school graduates and persons 21 years of age and over enrolled in combination high schools and junior colleges, vocational training schools and child-care institutions. Exception: Camp Counselors under 21 years of age shall not be regarded as adults.

(b) "AMS" means the Agricultural Marketing Service of the United States Department of Agriculture.

(c) "CCC" means the Commodity Credit Corporation.

(d) "Child-care institution" means any nonprofit nursery school (other than nursery schools falling within the definition of school in this section), childcare center, settlement house, summer camp or similar nonprofit instituiton, devoted to the care and training of children. "Child-care institution” as used in this part includes, where applicable, the authorized sponsoring agency which

has entered into an agreement under the Program for a child-care institution. (e) "Cost of milk” means the net purchase price paid by the school or childcare institution to the milk supplier for milk delivered to the school or child-care institution. This shall not include any amount paid to the milk supplier for servicing, rental of or installment purchase of milk service equipment.

(f) "Department" means the United States Department of Agriculture.

(g) "Distribution costs" means direct expenses incurred by the school or childcare institution in connection with the sale, handling and service of milk. This may include expenses incident to acquisition or rental of necessary milk service equipment.

(h) “FDD" means the Food Distribution Division of the Agricultural Marketing Service of the United States Department of Agriculture.

(i) "Fiscal year" means a period of twelve calendar months, beginning with July 1 of any calendar year and ending with June 30 of the following calendar year.

(j) "Milk” means unflavored milk which meets State and local butterfat and sanitation standards for fluid whole milk and flavored milk made from fluid whole milk which meets such standards. (k) "Nonpricing program" means a program which does not sell milk to children. This shall include any such program in a school or child-care institution, in which milk is normally provided children, along with food and other services, for a tuition or boarding charge or other fee. This shall also include any such program in a school or child-care institution, where the entire operation of the school or child-care institution is completely financed from tax sources or by private donations or endowments.

(1) "Nonprofit food service" or "nonprofit milk service" means food or milk service maintained by or on behalf of the school or child-care institution for the benefit of the children, all of the income from which is used solely for the operation or improvement of such food or milk service.

(m) "Nonprofit private school" means a nonpublic school that is exempt from income tax under the Internal Revenue Code, as amended.

(n) "Pricing program" means a program which sells milk to children, but shall also include any program in a school or child-care institution in which

the portion of the cost of milk which would otherwise have been charged to the children is paid by some individual or civic organization, or absorbed by the school or child-care institution (i.e., the price of milk is reduced to "zero").

(o) "Program" means the Special Milk Program for Children.

(p) "School" means the governing body responsible for the administration of a public or nonprofit private "school" of high school grade or under, as defined in the statutes of the State. The term also includes a nonprofit agency to which the school has delegated authority for the operation of its nonprofit milk service.

(q) "State" means any of the 50 States, and the District of Columbia.

(r) "State Agency" means the educational agency or other agency of a State.

(s) "Needy children” means children who cannot afford to make any payment at all for milk served to them.

(t) "Needy schools" means schools which, because of poor local economic conditions, have neither a food nor a milk service, and which are determined by State agencies or FDD to be in need of special assistance in order to serve milk without charge to needy children. Schools participating in special commodity assistance under the National School Lunch Program shall not be considered to have a food or milk service for the purpose of this paragraph.

[25 F.R. 5172, June 10, 1960, as amended at 26 F.R. 9155, Sept. 29, 1961] § 502.202 Administration.

(a) Within the Department, AMS shall act on behalf of CCC in the administration of the Program. Within AMS, FDD shall be responsible for Program administration.

(b) To the extent practicable and permissible under State law, responsibility for the administration of this Program in schools and child-care institutions within a State shall be in the educational agency of the State: Provided, however, That another State agency, upon request by an appropriate State official, may be approved by FDD to administer the Program in child-care institutions.

(c) FDD shall administer the Program in any nonprofit private schools and in child-care institutions in which the Program is not administered by the State.

(d) Each State Agency desiring to take part in the Program shall enter into

a written agreement with CCC for the administration of the Program in the State in accordance with the provisions of this part. Such agreement shall show the class or classes of schools and childcare institutions in which the State Agency will administer the Program. Such agreement shall cover a fiscal year and may be extended at the option of CCC.

(e) References in this part to “FDD where applicable" are to FDD as the agency administering the Program in nonprofit private schools and child-care institutions in which the Program is not administered by the State.

Reserve of funds for State

§ 502.203 Agencies.

As soon as possible after the beginning of each fiscal year for which funds are made available by the Congress, FDD will announce the amount of funds which it will reserve for that fiscal year for each State Agency. In establishing each reserve, FDD will take into account the total amount of reimbursement payments made during the preceding fiscal year to the class or classes of schools and child-care institutions in which the State Agency will administer the Program during the then current year.

§ 502.204 Payments to State Agencies.

(a) The funds reserved for any State Agency for any fiscal year shall be made available in not less than nine monthly payments. The first payment shall be scheduled to arrive in the State on or about September 1, and shall include payments for July, August and September. Payments for succeeding months shall be scheduled to arrive on or about the first of each month: Provided, however, That the payment for May shall cover operations for May and June.

(b) FDD reserves the right to request any State Agency to justify its need for the full amount of any scheduled payment prior to its advance. If FDD determines that a State Agency has not justified the need for the full amount of this payment, FDD shall withhold from such payment the amount determined to be in excess of the State's needs.

(c) In the event that a State Agency justifies the need for funds in excess of the amount of its reserve, additional funds will be provided to such State Agency to the extent funds are available for such purpose.

(d) The State Agency shall resurr to AMS any Federal funds paid to it under the Program which are obligated at the end of the fiscal year. Such returr shall be made BF BOOL BF practicable but in any event not later than 30 days folowing demand made by FDD. The State Agency shal also DET I AMS any interest paid or credited to it wiLL TEspect to Federal funds paid to it under the Program.

$502.205 Dse of funds.

Ponds made Evalable under the PDgram shal be used to increase the consumption of milk throught reimbursement payments to schools and child-care CUSTODemons in connection with the purchase of milk for service a chlidren.

§ 502.206 Requirements for participa

tion.

(a) Any school or child-care stiention not participating in the Program in the previous fiscal year soal mare WTKten application for participation to the State Agency, or FDD where applicable.

DAF a minimum applicanous snŁI provide info TESOL OF East of the nems listed below, except that State Agencies may putat some of the required miormation from other progran forIDE OF special age or older sources prior to approval of a school or enló-care instvenoz for participation.. Further exceptions mer be made with respect to any of the hem vinct FDD determines are not permen or ECEssay in the proper admix of the Program in the specife typer of schools or end-care institutions for vinien a Brant Agency E responsible under agreement v CCC.

(1) The name location and mailing address of the SCHUD Calo-CETE

DX

B) Whether the school or child-care institution operates its food or milk serv ice under a fee, concession or contract arrangement and, if so, & description of such arrangement:

I The opening date and closing date of operation if the school or chit-care Istitution does not operate year-round; Que The number of days of operation per week:

21 A description of the milk service in sufficient detai tenant & determ nation of whether the school or childcare institution operates a pricing Dr nonpricing program:

12 The new delivered cost of milk per hat pin after discount:

23 The day weekly or other perodic price per hat pin at which the school or chit-care institution offer chiarer mile separately priced and

34 & descriptor of specific service practices planner for encouraging m creased milk consumption by enlaver. If the schon or chic-care mistitution offers childrer milk 110 separately priced.

In addition applicam # Teery school desiring special assistatuse the reason why the Bendo. na nG participated in the Program. i the reBOL VITY THE schoo. Deleve rebric

participate in Program B & needy schoo. 1 any special proniems ir DItaining delivery of mint the est mated number of needs children, the proposed number of serving of milk without charge per enit per day Ready SCHOOIE DESTINE SUECIA assistance RISC SULL SUDMA & sertificatiO D THE SCXso that the schoo. has n 100 or mär service and that i will serve mir witDUR charge i neery clarer

E Any servo. We operates ins four or milk seract under a fet roNISE: BIOL, DF Contract arrangemen: shai no approved for participation ever though the school inser DREN IN prof from the operation of the food or milk Service Procwed however that th