40 TAC §12.3, §12.25
The Texas Department of Human Services (DHS) proposes amendments
to §12.3, concerning eligibility of contractors, facilities, and food
service management companies, and §12.25, concerning denials and terminations,
in its Special Nutrition Programs chapter. The purpose of the amendments is
to rescind the requirement that organizations must have 50 day homes in order
to be eligible to apply for participation in the Child and Adult Care Food
Program for Day Care Homes (CACFP DCH).
DHS currently requires an organization applying to participate in the CACFP
DCH to provide documentation that at least 50 registered or licensed day care
homes have signed an application and agreement to participate under their
sponsorship. DHS allows a waiver for an organization with fewer than 50 day
care homes if the day care homes are an integral but subordinate part of an
existing nonprofit or governmental community service. This rule was implemented
in 1994 in absence of federal rules to address program integrity issues regarding
the accountability and financial viability of CACFP DCH contractors. Subsequently,
DHS also established a requirement that non-governmental organizations applying
to participate in the CACFP DCH submit a performance bond equal to their projected
annual reimbursement if they have fewer than three years of administrative
and financial history in administering public funds.
In 2000, the Agricultural Risk Protection Act (P.L. 106-224) amended a
number of provisions to strengthen the integrity of the CACFP. Among other
provisions, United States Department of Agriculture guidance is now instructing
states to: reject the application of any CACFP DCH contractor who is not financially
viable; require a performance bond from organizations with no history of administering
public funds; and establish specific financial management principles and budgeting
procedures for contractors.
The current requirement that a contracting organization have 50 registered
or licensed day care homes to participate in the CACFP DCH is no longer needed
to determine financial viability. The eligibility requirement to obtain a
performance bond and the revised financial management procedures are sufficient
to determine an organization's viability in the current environment. In addition,
over time, it has been the Special Nutrition Program's experience that a sponsoring
organization's financial viability is not necessarily dependent on the number
of homes under its sponsorship.
James R. Hine, Commissioner, has determined that, for the first five-year
period the sections are in effect, there will be no fiscal implications for
state or local government as a result of enforcing or administering the sections.
Mr. Hine also has determined that, for each year of the first five years
the sections are in effect, the public benefit anticipated as a result of
enforcing the sections will be improved administration of the CACFP DCH pertaining
to managing and recruiting day homes. There will be no adverse economic effect
on small or micro businesses, because the contractors affected by the change
are non-profit or governmental entities and, therefore, not businesses. There
is no anticipated economic cost to persons who are required to comply with
the proposed sections. There is no anticipated effect on local employment
in geographic areas affected by these sections.
Questions about the content of this proposal may be directed to Karen Van
Reenen at (512) 420-2581 in DHS's Special Nutrition Programs. Written comments
on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-158,
Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030,
within 30 days of publication in the
Texas Register
.
Under §2007.003(b) of the Texas Government Code, the department has
determined that Chapter 2007 of the Government Code does not apply to these
rules. Accordingly, the department is not required to complete a takings impact
assessment regarding these rules.
The amendments are proposed under the Human Resources Code, Title
2, Chapters 22 and 33, which authorize the department to administer public
and nutritional assistance programs.
The amendments implement the Human Resources Code, §§22.001-22.036
and 33.001-33.027.
§12.3.Eligibility of Contractors, Facilities, and Food Service Management Companies.
(a)
(No change.)
(b)
To be eligible to participate in the CACFP as a day care
home sponsor
,
[
;
] applicants must:
(1)
provide documentation that verifies that
each
[
a minimum of 50 registered or licensed day care homes have signed an application
and agreement, as specified by the Texas Department of Human Services (DHS),
to participate under the contractor's sponsorship. Each
] day care home
is
[
must be
] providing child care to at least one nonresidential
child. Day care homes must be eligible to execute a sponsorship agreement
in accordance with §12.6(f) of this title (relating to Agreement)
;
[
. DHS may approve applications for fewer than 50 day care homes,
if the sponsorship of day care homes is an integral but subordinate part of
an existing nonprofit or governmental community service provided by the sponsor;
]
(2) - (6)
(No change.)
(c) - (u)
(No change.)
§12.25.Denials and Terminations.
(a) - (i)
(No change.)
[(j)
DHS terminates agreements, in whole or
in part, with contractors that sponsor day care homes if they receive reimbursement
for fewer than 50 day care homes for three consecutive months.]
(j)
[
(k)
] DHS denies applications for
participation and terminates agreements, in whole or in part, with contractors
subject to the bonding requirement identified in §12.3(b) of this title
(relating to Eligibility of Contractors, Facilities, and Food Service Management
Companies) if they fail to submit and maintain in good standing a performance
bond in the amount established by DHS. DHS denies requests for relief from
the bonding requirement if the contractor has an outstanding financial obligation
to DHS.
(k)
[
(l)
] Sponsoring organizations of
day homes must:
(1)
terminate the participation of any day care home provider
that they have determined has knowingly claimed meals for a child not enrolled
for child care or not in attendance on a day that meals were claimed for the
child; and
(2)
submit the provider for inclusion on a list of seriously
deficient providers.
(l)
[
(m)
] Sponsoring organizations of
day homes must:
(1)
terminate the participation of any day care home provider
that refuses to enter into or comply with a corrective action plan designed
to achieve compliance with program requirements; and
(2)
submit the provider for inclusion on a list of seriously
deficient providers.
(m)
[
(n)
] DHS denies or revokes the registration
of a food service management company (FSMC) for failure to demonstrate its
ability to perform according to program requirements, or for failure to submit
all necessary documentation to complete the application within 60 calendar
days. DHS may deny participation to a FSMC or any combination of its food
preparation facilities. If DHS denies the application, the FSMC may not reapply
for the remainder of the fiscal year in which the application was submitted.
A FSMC may appeal the denial or revocation of registration according to §12.26
of this title (relating to Appeals).
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on May 3, 2002.
TRD-200202768
Paul Leche
General Counsel, Legal Services
Texas Department of Human Services
Earliest possible date of adoption: June 16, 2002
For further information, please call: (512) 438-3734