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CHAPTER V-AGRICULTURAL MARKETING SERVICE

DEPARTMENT OF AGRICULTURE

SUBCHAPTER A-GENERAL REGULATIONS AND POLICIES

Part 503

Donation of food commodities for use in United States for school lunch

programs, training students in home economics, summer camps for children, and relief purposes, and in State correctional institutions for minors.

SUBCHAPTER B-EXPORT AND DOMESTIC CONSUMPTION PROGRAMS

517 519 535 540

Fruits and berries, fresh.
Fresh Irish potatoes.
Cotton and its by-products diversion program regulations.
Pilot food stamp program.

SUBCHAPTER A GENERAL REGULATIONS AND POLICIES

PART 503—DONATION OF FOOD

COMMODITIES FOR USE IN UNITED STATES FOR SCHOOL LUNCH PROGRAMS, TRAINING STUDENTS IN HOME ECONOMICS, SUMMER CAMPS FOR CHILDREN, AND RELIEF PURPOSES, AND IN STATE CORRECTIONAL INSTITUTIONS FOR MINORS

Sec. 503.1 503.2 503.3 503.4 503.5 503.6 503.7

AUTHORITY: $ $ 503.1 to 503.12 issued under R.S. 161, sec. 416, 63 Stat. 1058, as amended; 5 U.S.C. 22, 7 U.S.C. 1431. Interpret or apply sec. 32, 49 Stat. 774, as amended, secs. 6 and 9, 60 Stat. 231, 233, 76 Stat. 945, sec. 210, 70 Stat. 202, 72 Stat. 164, 287, 1792, 74 Stat. 899, 75 Stat. 411, 7 U.S.C. 612c, 42 U.S.C. 1755, 1758, P.L. 87-823, 7 U.S.C. 1859, 7 U.S.C. 1431 note.

SOURCE: $ $ 503.1 to 502.12 appear at 28 F.R. 51, Jan. 3, 1963. $ 503.1

General purpose and scope. (a) Terms and conditions. This part contains the regulations prescribing the terms and conditions under which commodities may be obtained by Federal, State and private agencies for use in the United States in schools operating nonprofit school-lunch programs, in nonprofit summer camps for children, by needy Indians on reservations, in institutions, in State correctional institutions for minors, and in the assistance of other needy persons.

General purpose and scope.
Administration.
Definitions.
Availability of commodities.
Eligible distributing agencies.
Obligations of distributing agencies.
Disposition of damaged or out-of-

condition commodities. Eligible recipient agencies. Eligible recipients. Miscellaneous provisions. Where to obtain information. Amendments.

503.8 503.9 503.10 503.11 503.12

. • (2)

*

(b) Legislation. The legislation under on such terms and under such regulations as which commodities are distributed for the Secretary of Agriculture may deem in the the stated purposes is as follows:

public interest, and upon application, to

donate food commodities acquired through (1) Section 416 of the Agricultural Act

price-support operations • • • to State cor. of 1949, as amended (hereinafter referred

rectional institutions for minors, other than to as "section 416"), which reads in part those in which food service is provided for as follows:

inmates on a fee, contract or concession In order to prevent the waste of commodi

basis. ties whether in private stocks or acquired (3) Section 32 of Public Law 320, 74th through, price-support operations by the

Congress, as amended (hereinafter reCommodity Credit Corporation before they can be disposed of in normal domestic chan

ferred to as "section 32"), which reads in nels without impairment of the price-support

part as follows: program or sold abroad at competitive world There is hereby appropriated for each prices, the Commodity Credit Corporation is fiscal year beginning with the fiscal year authorized, on such terms and under such

ending June 30, 1936, an amount equal to 30 regulations as the Secretary may deem in per centum of the gross receipts from duties the public interest • • • (3) in the case of collected under the customs laws during the food commodities to donate such commodi

period January 1 to December 31, both inties to the Bureau of Indian Affairs and to

clusive, preceding the beginning of each such such State, Federal, or private agency or fiscal year. Such sums shall be maintained agencies as may be designated by the proper in a separate fund and shall be used by the State or Federal authority and approved by Secretary of Agriculture only to * the Secretary, for use in the United States

encourage the domestic consumption of such in nonprofit school-lunch programs, in non- (agricultural] commodities or products by profit summer camps for children, in the

diverting them * * * from the normal assistance of needy persons, and in charitable channels of trade and commerce * * * institutions, including hospitals, to the extent that needy persons are served * * In (4) Public Law 165, 75th Congress, as the case of (3) * * the Secretary shall ob- amended, which supplemented section 32 tain such assurance as he deems necessary and reads in part as follows: that the recipients thereof will not diminish their normal expenditures for food by reason

In carrying out clause (2) of section 32, of such donation. In order to facilitate the

the funds appropriated by said section may appropriate disposal of such commodities, the

be used for the purchase *

* . of agriculSecretary may from time to time estimate

tural commodities and products thereof, and and announce the quantity of such commodi

such commodities * * * may be donated for ties which he anticipates will become avail

relief purposes and for use in nonprofit sumable for distribution under (3)

mer camps for children. Commodity Credit Corporation may pay, with (5) Section 9 of the Act of September respect to commodities disposed of under this section, reprocessing, packaging, trans

6, 1958 which reads in part as follows: portation, handling, and other charges ac- Notwithstanding any other provision of cruing up to the time of their delivery to a law (1) those areas under the jurisdiction or Federal agency or to the designated State or administration of the United States are private agency, in the case of commodities authorized to receive from the Department of made available for use within the United Agriculture for distribution on the same basis States * * In addition, in the case of food as domestic distribution in any State, Terricommodities disposed of under this section, tory, or possession of the United States, withthe Commodity Credit Corporation may pay out exchange of funds, such surplus comthe cost of processing such commodities modities as may be available pursuant to into a form suitable for home or institu- clause (2) of section 32 of the Act of August tional use, such processing to be accom- 24, 1935, as amended (7 U.S.C. 612c), and plished through private trade facilities to the section 416 of the Agricultural Act of 1949, greatest extent possible. For the purpose of as amended (7 U.S.C. 1431); this section the terms “State” and “United States" include the District of Columbia and

(6) Section 6 of the National School any Territory or possession of the United Lunch Act, as amended, (hereinafter reStates.

ferred to as "section 6”), which reads in

part as follows: (2) Section 210 of the Agricultural Act of 1956 (hereinafter referred to as “sec

The funds appropriated for any fiscal year

for carrying out the provisions of this act, tion 210”), which reads in part as

less not to exceed 312 per centum thereof follows:

hereby made available to the Secretary for Notwithstanding any other limitation as his administrative expenses less the amount to the disposal of surplus commodities ac- apportioned by him pursuant to sections 4, quired through price-support operations, the 5, and 10, and less the amount appropriated Commodity Credit Corporation is authorized pursuant to section 11, shall be available to

The

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the Secretary during such year for direct expenditure by him for agricultural commodities and other foods to be distributed among the States and schools participating in the school-lunch program under this Act in accordance with the needs as determined by the local school authorities.

(7) Section 9 of the National School Lunch Act which reads in part as follows:

Commodities purchased under the author. ity of section 32 of the Act of August 24, 1935 (49 Stat. 774), as amended, may be donated by the Secretary to schools, in accordance with the needs as determined by local school authorities, for utilization in the schoollunch program under the Act as well as to other schools carrying out nonprofit schoollunch programs and institutions authorized to receive such commodities.

(8) Section 402 of the Mutual Security Act of 1954, as amended, which reads in part as follows:

Surplus food coinmodities or products thereof made available for transfer under this Act (or any other Act) as a grant or

a sale for foreign currencies Iray also be made available to the maximum extent practicable to eligible domestic recipients pursuant to section 416 of the Agricultural Act of 1949, as amended (7 U.S.C. 1431), or to needy persons within the United States pursuant to clause (2) of section 32 of the Act of August 24, 1935, as amended (7 U.S.C. 612c).

(9) Section 307 of the Agricultural Trade Development and Assistance Act of 1954, as amended, which reads as follows:

Whenever the Secretary of Agriculture determines under section 106 of this Act that any food commodity is a surplus agricultural commodity, insofar as practicable he shall make such commodity available for distribution to needy families and persons in the United States in such quantities as he determines are reasonably necessary before such commodity is made available for sale for foreign currencies under title I of this Act.

(10) Public Law 86–756, as amended, which reads as follows:

Schools receiving surplus foods pursuant to clause (3) of section 416 of the Agricultural Act of 1949 (7 U.S.C. 1431) or section 32 of the Act of August 24, 1935, as amended (7 U.S.C. 612c) are authorized to use such foods in training students in home economics, including college students if the same facilities and instructors are used for training both high school and college students in home economics courses. § 503.2 Administration.

The Agricultural Marketing Service (referred to in this part as "AMS”) of

the United States Department of Agriculture shall have responsibility for the program of donation of food commodities under this part. $ 503.3 Definitions.

(a) “Commodities" means foods donated, or available for donation, by the Department under any of the legislation referred to in this part.

(b) "Department” means the United States Department of Agriculture or the Commodity Credit Corporation whichever is donor under the pertinent legislation.

(c) "Disaster organizations" means organizations authorized by appropriate Federal or State officials to assist disaster victims.

(d) “Disaster victims" i means persons who, because of Acts of God or manmade disasters, are in need of food assistance.

(e) "Distributing agencies” means State, Federal or private agencies which enter into agreements with the Department for the distribution of commodities to eligible recipient agencies and recipients. A distributing agency may also be a recipient agency.

(f) "Household” means a group of related or non-related individuals, exclusive of boarders, who are not residents of an institution, but who are living as one economic unit, sharing common cooking facilities, and for whom food is customarily purchased in common. It also means a single individual, living alone, who has cooking facilities and prepares food for home consumption.

(g) "Institutions" means (1) nonpenal, noneducational, public (Federal, State or local) institutions, (2) nonprofit, tax-exempt, private hospitals, or (3) other nonprofit, noneducational, tax-exempt, private institutions organized for charitable or public welfare purposes, including but not limited to, homes for the aged, orphanges, refugee camps, and child-care centers. For purposes of this paragraph, tax-exempt shall mean exempt from income tax under the Internal Revenue Code, as amended, and an institution shall be considered “noneducational” even though educational courses are given, where such courses are an incident to the primary purpose of the institution.

1 The category "needy persons" referred to in section 416 encompasses both of the terms "needy persons" and "disaster victims" as defined in the regulations of this part.

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(h) “Nonprofit lunch program" means in they are taught food preparation, a food service maintained by a school for cooking, and serving. the benefit of children, all of the income (r) "Subdistributing agencies” means from which is used solely for the opera- agencies performing one or more distion or improvement of the food service tribution functions for distributing and which is not operated under a fee, agencies other than, or in addition to, concession or contract arrangement. functions normally performed by com

(i) “Nonprofit summer camps for chil- mon carriers or warehousemen. A subdren” means nonprofit camps in which, distributing agency also may be a during the summer months, nonprofit recipient agency. feeding services are conducted for chil- (s) "Welfare agencies” means public dren of high school grade and under. (Federal, State or local) or private agen

(j) “Recipient agencies” means schools, cies offering assistance on a charitable summer camps for children, institutions, or welfare basis to needy persons who welfare agencies, or disaster organiza- are not residents of an institution, and tions receiving commodities for their own to Tribal Councils designated by the use or for distribution to eligible recipi- Bureau of Indian Affairs. ents. (k) "Recipients” means needy persons,

§ 503.4 Availability of commodities. including needy Indians, and disaster (a) Distribution and use of commodivictims receiving commodities for their ties. Commodities shall be available own use.

only for distribution and use in accord(1) "Secretary" means the Secretary ance with the provisions of this part. of Agriculture.

Commodities not so distributed or used (m) “Needy persons” means (1) per- (for any reason) shall not be sold, exsons served by institutions who, because changed or otherwise disposed of withof their economic status, are in need of out the approval of the Department. food assistance, and (2) all the members However, commodities may be transof a household which is certified as in ferred between recipient agencies upon need of food assistance.

the authorization of the distributing (n) "School” means the governing agency if determined to be in the best body responsible for the administration interest of the distribution program. of a public or nonprofit private school of (b) Quantities. The quantity of comhigh school grade or under, as defined modities to be made available for donain the statutes of the State, and, in the tion under this part shall be determined case of Puerto Rico, nonprofit child-care in accordance with the pertinent legiscenters certified by the Governor of lation and the program obligations of Puerto Rico. The term also includes a the Department, and shall be such as nonprofit agency to which the school has can be effectively distributed in furtherdelegated authority for the operation of ance of the objectives of the pertinent its nonprofit lunch program.

legislation. The Department may, at its (0) "State and United States" include discretion, restrict distribution of comthe District of Columbia, Puerto Rico, the modities to one or more classes of reVirgin Islands, Guam and American Sa- cipient agencies or recipients. When moa, and, except with reference to com- this is done, priority insofar as practimodities donated under section 6, also cable shall be given to recipient agencies include other possessions of the United or recipients in the following order: (1) States and those areas under the juris- Schools, (2) nonprofit summer camps for diction or administration of the United children, (3) needy Indians receiving States.

commodities on reservations, (4) insti(p) “State correctional institutions for tutions and State correctional instituminors” means institutions, such as re- tions for minors, and (5) other needy form schools or training schools, op- persons. Notwithstanding the foregoerated by a State, which are devoted ing priorities, if any commodity detersolely to the rehabilitation and education mined by the Secretary to be a surplus of minors and are classified under State agricultural commodity under section law as nonpenal in character, and in 106 of the Agricultural Trade Developwhich food service is not provided for ment and Assistance Act of 1954, as inmates on a fee, contract, or concession amended, is made available for donation basis.

under this part, distribution thereof (q) “Students in home economics" shall be made to needy families and permeans students in regular classes where- sons, including needy Indians receiving commodities on reservations, and to in- mental or testing agencies, or for use stitutions; and any quantity of such in workshops, for demonstrations or tests commodity in excess of that reasonably relating to the utilization of such comnecessary to meet the needs of such re- modity by the recipient agency or recipients and recipient agencies may be cipient. No such transfer by any redistributed to schools, nonprofit summer cipient agency shall be made without the camps for children, and State correc- approval of the appropriate distributing tional institutions for minors. Dona- agency. tions to disaster organizations may be

8 503.5 Eligible distributing agencies. made without regard to any of the priorities established herein. The foregoing

(a) State and Federal agencies. Such provisions of this paragraph with respect

State and Federal agencies as are desigto establishing priorities are not appli

nated by the Governor of the State, by cable to section 6 commodities, distribu

the State legislature, or by proper Fedtion of which is limited by law to eral authority and approved by the Secschools operating lunch programs under retary shall be eligible to become disthe National School Lunch Act.

tributing agencies. (c) Minimum donations. Commodi- (b) Private agencies. Where State ties shall be donated only in such quan

distributing agencies are not permitted tities as will protect the lowest carload by law to make distribution to private freight rate, except as deemed in the recipient agencies, or to any class of best interest of the program as deter- private recipient agency, private agenmined by the Department.

cies which agree to make distribution of (d) Allocations. As commodities be- commodities on a State-wide basis and come available for donation, the Food which apply directly to the Food DisDistribution Division, AMS, shall notify tribution Division, AMS, and are apdistributing agencies regarding the com- proved by the Secretary shall be eligible modities, the class or classes of recipient to become distributing agencies. agencies or recipients eligible to receive (a) Agencies now under agreement. them, and any special terms and condi- Notwithstanding any other provision of tions of donation and distribution which

this section, agencies under agreement attach to a particular commodity in ad

with the Department for the distribution dition to the general terms and condi- of commodities as of the date this part tions set forth herein. Every attempt

becomes effective shall be eligible to shall be made to deliver commodities in enter into new agreements hereunder accordance with requested schedules.

without obtaining further designation of However, the Department shall not be approval. responsible for delays in delivery or for (d) Agreements with Department. nondelivery of commodities due to any Prior to the inauguration of a distribu

tion program, eligible agencies shall cause.

(e) Processing and other costs. The enter into written agreements with the Department shall pay such processing,

Department which shall incorporate by reprocessing, transporting, handling and reference or otherwise the terms and other charges accruing up to the time conditions set forth in this part. When of transfer of title to distributing agen- requested by the Department an eligible cies as is deemed in the interest of the agency shall present evidence of its auDepartment.

thority to enter into such agreements. (f) Transfer of title. Title to com- 8 503.6 Obligations of distributing agenmodities shall pass to distributing agen

cies. cies upon their acceptance of the com

(a) Determination of eligibility. Dismodities at time and place of delivery,

tributing agencies shall determine that limited, however, by the obligation of the distributing agency to use such commod

recipient agencies or recipients to whom

they distribute commodities are eligible ities for the purposes and upon the terms

under this part, and shall impose upon and conditions set forth in this part. (g) Availability for demonstrations

public welfare agencies the responsibiland tests. Notwithstanding any other

ity for determining that recipients to

whom welfare agencies distribute comprovision of this part, a quantity of any commodity donated for use by any re

modities are eligible. cipient agency or recipient may be trans- (b) Agreements. Distributing agencies ferred by the distributing agency or by shall enter into agreements with subthe recipient agency to bona fide experi- distributing agencies, recipient agencies,

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