[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR248.14]

[Page 424-426]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 248_WIC FARMERS' MARKET NUTRITION PROGRAM (FMNP)--Table of Contents
 
                    Subpart E_State Agency Provisions
 
Sec.  248.14  Distribution of funds.

    (a) Conditions for receipt of Federal funds.--(1) Matching of 
funds--(i) Match amount. As a prerequisite to the receipt of Federal 
funds, a State agency must agree to contribute State, local or private 
funds, or program income, equal to not less than 30 percent of its total 
FMNP cost. The Secretary may negotiate a lower percentage of matching 
funds, but not lower than 10 percent of the total cost of the program, 
in the case of an Indian State agency that demonstrates to the Secretary 
financial hardship for the affected Indian tribe, band, group, or 
council. The State agency may contribute more than this minimum amount. 
State, local or private funds for similar programs as defined in (248.2 
may satisfy the State matching requirement.
    (ii) Sources of matching contributions. A State agency may count any 
form of contribution authorized by 7 CFR 3016.24 toward the State 
matching requirement including in-kind contributions.
    (iii) Failure to match. A State agency's failure to meet the State 
matching requirement will result in the establishment of a claim for the 
amount of Federal grant funds not matched. The matching requirement will 
be considered satisfied if State or other non-Federal matching 
contributions reported on the final closeout report required by Sec.  
248.15(a) of this part amount to at least 30 percent of the total FMNP 
costs. This match amount may be lower for those Indian State agencies 
that have demonstrated to the Secretary financial hardship as set forth 
in paragraph (a)(1)(i) of this section.
    (2) State Plan and agreement. A State agency shall have its State 
Plan approved and shall execute an agreement with the Department in 
accordance with Sec.  248.3(c) of this part.
    (b) Distribution of FMNP funds to previously participating State 
agencies. Provided that sufficient FMNP funds are

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available, each State agency that participated in the FMNP in any prior 
fiscal year, shall receive not less than the amount of funds the State 
agency received in the most recent fiscal year in which it received 
funding, if it otherwise complies with the requirements established in 
this part.
    (c) Ratable reduction. If amounts appropriated for any fiscal year 
for grants under the FMNP are not sufficient to pay to each previously 
participating State agency at least an amount as identified in paragraph 
(b) of this section, each State agency's grant shall be ratably reduced, 
except that, to the extent permitted by available funds, each State 
agency shall receive at least $75,000 or the amount that the State 
agency received for the most recent prior fiscal year in which the State 
participated, if that amount is less than $75,000.
    (d) Expansion of participating State agencies and establishment of 
new State agencies. Any FMNP funds remaining for allocation after 
meeting the requirements of paragraph (b) of this section shall be 
allocated in the following manner:
    (1) Of the remaining funds, 75 percent shall be made available to 
State agencies already participating in the FMNP that wish to serve 
additional recipients. If this amount is greater than that necessary to 
satisfy all State plans approved for additional recipients, the 
unallocated amount shall be applied toward satisfying any unmet need in 
paragraph (d)(2) of this section.
    (2) Of the remaining funds, 25 percent shall be made available to 
State agencies that have not participated in the FMNP in any prior 
fiscal year. If this amount is greater than that necessary to satisfy 
the approved State Plans for new States, the unallocated amount shall be 
applied toward satisfying any unmet need in paragraph (d)(1) of this 
section. The Department reserves the right not to fund every State 
agency with an approved State Plan.
    (3) In any fiscal year, any FMNP funds that remain unallocated after 
satisfying the requirements of paragraphs (d)(1) and (d)(2) of this 
section, shall be reallocated in accordance with paragraph (k) of this 
section.
    (e) Expansion for current State agencies. In providing funds to 
State agencies that participated in the FMNP in the previous fiscal 
year, the Department shall consider on a case-by-case basis, the 
following:
    (1) Whether the State agency utilized at least 80 percent of its 
prior year food grant. States that did not spend at least 80 percent of 
their prior year food grant may still be eligible for expansion funding 
if, in the judgment of the Department, good cause existed which was 
beyond the management control of the State, such as severe weather 
conditions, or unanticipated decreases in participant caseload in the 
WIC Program.
    (2) Documentation supporting the funds expansion request as outlined 
in Sec.  248.4(a)(19).
    (f) Funding of new State agencies. Funds will be awarded to new 
State agencies in accordance with Sec.  248.5.
    (g) Administrative funding. A State agency shall have available for 
administrative costs an amount not greater than 17 percent of total FMNP 
funds. The 17 percent administrative cost limitation shall not apply to 
any funds that a State agency may contribute in excess of its minimum 
matching requirement. A State agency may use any non-Federal 
contributions in excess of the 30 percent (or the negotiated percentage 
for those Indian State agencies that received a lower amount) matching 
requirement for food and/or administrative costs.
    (h) Market development. A State agency shall be permitted to use not 
more than 2 percent of total program funds for market development or 
technical assistance to farmers' markets if the Secretary determines 
that the State intends to promote the development of farmers' markets in 
socially or economically disadvantaged areas, or remote rural areas, 
where individuals eligible for participation in the program have limited 
access to locally grown fruits and vegetables.
    (i) Transfer of funds. A State agency may use not more than 5 
percent of the Federal FMNP funds made available for the fiscal year to 
reimburse expenses incurred by the FMNP during a preceding fiscal year. 
The State agency shall provide such justification for its

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request to spend back funds under this paragraph as FNS may require.
    (j) Recovery of unused funds. State agencies shall return to FNS any 
unexpended funds made available for a fiscal year by February 1 of the 
following fiscal year.
    (k) Reallocation of funds. Any funds recovered under paragraphs 
(d)(3) and (j) of this section will be reallocated in accordance with 
the appropriate method determined by FNS.

[59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49747, Sept. 27, 1995; 
60 FR 57148, Nov. 14, 1995; 64 FR 48076, Sept. 2, 1999]