[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR247.7]

[Page 411]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 247_COMMODITY SUPPLEMENTAL FOOD PROGRAM--Table of Contents
 
Sec.  247.7  Selection of local agencies.

    (a) How does a local agency apply to participate in CSFP? Local 
agencies wishing to participate in CSFP must submit a written 
application to the State agency. The application must describe how the 
local agency will operate the program and, for nonprofit agencies, must 
include the agency's tax-exempt status. To be eligible to participate in 
CSFP, a nonprofit agency must have tax-exempt status under the Internal 
Revenue Code (IRC), or have applied for tax-exempt status with the 
Internal Revenue Service (IRS), and be moving towards such status. 
Nonprofit agencies organized or operated exclusively for religious 
purposes are automatically tax-exempt under the IRC. Nonprofit agencies 
required to obtain tax-exempt status must provide documentation from the 
IRS that they have obtained such status, or have applied for it.
    (b) On what basis does the State agency make a decision on the local 
agency's application? The State agency must approve or disapprove the 
local agency's application based on, at minimum, the following criteria:
    (1) The ability of the local agency to operate the program in 
accordance with Federal and State requirements;
    (2) The need for the program in the projected service area of the 
local agency;
    (3) The resources available (caseload and funds) for initiating a 
program in the local area; and
    (4) For nonprofit agencies, the tax-exempt status, with appropriate 
documentation.
    (c) What must the State agency do if a nonprofit agency approved for 
CSFP is subsequently denied tax-exempt status by the IRS, or does not 
obtain this status within a certain period of time? In accordance with 
paragraph (a) of this section, the State agency may approve a nonprofit 
agency that has applied to the IRS for tax-exempt status, and is moving 
toward compliance with the requirements for recognition of tax-exempt 
status. However, if the IRS subsequently denies a participating agency's 
application for recognition of tax-exempt status, the agency must 
immediately notify the State agency of the denial. The State agency must 
terminate the agency's agreement and participation immediately upon 
notification. If documentation of recognition of tax-exempt status is 
not received within 180 days of the effective date of the agency's 
approval to participate in CSFP, the State agency must terminate the 
agency's participation until such time as recognition of tax-exempt 
status is obtained. However, the State agency may grant an extension of 
90 days if the agency demonstrates that its inability to obtain tax-
exempt status in the 180-day period is due to circumstances beyond its 
control.
    (d) How much time does the State agency have to make a decision on 
the local agency's application? The State agency must inform the local 
agency of approval or denial of the application within 60 days of its 
receipt. If the application is denied, the State agency must provide a 
written explanation for the denial, along with notification of the local 
agency's right to appeal the decision, in accordance with Sec.  247.35. 
If the application is approved, the State and local agency must enter 
into an agreement in accordance with the requirements of Sec.  247.4.

(Approved by the Office of Management and Budget under control number 
0584-0293)