BILL NUMBER: S5057A
SPONSOR: HINCHEY
 
TITLE OF BILL:
An act to amend chapter 537 of the laws of 1976 relating to paid, free
and reduced price breakfast for eligible pupils in certain school
districts, in relation to increasing the state subsidy for school lunch
meals
 
PURPOSE:
This bill makes several changes to the Farm to School incentive program
in order to streamline participation, incentivize school district
participation, and increase reimbursement.
 
SUMMARY OF PROVISIONS:
Section one:
Currently, schools that source at least 30% of their lunch food
purchases from New York producers are eligible for additional State
reimbursement of 19.01 cents per lunch meal. This section:
- Changes the eligibility calculation to be determined based on a
school's total food purchases, including lunch, breakfast, and snacks;
- Increases the per- lunch meal reimbursement from 19.01 cents for
schools above 30%, to 26 cents for schools between 30% - 40%; 28 cents
for schools between 40% - 50%; and 30 cents for schools above 50%.
- Applies a 1.5% annual, increase to those rates going forward.
- Provides a hold harmless period in which any school eligible for the
program at the time the eligibility rules change shall continue to be
deemed eligible for three years.
Section two: Effective date.
 
JUSTIFICATION:
The Farm to School incentive program provides additional per- lunch meal
reimbursement to schools that procure at least 30% of their lunch meal
products from New York farmers. This promotes local purchasing, helps
farmers expand their markets, and ensures our students have fresh, high
quality local food.
However, participation in this program remains far too low at just 83
out of 4,400 schools as of 2026. The State regularly appropriates around
$10M annually for this initiative, but the actual payout has been around
$3M maximum due to challenges participating in the program. This
includes outdated rules for calculating eligibility, reimbursement rates
that have not kept up with food inflation, and a single reimbursement
rate that discourages purchasing additional products once a school hits
the minimum threshold.
This bill makes several changes to the program intended to increase
participation, in order to provide our students access to local food,
help our farmers find new institutional purchasers, and ensure the State
actually expends closer to the regular $10M appropriation, including:
Expanding the eligibility calculation to include all food purchases, not
just lunch. When schools purchase food, they do not necessarily
purchase separate items per meal. For example a school that buys apples
is not likely to invoice their lunch apples separately from breakfast or
snack apples. But since only lunch purchases are calculated towards the
30% threshold, this makes it onerous for schools to track their spending
in a way that allows them to seek eligibility. Including all purchases
in the eligibility calculation will simplify this process.
Increasing the per-meal reimbursement from 19 cents to at least 26
cents. Base reimbursement has not been updated since the program began
in 2018. Food procurement costs have far surpassed the value of the
payment necessary to incentivize participation. This bill increases the
base payment, with ongoing inflation adjustments going forward, to
address rising food purchasing costs.
Adding tiered reimbursement. Today, schools receive the same 19 cents
per lunch meal once deemed eligible whether they procure 30% or 50% of
their food from New York farms. For this reason, combined with the stag-
nant reimbursement, there is often an incentive for districts to stop
seeking New York products once they've hit the minimum eligibility
threshold. Tiered reimbursement, with higher payments kicking in at 40%
and 50%, will help New York farmers by incentivizing schools to continue
aiming higher rather than settling at the minimum number needed to qual-
ify.
Hold harmless provision. Based on discussions with Agriculture and
Markets, there are some currently participating schools that would fall
below 30% if all meals are included in the eligibility formula and they
do not have time to adjust their purchasing to meet the new system. This
bill therefore includes a three-year hold harmless provision that those
schools eligible at the time of enactment shall continue to be deemed
eligible for the transition period provided they submit any documenta-
tion required by Ag and Markets.
 
LEGISLATIVE HISTORY:
New Bill.
 
FISCAL IMPLICATIONS:
None. The State has annually appropriated $1 OM for this program for
several years in a row, but has never actually disbursed more than $3M
annually due to the tow participation rates. This bill is intended to
increase participation and reimbursement in order to actually utilize
the regularly appropriated funding level.
 
EFFECTIVE DATE:
This act shall take effect immediately, provided that it shall apply to
purchases made on or after July 1, 2026,