(a) Program application and review. Within 45 days of the announced application deadline, AMS will review all timely submitted applications and notify applicants regarding approval or disapproval for program participation during the applicable fiscal year. AMS's review will include the following considerations:

(1) Total annual funds available for program administration, including an appropriate reserve to cover costs related to increases in milk prices and emergencies including, but not limited to, natural disasters;

(2) The feasibility of the Milk Donation and Distribution Plan;

(3) The extent to which the Milk Donation and Distribution Plan -

(i) Promotes the donation of eligible milk,

(ii) Provides nutrition assistance to individuals in low-income groups, and

(iii) Reduces food waste; and

(4) The amount of funding and in-kind contributions the eligible dairy organization plans to provide to the eligible distributor in addition to the donations for which it will seek reimbursements.

(b) Continued program participation. Within 45 days of the announced application deadline, AMS will review and notify applicants regarding approval or disapproval of all timely submitted requests for continued program participation. AMS's review of requests for continued program participation will be based on consideration of the factors in paragraphs (a) and (b)(1) through (3) of this section:

(1) Eligible partnerships requesting continued program participation for a subsequent fiscal year can include information about the extent to which they provided funding and in-kind contributions in addition to eligible milk donations for which they were reimbursed through the program for the previous fiscal year.

(2) If there are no changes to the eligible partnership's approved Milk Donation and Distribution Plan from the previous fiscal year, the eligible partnership must request that AMS consider the partnership's previously approved Plan and provide the additional information described in paragraph (b)(1) of this sectoin, if applicable.

(3) If there are changes to the eligible partnership's approved Milk Donation and Distribution Plan from the previous fiscal year, the eligible partnership must submit a new Plan as described in paragraph (a) and provide the additional information described in paragraph (b)(1) of this section, if applicable.

(c) Plan approval. Subject to the provisions in paragraph (a) of this section, AMS will determine whether to approve new and continuing Milk Donation and Distribution Plans for all or a proportion of each Plan's proposed donations and reimbursements. For each approved Plan, AMS will determine:

(1) A reimbursement rate applicable to each claim for reimbursement during the fiscal year, and

(2) A total dollar amount available for reimbursement during the fiscal year.

(d) Adjustments. AMS will review the activity of approved Milk Donation and Distribution Plans during the fiscal year to determine whether adjustments should be made to the reimbursement amounts approved under paragraph (c) of this section.

(1) Determinations about adjustments will be based on -

(i) The participating partnership's performance,

(ii) Availability of program funds, and

(iii) Demand for eligible milk donations.

(2) AMS will provide 30 days' notice to participating partnerships prior to adjusting reimbursement amounts in their respective approved Milk Donation and Distribution Plans.

(e) Request for increase. Eligible partnerships with approved Milk Donation and Distribution Plans during any fiscal year may request an increase in the amount of reimbursement approved under paragraph (c) of this section based on changes in conditions.

(1) Requests for an increase must be submitted to AMS in the manner and form established by AMS, and must -

(i) Describe the change in conditions that would warrant an increase in reimbursement,

(ii) Indicate whether the requested increase is intended to be a long-term revision to the eligible partnership's approved Milk Donation and Distribution Plan or a short-term increase to respond to temporary conditions, and

(iii) Specify the amount of increased reimbursement requested.

(2) Within 30 days of receipt, AMS will review the request for an increase and will notify the requester regarding approval or disapproval of the request. AMS's determination about whether such an increase is feasible will be based on its evaluation of the factors described in paragraph (e)(1) of this section and the availability of funds.

(3) Based on the change in conditions identified by the requester, AMS will determine whether to provide interim approval of an increase requested under paragraph (e)(1) of this section and an incremental increase to the amount of reimbursement approved under paragraph (c) of this section prior to making a final determination regarding approval of the requested increase.