(a) A sponsoring organization applying to participate in CACFP with less than three years of successful administrative and financial history shall be required to obtain and maintain a performance bond from a company designated in United States Treasury Circular 570 as certified to issue bonds for federally funded programs in an amount specified by TDA unless or until it can demonstrate a total of three years of successful administrative and financial history within the preceding seven years or is a governmental entity.
(b) The initial amount of the performance bond will be determined by the sponsor's anticipated enrollment and the sum of the following formula for each meal type served: (Total Enrollment) x (Current Free Reimbursement Rate for Meal Type) x 90.
(c) The bond amount shall be adjusted to reflect actual enrollment or reimbursement as needed based on the following guidelines:
  (1) If the sponsor's enrollment or reimbursement increases by 50% of the original anticipated enrollment then the bond must be increased to reflect the sponsor's actual enrollment or reimbursement within 45 days.
  (2) Each time the sponsor's enrollment or reimbursement increases by 50% of the actual participation or reimbursement from the time the bond was last increased then the bond must be increased to reflect the sponsor's new actual enrollment or reimbursement within 45 days.
  (3) A decrease in bond amount may be requested based on a decrease in enrollment or reimbursement by submitting a written request to TDA.
(d) A sponsor may request relief from the bonding requirement once it can demonstrate that it has accumulated three years of successful administrative and financial history within the preceding seven years by submitting a written request to TDA.

Source Note: The provisions of this §25.17 adopted to be effective January 11, 2011, 36 TexReg 37; amended to be effective March 29, 2012, 37 TexReg 2070