[Federal Register Volume 65, Number 143 (Tuesday, July 25, 2000)]
[Proposed Rules]
[Pages 45725-45739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18631]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 65, No. 143 / Tuesday, July 25, 2000 / 
Proposed Rules  

[[Page 45725]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 215, 225, 226, and 245

RIN 0584-AC21


Special Milk Program for Children, Summer Food Service Program, 
Child and Adult Care Food Program, and Determining Eligibility for Free 
and Reduced Price Meals and Free Milk in Schools: Disclosure of 
Children's Eligibility Information

AGENCY: Food and Nutrition Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would amend the regulations for the Special 
Milk Program for Children, Summer Food Service Program, Child and Adult 
Care Food Program and the Determination of Eligibility for Free and 
Reduced Price Meals and Free Milk in Schools to establish new 
requirements. These requirements relate to the confidentiality of 
information about individuals who receive free and reduced price meals 
and free milk. The rule would protect the confidentiality of personal 
data, but would allow the limited disclosure and use of a participant's 
program eligibility information or eligibility status. That information 
could be used by certain education, health, and means-tested nutrition 
programs. The rule reflects the confidentiality provisions of the 
Healthy Meals for Healthy Americans Act of 1994.

DATES: To be assured of consideration, comments must be postmarked on 
or before November 22, 2000.

ADDRESSES: Address all comments concerning this proposed rule to Robert 
M. Eadie, Chief, Policy and Program Development Branch, Child Nutrition 
Division, Food and Nutrition Service, USDA, 3101 Park Center Drive, 
Alexandria, VA 22302. You also may submit comments electronically at 
[email protected]. All written submissions received will be 
available for public inspection in Room 1007 at the address listed 
above, during regular business hours (8:30 a.m. to 5 p.m.) Monday 
through Friday.

FOR FURTHER INFORMATION CONTACT: Barbara Semper or Mary Jane Whitney at 
the above address or by telephone at 703-305-2620.

SUPPLEMENTARY INFORMATION:

Background

    The Food and Nutrition Service (FNS) has had a longstanding policy 
that the information obtained from children's free and reduced price 
meal or free milk applications is confidential. Under this policy, the 
determining agency could only use the information on the application 
for program purposes. (For the purpose of this preamble, a determining 
agency means the State agency, school food authority, school (including 
a private or charter school), child care institution or Summer Food 
Service Program sponsor that makes the free and reduced price meal or 
free milk eligibility determination.) FNS applied this policy to all 
the Child Nutrition Programs, which include the National School Lunch 
Program (NSLP), Special Milk Program for Children (SMP), Summer Food 
Service Program (SFSP), and the Child and Adult Care Food Program 
(CACFP). FNS based the policy on sections 9(b)(4) and (5), 11(e), and 
17(g)(2) of the National School Lunch Act (NSLA) (42 U.S.C. 1758(b)(4) 
and (5), 1759a(e), and 1766(g)(2)). These sections of the NSLA prohibit 
the overt identification of individuals who are eligible for free and 
reduced price meals or free milk. FNS incorporated the overt 
identification provision into the regulations at 7 CFR 215.13a(a) and 
(d)(3) for the SMP in child-care institutions; 225.6(c)(3)(ii)(C) and 
(F) for the SFSP; 226.23(b) and (c)(3) and (5) for the CACFP; and 
245.1(b), 245.8(b), and 245.10(a)(4) for the NSLP, SBP, and SMP in 
schools. The policy permitted the determining agency to disclose only 
aggregate information, such as the number of children eligible for free 
and reduced price meals in an individual school. However, the 
determining agency could only disclose other information with the 
consent of children's parents or guardians.
    Other programs have had increased interest in access to information 
about individuals who are eligible for free and reduced price meals or 
free milk. In fact, several Federal agencies, such as the Department of 
Labor and the Department of Education, cite free and reduced price meal 
eligibility as an eligibility criterion for some programs that they 
administer. Additionally, some Federal, State, and local education 
programs have requested free and reduced price meal eligibility status 
to use for statistical and research purposes.
    FNS recognized that sharing information may benefit program 
participants and their households. FNS issued guidance to determining 
agencies in June 1992 and again in August 1998 concerning multi-use 
applications in the NSLP, SBP or SMP. The 1998 guidance also stated 
that the CACFP could also use a multi-use application. Using the multi-
use application approach, households can indicate interest in programs 
in addition to applying for free and reduced price school meals or free 
milk. Determining agencies that choose to use a multi-use application 
must include a consent statement on the free and reduced price meal and 
free milk application. The consent statement lists the programs or uses 
to which the household may indicate interest, permits children's 
parents or guardians to limit consent to specified uses or programs and 
advises households that agreeing to the disclosure of their free and 
reduced price eligibility is not a requirement for participation in the 
child nutrition programs. The parent/guardian must sign the consent 
indicating that they understand that the determining agency may share 
eligibility information with these programs. The determining agency may 
also use a consent form separate from the free and reduced price 
application.

I. What Is a Disclosure and What Is the Disclosure Statute?

    Any time information is revealed or used for a purpose other than 
for the purpose for which the information was obtained is a disclosure. 
This is true even when the same agency that obtained the information is 
the one wishing to use it for another purpose. The term ``disclosure,'' 
refers to access, release, or transfer of personal data about 
participants by means of print, tape, microfilm, microfiche, and 
electronic communication or other means. In this rule, the data would 
be individual children's free and reduced

[[Page 45726]]

price eligibility status or other information obtained through the free 
and reduced price meal or free milk eligibility process. In the CACFP, 
this could also include a participating adult's eligibility 
information.
    As discussed above, determining agencies were previously prohibited 
from disclosing personal data unless they first obtained consent. 
Section 108 of Public Law 103-448, the Healthy Meals for Healthy 
Americans Act of 1994, amended Section 9(b)(2)(C) of the NSLA to allow, 
without consent, limited disclosure of eligibility information about 
free and reduced price meal eligibility. The statute authorizes the 
disclosure of participants' free and reduced price information obtained 
from a free and reduced price meal application or obtained through 
direct certification. Direct certification is the process by which 
program operators determine program eligibility by directly 
communicating with the appropriate State or local agency to obtain 
documentation that an individual is a member of a food stamp household 
or a family receiving assistance under certain State programs for the 
Temporary Assistance for Needy Families (TANF). The statute authorizes 
disclosure to:
    (1) Persons directly connected with the administration or 
enforcement of the NSLA or the Child Nutrition Act of 1966 (42 U.S.C. 
1771 et seq.) (CNA) or a regulation enacted under either of those Acts;
    (2) Persons directly connected with the administration or 
enforcement of a Federal education program;
    (3) Persons directly connected with the administration or 
enforcement of a State health or education program (other than 
Medicaid) administered by the State or local education agency;
    (4) Persons directly connected with the administration or 
enforcement of a Federal, State or local means-tested nutrition program 
with eligibility standards comparable to the NSLP;
    (5) The Comptroller General of the United States for audit and 
examination; and
    (6) Law enforcement officials involved in investigating alleged 
violations of any of these programs.
    The statute specifies that certain of the persons and programs 
listed above may have access to participants' names and eligibility 
status only, while other persons or programs may have access to all 
eligibility information. Any disclosures not authorized by the statute 
require the prior consent of parents or guardians. The statute also 
specifies a fine of not more than $1,000 or imprisonment of not more 
than 1 year, or both, for unauthorized disclosures of free and reduced 
price eligibility information.
    Please note that although the statute allows limited disclosure, 
determining agencies are not required by the statute or by this 
proposed rulemaking to disclose eligibility information. This is a 
State and local decision.

II. What Programs Do the Disclosure Provisions Apply To?

    The new disclosure provisions appear in the part of the NSLA that 
pertains to the free and reduced price meal application process for the 
NSLP. However, based on FNS practices and policies dealing with issues 
in the past and need for consistency among the Child Nutrition 
Programs, we are proposing to apply the confidentiality provision to 
information obtained in all the Child Nutrition Programs including the 
SBP, SMP, CACFP, and camps and enrolled sites in the SFSP. Therefore, 
this rule would also amend the regulations for each of these programs. 
The various sections to be amended are listed following the discussion 
of each issue addressed by this rule. The minor wording differences 
necessary to accommodate the terminology for the specific programs are 
not addressed in the preamble. School food authorities, SMP child-care 
institutions, CACFP institutions, and SFSP sponsors are collectively 
referred to as ``program operators'' in the preamble.

III. Does the Statute Limit the Disclosure to Eligibility 
Information That Program Operators Obtain From the Free and Reduced 
Price Meal or Free Milk Application or May Program Operators 
Disclose Information That They Obtain From Other Sources?

    The statute refers only to the use and disclosure of information 
obtained from an application for free and reduced price meals or 
through direct certification. The statute does not refer to other 
information concerning program eligibility, such as information 
obtained through verification efforts. State agencies and school food 
authorities are required to verify the information on selected free and 
reduced price meal applications for the NSLP and the CACFP. These 
requirements are in sections 245.6a for the NSLP and the SBP and 
226.23(h) for the CACFP. Verification may include obtaining 
documentation of eligibility from the applicant households and 
collateral contacts with third parties to confirm information provided 
by the household. This proposal would expand the statutory provision 
and treat all program eligibility information, including verification 
information not originating with the free and reduced price meal 
application, the same as information obtained from the free and reduced 
price meal application. All the disclosure provisions would apply.

IV. Why Is There Need for a Proposed Rule?

    The statute is clear regarding disclosure of information to 
specific persons and programs for some uses, but not others. For 
example, there may be some question as to what constitutes an education 
program or who are persons directly connected with the administration 
or enforcement of programs under the NSLA or CNA. Also, student privacy 
and the potential for misuse of confidential information are issues of 
concern. Therefore, FNS is issuing this proposal to invite comment on 
which persons and programs should have access within the structure 
provided by the statutory provisions.
    On December 7, 1998, FNS issued to all State agencies guidance on 
the disclosure of program eligibility information under the amendments 
made by Public Law 103-448 to section 9(b)(2)(C) of the NSLA. This 
proposed rule generally reflects the content of the guidance. However, 
once a final rule is published it will supersede the guidance.

V. What Information May Be Disclosed Without Consent?

A. Disclosure of Aggregate Information

    This proposed rule would continue to permit program operators to 
disclose school level aggregate information (e.g., numbers of 
participants eligible for free meals) that does not individually 
identify participants to any person or program. Program operators are 
not required to obtain parental consent for this type of disclosure. 
The authority for disclosure of aggregate information would be added to 
sections 215.13a(g)(2), 225.15(g)(2), 226.23(i)(2), and 245.6(f)(2) by 
this proposed rule.

B. Disclosure of Names and Eligibility Status, As Specified in the 
Statute

    Section 9(b)(2)(C)(iii)(II) of the NSLA specifies that information 
obtained from the free and reduced price application and through direct 
certification may be disclosed to ``persons directly connected'' with 
the administration or enforcement of certain programs. The statute only 
explicitly mentions eligibility information and does not specifically 
mention participant's names. However, while the law does not mention 
the disclosure of participants' names, the eligibility status would be 
no

[[Page 45727]]

different than aggregate information without the names. Thus, this 
proposed rule would add sections 215.13a(g)(3), 225.15(g)(3), 
226.23(i)(3), and 245.6(f)(3) to permit the disclosure of only the 
participants' names and eligibility status to persons directly 
connected with the administration or enforcement of the following 
programs:
    (1) Federal education programs. In section 9(b)(2)(C)(iii)(II)(aa) 
of the NSLA, Congress specified that eligibility status may be 
disclosed to ``persons directly connected'' with the administration or 
enforcement of a Federal education program. The law intends that 
persons directly connected with a Federal program which provides 
academic or vocational educational benefits to children may have access 
to a student's eligibility status for Child Nutrition Programs. This 
would include persons directly responsible for administering or 
enforcing program regulations under the Department of Education. The 
Department of Education's programs are too numerous to list, but would 
include such programs as Title I; TRIO Programs; migrant education; 
educational research projects, such as the National Assessment of 
Educational Progress; vocational programs under the Carl D. Perkins 
Vocational and Applied Technology Education Act; and enforcement 
activities, such as program compliance and civil rights reviews.
    The statute allows the disclosure of eligibility status to 
educational programs under the jurisdiction of any Federal agency, not 
just the Department of Education. Therefore, the disclosure of 
eligibility status to persons directly connected to the administration 
or enforcement of vocational training programs under the Department of 
Labor, such as educational/job training programs under the Workforce 
Investment Act (previously the Job Training Partnership Act), and any 
compliance reviews under those programs would fall within the category 
of ``Federal education programs.'' FNS encourages commenters to provide 
specific information about other Federal programs that they believe may 
qualify in this regard.
    (2) State health or education programs (other than Medicaid). In 
section 9(b)(2)(C)(iii)(II)(bb) of the NSLA, Congress specified that 
eligibility status may be disclosed to ``persons directly connected'' 
with the administration or enforcement of a State health or education 
program administered by either a State agency or local educational 
agency. FNS emphasizes that the statute specifies that these must be 
State health or education programs.
    To assist with health insurance outreach for children from low-
income households, FNS included in its prototype application for free 
and reduced price meals, issued August 1998, a provision under which 
parents may consent to the sharing of information with Medicaid and the 
State Children's Health Insurance Program (SCHIP). Subsequently, FNS 
developed and distributed to State agencies several additional 
prototype forms to facilitate the disclosure of children's free and 
reduced price meal eligibility information, with parental/guardian 
consent, to identify and enroll children in Medicaid and SCHIP. 
However, the Agricultural Risk Protection Act of 2000, (Public Law 106-
224), enacted on June 20, 2000, amended Section 9(b)(2)(C) of the NSLP 
(42 U.S.C. 1751(b)(2)(C)) to permit limited disclosure of children's 
free and reduced price meal eligibility information to ``a person 
directly connected with the administration of the State medicaid 
program under title XIX of the Social Security Act (42 U.S.C. 1396 et 
seq.) or the State children's health insurance program under title XXI 
of that Act (42 U.S.C. 1397aa et seq.).'' The provision is effective 
October 1, 2000. Additionally, Section 263 of Public Law 106-224 
requires that the Secretary promulgate regulations to implement its 
provisions. FNS will issue a rule to implement the authority to 
disclose children's free and reduced price meal eligibility information 
for State Medicaid and SCHIP purposes as a separate implementing rule. 
In the interim, FNS continues to partner with the Departments of 
Education and Health and Human Services to facilitate the enrollment of 
children in State Medicaid and SCHIP.
    Currently, there is increased emphasis on developing comprehensive 
school health programs in recognition of the contribution proper health 
and well-being make in maximizing educational opportunities. State 
health programs administered by a State agency or local education 
agency that may have access to participants' eligibility status, 
without consent, could include alcohol and drug abuse education 
programs, dental, immunization and vision services, and mental health 
services under the sponsorship of the school.
    Additionally, Congress included only State education programs and 
Federal education programs, as previously discussed. Therefore, no 
program eligibility information (including names and eligibility 
status) may be disclosed for local education programs without consent. 
Representatives of State or local education agencies evaluating the 
results and compliance with student assessment programs would be 
covered only to the extent that the assessment programs were 
established at the State, not local level.
    (3) Federal, State or local means-tested nutrition programs. 
Section 9(b)(2)(C)(iii)(II)(cc) of the NSLA permits the disclosure and 
use of eligibility status for some other Federal, State and local 
means-tested nutrition programs. These are programs with eligibility 
standards comparable to the NSLP (i.e., a maximum eligibility limit of 
185 percent of the Federal poverty level ($30,895 annually for a 
household of four for School Year 1999-2000)). This would include the 
Food Stamp Program and some State and local means-tested nutrition 
programs as eligible recipients of eligibility status.

C. Disclosure of All Eligibility Information, As Specified in the 
Statute

    In addition to names and eligibility status, determining agencies 
may disclose, without consent, any or all information concerning 
participation, including the information obtained from the application 
for free and reduced price meals or free milk, through direct 
certification, or through verification, to the following:
    (1) Persons directly connected with the administration or 
enforcement of National School Lunch Act or Child Nutrition Act 
programs. Section 9(b)(2)(C)(iii)(I) permits persons directly connected 
with the administration or enforcement of the NSLA or CNA to have 
access to all information obtained from the free and reduced price meal 
application or direct certification. As discussed above, FNS is 
proposing to treat all program eligibility information the same as 
information obtained from the application or direct certification. 
Therefore, this rule would permit the disclosure of all program 
eligibility information to persons directly connected with the 
administration or enforcement of the NSLA or CNA. This means that 
program eligibility information may now be shared, without consent, 
between Child Nutrition Programs and other programs authorized under 
those Acts. Although, accordingly, eligibility information may now be 
shared with the Special Supplemental Nutrition Program for Women, 
Infants and Children (WIC), this rule in no way affects the sharing of 
information about WIC participants. Information about WIC participants 
may be shared only in accordance with 7 CFR part 247. This means that 
program eligibility information may be shared

[[Page 45728]]

with another Child Nutrition Program, even if the programs are 
sponsored by different entities. For example, a public school may 
disclose information from children's free and reduced price school meal 
application, without consent, to a person directly connected with an 
organization, such as Parks and Recreation, administering a Summer Food 
Service Program. This provision is in sections 215.13a(g)(4)(i), 
225.15(g)(4)(i), 226.23(i)(4)(i), and 245.6(f)(4)(i) of this proposed 
rule.
    (2) Certain law enforcement officials. Section 
9(b)(2)(C)(iii)(III)(bb) of the NSLA allows disclosure of all 
information obtained from the free and reduced price meal application 
or direct certification to Federal, State, and local law enforcement 
officials who are investigating alleged violations of any of the 
programs under the NSLA or CNA or any of the programs permitted to 
receive names and eligibility status. As discussed above, FNS is 
proposing to treat all program eligibility information the same as 
information obtained from the application or direct certification. 
Therefore, this rule would permit the disclosure of all program 
eligibility information, including information obtained through any 
verification procedures, to these law enforcement officials. This 
provision is in section 215.13a(g)(4)(iii), 225.15(g)(4)(iii), 
226.23(i)(4)(iii), and 245.6(f)(4)(iii) of this proposed rule.
    Thus, this proposal would allow disclosure of any or all program 
eligibility information to law enforcement officials investigating 
alleged violations of the Child Nutrition Programs and WIC. Also, the 
proposal would permit disclosure of this information to law enforcement 
officials who are investigating an alleged violation of a program 
authorized access to eligibility status under the NSLA. This could be a 
Federal education program, a State health or education program (other 
than Medicaid) administered by the State or local education agency, or 
other Federal, State or local means-tested nutrition programs (such as 
the Food Stamp Program). The statute does not authorize disclosure of 
any program eligibility information (other than aggregate information) 
to law enforcement officials investigating alleged violations of other 
programs or laws. For example, law enforcement officials involved in 
child custody cases are not authorized access under this provision. 
However, FNS continues to advise that if the request for information is 
in the form of a subpoena issued by a court or other government body 
possessed of subpoena power, program operators should seek guidance 
from their legal counsel and the State agency.
    (3) The Comptroller General of the United States. Section 
9(b)(2)(C)(iii)(III)(aa) of the NSLA specifically authorizes the 
Comptroller General of the United States to have access to information 
obtained from the free and reduced price meal application or direct 
certification for audit and examination. As discussed above, FNS is 
proposing to treat all program eligibility information the same as 
information obtained from the application or direct certification. 
Therefore, this rule would permit the disclosure of all program 
eligibility information to the Comptroller General. This provision 
would be added to sections 215.13a(g)(4)(ii), 225.15(g)(4)(ii), 
226.23(i)(4)(ii), and 245.6(f)(4)(ii) by this proposed rule.

VI. Who Are ``Directly Connected Persons?''

    The confidentiality provision in the NSLA permits disclosure and 
use of certain program eligibility information specifically to 
``persons directly connected with the administration or enforcement'' 
of various statutes and programs. This rule would define ``persons 
directly connected with the administration or enforcement'' as Federal, 
State, and local program operators responsible for the ongoing 
operation of the programs or activities listed in section 9(b)(2)(C) of 
the NSLA and compliance officials responsible for monitoring, 
reviewing, auditing, or investigating a program, who are thereby 
authorized access to children's free and reduced price eligibility 
information as a specified function of those activities. It may also 
include contractors or grantees, who act on their behalf. Grantees and 
contractors, like others involved in the administration and enforcement 
of a program, may only use the information for program purposes.
    The statute does not imply that Congress intended that programs or 
individuals have unlimited access to free and reduced price eligibility 
information. Rather, there must be a legitimate need to know in order 
to provide a service or carry out an activity authorized under the 
disclosure provision of section 9(b)(2)(C) of the NSLA. For example, 
persons having legitimate access may include the school principal, who 
has overall responsibility for specific programs within the school, 
which are entitled to eligibility information. Additionally, the school 
food service director, cafeteria manager and cafeteria staff, who are 
responsible for determining free and reduced price school meal 
eligibility and/or verifying the information, issuing the medium of 
exchange for free and reduced price meals, or for counting meals served 
by type are persons having legitimate access to free and reduced price 
eligibility information. Federal, State and local reviewers responsible 
for reviewing or auditing compliance with the Program regulations may 
have access to program eligibility information for monitoring purposes. 
Reviews may include civil rights reviews to ensure that there is no 
discrimination in the food service, as well as administrative reviews 
or audits, such as those conducted under the Coordinated Review Effort. 
Release of free and reduced price eligibility information to teachers, 
cafeteria staff or other persons who are not involved in any program 
function which would necessitate knowledge about eligibility would not 
be entitled to that information. Additionally, parent organizations 
could not have access either, since they would not be involved in the 
administration or enforcement of the program. The intent is to limit 
disclosure of program eligibility information to those who have a 
``need to know'' program eligibility information for proper 
administration or enforcement of the particular program. A description 
of ``persons directly connected'' is included in proposed sections 
215.13a(g)(5), 225.15(g)(6), 226.23(i)(6), and 245.6(f)(5).

VII. For What Purposes May Program Eligibility Information Be Used?

    The State agency and program operator may use program eligibility 
information for administering or enforcing the program for which the 
information was obtained. In addition, any other Federal, State or 
local agency charged with administering or enforcing the program may 
use the information for that purpose. This provision would be added to 
Secs. 215.13a(g)(6), 225.15(g)(5), 226.23(i)(5), and 245.6(f)(6).

VIII. Who Decides Whether To Disclose Program Eligibility 
Information?

    The agency that makes the free and reduced price meal or free milk 
determination is the only agency that can decide to disclose program 
eligibility information. In most cases, this is the school food 
authority or school, Summer Food Service Program sponsor, or Child and 
Adult Care Food Program sponsor, but sometimes the State agency 
performs this function. This provision is at proposed 
Secs. 215.13a(g)(1), 225.15(g)(1), 226.23(i)(1), 245.6(f)(1).

[[Page 45729]]

IX. What If Student Records and Other Systems Are Computerized?

    Many schools are now computerized, and individual student 
information is often part of a Statewide electronic data base under the 
responsibility of the State's Department of Education. The information 
may also be part of a local school district data base. Typically, these 
databases contain ``directory information,'' such as student's name, 
address, phone number, and ``education records,'' such as achievement 
test scores, grades, special education plans, and evaluations. The 
Department of Education has regulations restricting access to 
``education records,'' including those on computerized systems. These 
regulations are found at 34 CFR part 99.
    Program operators should take note that ``education records'' do 
not include Child Nutrition Program eligibility information. Therefore, 
the Department of Education regulations do not extend to program 
eligibility information for the Child Nutrition Programs. Nor is 
compliance with the Department of Education confidentiality regulations 
sufficient to meet the confidentiality protections in the NSLA. 
Therefore, program operators must ensure that to the extent that Child 
Nutrition Program eligibility information is kept together with other 
school records, the program operators, who may also be database 
managers, establish controls to ensure that the program eligibility 
information is used only for the authorized purposes and is available 
only to persons directly connected with the program.
    Access to eligibility information for authorized purposes and to 
persons directly connected with the program is of particular concern in 
computerized databases. FNS is not proposing any specific methods to 
ensure compliance with the NSLA confidentiality provisions in these 
situations. However, FNS remains concerned about the extent of access 
to the databases, and ways to protect program eligibility information 
from disclosure and use beyond what is authorized by Congress. Since 
FNS experience in this area is limited, commenters are encouraged to 
provide their experiences with student databases in which access 
restrictions vary according to the sensitivity of the different data 
items in the database. An example would be a school district database 
where access to students' academic records is more restricted than is 
access to students' class schedules, addresses, and other common 
information. Comments on this subject will aid FNS in determining 
whether special controls are necessary in situations in which program 
eligibility information reside in the same database where other student 
information is maintained. While this rule would not forbid such 
arrangement, FNS wishes to emphasize that to comply with this rule, 
database managers, who may also be program operators, must restrict 
access to program eligibility information to only those individuals and 
uses authorized by statute and regulation.

X. Who Needs To Be Notified or May Give Consent for the Disclosure 
of Program Eligibility Information to Other Persons or Programs?

    In general, when eligibility status or other information from the 
program eligibility information is shared with the persons and/or 
programs as authorized by the NSLA confidentiality provisions, the 
statute does not require that program operators first obtain consent. 
However, FNS believes that households should be informed of any 
potential disclosure of program eligibility information at the time of 
program application. This notice could be in the notice/letter to 
households that accompanies the application. It could also be on the 
application itself, or, for participants directly certified for free 
meals or milk, on the document informing the household of the 
participant's eligibility through direct certification. While FNS 
recommends that notice be given, FNS is not proposing to amend the 
regulations to require the notice. Different requirements apply with 
respect to disclosure of social security numbers as discussed later in 
this preamble.

XI. Consent

    Determining agencies that want to disclose more information than 
that specifically permitted by the NSLA or for programs not specified 
in the NSLA provisions must obtain consent prior to the disclosure. For 
children, the consent must be given by the parent or guardian who is a 
member of the household or family for purposes of the free and reduced 
price meal or free milk application. For an adult participant in the 
CACFP, the consent must be given by the adult participant, unless a 
guardian has been appointed to act for the adult. The consent may be 
accomplished as part of the free and reduced price application, such as 
on a multi-use application, or at a later time. This approach is 
already authorized by the multi-use application guidance discussed 
earlier in the preamble. Also, the State agency or program operator may 
rely on a consent form initiated by the program or agency that wants to 
use the free and reduced price information. For example, the agency 
administering a local eye care program, which provides free or low cost 
eye examinations to low income children may request written permission 
from parents/guardians to get their children's free or reduced price 
meal eligibility information from their children's schools. The eye 
care program, in this case, would be securing from the household the 
consent for the determining agency to release the information to the 
administering agency.
    In the case of direct certification, school officials or the agency 
administering the food stamp, FDPIR, or TANF, as appropriate, may add a 
consent statement to the notice of eligibility for free meals or milk 
that is provided to the household. A household interested in obtaining 
the specified services or benefits would sign and return the consent to 
the school.
    FNS wishes to emphasize that under this proposed rule, only a 
parent or guardian who is part of the household or family for program 
application purposes may provide consent to disclose. In the Child 
Nutrition Programs, generally the household or family is the group of 
related or nonrelated individuals, who are not residents of an 
institution or boarding house, but who are living as one economic unit. 
For adults in the CACFP, it is the adult and the adult's spouse and 
dependent(s) residing with the adult. (See the definitions of 
``family'' or ``household'' in 7 CFR 215.2(k) for the SMP in child-care 
institutions, 225.2 for the SFSP, 226.2 for the CACFP, and 245.2 for 
the SMP in schools and the SBP and NSLP). Thus, in most cases of 
divorce or separation, this means the custodial parent or guardian. 
However, if custody is shared, the parents or guardians must decide who 
has primary custody for purposes of making application for the program. 
The parent or guardian having such custody would be the only person who 
could provide consent to disclosure of program eligibility information.
    FNS is concerned about the personal financial data at stake. This 
information is unlike other student records that directly concern the 
education of the child, and in which both parents have a direct 
interest. The program eligibility information in these circumstances is 
associated with one parent or guardian, and FNS believes that only that 
parent or guardian should be able to give consent to its disclosure. 
FNS recognizes that this is a difficult issue and is particularly 
interested in comments on this point.
    Regardless of the document used to secure the consent, officials 
must

[[Page 45730]]

provide the household with adequate information for them to determine 
whether or not to give consent to the proposed disclosure. This rule 
would amend Secs. 215.13a(g)(9), 225.15(g)(9), 226.23(i)(9), and 
245.6(f)(9) to set the minimum standards for that notice. To be valid, 
the consent must be in writing. It must identify the information that 
will be shared, how the information will be used, and be signed and 
dated by the participant's parent or guardian (or adult applicant or 
participant in the CACFP). It must also state that failing to sign the 
consent will not affect the participant's eligibility for the program 
for which application is being made and that the information will not 
be shared by the receiving program for other than program related 
reasons.
    Parents/guardians/adult applicants and participants must also be 
permitted to limit the consent to only those programs with which they 
wish to share information. For example, the consent could use a check-
off system under which the applicant would check or initial a box to 
indicate that he or she wants to have information disclosed to 
determine eligibility for benefits from a particular program. Finally, 
the consent must be signed and dated by a parent or guardian (or adult 
applicant or participant in the CACFP). Readers should note that 
although any adult household member may sign the free and reduced 
priced meal or free milk application, the consent must be signed by the 
parent or guardian for the child, or by the adult applicant or 
participant in the CACFP or that person's guardian. Only those persons 
have the authority to consent to these disclosures. Information may not 
be disclosed to individuals or programs under any circumstances beyond 
that authorized by law or the implementing regulation without consent.

XII. What Is Required When Social Security Numbers Are Disclosed?

    There is no statutory requirement that applicants or participants 
must be notified of the potential use of program eligibility 
information. However, the Privacy Act requires that notice be given of 
the intended uses of social security numbers. Thus, if a State agency 
or program operator intends to release social security numbers, either 
through the disclosures authorized in the NSLA or with specific 
parental consent, then section 7(b) of the Privacy Act of 1974 (5 
U.S.C. 552a note) requires that notice of the planned uses of the 
social security number be given. The easiest method is to include the 
planned uses in the Privacy Act statement currently required by 
Secs. 225.15(f)(4), 226.23(e)(1)(ii)(F), and 245.6(a)(1). The only uses 
currently listed in the regulations and the prototype application are 
for the determination and verification of eligibility for program 
meals. Any State agency or program operator that plans to release the 
social security number for other purposes must amend the Privacy Act 
statement to reflect this. State agencies and program operators are 
responsible for ensuring the adequacy of their Privacy Act statement, 
and FNS encourages them to consult with their legal counsel. This 
requirement would be added to sections 215.13a(g)(7), 225.15(g)(7), 
226.23(i)(7), and 245.6(f)(7) by this proposed rule.
    This rule would also propose to revise the current Privacy Act 
notice required in Parts 225, 226, and 245 and would propose a new 
Privacy Act notice requirement for the SMP in child-care institutions 
to ensure Privacy Act compliance in that program. The Privacy Act 
statements required to be given at the time of application would each 
be revised to replace the three sentences giving detailed descriptions 
of the potential use of the social security number for verification 
with a more general statement that the number will be used in the 
administration and enforcement of the program. An additional Privacy 
Act notice is required to be given before verification (for those 
programs subject to verification). That notice would continue to 
provide the more detailed description on the potential uses of social 
security numbers in verification. The sections that would be revised 
are Secs. 225.15(f)(2)(vi), 226.23(e)(1)(ii)(F), and 245.6(a)(1). The 
Privacy Act requirement for the SMP in child-care institutions would be 
added at section 215.13a(f).

XIII. Are Agreements Required Before Disclosing Program Eligibility 
Information?

    Persons and programs to which program eligibility information is 
disclosed under the statute (see Section I of the preamble), may only 
use the information in the administration or enforcement of the 
programs for which the information was released. The receiving agency 
cannot transfer or otherwise disclose eligibility information to a 
third party. This rule recommends that the determining agency enter 
into agreements with the persons or programs receiving the information 
before any disclosures are made, including disclosures made with 
consent. This is to ensure proper use of the information.
    FNS wishes to ensure that parties receiving program eligibility 
information (including participants' names and eligibility status) 
fully understand the limitations on the use of the information and the 
penalties for misusing the information. The agreement should identify 
the programs and persons receiving the information and describe the 
information to be disclosed and how it will be used. It should also 
describe how the information will be protected from unauthorized uses 
and disclosures and describe the penalties for unauthorized disclosure. 
This provision would be added to Secs. 215.13a(g)(10), 225.15(g)(10), 
226.23(i)(10), and 245.6(f)(10).

XIV. Are There Any Penalties for Unauthorized Disclosure or Misuse 
of Information?

    As mandated in the statute, the proposal includes criminal 
penalties for any person who publishes, divulges, discloses or makes 
known in any manner, or to any extent not authorized by Federal law, 
information disclosed under these provisions. The penalties may include 
a fine of up to $1,000 or imprisonment of up to 1 year or both. These 
penalties would be described in Secs. 215.13a(g)(11), 225.15(g)(11), 
226.23(i)(11), and 245.6(f)(11) of the proposed rule.

XV. Summary

    FNS is proposing to amend the Child Nutrition Program regulations 
to permit the release of program eligibility information that is 
consistent with the revised provisions of the NSLA. FNS' goal is to 
facilitate the release of free and reduced price information to 
specified programs or individuals, without sacrificing the 
confidentiality of the individuals or their parents/guardians.
    Readers should note that the law does not require State agencies 
and program operators to share information but provides authority for 
State agencies and program operators to do so. Also, program operators 
must continue to prevent the overt identification of children receiving 
free and reduced price meals or free milk. This includes following such 
practices as not publishing, posting or announcing the names of 
children eligible for free or reduced price meals or free milk. Program 
operators are also prohibited from making children eligible for free 
and reduced price meals or free milk use special serving lines or 
special tokens or tickets that are not made available to all students.

[[Page 45731]]

Executive Order 12866

    This rule has been determined to be significant and was reviewed by 
the Office of Management and Budget under Executive Order 12866.

Public Law 104-4

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes a requirement for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, the 
Food and Nutrition Service generally prepares a written statement, 
including a cost-benefit analysis. This is done for proposed and final 
rules that have ``Federal mandates'' which may result in expenditures 
of $100 million or more in any one year by State, local, or tribal 
governments, in the aggregate, or by the private sector. When this 
statement is needed for a rule, section 205 of the UMRA generally 
requires the Food and Nutrition Service to identify and consider a 
reasonable number of regulatory alternatives. It must then adopt the 
least costly, most cost-effective or least burdensome alternative that 
achieves the objectives of the rule.
    This proposed rule contains no Federal mandates of $100 million or 
more in any one year (under regulatory provisions of Title II of the 
UMRA) for State, local, and tribal governments or the private sector. 
Thus, this proposed rule is not subject to the requirements of sections 
202 and 205 of the UMRA.

Regulatory Flexibility Act

    This proposed rule has been reviewed with regard to the 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). 
Shirley R. Watkins, Under Secretary for Food, Nutrition and Consumer 
Services, has certified that this rule will not have a significant 
economic impact on a substantial number of small entities. By 
permitting access to certain eligibility information, this rule could 
reduce duplicate paperwork by certain agencies which serve low-income 
children and adults. The rule could streamline operations of those 
programs. The provisions of this rule also may enhance access to these 
programs by needy children. The Department of Agriculture (the 
Department or USDA) does not anticipate any adverse fiscal impact 
resulting from implementation of this rulemaking. Although there may be 
some burdens associated with this rule, the burdens would not be 
significant and would be outweighed by the benefits of sharing of 
information.

Executive Order 12372

    The Special Milk Program, the Summer Food Service Program, and the 
Child and Adult Care Food Program are listed in the Catalog of Federal 
Domestic Assistance under Nos. 10.556, 10.559, and 10.558 respectively. 
These programs are subject to the provisions of Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials (7 CFR part 3015, subpart V, and final rule related notice at 
48 FR 29115, June 24, 1983).

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is intended to have preemptive effect with 
respect to any State or local laws, regulations or policies which 
conflict with its provisions or which would impede its full 
implementation. This rule is not intended to have retroactive effect 
unless that is specified in the Effective Date section of the preamble 
of the final rule. Before any judicial challenge to the provisions of 
this rule or the application of its provisions, all administrative 
procedures that apply must be followed. The only administrative appeal 
procedures relevant to this proposed rule are the hearings that FNS 
must provide for decisions relating to eligibility for free and reduced 
price meals and free milk (section 245.7 for the NSLP, SBP, and SMP in 
schools; section 226.23(e)(5) for the CACFP).

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. 
3507, this notice invites the general public and other public agencies 
to comment on proposed information collection.
    Written comments must be received on or before September 25, 2000.
    Comments concerning the information collection aspects of this 
proposed rule should be sent to Brenda Aguilar, Desk Officer, Office of 
Information and Regulatory Affairs, Office of Management and Budget 
(OMB), Washington, DC. 20503. A copy of these comments may also be sent 
to Mr. Eadie at the address listed in the ADDRESSES section of this 
preamble. Commenters are asked to separate their information collection 
requirements comments from their comments on the remainder of this 
proposed rule.
    OMB is required to make a decision concerning the collection of 
information contained in this proposed regulation between 30 and 60 
days after the publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment to the Department on the 
proposed regulation.
    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information has practical utility; 
(b) the accuracy of the agency's estimate of the proposed collection of 
information, including the validity of the methodology and assumptions 
used; (c) ways to enhance the quality, utility, and clarity of the 
information to be collected; and (d) ways to minimize the burden of the 
collection of information on those who are to respond, including 
through the use of appropriate automated, electronic, mechanical, or 
other technological collection techniques or other forms of information 
technology.
    The title, description, and respondent description of the 
information collections are shown below with an estimate of the annual 
recordkeeping burdens. Included in the estimate is the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    Title: 7 CFR Part 215, Special Milk Program; 7 CFR Part 225 Summer 
Food Service Program; 7 CFR Part 226, Child and Adult Care Food 
Program; 7 CFR Part 245 Determining Eligibility for Free and Reduced 
Price Meals and Free Milk in Schools.
    OMB Number: 0584-0005, 0584-0280, 0584-0055 and 0584-0026, 
respectively.
    Expiration Date: 8/31/02, 2/28/03, 5/31/01, and 9/30/01, 
respectively.
    Type of Request: Revision of currently approved collection.
    Abstract: Under this proposal, determining agencies may disclose 
applicants' names and eligibility, without consent, to persons directly 
connected with the administration or enforcement of the following 
programs: Federal education programs; State health and State education 
programs administered by the State or local education agency; Federal, 
State, or local means-tested nutrition programs with eligibility 
standards comparable to the Child Nutrition Programs (i.e., food 
assistance to households with income at or below 185 percent of the 
Federal poverty level). Additionally, State agencies and program 
operators may disclose all other eligibility information obtained 
through the free and reduced price meal or free milk eligibility 
process (including all information on

[[Page 45732]]

the application or obtained through direct certification or 
verification), without consent, to the following: Persons directly 
connected with the administration or enforcement of the programs 
authorized under the NSLA and CNA; the Comptroller General of the 
United States for audit and examination; and Federal, State or local 
law enforcement officials investigating alleged violations of the 
programs under the NSLA and CNA or investigating violations of any of 
the programs authorized access to names and free and reduced price meal 
or free milk eligibility information. Disclosing any free and reduced 
price meal or free milk eligibility information to individuals and 
programs not authorized under the statute requires written consent. The 
proposed rule makes several recommendations to State agency, school 
food authority, SMP child-care institution, SFSP sponsor, or CACFP 
institutions that intend to disclose participants eligibility 
information. The rule recommends (1) that these entities inform 
potential participants that their eligibility information may be shared 
with other entities; and (2) that there is an agreement between the 
State agency, school food authority, SMP child-care institution, SFSP 
sponsor, or CACFP institution and the entity that is requesting the 
program eligibility information.

                                                   Estimated Annual Recordkeeping and Reporting Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Annual                    Average       Annual
                                                                      Section                         number of      Annual     burden per      burden
                                                                                                     respondents   frequency     response       hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
State agency or child care institution should
 enter into a written agreement with the party
 requesting the information:
    Total Existing State agencies.............  7 CFR 215.13a(g)(10)...............................            0            0         0                0
    Total Proposed State agencies.............  7 CFR 215.13a(g)(10)...............................           57            1          .50            29
    Total Existing Child Care Institutions....  7 CFR 215.13a(g)(10)...............................            0            0         0                0
    Total Proposed Child Care Institutions....  7 CFR 215.13a(g)(10)...............................          207            1          .25            52
State agency and child care institution must
 give notice of any additional uses of the
 social security number:
    Total Existing State agencies.............  7 CFR 215.13a(g)(7)................................            0            0         0                0
    Total Proposed State agencies.............  7 CFR 215.13a(g)(7)................................           57            1          .32            18
    Total Existing Child Care Institutions....  7 CFR 215.13a(g)(7)................................            0            0         0                0
    Total Proposed Child Care Institutions....  7 CFR 215.13a(g)(7)................................          207            1          .16            33
Child care institutions that plan to use or
 disclose information in ways not permitted
 must first obtain written consent from the
 child's parent or guardian:
    Total Existing Child Care Institutions....  7 CFR 215.13a(g)(9)................................            0            0         0                0
    Total Proposed Child Care Institutions....  7 CFR 215.13a(g)(9)................................          207            1          .07            14
    Total Existing Household..................  7 CFR 215.13a(g)(9)................................            0            0         0                0
    Total Proposed Household..................  7 CFR 215.13a(g)(9)................................       14,006            1          .07           980
Total Existing:                                 0..................................................
Total Proposed:                                 +1,126.............................................
Change:                                         +1,126.............................................
State agency or sponsor should enter into a
 written agreement with the party requesting
 the information:
    Total Existing State Agency...............  7 CFR 225.15(g)(10)................................            0            0         0                0
    Total Proposed State Agency...............  7 CFR 225.15(g)(10)................................           49            1          .25            12
    Total Existing Sponsor....................  7 CFR 225.15(g)(10)................................            0            0         0                0
    Total Proposed Sponsor....................  7 CFR 225.15(g)(10)................................        3,309            1          .25           827
State agency or sponsors must give notice of
 any additional uses of the social security
 number:
    Total Existing State Agencies.............  7 CFR 225.13(g)(7).................................            0            0         0                0
    Total Proposed State Agencies.............  7 CFR 225.13(g)(7).................................           49            1          .16             8
    Total Existing Sponsors...................  7 CFR 225.13(g)(7).................................            0            0         0                0
    Total Proposed Sponsors...................  7 CFR 225.13(g)(7).................................        3,309            1          .16           529
State agencies and sponsors that plan to use
 or disclose information in ways not permitted
 must first obtain written consent from the
 child's parent or guardian:
    Total Existing State Agency...............  7 CFR 225.15(g)(9).................................            0            0         0                0
    Total Proposed State Agency...............  7 CFR 225.15(g)(9).................................           49            1          .25            12
    Total Existing Sponsors...................  7 CFR 225.15(g)(9).................................            0            0         0                0
    Total Proposed Sponsors...................  7 CFR 225.15(g)(9).................................        3,309            1          .25           827
    Total Existing Household..................  7 CFR 225.15(g)(9).................................            0            0         0                0
    Total Proposed Household..................  7 CFR 225.15(g)(9).................................       72,864            1          .083        6,047
Total Existing:                                 0..................................................
Total Proposed:                                 +8,262.............................................
Change:                                         +8,262.............................................
State agency or child care institution should
 enter into a written agreement with the party
 requesting the information:
    Total Existing State Agency...............  7 CFR 226.23(i)(10)................................            0            0         0                0
    Total Proposed State Agency...............  7 CFR 226.23(i)(10)................................           54            1          .25            13

[[Page 45733]]

 
    Total Existing Child and Adult Day Care     7 CFR 226.23(i)(10)................................            0            0         0                0
     Institutions.
    Total Proposed Child and Adult Day Care     7 CFR 226.23(i)(10)................................       10,144            1          .25         2,536
     Institutions.
State agencies and child care institution must
 give notice of any additional uses of the
 social security number:
    Total Existing State Agency...............  7 CFR 226.23(i)(10)................................            0            0         0                0
    Total Proposed State Agency...............  7 CFR 226.23(i)(10)................................           54            1          .25            13
    Total Existing Child Care Institutions....  7 CFR 226.13(g)(7).................................            0            0         0                0
    Total Proposed Child Care Institutions....  7 CFR 226.13(g)(7).................................       10,144            1          .16         1,623
State agencies and child care institutions
 that plan to use or disclose information in
 ways not permitted must first obtain written
 consent from the child's parent or guardian:
    Total Existing State Agency...............  7 CFR 226.23(i)(9).................................            0            0         0                0
    Total Proposed State Agency...............  7 CFR 226.23(i)(9).................................           54            1          .25            13
    Total Existing Child and Adult Day Care     7 CFR 226.23(i)(9).................................            0            0         0                0
     Institution.
    Total Proposed Child and Adult Day Care     7 CFR 226.23(i)(9).................................       10,144            1          .25         2,536
     Institution.
    Total Existing Household..................  7 CFR 226.23(i)(9).................................            0            0         0                0
    Total Proposed Household..................  7 CFR 226.23(i)(9).................................      687,562            1          .083       57,067
Total Existing:                                 0..................................................
Total Proposed:                                 +63,801............................................
Change:                                         +63,801............................................
State agency, SFA, or school should enter into
 a written agreement with the party requesting
 the information:
    Total Existing State Agency...............  7 CFR 245.6(f)(10).................................            0            0         0                0
    Total Proposed State Agency...............  7 CFR 245.6(f)(10).................................           58            1          .25            14
    Total Existing School Food Authorities....  7 CFR 245.6(f)(10).................................            0            0         0                0
    Total Proposed School Food Authorities....  7 CFR 245.6(f)(10).................................       16,342            3          .25        12,256
    Total Existing Schools....................  7 CFR 245.6(f)(10).................................            0            0         0                0
    Total Proposed Schools....................  7 CFR 245.6(f)(10).................................      101,000            3          .25        75,750
State agencies, SFA, or school must give
 notice of any additional uses of the social
 security number:
    Total Existing State Agencies.............  7 CFR 245.6(f)(7)..................................            0            0         0                0
    Total Proposed State Agencies.............  7 CFR 245.6(f)(7)..................................           58            1          .16             9
    Total Existing School Food Authorities....  7 CFR 245.6(f)(7)..................................            0            0         0                0
    Total Proposed School Food Authorities....  7 CFR 245.6(f)(7)..................................       16,342            3          .25        12,256
    Total Existing Schools....................  7 CFR 245.6(f)(7)..................................            0            0         0                0
    Total Proposed Schools....................  7 CFR 245.6(f)(7)..................................      101,000            3          .25        75,750
State agencies, SFAs, and schools that plan to
 use or disclose information in ways not
 permitted must first obtain written consent
 from the child's parent or guardian:
    Total Existing State Agency...............  7 CFR 245.6(f)(9)..................................            0            0         0                0
    Total Proposed State Agency...............  7 CFR 245.6(f)(9)..................................           58            1          .25            14
    Total Existing School Food Authority......  7 CFR 245.6(f)(9)..................................            0            0         0                0
    Total Proposed School Food Authority......  7 CFR 245.6(f)(9)..................................       16,342            3          .25        12,256
    Total Existing School.....................  7 CFR 245.6(f)(9)..................................            0            0         0                0
    Total Proposed School.....................  7 CFR 245.6(f)(9)..................................      101,000            3          .25        75,750
    Total Existing Household..................  7 CFR 245.6(f)(9)..................................            0            0         0                0
    Total Proposed Household..................  7 CFR 245.6(f)(9)..................................    4,138,810            1          .07       289,716
Total Existing:                                 0..................................................
Total Proposed:                                 +553,771...........................................
Change:                                         +553,771...........................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

List of Subjects

7 CFR Part 215

    Food assistance programs, Grant programs--education, Grant 
programs--health, Infants and children, Milk, Reporting and 
recordkeeping requirements.

7 CFR Part 225

    Food assistance programs, Grant programs--health, Infants and 
children, Labeling, Reporting and recordkeeping requirements.

7 CFR Part 226

    Accounting, Aged, Day care, Food assistance programs, Grant 
programs, Grant programs--health, Indians, Individuals with 
disabilities, Infants and children, Intergovernmental relations, Loan 
programs, Reporting and

[[Page 45734]]

recordkeeping requirements, Surplus agricultural commodities.

7 CFR Part 245

    Civil rights, Food assistance programs, Grant programs--education, 
Grant programs--health, Infants and children, Milk, Reporting and 
recordkeeping requirements, School breakfast and lunch programs.
    Accordingly, 7 CFR parts 215, 225, 226, and 245 are proposed to be 
amended as follows:

PART 215--SPECIAL MILK PROGRAM FOR CHILDREN

    1. The authority citation for part 215 is revised to read as 
follows:

    Authority: 42 U.S.C. 1772 and 1779.

    2. In Sec. 215.13a, new paragraphs (f) and (g) are added to read as 
follows:


Sec. 215.13a  Determining eligibility for free milk in child-care 
institutions.

* * * * *
    (f) Is a Privacy Act notice required on the free milk application? 
Each free milk application must include substantially the following 
statement: ``Unless you include your child's case number for the Food 
Stamp Program, the Food Distribution Program on Indian Reservations (or 
other identifier for the Food Distribution Program on Indian 
Reservations) or the Temporary Assistance for Needy Families Program, 
you must include the social security number of the adult household 
member signing the application or indicate that the household member 
does not have a social security number. This is required by section 9 
of the National School Lunch Act. The social security number is not 
mandatory, but the application cannot be approved if a social security 
number is not given or an indication is not made that the signer does 
not have a social security number. The social security number will be 
used in the administration and enforcement of the program.''
    (g) May program eligibility information be used for non-program 
purposes or disclosed to other individuals or programs? Certain 
information about children eligible for free milk may be disclosed to 
the individuals and programs described in this section. Additionally, 
program eligibility information may be disclosed to other people and 
programs if parental consent is given.
    (1) Who decides whether to disclose program eligibility 
information? The State agency or child care institution that determines 
free milk eligibility is responsible for deciding whether to disclose 
program eligibility information.
    (2) To whom may the State agency or child care institution disclose 
aggregate information? The State agency or child care institution, as 
appropriate, may disclose aggregate information to any party. Parental 
consent is not necessary, since children are not identified. For 
example, the State agency or child care institution may disclose 
aggregate information, that is the number of children eligible for free 
milk, but not children's names.
    (3) To whom may the State agency or child care institution disclose 
participants' names and eligibility status, without consent? The State 
agency or child care institution, as appropriate, may disclose, without 
parental consent, children's names and eligibility status (whether they 
are eligible for free milk) to persons directly connected with the 
administration or enforcement of the following programs:
    (i) A Federal education program;
    (ii) A State health program (other than Medicaid) or State 
education program administered by the State or local education agency; 
or
    (iii) A Federal, State, or local means-tested nutrition program 
with eligibility standards comparable to the National School Lunch 
Program (i.e., food assistance programs for households with incomes at 
or below 185 percent of the Federal poverty level).
    (4) To whom may the State agency or child care institution disclose 
all eligibility information, without consent? In addition to children's 
names and eligibility status, the State agency or child care 
institution, as appropriate, may disclose, without parental consent, 
all eligibility information obtained through the free milk eligibility 
process (including all information on the application or obtained 
through direct certification or any verification of eligibility 
efforts) to the following:
    (i) Persons directly connected with the administration or 
enforcement of programs authorized under the National School Lunch Act 
or the Child Nutrition Act of 1966. This means that all eligibility 
information obtained for the Special Milk Program may be disclosed to 
persons directly connected with administering or enforcing regulations 
under the National School Lunch or School Breakfast Programs (parts 210 
and 220, respectively, of this chapter), Child and Adult Care Food 
Program (part 226 of this chapter), Summer Food Service Program (part 
225 of this chapter) and the Special Supplemental Nutrition Program for 
Women, Infants and Children (WIC) (part 246 of this chapter);
    (ii) The Comptroller General of the United States for purposes of 
audit and examination; and
    (iii) Federal, State, and local law enforcement officials for the 
purpose of investigating any alleged violation of the programs listed 
in paragraphs (g)(3) and (g)(4) of this section.
    (5) For what purposes may program eligibility information be used? 
State agencies and child-care institutions may use program eligibility 
information for administering or enforcing the program. Additionally, 
any other Federal, State, or local agency charged with administering or 
enforcing the program may use the information for that purpose. 
Individuals and programs to which program eligibility information is 
disclosed under this section may only use the information in the 
administration or enforcement of the receiving program. No further 
disclosure of the information may be made.
    (6) Who are ``directly connected'' persons? Persons directly 
connected with the administration or enforcement of a program are the 
Federal, State, and local program operators responsible for program 
compliance, including their contractors, to the extent those persons 
have a need to know the information for program administration or 
enforcement. Program operators include persons responsible for the 
ongoing operation of the program. Compliance officials include persons 
responsible for monitoring, reviewing, auditing, or investigating the 
program. Contractors include evaluators, auditors, and others with whom 
State agencies and program operators may contract to assist in the 
administration or enforcement of their program.
    (7) May social security numbers be disclosed? The State agency or 
child care institution, as appropriate, may disclose social security 
numbers to any programs or persons authorized to receive all program 
eligibility information under paragraph (g)(4) of this section or when 
consent is obtained. However State agencies and child care institutions 
that plan to disclose social security numbers must give notice of the 
planned use of the social security number. This notice must be in 
accordance with section 7(b) of the Privacy Act of 1974 (5 U.S.C. 552a 
note). The application must include substantially the following 
language for disclosures of social security numbers under paragraph 
(g)(4) of this section: ``The social security number may also be 
disclosed to programs under the National School Lunch Act and Child 
Nutrition Act, the Comptroller General of the United States, and law 
enforcement officials for the purpose of

[[Page 45735]]

investigating violations of certain Federal, State, and local 
education, health and nutrition programs.'' This language is in 
addition to the notice required in paragraph (f) of this section. State 
agencies and child care institutions are responsible for drafting the 
appropriate notice for disclosures of social security numbers under the 
consent provisions of paragraph (g)(10) of this section.
    (8) When is parental consent required? State agencies and child 
care institutions that plan to use or disclose information about 
children eligible for free milk in ways not specified in this section 
must obtain written consent from the child's parent or guardian prior 
to the use or disclosure.
    (9) Who may give consent for the disclosure of program eligibility 
information to other programs or persons? Only a parent or guardian who 
is a member of the child's household for purposes of the free milk 
application may give consent to the disclosure of program eligibility 
information. The consent must identify the information that will be 
shared and how the information will be used. Additionally, the consent 
statement must be signed and dated by the child's parent or guardian 
who is a member of the household for purposes of the free milk 
application. There must be a statement informing parents and guardians 
that failing to sign the consent will not affect the child's 
eligibility for free milk and that the individuals or programs 
receiving the information will not share the information with any other 
entity or program. Parents/guardians must also be permitted to limit 
the consent to only these programs with which they wish to share 
information.
    (10) Are agreements required before disclosing program eligibility 
information? Agreements between the State agency or child care 
institution, as appropriate, and the individual or program receiving 
the information are not required. However, agreements are recommended. 
Before disclosing any information, the State agency or child care 
institution should enter into a written agreement with the party 
requesting the information. An agreement is not necessary for 
disclosures to Federal, State or local agencies evaluating or reviewing 
program operations or for disclosures to the Comptroller General. The 
agreement should:
    (i) Identify the programs or persons receiving the information;
    (ii) Describe the information to be disclosed and how the 
information will be used;
    (iii) Describe how the information will be protected from 
unauthorized uses and disclosures and include the penalties for using 
the information for unauthorized purposes; and
    (iv) Be signed by both the determining agency and the receiving 
party.
    (11) What are the penalties for unauthorized disclosure or misuse 
of information? Any individual who publishes, divulges, discloses or 
makes known in any manner, or to any extent not authorized by statute 
or the regulations in this part, any information obtained under this 
paragraph (g) will be fined up to $1,000 or imprisoned for up to 1 
year, or both.

PART 225--SUMMER FOOD SERVICE PROGRAM

    1. The authority citation for part 225 continues to read as 
follows:

    Authority: Secs. 9, 13, and 14, National School Lunch Act, as 
amended (42 U.S.C. 1758, 1761, and 1762a).

    2. In Sec. 225.15, redesignate paragraphs (g) and (h) as paragraphs 
(h) and (i) and add a new paragraph (g).
    The addition reads as follows:


Sec. 225.15  Management responsibilities of sponsors.

* * * * *
    (g) May program eligibility information be used for non-program 
purposes or disclosed to other individuals or programs? Certain 
information about children eligible for free meals may be disclosed to 
the individuals and programs described in this section. Additionally, 
program eligibility information may be disclosed to other individuals 
and programs if parental consent is given.
    (1) Who decides whether to disclose program eligibility 
information? The State agency or sponsor that determines free meal 
eligibility is responsible for deciding whether to disclose program 
eligibility information.
    (2) To whom may the State agency or sponsor disclose aggregate 
information? The State agency or sponsor, as appropriate, may disclose 
aggregate information to any party. Parental consent is not necessary, 
since children are not identified. For example, the State agency or 
sponsor may disclose aggregate information, that is the number of 
children eligible for free and reduced price meals, but not children's 
names.
    (3) To whom may the State agency or sponsor disclose participants' 
names and eligibility status? The State agency or sponsor may disclose, 
without parental consent, children's names and eligibility status 
(whether they are eligible for free meals) to persons directly 
connected with the administration or enforcement of the following 
programs:
    (i) A Federal education program;
    (ii) A State health program (other than Medicaid) or State 
education program administered by the State or local education agency; 
or
    (iii) A Federal, State, or local means-tested nutrition program 
with eligibility standards comparable to the National School Lunch 
Program (i.e., food assistance programs for households with incomes at 
or below 185 percent of the Federal poverty level).
    (4) To whom may the State agency or sponsor disclose all 
eligibility information, without parental consent? In addition to 
children's names and eligibility status, the State agency or sponsor 
may disclose, without parental consent, all eligibility information 
obtained through the free meal eligibility process (including all 
information on the application or obtained through direct certification 
or any verification of eligibility efforts) to the following:
    (i) Persons directly connected with the administration or 
enforcement of programs authorized under the National School Lunch Act 
(NSLA) or the Child Nutrition Act of 1966 (CNA). This means that all 
eligibility information obtained for the Summer Food Service Program 
may be disclosed to persons directly connected with administering or 
enforcing regulations under the Special Milk Program (part 215 of this 
chapter), the National School Lunch or School Breakfast Programs (parts 
210 and 220, respectively, of this chapter), Child and Adult Care Food 
Program (part 226 of this chapter), and the Special Supplemental 
Nutrition Program for Women, Infants and Children (WIC) (part 246 of 
this chapter);
    (ii) The Comptroller General of the United States for purposes of 
audit and examination; and
    (iii) Federal, State, and local law enforcement officials for the 
purpose of investigating any alleged violation of the programs listed 
in paragraphs (g)(3) and (g)(4) of this section.
    (5) For what purposes may program eligibility information be used? 
State agencies and sponsors may use program eligibility information for 
administering or enforcing the program. Additionally, any other 
Federal, State, or local agency charged with administering or enforcing 
the program may use the information for that purpose. Individuals and 
programs to which program eligibility information is disclosed under 
this section may only use the information in the

[[Page 45736]]

administration or enforcement of the receiving program. No further 
disclosure of the information may be made.
    (6) Who are ``directly connected'' persons? Persons directly 
connected with the administration or enforcement of a program are the 
Federal, State, and local program operators responsible for program 
compliance, including their contractors, to the extent those persons 
have a need to know the information for program administration. Program 
operators include persons responsible for the ongoing operation of the 
program. Compliance officials include persons responsible for 
monitoring, reviewing, auditing, or investigating the program. 
Contractors include evaluators, auditors, and others with whom State 
agencies and program operators may contract to assist in the 
administration or enforcement of their program.
    (7) May social security numbers be disclosed? The State agency or 
sponsor may disclose social security numbers to any programs or persons 
authorized to receive all program eligibility information under 
paragraph (g)(4) of this section or when consent is obtained. However 
State agencies or sponsors that plan to disclose social security 
numbers must give notice of the planned use of the social security 
number. This notice must be in accordance with section 7(b) of the 
Privacy Act of 1974 (5 U.S.C. 552a note). The application must include 
substantially the following language for disclosures of social security 
numbers under paragraph (g)(4) of this section: ``The social security 
number may also be disclosed to programs under the National School 
Lunch Act and Child Nutrition Act, the Comptroller General of the 
United States, and law enforcement officials for the purpose of 
investigating violations of certain Federal, State, and local 
education, health and nutrition programs.'' This language is in 
addition to the notice required in paragraph (f) of this section. 
Determining agencies are responsible for drafting the appropriate 
notice for disclosures of social security numbers under the consent 
provisions of paragraph (g)(10) of this section.
    (8) When is parental consent required? State agencies and sponsors 
that plan to use or disclose information about children eligible for 
free milk in ways not specified in this section must obtain written 
consent from the child's parent or guardian prior to the use or 
disclosure.
    (9) Who may give consent for the disclosure of program eligibility 
information to other programs or persons? Only a parent or guardian who 
is a member of the child's household for purposes of the free meal 
application may give consent to the disclosure of program eligibility 
information. The consent must identify the information that will be 
shared and how the information will be used. Additionally, the consent 
statement must be signed and dated by the child's parent or guardian 
who is a member of the household for purposes of the free and reduced 
price meal application. There must be a statement informing parents and 
guardians that failing to sign the consent will not affect the child's 
eligibility for free meals and that the individuals or programs 
receiving the information will not share the information with any other 
entity or program. Parents/guardians must also be permitted to limit 
the consent to only these programs with which they wish to share 
information.
    (10) Are agreements required before disclosing program eligibility 
information? Agreements between the State agency or sponsor and the 
individual or program receiving the information are not required. 
However, agreements are recommended. Before disclosing any information, 
the State agency or sponsor should enter into a written agreement with 
the party requesting the information. An agreement is not necessary for 
disclosures to Federal, State or local agencies evaluating or reviewing 
program operations or for disclosures to the Comptroller General. The 
agreement should:
    (i) Identify the programs or persons receiving the information;
    (ii) Describe the information to be disclosed and how the 
information will be used;
    (iii) Describe how the information will be protected from 
unauthorized uses and disclosures and include the penalties for using 
the information for unauthorized purposes; and
    (iv) Be signed by both the determining agency and the receiving 
party.
    (11) What are the penalties for unauthorized disclosure or misuse 
of information? Any individual who publishes, divulges, discloses or 
makes known in any manner, or to any extent not authorized by statute 
or the regulations in this part, any information obtained under this 
paragraph (g) will be fined up to $1,000 or imprisoned for up to 1 
year, or both.
* * * * *

PART 226--CHILD AND ADULT CARE FOOD PROGRAM

    1. The authority citation for part 226 continues to read as 
follows:

    Authority: Secs. 9, 11, 14, 16 and 17, National School Lunch 
Act, as amended (42 U.S.C. 1758, 1759a, 1762a, 1765, and 1766).

    2. In Sec. 226.23,
    a. Paragraph (e)(1)(ii)(F) is revised; and
    b. A new paragraph (i) is added.
    The revision and addition read as follows:


Sec. 226.23  Free and reduced-price meals.

* * * * *
    (e)(1) * * *
    (ii) * * *
    (F) A statement that includes substantially the following 
information: ``Unless you include your child's case number for the Food 
Stamp Program, the Food Distribution Program on Indian Reservations (or 
other identifier for the Food Distribution Program on Indian 
Reservations) or the Temporary Assistance for Needy Families Program, 
you must include the social security number of the adult household 
member signing the application or indicate that the household member 
does not have a social security number. This is required by section 9 
of the National School Lunch Act. The social security number is not 
mandatory, but the application cannot be approved if a social security 
number is not given or an indication is not made that the signer does 
not have a social security number. The social security number will be 
used in the administration and enforcement of the program.'' State 
agencies and institutions must ensure that the notice complies with 
section 7(b) of the Privacy Act of 1974 (5 U.S.C. 552a note); and
* * * * *
    (i) May program eligibility information be used for non-program 
purposes or disclosed to other individuals or programs? Certain 
information about children eligible for free and reduced price meals 
may be disclosed to the individuals and programs described in this 
section. Additionally, program eligibility information may be disclosed 
to other people and programs if parental consent is given.
    (1) Who decides whether to disclose program eligibility 
information? The State agency or institution that makes the free and 
reduced price meal determination is responsible for deciding whether to 
disclose program eligibility information.
    (2) To whom may the State agency or institution disclose aggregate 
information? The State agency or institution may disclose aggregate 
information to any party. Parental consent is not necessary, since 
children are not identified. For example, the

[[Page 45737]]

State agency or institution may disclose aggregate information, that is 
the number of children eligible for free and reduced price meals, but 
not children's names.
    (3) To whom may the State agency or institution disclose 
participants' names and eligibility status? The State agency or 
institution may disclose, without parental consent, children's names 
and eligibility status (whether they are eligible for free or reduced 
price meals) to persons directly connected with the administration or 
enforcement of the following programs:
    (i) A Federal education program;
    (ii) A State health program (other than Medicaid) or State 
education program administered by the State or local education agency; 
or
    (iii) A Federal, State, or local means-tested nutrition program 
with eligibility standards comparable to the National School Lunch 
Program (i.e., food assistance programs for households with incomes at 
or below 185 percent of the Federal poverty level).
    (4) To whom may the State agency or institution disclose all 
eligibility information, without parental consent? In addition to 
children's names and eligibility status, the State agency or 
institution may disclose, without parental consent, all eligibility 
information obtained through the free and reduced price meal 
eligibility process (including all information on the application or 
obtained through direct certification or any verification of 
eligibility efforts) to the following:
    (i) Persons directly connected with the administration or 
enforcement of programs authorized under the National School Lunch Act 
(NSLA) or the Child Nutrition Act of 1966 (CNA). This means that all 
eligibility information obtained for the Child and Adult Care Food 
Program may be disclosed to persons directly connected with 
administering or enforcing regulations under the Special Milk Program 
(part 215 of this chapter), the National School Lunch or School 
Breakfast Programs (parts 210 and 220, respectively, of this chapter), 
Summer Food Service Program (part 225 of this chapter), and the Special 
Supplemental Nutrition Program for Women, Infants and Children (WIC) 
(part 246 of this chapter);
    (ii) The Comptroller General of the United States for purposes of 
audit and examination; and
    (iii) Federal, State, and local law enforcement officials for the 
purpose of investigating any alleged violation of the programs listed 
in paragraphs (i)(3) and (i)(4) of this section.
    (5) For what purposes may program eligibility information be used? 
State agencies and institutions may use program eligibility information 
for administering or enforcing the program. Additionally, any other 
Federal, State, or local agency charged with administering or enforcing 
the program may use the information for that purpose. Individuals and 
programs to which program eligibility information is disclosed under 
this section may only use the information in the administration or 
enforcement of the receiving program. No further disclosure of the 
information may be made.
    (6) Who are ``directly connected'' persons? Persons directly 
connected with the administration or enforcement of a program are the 
Federal, State, and local program operators responsible for program 
compliance, including their contractors, to the extent those persons 
have a need to know the information for program administration. Program 
operators include persons responsible for the ongoing operation of the 
program. Compliance officials include persons responsible for 
monitoring, reviewing, auditing, or investigating the program. 
Contractors include evaluators, auditors, and others with whom State 
agencies and program operators may contract to assist in the 
administration or enforcement of their program.
    (7) May social security numbers be disclosed? The State agency or 
institution may disclose social security numbers to any programs or 
persons authorized to receive all program eligibility information under 
paragraph (i)(4) of this section or when consent is obtained. However, 
State agencies or institutions that plan to disclose social security 
numbers must give notice of the planned use of the social security 
number. This notice must be in accordance with section 7(b) of the 
Privacy Act of 1974 (5 U.S.C. 552a note). The application must include 
substantially the following language for disclosures of social security 
numbers under paragraph (i)(4) of this section: ``The social security 
number may also be disclosed to programs under the National School 
Lunch Act and Child Nutrition Act, the Comptroller General of the 
United States, and law enforcement officials for the purpose of 
investigating violations of certain Federal, State, and local 
education, health and nutrition programs.'' This language is in 
addition to the notice required in paragraph (e) of this section. State 
agencies and child care institutions are responsible to drafting the 
appropriate notice for disclosures of social security numbers under the 
consent provisions of paragraph (i)(10) of this section.
    (8) When is parental consent required? State agencies and child 
care institutions that plan to use or disclose information about 
children or adults eligible for free and reduced price meals in ways 
not specified in this section must obtain written consent from the 
child's parent or guardian or the adult participant or guardian prior 
to the use or disclosure.
    (9) Who may give consent for the disclosure of program eligibility 
information to other programs or persons? Only a parent or guardian who 
is a member of the child's household for purposes of the free or 
reduced price meal application may give consent to the disclosure of 
program eligibility information. The consent must identify the 
information that will be shared and how the information will be used. 
Additionally, the consent statement must be signed and dated by the 
child's parent or guardian who is a member of the household for 
purposes of the free and reduced price meal application. There must be 
a statement informing parents and guardians that failing to sign the 
consent will not affect the child's eligibility for free and reduced 
price meals and that the individuals or programs receiving the 
information will not share the information with any other entity or 
program. Parents/guardians must also be permitted to limit the consent 
to only these programs with which they wish to share information. For 
an adult applicant or participant in the CACFP, the consent must be 
given and signed by the adult applicant or participant, unless a 
guardian has been appointed to act for the adult.
    (10) Are agreements required before disclosing program eligibility 
information? Agreements between the State agency or child care 
institution and the individual or program receiving the information are 
not required. However, agreements are recommended. Before disclosing 
any information, the State agency or child care institution should 
enter into a written agreement with the party requesting the 
information. An agreement is not necessary for disclosures to Federal, 
State or local agencies evaluating or reviewing program operations or 
for disclosures to the Comptroller General. The agreement should:
    (i) Identify the programs or persons receiving the information;
    (ii) Describe the information to be disclosed and how the 
information will be used;
    (iii) Describe how the information will be protected from 
unauthorized uses and disclosures and include the

[[Page 45738]]

penalties for using the information for unauthorized purposes; and
    (iv) Be signed by both the State agency or child care institution 
and the receiving party.
    (11) What are the penalties for unauthorized disclosure or misuse 
of information? Any individual who publishes, divulges, discloses or 
makes known in any manner, or to any extent not authorized by statute 
or the regulations in this part, any information obtained under this 
paragraph (i) will be fined up to $1,000 or imprisoned for up to 1 
year, or both.

PART 245--DETERMINING ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS 
AND FREE MILK IN SCHOOLS

    1. The authority citation for part 245 is revised to read as 
follows:

    Authority: 42 U.S.C. 1752, 1758, 1759a, 1772, 1773, and 1779.

    2. In Sec. 245.6, paragraph (a)(1) is revised and a new paragraph 
(f) is added.
    The revision and addition read as follows:


Sec. 245.6  Certification of children for free and reduced price meals 
and free milk.

    (a) * * *
    (1) ``Unless you include your child's case number for the Food 
Stamp Program, the Food Distribution Program on Indian Reservations (or 
other identifier for the Food Distribution Program on Indian 
Reservations) or the Temporary Assistance for Needy Families Program, 
you must include the social security number of the adult household 
member signing the application or indicate that the household member 
does not have a social security number. This is required by section 9 
of the National School Lunch Act. The social security number is not 
mandatory, but the application cannot be approved if a social security 
number is not given or an indication is not made that the signer does 
not have a social security number. The social security number will be 
used in the administration and enforcement of the program.'' State 
agencies and school food authorities must ensure that the notice 
complies with section 7(b) of the Privacy Act of 1974 (5 U.S.C. 552a 
note); and
* * * * *
    (f) May program eligibility information be used for non-program 
purposes or disclosed to other individuals or programs? Certain 
information about children eligible for free meals may be disclosed to 
the individuals and programs described in this section. Additionally, 
program eligibility information may be disclosed to other people and 
programs if parental consent is given.
    (1) Who decides whether to disclose program eligibility 
information? The agency that makes the free and reduced price meal or 
free milk eligibility determination (i.e., the determining agency) is 
the only agency that can decide to disclose program eligibility 
information. In most cases, this is the school food authority, but 
sometimes the State agency performs this function.
    (2) To whom may the determining agency disclose aggregate 
information? The State agency or school food authority may disclose 
aggregate information to any party. Parental consent is not necessary, 
since children are not identified. For example, the State agency or 
school food authority may disclose aggregate information, that is the 
number of children eligible for free and reduced price meals or free 
milk, but not children's names.
    (3) To whom may the determining agency disclose participants' names 
and eligibility status, without consent? The State agency or school 
food authority may disclose, without parental consent, children's names 
and eligibility status (whether they are eligible for free and reduced 
price meals or free milk) to persons directly connected with the 
administration or enforcement of the following programs:
    (i) A Federal education program;
    (ii) A State health program (other than Medicaid) or State 
education program administered by the State or local education agency; 
or
    (iii) A Federal, State, or local means-tested nutrition program 
with eligibility standards comparable to the National School Lunch 
Program (i.e., food assistance programs for households with incomes at 
or below 185 percent of the Federal poverty level).
    (4) To whom may the determining agency disclose all eligibility 
information, without consent? In addition to children's names and 
eligibility status, the State agency or child-care institution may 
disclose, without parental consent, all eligibility information 
obtained through the free and reduced price meal or free milk 
eligibility process (including all information on the application or 
obtained through direct certification or any verification of 
eligibility efforts) to the following:
    (i) Persons directly connected with the administration or 
enforcement of programs authorized under the National School Lunch Act 
or the Child Nutrition Act of 1966. This means that all eligibility 
information obtained for the Special Milk Program may be disclosed to 
persons directly connected with administering or enforcing regulations 
under the National School Lunch or School Breakfast Programs (parts 210 
and 220, respectively, of this chapter), Child and Adult Care Food 
Program (part 226 of this chapter), Summer Food Service Program (part 
225 of this chapter) and the Special Supplemental Nutrition Program for 
Women, Infants and Children (WIC) (part 246 of this chapter);
    (ii) The Comptroller General of the United States for purposes of 
audit and examination; and
    (iii) Federal, State, and local law enforcement officials for the 
purpose of investigating any alleged violation of the programs listed 
in paragraphs (f)(3) and (f)(4) of this section.
    (5) Who are ``directly connected'' persons? Persons directly 
connected with the administration or enforcement of a program are the 
Federal, State, and local program operators responsible for program 
compliance, including their contractors, to the extent those persons 
have a need to know the information for program administration or 
enforcement. Program operators include persons responsible for the 
ongoing operation of the program. Compliance officials include persons 
responsible for monitoring, reviewing, auditing, or investigating the 
program. Contractors include evaluators, auditors, and others with whom 
State agencies and program operators may contract to assist in the 
administration or enforcement of their program.
    (6) For what purposes may program eligibility information be used? 
State agencies and school food authorities may use program eligibility 
information for administering or enforcing the program. Additionally, 
any other Federal, State, or local agency charged with administering or 
enforcing the program may use the information for that purpose. 
Individuals and programs to which program eligibility information is 
disclosed under this section may only use the information in the 
administration or enforcement of the receiving program. No further 
disclosure of the information may be made.
    (7) May social security numbers be disclosed? The determining 
agency may disclose social security numbers to any programs or persons 
authorized to receive all program eligibility information under 
paragraph (f)(4) of this section or when consent is obtained. However 
State agencies and school food authorities that plan to disclose social 
security numbers under this paragraph (f)(7) must give notice of the 
planned use of the social security

[[Page 45739]]

number. This notice must be in accordance with section 7(b) of the 
Privacy Act of 1974 (5 U.S.C. 552a note). The application must include 
substantially the following language for disclosures of social security 
numbers under paragraph (f)(4)of this section: ``The social security 
number may also be disclosed to programs under the National School 
Lunch Act and Child Nutrition Act, the Comptroller General of the 
United States, and law enforcement officials for the purpose of 
investigating violations of certain Federal, State, and local 
education, health and nutrition programs.'' This language is in 
addition to the notice required in paragraph (a) of this section. State 
agencies and school food authorities are responsible for drafting the 
appropriate notice for disclosures of social security numbers under the 
consent provisions of paragraph (f)(9) of this section.
    (8) When is parental consent required? State agencies and school 
food authorities that plan to use or disclose information about 
children eligible for free and reduced price meals or free milk in ways 
not specified in this section must obtain written consent from the 
child's parent or guardian prior to the use or disclosure.
    (9) Who may give consent for the disclosure of program eligibility 
information to other programs or persons? Only a parent or guardian who 
is a member of the child's household for purposes of the free and 
reduced price meal or free milk application may give consent to the 
disclosure of program eligibility information. The consent must 
identify the information that will be shared and how the information 
will be used. Additionally, the consent statement must be signed and 
dated by the child's parent or guardian who is a member of the 
household for purposes of the free and reduced price meal or free milk 
application. There must be a statement informing parents and guardians 
that failing to sign the consent will not affect the child's 
eligibility for free and reduced price meals or free milk and that the 
individuals or programs receiving the information will not share the 
information with any other entity or program. Parents/guardians must 
also be permitted to limit the consent to only these programs with 
which they wish to share information.
    (10) Are agreements required before disclosing program eligibility 
information? Agreements between the State agency or school food 
authority (determining agency) and the individual or program receiving 
the information are not required. However, agreements are recommended. 
Before disclosing any information, the determining agency should enter 
into a written agreement with the party requesting the information. An 
agreement is not necessary for disclosures to Federal, State or local 
agencies evaluating or reviewing program operations or for disclosures 
to the Comptroller General. The agreement should:
    (i) Identify the programs or persons receiving the information;
    (ii) Describe the information to be disclosed and how the 
information will be used;
    (iii) Describe how the information will be protected from 
unauthorized uses and disclosures and include the penalties for using 
the information for unauthorized purposes; and
    (iv) Be signed by both the determining agency and the receiving 
party.
    (11) What are the penalties for unauthorized disclosure or misuse 
of information? Any individual who publishes, divulges, discloses or 
makes known in any manner, or to any extent not authorized by statute 
or the regulations in this part, any information obtained under this 
paragraph (f) will be fined up to $1,000 or imprisoned for up to 1 
year, or both.

    Dated: July 11, 2000.
Shirley R. Watkins,
Under Secretary, Food, Nutrition and Consumer Services.
[FR Doc. 00-18631 Filed 7-24-00; 8:45 am]
BILLING CODE 3410-30-P