[Federal Register Volume 72, Number 218 (Tuesday, November 13, 2007)]
[Rules and Regulations]
[Pages 63785-63796]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-22053]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 210, 215, 220, 235 and 245

[FNS-2007-0023]
RIN 0584-AD54


Applying for Free and Reduced Price Meals in the National School 
Lunch Program and School Breakfast Program and for Benefits in the 
Special Milk Program and Technical Amendments

AGENCY: Food and Nutrition Service, USDA.

ACTION: Interim Rule.

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SUMMARY: This interim rule amends the regulations on eligibility 
determinations for free and reduced price school meals to implement 
nondiscretionary provisions of the Child Nutrition and WIC 
Reauthorization Act of 2004. In this interim rule, the statutory 
definition of ``local educational agency'' is added. In addition, this 
interim rule specifies that a family only has to submit one application 
for all children in the household as long as they attend schools in the 
same local educational agency and requires enhancement of the 
descriptive materials distributed to families. This rule provides for 
electronically-submitted applications, addresses electronic signatures 
and establishes use and disclosure standards for such applications. 
This rule establishes that eligibility for free or reduced price school 
meals remains valid for one year unless the household chooses to 
decline a level of benefits. These changes are intended to provide 
children with increased access to the school nutrition programs by 
simplifying the certification process, streamlining program operations 
and improving program management.

DATES: Effective date: This rule is effective December 13, 2007.
    Comment date: To be assured of consideration, mailed comments must 
be postmarked on or before May 12, 2008; e-mailed or faxed comments 
must be submitted by 11:59 p.m. May 12, 2008; and hand-delivered 
comments must be received by 5 p.m. May 12, 2008.

ADDRESSES: The Food and Nutrition Service invites interested persons to 
submit comments on this interim rule. Comments may be submitted by any 
of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Address comments to Mr. Robert M. Eadie, Chief, 
Policy and Program Planning Branch, Child Nutrition Division, Food and 
Nutrition Service, Department of Agriculture, 3101 Park Center Drive, 
Room 640, Alexandria, Virginia 22302-1594.
     Fax: Submit comments by facsimile transmission to: (703) 
305-2879, attention Mr. Robert M. Eadie.
     Hand Delivery or Courier: Deliver comments to 3101 Park 
Center Drive, Room 640, Alexandria, Virginia 22302-1594, during normal 
business hours of 8:30 a.m.-5 p.m.
    All comments submitted in response to this interim rule will be 
included in the record and will be made available to the public. Please 
be advised that the substance of the comments and the identity of the 
individuals or entities submitting the comments will be subject to 
public disclosure. All submissions will be available for public 
inspection at the address noted above Monday through Friday, 8:30 a.m.-
5 p.m. The Department may also make the comments available on the 
Federal eRulemaking portal.

FOR FURTHER INFORMATION CONTACT: Mr. Robert Eadie, Child Nutrition 
Division, Food and Nutrition Service at 703-305-2590.

SUPPLEMENTARY INFORMATION: 

I. Background

    Public Law 108-265, the Child Nutrition and WIC Reauthorization Act 
of 2004, enacted June 30, 2004, amended the Richard B. Russell National 
School Lunch Act (NSLA) (42 U.S.C. 1751 et seq.) and the Child 
Nutrition Act of 1966 (CNA) (42 U.S.C. 1771 et seq.) concerning 
applications for free and reduced price meals under the National School 
Lunch Program and the School Breakfast Program, and for free milk under 
the Special Milk Program for Children. Please note that while the 
application and certification procedures apply to the Special Milk 
Program, the preamble will only discuss free and reduced price meal 
benefits, as only a very small number of children participate in the 
Special Milk Program. However, this interim rule makes appropriate 
changes to the Special Milk Program regulations. All references to 
regulatory citations in this preamble are to Title 7, United States 
Code unless otherwise indicated.
    In response to the statutorily imposed effective dates established 
by sections 501 and 502 of Public Law 108-265, the Department of 
Agriculture (USDA or the Department) issued memoranda to implement some 
of the provisions regulatorily codified in this interim rule.

[[Page 63786]]

These memoranda include the July 7, 2004 Duration of Households' Free 
and Reduced Price Meal Eligibility--Reauthorization 2004 Implementation 
Memo--SP 3; the March 7, 2005 Statutory Changes in the Free and Reduced 
Price Eligibility Determination Process and Revised Prototype 
Application--Implementation Memo--SP 12; the August 30, 2005 Initial 
Carry-over of Previous Year's Eligibility--Reauthorization 
Implementation Memo--SP 17; the September 26, 2005 memo General Follow-
up of Provisions--Reauthorization 2004 Implementation Memo--SP 21; the 
November 22, 2005 memo SP 03-2006, Translation of Free and Reduced 
Price Application Prototypes for People with Limited English 
Proficiency; the December 23, 2005 memo, SP 08-2006 Reauthorization 
2004: Communication with Households; and the February 9, 2006 memo 
Commercial Software Used in School Nutrition Programs; all located at 
http://www.fns.usda.gov/cnd/ click on Policy under ``See Also''.
    This interim rule includes modifications made by Public Law 108-265 
that necessitated changes to the existing regulatory procedures 
relating to application and certification for free and reduced price 
meal benefits. This rule also adds definitions and makes other 
technical changes to 7 CFR Part 210 (National School Lunch Program), 7 
CFR Part 215 (Special Milk Program for Children), 7 CFR Part 220 
(School Breakfast Program), 7 CFR Part 235 (State Administrative 
Expense Funds) and 7 CFR Part 245 (Determining Eligibility for Free and 
Reduced Meals and Free Milk in Schools) to increase consistency among 
these regulatory divisions in relation to application and certification 
requirements.
    Readers should note that while this interim regulation makes a 
number of changes to 7 CFR Part 245 (specifically Sec.  245.6), 
separate rules on verification and direct certification will 
additionally revise this section, completing the changes mandated by 
Public Law 108-265. USDA's program guidance on eligibility 
determinations will be updated to reflect the regulatory changes 
resulting from Public Law 108-265. Also of note--updated prototype 
multi-child (household) applications in English, Spanish and 24 
additional languages are now available at http://www.fns.usda.gov/cnd/FRP/frp.process.htm.
    In addition, this interim rule makes technical nonsubstantive 
changes to 7 CFR Sec. Sec.  215.2, 220.2, 235.2, and 245.2, the 
definitions sections for these parts. The rule removes primary 
designations and alphabetizes the definitions. In addition, new 
definitions are added for ``Food Stamps'' and ``Nonprofit.''

II. Specific Provisions

A. Definition of Local Educational Agency

What was in place prior to Public Law 108-265?
    Prior to Public Law 108-265, the NSLA used the term ``school food 
authority'' to describe ``the governing body which is responsible for 
the administration of one or more schools and has the legal authority 
to operate the Program therein or be otherwise approved by the Food and 
Nutrition Service to operate the Program.'' The term is used 
consistently throughout regulations and guidance that govern all 
aspects of the school meals programs. There was no regulatory or 
statutory definition of local educational agency prior to the 2004 
statutory amendment.
What changes were made by Public Law 108-265?
    Section 108 of Public Law 108-265 replaced the terms ``school food 
authorities'' and ``local school authorities'' with the term ``local 
educational agencies'' in sections 9(b)(11) and 9(d)(2) of the NSLA, 42 
U.S.C. 1758(b)(11) and (d)(2), and in section 4(b)(1)(E) of the CNA, 42 
U.S.C. 1773 (b)(1)(E). The NSLA now specifies, in section 12(d)(4), (42 
U.S.C. 1761 (d)(4)), that local educational agency has the meaning as 
provided for in section 9101 of the Elementary and Secondary Education 
Act of 1965 (ESEA) (20 U.S.C. 7801) and, for private nonprofit schools, 
entities as determined by the Secretary. In addition to section 108, 
other sections of Public Law 108-265 use the term ``local educational 
agencies'' instead of school food authorities or local school 
authorities.
    Under the ESEA, ``local educational agency'' means ``a public board 
of education or other public authority legally constituted within a 
State for either administrative control or direction of, or to perform 
a service function for, public elementary schools or secondary schools 
in a city, county, township, school district, or other political 
subdivision of a State, or of or for a combination of school districts 
or counties that is recognized in a State as an administrative agency 
for its public elementary schools or secondary schools.'' The 
definition in the ESEA also includes any other public institution or 
agency having administrative control and direction of a public 
elementary school or secondary school, eligible Bureau of Indian 
Affairs schools, educational service agencies and consortia of those 
agencies, and the State educational agency in a State in which the 
State educational agency is the sole educational agency for all public 
schools. The ESEA, however, does not address non-profit private schools 
in its definition. Such schools do participate in the school meals 
programs. For the purposes of the school meals programs, the Department 
currently defines schools to include nonprofit private as well as 
public entities for the purposes of the school meals programs. It also 
defines nonprofit for the purposes of the school meals and school milk 
programs.
What are the changes that this interim rule makes?
    The term ``local educational agency'' will be used when discussing 
certification and verification requirements, but the term ``school food 
authority'' will continue to be used when addressing other aspects of 
operating the school meals programs, such as when discussing agreements 
or nutritional requirements.
    Because the ESEA does not define private nonprofit schools, section 
108 of Public Law 108-265 states that the term local educational agency 
includes, for the purposes of a private nonprofit school, an 
appropriate entity determined by the Secretary. Current school meals 
programs regulations, at Sec. Sec.  210.2 and 220.2, recognize private 
nonprofit schools and nonprofit private residential child care 
institutions in the definition of ``School.'' As a result, for schools 
meals programs purposes, local educational agencies may be comprised of 
private, nonprofit schools/institutions. The terms private nonprofit 
school and private nonprofit residential child care institution in the 
definition of ``Local educational agency'' have the same meaning as 
used in the paragraphs (b) and (c) of the definition of ``School'' in 
Sec.  210.2 and in corresponding regulatory provisions in Parts 215, 
220, 235 and 245. A definition of ``Local educational agency'' is added 
to Sec. Sec.  210.2, 215.2, 220.2, 235.2 and 245.2.

B. Applications and Descriptive Materials

1. Household Applications
What was in place prior to Public Law 108-265?
    Prior to Public Law 108-265, a State or school food authority could 
require an application for each potentially eligible child in the 
household (single child application) or one application for all 
potentially eligible children in the household (household application). 
The

[[Page 63787]]

Department provided prototypes for each of these types of applications.
    Under existing regulations, single child applications are used for 
foster and institutionalized children. This is in accordance with Sec.  
245.3(c) of existing regulations which states that any child who is not 
a member of a family, as defined in Sec.  245.2, is considered a family 
of one. FNS Instruction 765-5, Revision 1, entitled ``Free and Reduced 
Price Eligibility Determinations for Foster and Institutionalized 
Children'' (March 19, 1986) clarifies that foster children and 
institutionalized children are considered households of one, thus 
triggering use of the single child application.
What changes were made by Public Law 108-265?
    Section 105 of Public Law 108-265 revised section 9(b)(3) of the 
NSLA to require local educational agencies to only use household 
applications. The provision became effective on July 1, 2005, pursuant 
to Section 502 of Public Law 108-265. Therefore, effective July 1, 
2005, only household applications may be used when all school age 
children in a household attend schools in the same local educational 
agency. This change was made to decrease paperwork for households who 
wish to apply and schools by eliminating multiple application 
completion and submission for households with more than one child.
What are the changes that this interim rule makes?
    This interim rule adds a definition of ``Household application'' in 
Sec.  245.2, and stipulates in Sec.  245.6(a) that the household 
application must identify all children in the household for whom free 
or reduced price meal benefits are being requested. A household has the 
same definition as ``Family'' in Sec.  245.2; that is, a group of 
related or non-related individuals, who are not residents of an 
institution or boarding house, but who are living as one economic unit. 
This rule also prohibits State agencies and local educational agencies 
from requesting separate applications for each child attending schools 
in the same local educational agency. A household only has to submit 
one application for all children in their household (even if the 
children attend different schools) as long as those schools are in the 
same local educational agency. To clarify, however, since Sec.  
245.3(c) of the regulations requires that each foster or 
institutionalized child be considered a family of one, a separate 
application will continue to be needed for each such child in the 
household's care.
    This change does not mandate central processing of applications. 
However, the Department encourages all local educational agencies to 
use centralized approval of applications whenever possible. Local 
educational agencies need to ensure that children who transfer to 
schools within the same local educational agency are not required to 
reapply for free or reduced price meal benefits as stated in existing 
regulations at Sec.  245.3(c). Copies of the approved application or 
the direct certification notice may be provided to the new school. 
Since applications must still be tied to individual schools for reviews 
conducted by State agencies, a local educational agency may establish a 
separate record for each child for tracking purposes. These changes may 
be found at Sec.  245.6(a)(1).
2. Notification of Possible Eligibility
What was in place prior to Public Law 108-265?
    Prior to Public Law 108-265, section 9(b) of the NSLA required that 
applications for free and reduced price school meals and descriptive 
materials about school meal programs must be distributed to parents and 
guardians. Existing regulations require that the school meal 
application and media materials include notification that State 
Temporary Assistance for Needy Families (TANF), Food Stamp Program, and 
Food Distribution Program on Indian Reservations (FDPIR) participants 
can submit an application with a case number rather than income 
information.
What changes were made by Public Law 108-265?
    Effective July 1, 2005, section 104(a) of Public Law 108-265 
amended section 9(b)(2) of the NSLA to require that school meal 
applications and descriptive materials distributed to parents and 
guardians contain a notification that, in addition to the notification 
already provided pursuant to school meals programs provisions, 
notification that participants in the Special Supplemental Nutrition 
Program for Women, Infants, and Children (WIC) may be eligible for free 
or reduced price school meals. It is important to note that this does 
not mean that children from families that participate in WIC are 
automatically (categorically) eligible; rather it means that such 
participants are likely to be eligible and should consider applying for 
free or reduced priced meals.
What are the changes that this interim rule makes?
    This interim rule adds the requirement that the school meal 
application's descriptive materials include notification that WIC 
participants may be eligible for free or reduced price meals. The 
updated free and reduced price meal benefits prototype application 
includes this notification. Please refer to our Web site (http://www.fns.usda.gov/cnd/FRP/frp.process.htm). This change can be found in 
Sec.  245.5(a)(1)(ix) of this interim regulation.
3. Communications
What was in place prior to Public Law 108-265?
    Under Federal regulations implementing Title VI of the Civil Rights 
Act of 1964, recipients of Federal financial assistance, such as school 
food authorities, have a responsibility to ensure meaningful access to 
their programs by persons with limited English proficiency. Prior to 
Public Law 108-265, the NSLA did not specifically address providing 
materials in other than English for the school meal programs.
    Current regulations at Sec.  245.6(a) mandate that the school meals 
programs application be clear and simple in design and that the 
information requested be limited to that required to demonstrate that 
the family does, or does not, meet the eligibility criteria for free or 
reduced price meals. In regard to foreign language translations, the 
Department encourages schools to provide households with assistance in 
completing applications through the use of personnel proficient in 
foreign languages.
    To assist schools with providing simpler applications and 
applications in other languages, the Department worked with a 
contractor in 2002 that specialized in form design and language 
simplification to provide an application with a reduced reading level 
and in a format that is easier to accurately complete. In 2006, the 
application materials for the free and reduced price prototype 
application and descriptive materials were translated into Spanish and 
24 additional languages. If foreign language materials for a particular 
language are not available, local educational agencies are always 
encouraged to provide assistance with completion of English language 
school meals programs applications through the use of personnel 
proficient in the necessary foreign language(s) as well as English.

[[Page 63788]]

What changes were made by Public Law 108-265?
    In addition to the responsibilities established under Title VI of 
the Civil Rights Act of 1964, section 104(b) of Public Law 108-265, 
effective July 1, 2005, amended section 9(b) of the NSLA to require 
that any communication with households regarding application, 
verification, or documentation of eligibility must be in an 
understandable and uniform format and, to the maximum extent 
practicable, in a language that parents and legal guardians can 
understand.
What are the changes that this interim rule makes?
    This interim rule amends the existing regulations that to state 
that the school meals programs application must be clear and simple in 
design. This rule adds language reflecting the statutory requirement 
that any communication with households regarding certification be 
understandable, and to the maximum extent practicable, provided in a 
language that the parents and guardians can understand is being added 
at Sec.  245.6(a)(2). A similar statement concerning verification 
materials is being added at Sec.  245.6a (a)(2).
4. Electronic Applications
What was in place prior to Public Law 108-265?
    There were no provisions in the NSLA prior to Public Law 108-265 
that addressed electronic applications and electronic signatures. 
Current regulations do not address use of these methods, but do permit 
the use of electronic applications and electronic signatures in keeping 
with pertinent administrative guidance. Currently the Department allows 
electronic signatures and recommends that State agencies follow the 
same guidelines provided to Federal agencies for electronic 
transactions by the Department of Justice. The May 1, 2007, memorandum 
``Update on Electronic Transactions in the Child Nutrition Programs'' 
may be found at http://www.fns.usda.gov/cnd/Governance/Policy-Memos/2007/SP_10-2007.
What changes were made by Public Law 108-265?
    Effective July 1, 2005, section 104(b) of Public Law 108-265 
amended section 9(b)(3) of the NSLA to address electronic signatures 
and applications. The law states that a household application may be 
executed using an electronic signature if the application is submitted 
electronically and if the electronic application system meets 
confidentiality standards established by the Secretary. An electronic 
signature may be accepted pursuant to section 105(a) of Public Law 108-
265.
What are the changes that this interim rule makes?
    Many State and local educational agencies already have systems 
available to households that allow them to submit an application 
electronically and the Department encourages State and local agencies 
to facilitate the household's ability to apply electronically. This 
interim rule incorporates the provisions on electronic submissions in 
the NSLA. In addition, such systems must comply with technical 
assistance and guidance provided by the Department. On May 1, 2007, we 
provided such guidance based on guidelines for electronic transactions 
prescribed to Federal agencies by the Department of Justice.

C. Duration of Eligibility for Free or Reduced Price Meals

What was in place prior to Public Law 108-265?
    Prior to Public Law 108-265, regulations at Sec.  245.5(a)(1)(vi) 
and Sec.  245.6(c)(1) directed that, households be informed that they 
must report income increases of more than $50 monthly, decreases in 
household size, or, for children certified based on an application 
containing a case number, termination of receipt of TANF, food stamp, 
or FDPIR benefits. If the change reduced children's benefits, the local 
school food authority was to adjust their eligibility status as 
appropriate, including providing advance notification of an adverse 
change in accordance with Sec.  245.6a(e). The existing regulations at 
Sec.  245.6(c) permit the use of applications and documentation of 
direct certification from the preceding year to determine eligibility 
during the 30 operating days following the first operating day at the 
beginning of the school year, or during a timeframe established by the 
State agency, that cannot exceed the 30 operating day limit.
What changes were made by Public Law 108-265?
    Effective July 1, 2004, section 106 of Public Law 108-265 amended 
section 9(b)(9) of the NSLA by establishing that eligibility, beginning 
on the date of approval, is valid for the full school year until a date 
in the subsequent school year determined by USDA.
What are the changes that this interim rule makes?
    This rule provides for year long eligibility as now required by the 
NSLA. Therefore, once a child is determined eligible for free and 
reduced price meals, eligibility remains in effect from the date of 
eligibility determination for the current school year and for up to 30 
operating days (as discussed in the next paragraph) into the next 
school year. A household is no longer required to report changes in 
income, household size or categorical eligibility status.
    Section 106 of Public Law 108-265 also required that a child's 
eligibility be valid into the subsequent school year. The Department 
used the long-standing permissive carry-over authority of current Sec.  
245.6(c) as the basis for the new requirement. Section 245.6(c)(2) of 
this rule mandates that local educational agencies carry-over a child's 
eligibility from the previous school year. The local educational agency 
must use the previous year's eligibility status for a period not to 
exceed 30 operating days or until the new eligibility determination is 
made, whichever comes first.
    Year-long eligibility does not apply when the initial eligibility 
determination was incorrect, when verification activities for the 
household do not support the level of benefits for which the child was 
approved or if an administrative review (as provided for in Sec.  
210.18) indicates that the initial eligibility determination was in 
error. In those instances, local educational agency officials must make 
appropriate changes in eligibility in accordance with regulatory 
requirements. These provisions may be found at new Sec.  245.6(c)(3)(i) 
and (c)(3)(ii).
    Additionally, year-long eligibility does not apply when a household 
is given temporary approval. We continue to encourage determining 
officials to approve households on a temporary basis when their need 
for assistance appears to be short-term, such as when the household 
experiences a temporary reduction in income. A suggested time period 
for temporary approvals is 45 days unless otherwise stipulated by the 
State agency. At the end of the temporary approval, determining 
officials must re-evaluate the household's situation. The provision on 
temporary approval may be found at new Sec.  245.6(c)(3)(iii). 
Additional information on the use of temporary approvals may be found 
in program guidance issued by the Department.
    With the exception of the situations described above, if a 
household's income exceeds the eligibility limits at any point during 
the school year, their initial eligibility determination remains valid 
unless a new application is submitted. Since the household is no longer 
required to report changes in

[[Page 63789]]

income or household size or loss of food stamp or TANF benefits, this 
requirement is being deleted by removing paragraph (a)(1)(vi) from 
Sec.  245.5 and by removing it as part of the revisions to Sec.  
245.6(c)(1). However, households may voluntarily report changes, may 
apply for benefits any time during the school year. The household may 
also decline benefits when children are directly certified. This 
provision may be found at new Sec.  245.6(c)(6)(iii).
    As State child nutrition agencies and local educational agencies 
implement full-year eligibility, they have the opportunity to minimize 
disruptions when a child moves mid-year from one school district to 
another. They can do so by establishing an optional transfer of 
information system under which a child's school meal certification 
status is transferred from one school or local educational agency to 
another when the child moves. For example, States that maintain a 
database for all students could establish a data field to indicate the 
child's certification status--accessible only in accordance with the 
use or disclosure of information provisions set forth in section 9 of 
the NSLA--that could be checked by a school whenever a new student is 
enrolled. A local educational agency is not required to send this 
information, or accept this information from another local educational 
agency. However, this rule, at Sec.  245.6(a)(4), includes a provision 
that allows any local educational agency to accept the eligibility 
determination from the student's old school district without incurring 
liability for the accuracy of the initial determination.

D. Technical amendments

1. Numbering of Definitions
    Existing Sec. Sec.  215.2, 220.2, 235.2, and 245.2 include 
``primary designations'' (i.e. the letters and numbers that precede the 
words being defined) while Sec.  210.2 simply lists definitions in 
alphabetical order. This interim rule removes primary designations in 
the listed sections, makes corresponding reference changes, and places 
the definitions in alphabetical order. This is being done to create 
uniformity among the regulations for the school nutrition programs and 
is technical in nature.
2. Adding Definition of Food Stamp Program
    For consistency among the school nutrition programs, a definition 
of ``Food Stamp Program'' is being added to Sec.  245.2. The Food Stamp 
Program is also administered by USDA and the regulations governing this 
program may be found at 7 CFR Parts 271 through 283 of this Chapter.
3. Updating Definitions
    We are updating the definition of ``Nonprofit'' in our regulations 
to correspond to the definition in section 12(d)(5) of the NSLA and 
section 15(1) of the CNA which applies nonprofit status to schools and 
institutions which are exempt from tax under section 501(c)(3) of 
Internal Revenue Act of 1986. To accomplish this change, the definition 
of ``Nonprofit'' in Sec. Sec.  210.2, 215.2 and 220.2 is amended. Also 
for consistency the definition of ``Nonprofit'' is added to Sec. Sec.  
235.2 and 245.2. The definition of ``School'' in Sec.  215.2 is amended 
to remove an obsolete reference and the definition of ``School'' in 
Sec.  235.2 is amended to remove an erroneous citation.

III. Procedural Matters

Executive Order 12866

    This interim rule has been determined to be not significant for 
purposes of Executive Order 12866 and was not reviewed by the Office of 
Management and Budget in conformance with Executive Order 12866.

Regulatory Flexibility Act

    This interim rule has been reviewed with regard to the requirements 
of the Regulatory Flexibility Act (5 U.S.C. 601-612). Roberto Salazar, 
Administrator of the Food and Nutrition Service, has certified that 
this rule will not have a significant economic impact on a substantial 
number of small entities. Households applying for free or reduced price 
school meals for their children will be affected as they can no longer 
be required by the school district to complete and submit an 
application for each child. Local educational agencies will also be 
affected because there will be fewer applications to process and there 
will be potential for more economically beneficial centralized systems. 
This rule will reduce paperwork and reduce the workload for school 
officials.

Unfunded Mandate Reform Act

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements 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 Nutrition Service must generally prepare a written statement, 
including a cost-benefit analysis, for proposed and final rules with 
``Federal mandates'' that may result in expenditures to State, local or 
tribal governments, in the aggregate, or to the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires the Department to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, more cost-effective or least burdensome 
alternative that achieves the objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local and tribal 
governments or the private sector of $100 million or more in any one 
year. Thus, this interim rule is not subject to the requirements of 
sections 202 and 205 of the UMRA.

Executive Order 12372

    The National School Lunch Program, Special Milk Program, School 
Breakfast Program, and State Administrative Expense Funds are listed in 
the Catalog of Federal Domestic Assistance under Nos. 10.555, 10.556, 
10.553 and 10.560, respectively. For the reasons set forth in the final 
rule in 7 CFR Part 3015, Subpart V, and final rule related notice at 48 
FR 29114, June 24, 1983, these programs are included in the scope of 
Executive Order 12372, which requires intergovernmental consultation 
with State and local officials.

Executive Order 13132--Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's considerations in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132. The 
Food and Nutrition Service has considered the impact of this rule on 
State and local governments and has determined that this rule does not 
have Federalism implications. This rule does not impose or direct 
compliance costs on State and local governments. Therefore, under 
section 6(b) of the Executive Order, a federalism summary impact 
statement is not required.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is intended to have preemptive effect with 
respect to any State or local laws, regulations or policies which 
conflict with its

[[Page 63790]]

provisions or which would otherwise impede its full implementation.
    This rule is not intended to have retroactive effect unless so 
specified in the DATES section of this preamble. Prior to any judicial 
challenge to the provisions of this rule or the application of its 
provisions, all applicable administrative procedures must be exhausted.

Civil Rights Impact Analysis

    Under Department Regulation 4300-4, Civil Rights Impact Analysis, 
the Food and Nutrition Service, USDA, has reviewed this interim rule to 
identify and address any major civil rights impacts the interim rule 
might have on minorities, women, and persons with disabilities. After a 
careful review of the rule's intent and provisions, the Food and 
Nutrition Service, USDA, has determined that this rule would not in any 
way limit or reduce participants' ability to participate in the Child 
Nutrition Programs on the basis of an individual's or group's race, 
color, national origin, sex, age or disability (the Child Nutrition 
Programs' nondiscrimination policy can be found at Sec.  210.23(b)). 
The Food and Nutrition Service found no factors that would negatively 
and disproportionately affect any group of individuals.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
1320) requires that the Office of Management and Budget (OMB) approve 
all collections of information by a Federal agency before they can be 
implemented. Respondents are not required to respond to any collection 
of information unless it displays a current valid OMB control number. 
This rule does not contain any new information collection requirements 
subject to approval by OMB under the Paperwork Reduction Act of 1995. 
Information collections associated with this rule have been approved 
under following OMB control numbers 0584-0005, 0584-0006, 0584-0012, 
0584-0026 and 0584-0067.

E-Government Act Compliance

    The Food and Nutrition Service is committed to complying with the 
E-Government Act to promote the use of the Internet and other 
information technologies to provide increased opportunities for citizen 
access to Government information and services and for other purposes.

Public Participation

    This action is being finalized without prior notice or public 
comment under authority of 5 U.S.C. 553(b)(3)(A) and (B). This rule is 
being implemented through amendments to current program regulations 
because of nondiscretionary provisions mandated by the Child Nutrition 
and WIC Reauthorization Act of 2004 (Public Law 108-265) and the 
provisions included in this interim rule are consistent with long-
standing policies and procedures in the Child Nutrition Programs. This 
rule implements new requirements in a manner that builds on existing 
requirements and policies. Further, section 501(b) of Public Law 108-
265 permitted the Secretary to issue an interim rule to implement the 
provisions in Sections 105 and 106 of Public Law 108-265 which are 
included herein. These provisions have been substantially implemented 
through the Department's issuance of guidance, which was also permitted 
by section 501(a) of Public Law 108-265. Therefore, State agencies and 
local educational agencies began implementing the requirements and 
procedures set forth in this rule in School Year 2004-2005 and have 
been operating under them since that time. The Department has also 
modified and clarified some of these procedures in response to 
recommendations from State and local program officials and this interim 
regulation reflects those modifications and clarifications.
    In addition, promulgating these provisions in an interim rule 
allows for prompter codification in the Code of the Federal Register of 
procedures that are already in place. Codification reinforces the 
provisions significance with State agencies and local educational 
agencies. Publication of an interim rule provides the Department with 
the ability to collect comment on the actual implementation experience 
at all levels. Needed policy changes identified by comments can then be 
implemented through the publication of a final rule. Thus, the 
Department has determined in accordance with 5 U.S.C. 553(b), that 
Notice of Proposed Rulemaking and Opportunity for Public Comments is 
unnecessary and contrary to the public interest and, in accordance with 
5 U.S.C. 553(d), finds that good cause exists for making this action 
effective without prior public comment.

List of Subjects

7 CFR Part 210

    Children, Commodity School Program, Food assistance programs, 
Grants programs--social programs, National School Lunch Program, 
Nutrition, Reporting and recordkeeping requirements, Surplus 
agricultural commodities.

7 CFR Part 215

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

7 CFR Part 220

    Children, Food assistance programs, Grant programs--social 
programs, Nutrition, Reporting and recordkeeping requirements, School 
Breakfast Program.

7 CFR Part 235

    Administrative practice and procedure, Child and Adult Care Food 
Program, Food assistance programs, Grant administration, 
Intergovernmental relations, National School Lunch Program, Reporting 
and recordkeeping requirements, School Breakfast Program, Special Milk 
Program.

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.


0
Accordingly, 7 CFR parts 210, 215, 220, 235 and 245 are amended as 
follows:

PART 210--NATIONAL SCHOOL LUNCH PROGRAM

0
1. The authority citation for part 210 continues to read as follows:

    Authority: 42 U.S.C. 1751-1760, 1779.


0
2. In Sec.  210.2:
0
a. Amend paragraph (b) in the definition of ``Child'' by removing the 
reference ``paragraphs (c)'' and adding in its place the reference 
``paragraph (c)'';
0
b. Add a definition of ``Local educational agency'' in alphabetical 
order; and
0
c. Revise the definition of ``Nonprofit''.
    The addition and revision read as follows:


Sec.  210.2  Definitions.

* * * * *
    Local educational agency means a public board of education or other 
public or private nonprofit authority legally constituted within a 
State for either administrative control or direction of, or to perform 
a service function for, public or private nonprofit elementary schools 
or secondary schools in a city, county, township, school district, or 
other political subdivision of a State, or for a combination of school 
districts or

[[Page 63791]]

counties that is recognized in a State as an administrative agency for 
its public or private nonprofit elementary schools or secondary 
schools. The term also includes any other public or private nonprofit 
institution or agency having administrative control and direction of a 
public or private nonprofit elementary school or secondary school, 
including residential child care institutions, Bureau of Indian Affairs 
schools, and educational service agencies and consortia of those 
agencies, as well as the State educational agency in a State or 
territory in which the State educational agency is the sole educational 
agency for all public or private nonprofit schools.
* * * * *
    Nonprofit means, when applied to schools or institutions eligible 
for the Program, exempt from income tax under section 501(c)(3) of the 
Internal Revenue Code of 1986.
* * * * *


Sec.  210.9  [Amended]

0
4. In Sec.  210.9, amend paragraph (b)(7) by removing the words 
``school food authority'' and adding in their place the words ``local 
educational agency''.


Sec.  210.19  [Amended]

0
5. In 210.19, amend paragraph (c)(6)(ii) by removing the words ``the 
documentation specified under Sec.  245.2(a-4)(1)(ii); or'' and adding 
in their place the words ``the information specified in paragraph 
(1)(ii) of the definition of Documentation in Sec.  245.2 of this 
chapter; or''.

PART 215--SPECIAL MILK PROGRAM FOR CHILDREN

0
1. The authority citation for Part 215 continues to read as follows:

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

0
2. In Sec.  215.2:
0
a. Remove currently reserved paragraph (o);
0
b. Remove the remaining paragraph designations for paragraphs (a), (b), 
(c), (d), (e), (e-1), (e-2), (e-3), (e-4), (e-5), (f), (g), (h), (i), 
(i-1), (j), (j-1), (k), (k-1), (l), (m), (n), (p), (q), (r), (r-1), 
(s), (s-1), (t), (u), (u-1), (v), (w), (w-1), (x), (x-1), (x-2), (x-3), 
(x-4), (x-5), (x-6), (y), (z), (aa), and (bb) and arrange the 
definitions in alphabetical order;
0
c. Amend the definition of ``Child-care institution'' by removing the 
words ``Child-care'' and ``child-care'' wherever they appear and adding 
in their place the words ``Child care'' and ``child care'', 
respectively;
0
d. Amend third sentence of the definition of ``Child care institution'' 
by removing the words ``paragraph (v) of'';
0
e. Remove the definition of ``Children'' and add in its place a 
definition of ``Child'';
0
f. Amend the first sentence of the definition of ``Cost of milk'' by 
removing the words ``child-care'' wherever they appear and by adding in 
their place the words ``child care'';
0
g. Add a definition of ``Local educational agency'' in alphabetical 
order;
0
h. Revise the definition of ``Nonprofit'';
0
i. Amend the definition of ``Reimbursement'' by removing the words 
``child-care'' and adding in their place the words ``child care''; and
0
j. Amend the definition of ``School'' by adding the word ``or'' before 
the number ``(3)'' in the first sentence and by removing the words 
``more; or (4) with respect to the Commonwealth of Puerto Rico, non-
profit child care centers certified as such by the Governor of Puerto 
Rico.'' and adding in their place the word ``more.''
    The revisions and additions read as follows:


Sec.  215.2  Definitions.

* * * * *
    Child means
    (1) A person under 19 chronological years of age in a Child care 
institution as defined in this section;
    (2) A person under 21 chronological years of age attending a school 
as defined in paragraphs (3) and (4) of the definition of School in 
this section;
    (3) A student of high school grade or under attending school as 
defined in paragraphs (1) and (2) of the definition of School in this 
section; or
    (4) A student who is mentally or physically disabled as determined 
by the State and who is participating in a school program established 
for the mentally or physically disabled, of high school grade or under 
as determined by the State educational agency in paragraphs (1) and (2) 
of the definition of School in this section.
* * * * *
    Local educational agency means a public board of education or other 
public or private nonprofit authority legally constituted within a 
State for either administrative control or direction of, or to perform 
a service function for, public or private nonprofit elementary schools 
or secondary schools in a city, county, township, school district, or 
other political subdivision of a State, or for a combination of school 
districts or counties that is recognized in a State as an 
administrative agency for its public or private nonprofit elementary 
schools or secondary schools. The term also includes any other public 
or private nonprofit institution or agency having administrative 
control and direction of a public or private nonprofit elementary 
school or secondary school, including residential child care 
institutions, Bureau of Indian Affairs schools, and educational service 
agencies and consortia of those agencies, as well as the State 
educational agency in a State or territory in which the State 
educational agency is the sole educational agency for all public or 
private nonprofit schools.
* * * * *
    Nonprofit means, when applied to schools or institutions eligible 
for the Program, exempt from income tax under section 501(c)(3) of the 
Internal Revenue Code of 1986.
* * * * *


Sec.  215.3  [Amended]

0
3. In Sec.  215.3:
0
a. Amend paragraphs (b) and (c) by removing the words ``child-care'' 
wherever they appear and adding in their place the words ``child 
care'';
0
b. Amend paragraph (b) by removing the words ``as defined in Sec.  
215.2(v)(3) or Sec.  215.2(v)(4)'' and adding in their place the words 
``as described in paragraph (3) of the definition of School in Sec.  
215.2''; and
0
c. Amend paragraph (c) by removing the words ``in any school as defined 
in Sec.  215.2(v)(1), Sec.  215.2(v)(2) or Sec.  215.2(v)(3) or any 
child care institution as defined in Sec.  215.2(e)'' and adding in 
their place the words ``in any School or any Child care institution as 
defined in Sec.  215.2''.

PART 220--SCHOOL BREAKFAST PROGRAM

0
1. The authority citation for part 220 continues to read as follows:

    Authority: 42 U.S.C. 1773, 1779, unless otherwise noted.


0
2. In Sec.  220.2:
0
a. Remove the paragraph designations for paragraphs (a), (a-1), (b), 
(c), (c-1), (d), (d-1), (e), (f), (g), (g-1), (h), (i), (i-1), (j), 
(k), (l), (m), (n), (o), (o-1), (o-2), (o-3), (p), (p-1), (q), (q-1), 
(q-2), (r), (s), (t), (t-1), (u), (v), (v-1), (w), (w-1), (x), (x-1), 
(x-2), (x-3), (x-4), (x-5), (y), (z), (aa), and (bb) and arrange the 
definitions in alphabetical order;
0
b. Amend paragraph (2) of the definition of ``Child'' by removing the 
words ``in paragraphs (3) of the definition of ``School'' `` and adding 
in their place the words ``in paragraph (3) of the definition of School 
in this section'';

[[Page 63792]]

0
c. Add a definition of ``Local educational agency'' in alphabetical 
order;
0
d. Amend the second sentence of the definition of ``Menu item'' by 
removing the reference ``Sec.  220.2(i-1)'' and adding in its place the 
words ``the definition of Foods of minimal nutritional value in this 
section'';
0
e. Revise the definition of ``Nonprofit''; and
0
f. Amend the definition of ``State agency'' by removing the words ``as 
defined in Sec.  220.2(u)(3) of this part'' and adding in their place 
the words ``as described in paragraph (3) of the definition of School 
in this section''.
    The revision and addition read as follows:


Sec.  220.2  Definitions.

* * * * *
    Local educational agency means a public board of education or other 
public or private nonprofit authority legally constituted within a 
State for either administrative control or direction of, or to perform 
a service function for, public or private nonprofit elementary schools 
or secondary schools in a city, county, township, school district, or 
other political subdivision of a State, or for a combination of school 
districts or counties that is recognized in a State as an 
administrative agency for its public or private nonprofit elementary 
schools or secondary schools. The term also includes any other public 
or private nonprofit institution or agency having administrative 
control and direction of a public or private nonprofit elementary 
school or secondary school, including residential child care 
institutions, Bureau of Indian Affairs schools, and educational service 
agencies and consortia of those agencies, as well as the State 
educational agency in a State or territory in which the State 
educational agency is the sole educational agency for all public or 
private nonprofit schools.
* * * * *
    Nonprofit means, when applied to schools or institutions eligible 
for the Program, exempt from income tax under section 501(c)(3) of the 
Internal Revenue Code of 1986.
* * * * *


Sec.  220.3  [Amended]

0
3. In Sec.  220.3:
0
a. Paragraph (b) is amended by removing the words ``as defined in Sec.  
220.2(u)(1), (u)(2) and (u)(4)'' and adding in their place the words 
``as described in paragraphs (1) and (2) of the definition of School in 
Sec.  220.2'';
0
b. Paragraph (b) is further amended by removing the words ``as defined 
in Sec.  220.2(u)(1) of'' and adding in their place the words ``as 
described in paragraph (1) of the definition of School in Sec.  220.2 
in''; and
0
c. Paragraph (c) is amended by removing the words ``as defined in Sec.  
220.2(u)(3)'' and adding in their place the words ``, as described in 
paragraph (3) of the definition of School in Sec.  220.2,''.


Sec.  220.8  [Amended]

0
4. In Sec.  220.8, amend paragraph (h)(3)(iv) by removing the words 
``in Sec. Sec.  220.2(i-1) and 220.12 and appendix B to this part'' and 
adding in their place the words ``in the definition of Foods of minimal 
nutritional value in Sec.  220.2, in Sec.  220.12 and in Appendix B of 
this part''.


Sec.  220.12  [Amended]

0
5. In Sec.  220.12:
0
a. Amend paragraph (b)(1) by removing the reference ``Sec.  220.2(i-
1)'' wherever it appears and adding in its place the words ``the 
definition of Foods of minimal nutritional value in Sec.  220.2''; and
0
b. Amend (b)(2) by removing the words ``as foods of minimal nutritional 
value as defined in Sec.  220.2(i-1)'' wherever they appear and adding 
in their place the words `` as meeting the definition of Foods of 
minimal nutritional value in Sec.  220.2''.

PART 235--STATE ADMINISTRATIVE EXPENSE FUNDS

0
1. The authority citation for part 235 continues to read as follows:

    Authority: Secs. 7 and 10 of Child Nutrition Act of 1966, 80 
Stat. 888, 889, as amended (42 U.S.C. 1776, 1779).


0
2. In Sec.  235.2:
0
a. Remove currently reserved paragraphs (e), (j), (k), and (m);
0
b. Remove the paragraph designations for paragraphs (a), (b), (c), (d), 
(f), (g), (h), (i), (l), (n), (o), (p), (q), (q-1), (q-2), (q-3), (q-
4), (q-5), (r), (s), and (t) and arrange the definitions in 
alphabetical order;
0
c. Add a definition of ``Nonprofit'' in alphabetical order;
0
d. Revise the definition of ``School''; and
0
e. Amend the last sentence of paragraph (2) of the definition of 
``State agency'' by removing the words `` `distributing agency', as 
defined in Sec.  235.2(d),'' and adding in their place the words 
``Distributing agency as defined in this section,''.
    The addition and revision read as follows:


Sec.  235.2  Definitions.

* * * * *
    Nonprofit means exempt from income tax under section 501(c)(3) of 
the Internal Revenue Code of 1986.
* * * * *
    School means the term as defined in Sec.  210.2, Sec.  215.2, and 
Sec.  220.2 of this chapter, as applicable.
* * * * *

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

0
1. The authority citation for part 245 continues to read as follows:

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


Sec.  245.1  [Amended]

0
2. In Sec.  245.1:
0
a. Amend the first sentence of paragraph (a) by removing the words 
``(where applicable), and School Food Authorities'' and adding in their 
place the words ``, school food authorities or local educational 
agencies, as defined in Sec.  245.2, as applicable''; and
0
b. Amend paragraph (b) by removing the words ``and School Food 
Authorities'' and adding in their place the words ``school food 
authorities or local educational agencies, as applicable,''.

0
3. In Sec.  245.2:
0
a. Remove the paragraph designations for paragraphs (a), (a-1), (a-2), 
(a-3), (a-4), (b), (b-1),(b-2), (b-3), (c), (d), (d-1), (d-2), (e), 
(f), (f-1), (f-2), (f-3), (g), (h), (i), (j), (k), (l), and (m) and 
arrange the definitions in alphabetical order;
0
b. Amend the first sentence of paragraph (2) of the definition of 
``Documentation'' by removing the words ``school food authority'' and 
adding in their place ``local educational agency (as defined in this 
section)'';
0
c. Amend the definition of ``Household'' by removing the reference 
``Sec.  245.2(b)'' and adding in their place the words ``this 
section'';
0
d. Add definitions of ``Food Stamp Program'', ``Household 
application'', ``Local educational agency'' and ``Nonprofit'' in 
alphabetical order; and
0
e. Amend the second sentence of the definition of ``Verification'' by 
removing the words ``in the application which is defined as 
documentation in Sec.  245.(a-4)'' and adding in their place the words 
``on the application and defined as Documentation in this section''.
    The additions read as follows:


Sec.  245.2  Definitions.

* * * * *

[[Page 63793]]

    Food Stamp Program means the program established under the Food 
Stamp Act of 1977 (7 U.S.C. 2011 et seq.) and operated under Parts 271 
through 283 of this chapter.
* * * * *
    Household application means an application for free and reduced 
price meal or milk benefits, submitted by a household for a child or 
children who attend school(s) in the same local educational agency.
* * * * *
    Local educational agency means a public board of education or other 
public or private nonprofit authority legally constituted within a 
State for either administrative control or direction of, or to perform 
a service function for, public or private nonprofit elementary schools 
or secondary schools in a city, county, township, school district, or 
other political subdivision of a State, or for a combination of school 
districts or counties that is recognized in a State as an 
administrative agency for its public or private nonprofit elementary 
schools or secondary schools. The term also includes any other public 
or private nonprofit institution or agency having administrative 
control and direction of a public or private nonprofit elementary 
school or secondary school, including residential child care 
institutions, Bureau of Indian Affairs schools, and educational service 
agencies and consortia of those agencies, as well as the State 
educational agency in a State or territory in which the State 
educational agency is the sole educational agency for all public or 
private nonprofit schools.
* * * * *
    Nonprofit means exempt from income tax under section 501(c)(3) of 
the Internal Revenue Code of 1986.
* * * * *


Sec.  245.3  [Amended]

0
4. In Sec.  245.3:
0
a. Amend the first sentence of paragraph (a) by removing the words 
``School Food Authorities of schools'' and adding in their place the 
words ``local educational agencies, as defined in Sec.  245.2,'';
0
b. Amend the first sentence of paragraph (b) introductory text by 
removing the words ``School Food Authority'' and adding in their place 
the words ``local educational agency'';
0
c. Amend paragraph (b)(1) by removing the words ``School Food 
Authority'' the first time they appear and adding in their place the 
words ``local educational agency'';
0
d. Amend the first sentence of paragraph (b)(2) by removing the words 
``School Food Authority'' and adding in their place the words ``local 
educational agency'' and amend the second sentence of paragraph (b)(2) 
removing the words ``School Food Authority's'' and adding in their 
place the words ``local educational agency's'' and
0
e. Amend the second sentence of paragraph (c) by removing the words 
``as defined in Sec.  245.2(b)'' and adding in their place the words 
``(as defined in Sec.  245.2)''.

0
5. In Sec.  245.5:
0
a. Amend the first sentence of paragraph (a) introductory text by 
removing the words ``school food authority'' wherever they appear and 
adding in their place the words ``local educational agency (as defined 
in Sec.  245.2)'';
0
b. Amend paragraph (a)(1)(iii) by removing the words `` 
``documentation'' as defined in ``Sec.  245.2(a-4);'' and adding in its 
place the words ``information as described in paragraph (1)(i) of the 
definition of Documentation in Sec.  245.2'';
0
c. Amend paragraph (a)(1)(iv) by removing the reference ``Sec.  
245.2(a-4)'' and adding in its place the words ``paragraph (2)(ii) of 
the definition of Documentation in Sec.  245.2'';
0
d. Remove paragraph (a)(1)(vi);
0
e. Redesignate paragraphs (a)(1)(vii) through (a)(1)(xi) as (a)(1)(vi) 
through (a)(1)(x), respectively;
0
f. Amend newly redesignated paragraph (a)(1)(viii) by removing the 
words ``School Food Authority'' and adding in their place the words 
``local educational agency'';
0
g. Amend newly redesignated paragraph (a)(1)(x) by removing the words 
``School Food Authority'' and adding in their place the words ``local 
educational agency''; and
0
h. Add a new paragraph (a)(1)(xi).
    The addition reads as follows:


Sec.  245.5  Public announcement of the eligibility criteria.

    (a) * * *
    (1) * * *
    (xi) A statement to the effect that the Special Supplemental 
Nutrition Program for Women, Infants and Children (WIC) participants 
may be eligible for free or reduced price meals.
* * * * *

0
8. In Sec.  245.6:
0
a. Revise the heading;
0
b. Revise paragraph (a);
0
c. Amend paragraph (b) introductory text:
0
1. By removing the words ``school food authorities'' in the first 
sentence and adding in their place the words ``local educational 
agencies''; and
0
2. By removing the reference ``Sec.  245.2(a-4)(2)'' in the second 
sentence and adding in its place the words ``paragraph (2) of the 
definition of Documentation in Sec.  245.2'';
0
d. Revise paragraph (c);
0
e. Amend paragraphs (d) and (e) by adding headings;
0
f. Amend paragraph (d) by:
0
1. Removing the words ``School Food Authority'' wherever they appear 
and adding in their place the words ``local educational agency''; and
0
2. Removing the words ``School Food Authority's'' wherever they appear 
and adding in their place the words ``local educational agency's'';
0
g. Amend paragraphs (e) through (h) by removing the words ``school food 
authority'' wherever they appear and adding in their place the words 
``local educational agency'';
0
h. Amend paragraph (f)(4) by removing the words ``school food 
authorities'' and adding in their place the words ``local educational 
agencies''; and
0
i. Amend the second sentence of paragraph (h)(1) and the sixth sentence 
of paragraph (h)(2) by removing references to ``paragraph (a)(1)'' and 
adding in their place references to ``paragraph (a)(8)(i)'';
0
j. Amend paragraph (i) by removing the words ``school food 
authorities'' and adding in their place the words ``local educational 
agencies''.
    The revisions and additions read as follows:


Sec.  245.6  Application, eligibility and certification of children for 
free and reduced price meals and free milk.

    (a) General requirements--content of application and descriptive 
materials. Each local educational agency, as defined in Sec.  245.2, 
for schools participating in the National School Lunch Program, School 
Breakfast Program or Special Milk Program or a commodity only school 
shall provide meal benefit forms for use by families in making 
application for free or reduced price meals or free milk for their 
children.
    (1) Household applications. The State agency or local educational 
agency must provide a form that permits a household to apply for all 
children in that household who attend schools in the same local 
educational agency. The local educational agency cannot require the 
household to submit an application for each child attending its 
schools. The application shall be clear and simple in design and the 
information requested therein shall be limited to that required to 
demonstrate that the household does, or does not, meet the eligibility 
criteria

[[Page 63794]]

for free or reduced price meals, respectively, or for free milk, issued 
by the local educational agency. In accordance with Sec.  245.3(c), a 
foster child or an institutionalized child is considered a family of 
one.
    (2) Understandable communications. Any communication with 
households for eligibility determination purposes must be in an 
understandable and uniform format and to the maximum extent 
practicable, in a language that parents and guardians can understand.
    (3) Electronic availability. In addition to the distribution of 
applications and descriptive materials in paper form as provided for in 
this section, the local educational agency may establish a system for 
executing household applications electronically and using electronic 
signatures. The electronic submission system must comply with the 
disclosure requirements in this section and with technical assistance 
and guidance provided by FNS. Descriptive materials may also be made 
available electronically by the local educational agency.
    (4) Transferring eligibility status. When a student transfers to 
another school district, the new local educational agency may accept 
the eligibility determination from the student's former local 
educational agency without incurring liability for the accuracy of the 
initial determination. As required under paragraph (c)(3) of this 
section, the accepting local educational agency must make changes that 
occur as a result of verification activities or coordinated review 
findings conducted in that local educational agency.
    (5) Required income information. The information requested on the 
application with respect to the current income of the household must be 
limited to:
    (i) The income received by each member identified by the household 
member who received the income or an indication that which household 
members had no income; and
    (ii) The source of the income (such as earnings, wages, welfare, 
pensions, support payments, unemployment compensation, social security 
and other cash income). Other cash income includes cash amounts 
received or withdrawn from any source, including savings, investments, 
trust accounts, and other resources which are available to pay for a 
child's meals or milk.
    (6) Household members and social security numbers. The application 
must require applicants to provide the names of all household members. 
In addition, the social security number of the adult household member 
who signs the application must be provided. If the adult member signing 
the application does not possess a social security number, the 
household must so indicate. However, if application is being made for a 
child(ren) who is a member of a household receiving assistance under 
the Food Stamp Program, or is in a FDPIR or TANF household, the 
application shall enable the household to provide the appropriate food 
stamp or TANF case number or FDPIR case number or other FDPIR 
identifier in lieu of names of all household members, household income 
information and social security number.
    (7) Adult member's signature. The application must be signed by an 
adult member of the family. The application must contain clear 
instructions with respect to the submission of the completed 
application to the official or officials designated by the local 
educational agency to make eligibility determinations. A household must 
be permitted to file an application at any time during the school year. 
A household may, but is not required to, report any changes in income, 
household size or program participation during the school year.
    (8) Required statements for the application. The application and/or 
descriptive materials must contain substantially the following 
statements:
    (i) ``The Richard B. Russell National School Lunch Act requires the 
information on this application. You do not have to give the 
information, but if you do not, we cannot approve your child for free 
or reduced price meals. You must include the social security number of 
the adult household member who signs the application. The social 
security number is not required when you apply on behalf of a foster 
child or you list a Food Stamp, Temporary Assistance for Needy Families 
(TANF) Program or Food Distribution Program on Indian Reservations 
(FDPIR) case number for your child or other FDPIR identifier or when 
you indicate that the adult household member signing the application 
does not have a social security number. We will use your information to 
determine if your child is eligible for free or reduced price meals, 
and for administration and enforcement of the lunch and breakfast 
programs.'' When the State agency or local educational agency, as 
appropriate, plans to use or disclose children's eligibility 
information for non-program purposes, additional information, as 
specified in paragraph (h) of this section, must be added to the 
Privacy Act notice/statement. State agencies and local educational 
agencies are responsible for drafting the appropriate notice and 
ensuring that the notice complies with section 7(b) of the Privacy Act 
of 1974 (5 U.S.C. 552a note (Disclosure of Social Security Number)); 
and
    (ii) ``In certain cases, foster children are eligible for free or 
reduced price meals or free milk regardless of your household income. 
If you have foster children living with you and wish to apply for such 
meals or milk for them, please contact us.''
    (9) Attesting to information on the application. The application 
must also include a statement, immediately above the space for 
signature, that the person signing the application certifies that all 
information furnished in the application is true and correct, that the 
application is being made in connection with the receipt of Federal 
funds, that school officials may verify the information on the 
application, and that deliberate misrepresentation of the information 
may subject the applicant to prosecution under applicable State and 
Federal criminal statutes.
* * * * *
    (c) Determination of eligibility--(1) Duration of eligibility. 
Except as otherwise specified in paragraph (c)(3) of this section, 
eligibility, as determined through an approved application or by direct 
certification, for free or reduced price meals must remain in effect 
for the entire school year and for up to 30 operating days into the 
subsequent school year. The local educational agency must determine 
household eligibility, for free or reduced price meals, either through 
direct certification or the application process at or about the 
beginning of the school year. The local educational agency must 
determine eligibility for free or reduced price meals when a household 
submits an application or, if feasible, through direct certification, 
at any time during the school year.
    (2) Use of prior year's eligibility status. Prior to the processing 
of applications or the completion of direct certification procedures 
for the current school year, children from households with approved 
applications or documentation of direct certification on file from the 
preceding year shall be offered reimbursable free and reduced price 
meals or free milk, as appropriate. However, applications and 
documentation of direct certification from the preceding year shall be 
used only to determine eligibility for a period not to exceed the first 
30 operating days following the first operating day at the beginning of 
the school year, or until a new eligibility determination is made in

[[Page 63795]]

the current school year, whichever comes first.
    (3) Exceptions for year-long duration of eligibility--(i) Voluntary 
reporting of changes. If the household voluntarily reports a change in 
income or in program participation resulting in categorical 
eligibility, the local educational agency must inform the household of 
the consequences of any change that will result in lowered benefits. 
The household has the option to decline to have the change put into 
effect.
    (ii) Changes resulting from verification or administrative reviews. 
The local educational agency must change the children's eligibility 
status when a change is required as a result of verification activities 
conducted under Sec.  245.6a or as a result of a review conducted in 
accordance with Sec.  210.18 of this chapter.
    (iii) Temporary approvals. When a household reports no income or a 
temporary reduction in income, local educational agencies are 
encouraged to approve free or reduced price meal benefits on a 
temporary basis only. Approvals for a maximum of 45 days are 
recommended. At the end of the temporary approval period, the local 
educational agency would review the household's circumstances and 
certify or deny the household accordingly.
    (4) Calculating income. The local educational agency must use the 
income information provided by the household on the application to 
calculate the household's total current income. When a household 
submits an application containing complete documentation, as defined in 
Sec.  245.2, and the household's total current income is at or below 
the eligibility limits specified in the Income Eligibility Guidelines 
as defined in Sec.  245.2, the children in that household must be 
approved for free or reduced price benefits, as applicable.
    (5) Categorical eligibility. When a household submits an 
application containing the required food stamp, FDPIR or TANF 
documentation, as defined under Documentation in Sec.  245.2, the 
children in that household must be approved for free benefits. 
Additionally, when the local educational agency obtains documentation, 
as defined in Sec.  245.2, from the State or local agency responsible 
for the administration of the Food Stamp Program, FDPIR and/or TANF 
Program that children are members of a Food Stamp Program, FDPIR or 
TANF household receiving assistance from one or more of those programs, 
the local educational agency must approve such children for free 
benefits without an application.
    (6) Notice of approval--(i) Income applications. The local 
educational agency must promptly notify the household of the children's 
eligibility and provide the eligible children the benefits to which 
they are entitled.
    (ii) Direct Certification. Households approved for benefits based 
on information provided by the appropriate State or local agency 
responsible for the administration of the Food Stamp Program, FDPIR or 
TANF Program must be notified, in writing, that their children are 
eligible for free meals or free milk, that no application for free and 
reduced price school meals or free milk is required. The notice of 
eligibility must also inform the household that the parent or guardian 
must notify the local educational agency if they do not want their 
children to receive free benefits. However, when the parent or guardian 
transmits a notice of eligibility provided by the food stamp, FDPIR or 
TANF office, the local educational agency is not required to provide a 
separate notice of eligibility.
    (iii) Households declining benefits. Children from households that 
notify the local educational agency that they do not want free benefits 
must have their benefits discontinued as soon as possible. Any 
notification from the household declining benefits must be documented 
and maintained on file, as required under paragraph (e) of this 
section, to substantiate the eligibility determination.
    (7) Denied applications and the notice of denial. When the 
application furnished by a family is not complete or does not meet the 
eligibility criteria for free or reduced price benefits, the local 
educational agency must document and retain the reasons for 
ineligibility and must retain the denied application. In addition, the 
local educational agency must promptly provide written notice to each 
family denied benefits. As a minimum, this notice shall include:
    (i) The reason for the denial of benefits, e.g. income in excess of 
allowable limits or incomplete application;
    (ii) Notification of the right to appeal;
    (iii) Instructions on how to appeal; and
    (iv) A statement reminding parents that they may reapply for free 
or reduced price benefits at any time during the school year.
    (8) Appeals of denied benefits. A family that wishes to appeal an 
application that was denied may do so in accordance with the procedures 
established by the local educational agency as required by Sec.  245.7. 
However, prior to initiating the hearing procedure, the family may 
request a conference to provide the opportunity for the family and 
local educational agency officials to discuss the situation, present 
information, and obtain an explanation of the data submitted in the 
application or the decision rendered. The request for a conference 
shall not in any way prejudice or diminish the right to a fair hearing. 
The local educational authority shall promptly schedule a fair hearing, 
if requested.
    (d) Households that fail to apply. * * *
* * * * *
    (e) Recordkeeping. * * *
* * * * *

0
9. In Sec.  245.6a:
0
a. Amend paragraph (a) introductory text by:
0
1. Removing the words ``School Food Authorities'' wherever they appear 
and adding in their place the words ``local educational agencies''; and
0
2. Removing the words ``School Food Authority'' in the fifth sentence 
and adding in their place the words ``local educational agency'';
0
b. Amend paragraph (a)(1) by:
0
1. Removing the words ``School Food Authority'' wherever they appear 
and adding in their place the words ``local educational agency''; and
0
2. By removing the words ``the essential information specified in Sec.  
245.2(a-4)'' in the second sentence and adding in their place the words 
``the information specified in the definition of Documentation in Sec.  
245.2'';
0
c. Amend paragraph (a)(2) introductory text by:
0
1. Removing the words ``school food authority'' in the first sentence 
and adding in their place the words ``local educational agency'';
0
2. Adding a new sentence between the first and second sentences; and
0
3. Removing the words ``School food authorities'' in the last sentence 
and adding in their place the words ``Local educational agencies'';
0
d. Amend the second sentence of paragraph (a)(2)(v) by removing the 
words ``school food authorities'' and adding in their place the words 
``local educational agencies'';
0
e. Amend the second sentence of paragraph (a)(4) by removing the words 
``School Food Authority's'' and adding in their place the words ``local 
educational agency's'';
0
f. Amend paragraph (b)(3) by:
0
1. Removing the words ``School Food Authority'' in the first sentence 
and adding in their place the words ``local educational agency''; and
0
2. Removing the words ``school food authority'' in the second sentence 
and adding in their place the words ``local educational agency'';

[[Page 63796]]

0
g. Amend paragraph (c) by:
0
1. Removing the words ``school food authority'' wherever they appear 
and adding in their place the words ``local educational agency''; and
0
2. Removing the words ``school food authorities'' wherever they appear 
and adding in their place the words ``local educational agencies''; and
0
h. Amend paragraph (e) by removing the words ``School Food Authority'' 
wherever they appear and adding in their place the words ``local 
educational agency''.
    The addition reads as follows:


Sec.  245.6a  Verification requirements.

    (a) * * *
    (2) * * * Any communication with households concerning verification 
must be in an understandable and uniform format and, to the maximum 
extent practicable, in a language that parents and guardians can 
understand. * * *
* * * * *

0
10. In Sec.  245.7:
0
a. Revise the heading; and
0
b. Amend paragraph (a) by removing the words ``School Food Authority'' 
wherever they appear and adding in their place the words ``local 
educational agency'';
    The revision reads as follows:


Sec.  245.7  Hearing procedure for families and local educational 
agencies.

* * * * *


Sec.  245.8  [Amended]

0
11. In Sec.  245.8:
0
a. Amend the first sentence of the introductory text by adding the 
words ``and local educational agencies'' after the words ``School Food 
Authorities''; and
0
b. Amend paragraph (e) by removing the references ``Sec.  210.10, Sec.  
210.15a, Sec.  220.8 or Sec.  215.2(1)'' and adding in their place the 
words ``Sec.  210.10, Sec.  220.8 or the definition of Milk in Sec.  
215.2''.

0
12. Amend Sec.  245.10 by:
0
a. Revising the heading;
0
b. Removing the words ``School Food Authority'' wherever they appear 
and adding in their place the words ``local educational agency'';
0
c. Removing the words ``school food authority'' wherever they appear 
and adding in their place the words ``local educational agency'';
0
d. Removing the words ``School Food Authority's'' wherever they appear 
and adding in their place the words ``local educational agency's''; and
0
e. Removing the words ``school food authorities'' in the third sentence 
of paragraph (a)(3) and adding in their place the words ``local 
educational agencies''.
    The revision reads as follows:


Sec.  245.10  Action by local educational agencies.

* * * * *


Sec.  245.11  [Amended]

0
13. In 245.11:
0
a. Amend the first sentence of paragraph (a)(1) by removing the words 
``school food authority'' and adding in their place the words ``local 
educational agency as defined in Sec.  245.2'';
0
b. Amend paragraph (c) by removing the words ``School Food 
Authorities'' and adding in their place the words ``local educational 
agencies'';
0
c. Amend paragraph (d) by removing the words ``School Food 
Authorities'' and adding in their place the words ``local educational 
agencies'';
0
d. Amend paragraph (e) removing the words ``school food authority'' and 
adding in their place the words ``local educational agency'';
0
e. Amend paragraph (f) by removing the words ``School Food 
Authorities'' wherever they appear and adding in their place the words 
``local educational agencies'';
0
f. Amend paragraph (i) by removing the words ``school food authority'' 
wherever they appear and adding in their place the words ``local 
educational agency''; and
0
g. Amend the third sentence of paragraph (i) by removing the words 
``school food authorities'' and adding in their place the words ``local 
educational agencies''.

     Dated: November 2, 2007.
Roberto Salazar,
Administrator, Food and Nutrition Service.
 [FR Doc. E7-22053 Filed 11-9-07; 8:45 am]
BILLING CODE 3410-30-P