[Federal Register Volume 77, Number 20 (Tuesday, January 31, 2012)]
[Proposed Rules]
[Pages 4688-4698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-1835]


 ========================================================================
 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. 77, No. 20 / Tuesday, January 31, 2012 / 
Proposed Rules  

[[Page 4688]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Parts 245 and 272

RIN 0584-AE10


National School Lunch Program: Direct Certification Continuous 
Improvement Plans Required by the Healthy, Hunger-Free Kids Act of 2010

AGENCY: Food and Nutrition Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule proposes to amend the National School Lunch Program 
(NSLP) regulations to incorporate provisions of the Healthy, Hunger-
Free Kids Act of 2010 designed to encourage States to improve direct 
certification efforts with the Supplemental Nutrition Assistance 
Program (SNAP). The provisions would require State agencies to meet 
certain direct certification performance benchmarks and to develop and 
implement continuous improvement plans if they fail to do so. This rule 
also proposes to amend NSLP and SNAP regulations to provide for the 
collection of data elements needed to compute each State's direct 
certification performance rate to compare with the new benchmarks.

DATES: Comments on rule provisions must be received on or before April 
2, 2012 to be assured of consideration.
    Comments on the information collection requirements associated with 
this rule must be received by April 2, 2012.

ADDRESSES: The Food and Nutrition Service, USDA, invites interested 
persons to submit comments on this proposed rule. Comments may be 
submitted by one of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Send comments to Vivian Lees, Chief, State Systems 
Support Branch, Child Nutrition Division, Food and Nutrition Service, 
U.S. Department of Agriculture, 3101 Park Center Drive, Room 639, 
Alexandria, Virginia 22302-1594.
     Hand Delivery or Courier: Deliver comments to 3101 Park 
Center Drive, Room 639, Alexandria, Virginia 22302-1594, during normal 
business hours of 8:30 a.m.-5 p.m.

All comments submitted in response to this proposed 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. The Food and Nutrition Service will make the 
comments publicly available on the Internet via http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Address any questions to Vivian Lees 
or Patricia B. von Reyn, State Systems Support Branch, at (703) 305-
2590.

SUPPLEMENTARY INFORMATION:

Background

A. Legislative History Leading Up to This Rulemaking

    Section 104 of the Child Nutrition and WIC Reauthorization Act of 
2004 (Pub. L. 108-265) amended section 9(b) of the Richard B. Russell 
National School Lunch Act (NSLA) (42 U.S.C. 1758(b)) to require all 
local educational agencies (LEAs) that participate in the NSLP and/or 
School Breakfast Program to establish, by school year (SY) 2008-2009, a 
system to directly certify as eligible for free school meals children 
who are members of households receiving assistance under SNAP.
    Section 4301 of the Food, Conservation, and Energy Act of 2008 
(Pub. L. 110-246) (42 U.S.C. 1758a) requires the Secretary of 
Agriculture, beginning in 2008, to assess the effectiveness of State 
and local efforts to directly certify such children for free school 
meals and to provide annual reports to Congress.
    Section 101(b) of Public Law 111-296, the Healthy, Hunger-Free Kids 
Act of 2010 (HHFKA), amended section 9(b)(4) of the NSLA (42 U.S.C. 
1758(b)(4)) to establish and define required percentage benchmarks for 
directly certifying children who are members of households receiving 
assistance under SNAP. Section 101(b) further amended the NSLA to 
require that, beginning with SY 2011-2012, each State that does not 
meet the benchmark for a particular school year must develop, submit, 
and implement a continuous improvement plan (CIP) aimed at fully 
meeting the benchmarks and improving direct certification for the 
following school year. It also requires that the Secretary provide 
technical assistance to States agencies in developing and implementing 
CIPs.
    These provisions of Section 101(b) of the HHFKA, which were 
effective October 1, 2010, were implemented through USDA Food and 
Nutrition Service (FNS) Memorandum SP 32-2011--Child Reauthorization 
2010: Direct Certification Benchmarks and Continuous Improvement Plans, 
dated April 28, 2011, available at http://www.fns.usda.gov/cnd/governance/Policy-Memos/2011/SP32-2011.pdf. This rule proposes to 
incorporate these provisions into NSLP regulations.

B. New Requirements for Direct Certification Performance Benchmarks and 
Continuous Improvement Plans

    Section 9(b)(4) of the NSLA, as amended by the HHFKA, sets specific 
State performance benchmarks for directly certifying for free school 
meals those children who are members of households receiving assistance 
under SNAP. States must directly certify for free school meals the 
following percentages of school-aged children from SNAP households:
     80% for SY 2011-2012;
     90% for SY 2012-2013; and
     95% for SY 2013-2014 and for each school year thereafter.
    Additionally, for each school year beginning with SY 2011-2012, the 
NSLA requires that FNS identify any State that directly certifies less 
than the required percentage of the total number of school-aged 
children in the State who are members of households receiving 
assistance under SNAP. This rule proposes that FNS would identify these 
States by calculating direct certification rates for each State and 
comparing them with the required benchmark. (See the next section, 
``Data elements needed to compute States' direct certification rates 
for comparison to the benchmarks.'')
    This proposed rule provides that after FNS notifies a State agency 
that its State did not meet the direct certification performance 
benchmark, the State agency would have 60 days to submit its

[[Page 4689]]

CIP to FNS for approval. The NSLA requires that CIPs include, at a 
minimum:
    1. Specific measures that the State will use to identify more 
children who are eligible for direct certification, including 
improvements or modifications to technology, information systems, or 
databases;
    2. A timeline for the State to implement these measures; and
    3. Goals for the State to improve direct certification results for 
the following school year.

This proposal would add the word ``multiyear'' to the second component 
above, so that the CIP would include a multiyear timeline for the State 
to implement these measures. This is in acknowledgement of the 
possibility that by the time a State agency's CIP is submitted to FNS 
and approved, the new school year may already be underway.
    In addition, we are proposing to add a fourth component to the 
minimum requirements for a CIP:
    4. Information about the State's progress toward implementing other 
direct certification requirements.

    This fourth component to the minimum requirements for a CIP would 
help ensure that States are in compliance with other direct 
certification requirements, such as the new provisions required by the 
Interim Rule, Direct Certification and Certification of Homeless, 
Migrant and Runaway Children for Free School Meals (76 FR 22785, April 
25, 2011) at http://www.fns.usda.gov/cnd/governance/regulations/2011-04-25.pdf. State agencies would need, for example, to include 
information regarding their State's success at conducting direct 
certification efforts at least three times per year as well as their 
progress at phasing out the ``Letter Method'' as a form of direct 
certification with SNAP. For more guidance on the phase-out of the 
``Letter Method,'' refer to FNS Memorandum SP 13-2011, Child Nutrition 
Reauthorization 2010: Letter Method for Direct Certification, dated 
January 14, 2011, and FNS Memorandum SP 32-2011, Child Nutrition 
Reauthorization 2010: Direct Certification Benchmarks and Continuous 
Improvement Plans, dated April 28, 2011, both available at http://www.fns.usda.gov/cnd/governance/policy.htm.
    This rule proposes to amend 7 CFR Part 245 by redesignating 
Sec. Sec.  245.12 and 245.13 as Sec. Sec.  245.13 and 245.14, 
respectively, and adding a new Sec.  245.12 to set the required direct 
certification performance benchmarks, to require CIPs of any State that 
fails to meet a given benchmark, and to define the minimum required 
components of a CIP.

C. Data Elements Needed To Compute States' Direct Certification Rates 
for Comparison to the Benchmarks

    Each year since 2008, FNS has computed direct certification rates 
for each State to include in the annual report to Congress required by 
section 4301 of the Food, Conservation, and Energy Act of 2008. (See 
the Direct Certification in the National School Lunch Program: State 
Implementation Progress (Report to Congress) for 2008, 2009, 2010, and 
2011 at http://www.fns.usda.gov/ora/menu/Published/CNP/cnp.htm.) To 
formulate these direct certification rates, we have used a variety of 
data sources and a complex system of estimations and adjustments to 
approximate each of three component statistics required by section 
4301:
    1. The number of school-aged children who were directly certified 
as eligible for free school meals based on SNAP as of October;
    2. The number of school-aged children who were members of a 
household receiving SNAP assistance at any time in July, August, or 
September; and
    3. The number of school-aged children attending special provision 
schools (in a non-base year) who were members of a household receiving 
SNAP assistance at any time in July, August, or September.

We are proposing with this rulemaking to collect single data elements 
which would replace, wherever possible, the complex estimates we have 
had to make for each of these component statistics. Using these new 
data elements would allow for a timelier and a more straightforward, 
accurate, and transparent methodology for calculating States' direct 
certification rates. In addition, State agencies would have early 
access to these data elements and would be able to track their own 
performance as the data becomes available, using the same methodology 
that FNS uses--something currently not possible. This also would allow 
State agencies to better evaluate whether certain refinements to their 
direct certification systems or improvements outlined in their CIPs are 
effectual. It could even preclude the need for a CIP if data errors 
were to be identified and then corrected by SAs as LEAs report in.

    The new data elements needed to better meet the requirements of 
this mandate and to better serve the needs of State agencies as they 
endeavor to meet and maintain these new direct certification benchmarks 
are proposed as follows:
Data Element 1--SNAP Children Directly Certified for Free 
School Meals
    Data Element 1 is the count of the number of children who 
are members of households receiving assistance under SNAP and who were 
directly certified for free school meals as of the last operating day 
in October. This is to be a count of SNAP direct certifications only. 
Direct certification with other programs, such as with the Temporary 
Assistance to Needy Families (TANF) program, the Food Distribution 
Program on Indian Reservations (FDPIR), or with any of the other 
categorically eligible programs, would not be included. Additionally, 
only direct certifications are to be included, not certifications by 
application using a SNAP case number or through the ``Letter Method.'' 
The form FNS-742, Verification Summary Report, (OMB 0584-0026) 
has for years collected the broader count (one that includes TANF, 
FDPIR, ``Letter Method,'' etc.), but this data element, which is needed 
to selectively identify SNAP direct certifications, would be separately 
collected on the FNS-742 that is currently undergoing revision.
Data Element 2--Universe of School-Aged Children in SNAP 
Households
    Data Element 2 is the unduplicated count of children ages 
5 to 17 years old who are members of households receiving assistance 
under SNAP at any time during the months of July, August, or September. 
The best source for this count is the SNAP State agency, which 
maintains an existing collection of program participation data that is 
used for the direct certification matching with SNAP. This dataset 
includes birthdates, making it possible to query for the target age-
range of 5 to 17 year olds. This count from the SNAP State agency would 
be far more accurate than what could be estimated from other sources. 
For this reason, the proposed rule would require the SNAP State agency 
to provide Data Element 2 both to FNS and to the State agency 
administering the NSLP, by December 1st each year, on the proposed new 
form, the FNS-834, State Agency (NSLP/SNAP) Direct Certification Rate 
Data Element Report, which is being submitted to OMB for approval. This 
Data Element 2 would represent the universe of school-aged 
children who could be directly certified with SNAP to receive free 
school meals.
    We recognize that even though this data element is a strong one, it 
is not exact. The count coming from SNAP for

[[Page 4690]]

this data element may include children who are not actually attending 
school in the State come September or who are attending a school that 
does not participate in the NSLP. As a result, the direct certification 
rate may be negatively impacted. Conversely, there may be students 
attending school in the State who are not represented in the count 
coming from SNAP, particularly when a State has, for instance, a 
mandatory pre-K program or a large special education program with 
children up to age 22. We have chosen to ask SNAP for the number of 
children 5 to 17 years old because that age range can be used across 
the board for all States, it is the usual age range for children in 
schools across the United States, and it is the age range that we have 
used in the past for the Reports to Congress to represent ``school-
aged.'' When States run their matches on a wider age-range than that 
which represents the ages of students typically participating in the 
NSLP and are able to match these younger than 5-year-olds or older than 
17-year-olds, the direct certification rate may be inflated. As 
structured, however, this data element would be more accurate than what 
FNS has been able to use in the past. See the ``Special Circumstances'' 
section below that invites public comments.
Data Element 3--SNAP Children in Special Provision Schools 
Operating in a Non-Base Year
    Data Element 3 is a count of the number of children from 
households receiving assistance under SNAP that attend schools 
operating in a non-base year under the special assistance provisions of 
Section 11(a)(1) of the NSLA (42 U.S.C. 1759a(a)(1)) and 7 CFR 245.9. 
These are typically referred to as Provision 2 and Provision 3 schools, 
but will also include such schools as the Community Eligibility option 
schools that were added to Section 9(b) of the NSLA, 42 U.S.C. 1758(b), 
by Section 103 of the HHFKA and which will be addressed in future 
rulemaking. These special provision schools do not collect applications 
or directly certify children for free school meals every year; instead, 
they typically serve all children free meals, but are reimbursed based 
on the number of children who were determined to be eligible for free 
or reduced-price meals through application and/or direct certification 
in some prior year, called the base year.
    When a special provision school is operating in a base year, 
application processing and/or direct certification would occur as it 
does in other schools, and the counts of children directly certified 
with SNAP would be reported by the LEA through the normal verification 
report (the FNS-742) described for Data Element 1 above.
    When a special provision school is operating in a non-base year, 
however, the direct certification counts from the school, as reported 
by the LEA for the FNS-742, would be zero--no child from that school, 
whether from a household receiving SNAP benefits or not, would be 
directly certified that year because children already receive free 
meals through the special provision. Since the direct certification 
rate for a State is determined by the number of school-aged SNAP 
children directly certified as compared to the universe of school-aged 
SNAP children, States would show a lower direct certification rate 
whenever their special provision schools were in a non-base year unless 
some adjustment were made. For the Report to Congress, we have adjusted 
for this by estimating the number of SNAP children in special provision 
schools and offsetting the universe of school-aged SNAP children by 
this estimate. One of the difficulties with this methodology is that if 
the number of SNAP-children has increased significantly in a particular 
State since a special provision school's most recent base year, then 
the estimate for the offset might be too low and the State's direct 
certification rate may drop.
    To get a better measure for this adjustment, we propose to require 
that States run a match between SNAP records and student enrollment 
records from special provision schools each non-base year and count--
for these schools only--the number of children for whom a match is 
found and who theoretically could have been directly certified from 
that match had it occurred in a base year. Note that this is not a 
requirement to directly certify during the non-base year--LEAs still 
would not directly certify children since the children already get free 
meals through the special provision. A match in and of itself does not 
constitute a direct certification, and this matching process--which 
more often than not could be done at the State level--would be employed 
for the express purpose of getting a more-accurate count with which to 
make adjustments to the direct certification rate for the State. Under 
the proposed rule, all such SNAP matches in special provision schools 
operating in a non-base year would be included in the count for this 
data element. The resulting adjustment would more closely track the 
fluctuations in the number of SNAP children actually in these schools, 
would yield a more-accurate direct certification rate, and would give a 
better preview of the competency of the direct certification system 
before its use when the school is again in a base year.
    We propose to require that these matching efforts for special 
provision schools operating in a non-base year occur in or close to 
October, but no later than the last operating day in October. This Data 
Element 3 would be reported by the State agency administering 
the NSLP on the proposed new form, the FNS-834, State Agency (NSLP/
SNAP) Direct Certification Rate Data Element Report, by December 1st 
each school year.
Special Circumstances
    We would be interested in learning about any special circumstances 
that would affect a State's direct certification rate in a quantifiable 
way not captured by the formula below or the three data elements above. 
We would also be interested in any suggested methodology to quantify 
the effect, supportable by published Federal or State data sources.
Formula--for Calculating Direct Certification Rates With SNAP
    We propose to calculate States' direct certification rates with 
SNAP (the percent of children in households receiving assistance under 
SNAP that are directly certified for free school meals) using Data 
Elements 1-3 as described above:
[GRAPHIC] [TIFF OMITTED] TP31JA12.006


[[Page 4691]]


    These new data elements for calculating direct certification 
effectiveness would be reported both by the SNAP State agency and by 
the State agency that administers the NSLP, as described in the next 
two sections. It is critical that these data elements be available 
starting with SY 2012-2013 so that FNS and State agencies have the 
tools to monitor performance under this mandate.
    The proposed new Sec.  245.12(c) would require the reporting of the 
new data elements for computing direct certification rates to assess 
State progress in meeting the mandated direct certification performance 
benchmarks.
    This rule also proposes to amend SNAP's regulations at 7 CFR 272.8 
to add the requirement for the SNAP State agency to provide Data 
Element 2 to FNS and to the State agency administering the 
NSLP.

D. Collection of Data Element 1, and the Effect of This Rule 
on Form FNS-742, Verification Summary Report

    As described above, this rule proposes to collect Data Element 
1 on the FNS-742, Verification Summary Report, which is under 
revision at this time. The proposed rule would change the date this 
report is due so that Data Element 1 can be available as soon 
as possible for FNS and State agencies to use in calculating direct 
certification rates with SNAP.
    Currently, Sec.  245.6a(b) requires LEAs to complete verification 
efforts by November 15th each year (unless approved for an extension 
until December 15th by the State agency for reasons outlined in Sec.  
245.6a(b)(2)). In addition, State agencies currently must collect this 
annual verification data from each LEA no later than March 1st, and 
must submit it to FNS no later than April 15th of each year. Earlier 
availability of this data would enable FNS and State agencies earlier 
calculation of direct certification rates. The current FNS-742, 
however, requires State agencies to report the aggregate number of 
students who were terminated as a result of verification but who were 
reinstated for free or reduced price meal benefits as of February 15th 
each year based on regulatory provisions at Sec.  245.11(i). Those 
provisions reference a contingency on ``new funding'' that has not been 
appropriated since the rule's codification. As such, we propose to 
remove the requirement to report those students who were reinstated and 
to adjust the deadlines for the FNS-742, as follows:
    1. LEAs would continue to be required to complete verification 
efforts by November 15th (or, if approved for an extension by the State 
agency for reasons outlined in Sec.  245.6a(b)(2), by December 15th).
    2. State agencies would be required to collect the annual 
verification data from each LEA by February 1st (instead of March 1st).
    3. State agencies would be required to submit the FNS-742 to FNS by 
March 15th (instead of April 15th).
    The earlier submission of the FNS-742, as proposed in this rule, 
would allow State agencies and FNS timelier access to data elements 
important for the direct certification rate calculation and for the 
annual report to Congress. Additionally, it would allow State agencies 
to take ameliorative actions early on, before notification of a need 
for a CIP, providing more time for developing CIPs.
    This proposed rule would remove the February 15th data element 
requirement by amending Sec.  245.11(i) to remove the language, 
``Contingent upon new funding to support this purpose, FNS will also 
require each State agency to report the aggregate number of students 
who were terminated as a result of verification but who were reinstated 
as of February 15th.'' It would also amend Sec.  245.6a(h) and Sec.  
245.11(i) to change the dates for State agency collection of 
verification data from LEAs and for State agency reporting to FNS on 
the FNS-742, effective beginning with SY 2012-2013.

E. Collection of Other New Data Elements.

    For collecting Data Elements 2 and 3, FNS is 
proposing a new data reporting instrument which is being cleared along 
with this proposed rule. This instrument, the proposed FNS-834, State 
Agency (NSLP/SNAP) Direct Certification Rate Data Element Report, is an 
interagency form that would be used by both the SNAP State agencies and 
the State agencies administering the NSLP.
    This new data collection instrument, whose information collection 
burden is being cleared with this proposed rule, is described in the 
Paperwork Reduction Act section of this preamble. It is provided as 
Appendix A to this proposed rule for informational purposes only.

F. States Affected by This Rule

    All States, except those that have statewide universal free lunch, 
are affected by this rule. At this time, the States affected by this 
rule are the 50 States, District of Columbia, and Guam.

Procedural Matters

Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility.
    This rule has been designated non-significant under section 3(f) of 
Executive Order 12866.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980, (5 U.S.C. 601-612). Pursuant to 
that review, it has been certified that this rule would not have a 
significant impact on a substantial number of small entities.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates 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 
Department generally must prepare a written statement, including a cost 
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures by State, local or tribal 
governments, in the aggregate, or 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 most cost effective or least burdensome alternative that achieves 
the objectives of the rule.
    This proposed rule does not contain 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, the rule is not subject to the requirements of sections 
202 and 205 of the UMRA.

Executive Order 12372

    This proposed rule affects the NSLP and SNAP.
    The NSLP is listed in the Catalog of Federal Domestic Assistance 
Programs

[[Page 4692]]

under No. 10.555. For the reasons set forth in the final rule in 7 CFR 
part 3015, subpart V, and related Notice (48 FR 29115, June 24, 1983), 
this program is included in the scope of Executive Order 12372 which 
requires intergovernmental consultation with State and local officials. 
Since the NSLP is State-administered, Federally-funded program, FNS 
headquarters staff and FNS Regional Office staff have formal and 
informal discussions with State and local officials on an ongoing basis 
regarding program requirements and operation. This structure allows FNS 
to receive regular input which contributes to the development of 
meaningful and feasible Program requirements.
    SNAP is listed in the Catalog of Federal Domestic Assistance under 
10.551. For the reasons set forth in the final rule at 7 CFR Part 3015, 
Subpart V and related Notice (48 FR 29115, June 24, 1983), SNAP is 
excluded from the scope of Executive Order 12372 which requires 
intergovernmental consultation with State and local officials.

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 13121. FNS has 
considered the impact of this rule on State and local governments and 
has determined that this rule does not have federalism implications. 
Therefore, under Section 6(b) of the Executive Order, a federalism 
summary is not required.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule, when published as a final rule, 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 otherwise impede its full and timely implementation. This 
rule is not intended to have retroactive effect unless so specified in 
the Effective Dates section of the final rule. Prior to any judicial 
challenge to the provisions of the final rule, all applicable 
administrative procedures must be exhausted.

Civil Rights Impact Analysis

    FNS has reviewed this proposed rule in accordance with the 
Department Regulation 4300-4, Civil Rights Impact Analysis, to identify 
any major civil rights impacts the rule might have on children on the 
basis of race, color, national origin, sex, age or disability.
    This rule requires State agencies to develop and implement CIPs if 
they do not meet certain percentage performance benchmarks for directly 
certifying for free school meals children in households receiving SNAP 
benefits. LEAs have for years been required to directly certify for 
free school meals those children in households receiving assistance 
under SNAP, and FNS has been required to assess State and local efforts 
to directly certify these children. This rule codifies the benchmarks 
and CIP requirements set by the HHFKA. After a careful review of the 
rule's intent and provisions, FNS has determined that this rule is 
technical in nature and affects State agencies only. This rule will not 
affect children in the NSLP, except to continue to encourage States to 
increase efforts to have more eligible children directly certified for 
free meals.

Executive Order 13175--Consultation and Coordination With Indian Tribal 
Governments

    USDA is unaware of any current Tribal laws that could be in 
conflict with the requirements of this proposed rule. However, we have 
made special efforts to reach out to Tribal communities. In the spring 
of 2011, FNS offered opportunities for consultation with Tribal 
officials or their designees to discuss the impact of the Healthy, 
Hunger-Free Kids Act of 2010 on tribes or Indian Tribal governments. 
The consultation sessions were coordinated by FNS and held on the 
following dates and locations:

1. HHFKA Webinar & Conference Call--April 12, 2011
2. Mountain Plains--HHFKA Consultation, Rapid City, SD--March 23, 2011
3. HHFKA Webinar & Conference Call--June 22, 2011
4. Tribal Self-Governance Annual Conference in Palm Springs, CA--May 2, 
2011
5. National Congress of American Indians Mid-Year Conference, 
Milwaukee, WI--June 14, 2011

    There were no comments about this regulation during any of the 
aforementioned Tribal Consultation sessions.
    Reports from these consultations are part of the USDA annual 
reporting on Tribal consultation and collaboration. FNS will respond in 
a timely and meaningful manner to Tribal government requests for 
consultation concerning this rule. Currently, FNS provides regularly 
scheduled quarterly consultation sessions through the end of FY2012 as 
a venue for collaborative conversations with Tribal officials or their 
designees.

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 from the public 
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 is a new collection.
    One of the new provisions in this rule--the requirement for the 
development and submission of continuous improvement plans by any State 
that fails to meet certain mandated direct certification performance 
benchmarks--annually increases State agency reporting burden by 54 
hours and the recordkeeping burden by 9 hours, for a total of 63 
additional burden hours. FNS intends to merge these 63 hours into the 
Determining Eligibility for Free and Reduced Price Meals, OMB Control 
0584-0026, expiration date March 31, 2013. The current 
collection burden inventory for the Determining Eligibility for Free 
and Reduced Price Meals (7 CFR 245) is 960,367.
    Another provision, requiring the collection of data elements on a 
new, interagency form (FNS-834, State Agency (NSLP/SNAP) Direct 
Certification Rate Data Element Report, being cleared with this 
proposed rule), involves changes in both NSLP and SNAP regulations and 
would increase burden hours on State agencies by an additional 53 hours 
annually. These 53 burden hours would remain with the newly established 
OMB Control Number until such time as the FNS-834 is incorporated into 
the Food Programs Reporting System (FPRS) and the system is approved by 
OMB.
    These changes are contingent upon OMB approval under the Paperwork 
Reduction Act of 1995. When the information collection requirements 
have been approved, FNS will publish a separate action in the Federal 
Register announcing OMB's approval.
    Comments on the information collection in this proposed rule must 
be received by April 2, 2012. Send comments to the Office of 
Information and Regulatory Affairs, OMB, Attention: Desk Officer for 
FNS, Washington, DC

[[Page 4693]]

20503. Please also send a copy of your comments to Lynn Rodgers-
Kuperman, Chief, Program Analysis and Monitoring Branch, Child 
Nutrition Division, 3101 Park Center Drive, Alexandria, VA 22302. For 
further information, or for copies of the information collection 
requirements, please contact Lynn Rodgers-Kuperman at the address 
indicated above. Comments are invited on: (1) Whether the proposed 
collection of information is necessary for the proper performance of 
the Agency's functions, including whether the information will have 
practical utility; (2) the accuracy of the Agency's estimate of the 
proposed information collection burden, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility and clarity of the information to be collected; and (4) ways to 
minimize the burden of the collection of information on those who are 
to respond, including use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    All responses to this request for comments will be summarized and 
included in the request for OMB approval. All comments will also become 
a matter of public record.
    Title: National School Lunch Program: Direct Certification 
Continuous Improvement Plans Required by the Healthy, Hunger-Free Kids 
Act of 2010.
    OMB Number: 0584-NEW.
    Expiration Date: Not Yet Determined.
    Type of Request: New Collection.
    Abstract: (A) Continuous Improvement Plans--The new requirements of 
Section 101(b) of the HHFKA necessitate the submission of a continuous 
improvement plan (CIP) by any State that fails to meet the new 
percentage performance benchmarks (80% for SY 2011-12; 85% for SY 2012-
13; and 95% for SY 2013-14 and for each school year thereafter) for 
directly certifying for free school meals children who are members of 
households receiving assistance under SNAP. CIPs are required to 
include: Specific measures that the State will use to identify more 
children who are eligible for direct certification, including 
improvements or modifications to technology, information systems, or 
databases; a multiyear timeline for the State to implement these 
measures; goals for the State to improve direct certification results 
for the following school year; and information about the State's 
progress toward implementing other direct certification requirements.
    (B) Collecting New Data Elements--In addition, FNS must calculate 
the direct certification rates for States and compare them to the 
benchmarks to determine which States will need to submit CIPs. To 
calculate these direct certification rates, FNS proposes to annually 
collect specific direct certification data elements from SNAP State 
agencies and NSLP State agencies on a new interagency form, the 
proposed FNS-834, State Agency (NSLP/SNAP) Direct Certification Rate 
Data Element Report being cleared with this proposed rule.
    (C) State agencies must report data to show progress toward 
improving direct certification with SNAP. Such improvement will 
ultimately lead to fewer households having to complete an application 
form to receive free school meals. The average burden per response and 
the annual burden hours are explained below and summarized in the 
charts which follow.

Estimated Annual Reporting and Recordkeeping Burden for 0584-NEW, 
Direct Certification Requirements, 7 CFR 245

    Respondents for this Proposed Rule: State Agencies.
    Estimated Number of Respondents for this Proposed Rule: 18.
    Estimated Number of Responses per Respondent for this Proposed 
Rule: 2.
    Estimated Total Annual Responses: 36.
    Average Hours Per Response: 1.75.
    Estimated Total Annual Burden on Respondents for this Proposed 
Rule: 63.

                              Estimated Annual Reporting Burden for 0584-NEW, Direct Certification Requirements, 7 CFR 245
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Estimated
                                                       Section               number of     Frequency of   Average annual  Average burden   Annual burden
                                                                            respondents      response        responses     per response        hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Reporting (State Agencies)
--------------------------------------------------------------------------------------------------------------------------------------------------------
State agencies that fail to meet the        7 CFR 245.12(e) and (g).....              18               1              18               3              54
 direct certification benchmark must
 develop and submit a Continuous
 Improvement Plan within 60 days of
 notification.
                                                                         -------------------------------------------------------------------------------
    Total Reporting for Proposed Rule.....  ............................              18               1              18               3              54
        Total Existing Reporting Burden     ............................  ..............  ..............  ..............  ..............         954,317
         for Part 245.
                                                                                                                                         ---------------
        Total Reporting Burden for Part     ............................  ..............  ..............  ..............  ..............         954,371
         245 with Proposed Rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Recordkeeping (State Agencies)
--------------------------------------------------------------------------------------------------------------------------------------------------------
State agencies that fail to meet the        7 CFR 245.12(e) and (g).....              18               1              18             0.5               9
 direct certification benchmark must
 maintain a Continuous Improvement Plan.
                                                                         -------------------------------------------------------------------------------

[[Page 4694]]

 
    Total Recordkeeping for Proposed Rule.  ............................              18               1              18             0.5               9
        Total Existing Recordkeeping        ............................  ..............  ..............  ..............  ..............           6,050
         Burden for Part 245.
                                                                                                                                         ---------------
        Total Recordkeeping Burden for      ............................  ..............  ..............  ..............  ..............           6,059
         Part 245 with Proposed Rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Summary of Reporting and Recordkeeping Burden (OMB 0584-NEW) 7
                                 CFR 245
------------------------------------------------------------------------
 
------------------------------------------------------------------------
TOTAL NO. RESPONDENTS...............................                  18
AVERAGE NO. RESPONSES PER RESPONDENT................                   2
TOTAL ANNUAL RESPONSES..............................                  36
AVERAGE HOURS PER RESPONSE..........................                1.75
TOTAL BURDEN HOURS FOR PART 245 WITH PROPOSED RULE..             960,430
CURRENT OMB INVENTORY FOR PART 245..................             960,367
DIFFERENCE (NEW BURDEN REQUESTED WITH PROPOSED RULE)                  63
------------------------------------------------------------------------
* These 63 hours will be merged with OMB 0584-0026.

Estimated Annual Burden for 0584-NEW, Direct Certification 
Requirements, 7 CFR 245 and 272

    Respondents for this Proposed Rule: State Agencies.
    Estimated Number of Respondents for this Proposed Rule: 106.
    Estimated Number of Responses per Respondent for this Proposed 
Rule: 1.
    Estimated Total Annual Responses: 106.
    Average Hours per Response: .5.
    Estimated Total Annual Burden on Respondents for this Proposed 
Rule: 53.

                                Estimated Annual Burden for 0584-NEW, Direct Certification Requirements 7 CFR 245 and 272
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Estimated
                                                       Section               number of     Frequency of   Average annual  Average burden   Annual burden
                                                                            respondents      response        responses     per response        hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Reporting (State Agencies)
--------------------------------------------------------------------------------------------------------------------------------------------------------
NSLP State agencies must annually report    7 CFR 245.12(c).............              54               1              54             0.5              27
 data to FNS for calculating direct
 certification rates.
SNAP State agencies must annually report    7 CFR 272.8(a)(5)...........              52               1              52             0.5              26
 data to FNS for calculating direct
 certification rates.
                                                                         -------------------------------------------------------------------------------
    Total Reporting for Proposed Rule.....  ............................             106               1             106             0.5              53
        Total Existing Reporting Burden...  ............................  ..............  ..............  ..............  ..............               0
                                                                                                                                         ---------------
        Total Reporting Burden for Parts    ............................  ..............  ..............  ..............  ..............              53
         245 and 272 with Proposed Rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------


       Summary of Burden (OMB 0584-NEW) 7 CFR 245 and 272
------------------------------------------------------------------------
 
------------------------------------------------------------------------
TOTAL NO. RESPONDENTS...............................                 106
AVERAGE NO. RESPONSES PER RESPONDENT................                   1
TOTAL ANNUAL RESPONSES..............................                 106
AVERAGE HOURS PER RESPONSE..........................                  .5
TOTAL BURDEN HOURS FOR PART 245 and 272 WITH                          53
 PROPOSED RULE *....................................
CURRENT OMB INVENTORY FOR PART 245 and 272..........                   0

[[Page 4695]]

 
DIFFERENCE (NEW BURDEN REQUESTED WITH PROPOSED RULE)                  53
------------------------------------------------------------------------
* Represents increase of 53 hours from existing reporting burden; no
  additional recordkeeping burden. These 53 hours will remain with the
  newly established OMB Control Number.

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.

Appendix A to This Proposed Rule

    Appendix A attached to this proposed rule is a sample completed 
form FNS-834, State Agency (NSLP/SNAP) Direct Certification Rate Data 
Element Report, currently pending OMB approval and published for 
informational purposes only.

List of Subjects

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.

7 CFR Part 272

    Alaska, Civil rights, Claims, Food stamps, Grant programs--social 
programs, Reporting and recordkeeping requirements, Unemployment 
compensation, wages.

    Accordingly, 7 CFR Parts 245 and 272 are proposed to be amended as 
follows:

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

    1. The authority citation for 7 CFR Part 245 continues to read as 
follows:


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

    2. Section 245.6a is amended in paragraph (h) by removing the word 
``March'' and adding in its place the word ``February''.
    3. Paragraph 245.11(i) is revised to read as follows:


Sec.  245.11  Action by State agencies and FNSROs.

* * * * *
    (i) No later than February 1, 2013, and by February 1st each year 
thereafter, each State agency must collect annual verification data 
from each local educational agency as described in Sec.  245.6a(h) and 
in accordance with guidelines provided by FNS. Each State agency must 
analyze these data, determine if there are potential problems, and 
formulate corrective actions and technical assistance activities that 
will support the objective of certifying only those children eligible 
for free or reduced price meals. No later than March 15, 2013, and by 
March 15th each year thereafter, each State agency must report to FNS, 
in a consolidated electronic file by local educational agency, the 
verification information that has been reported to it as required under 
Sec.  245.6a(h), as well as any ameliorative actions the State agency 
has taken or intends to take in local educational agencies with high 
levels of applications changed due to verification. State agencies are 
encouraged to collect and report any or all verification data elements 
before the required dates.
* * * * *
    4. Redesignate Sec. Sec.  245.12 and 245.13 as Sec. Sec.  245.13 
and 245.14, respectively.
    5. Section 245.12 is added to read as follows:


Sec.  245.12  State agencies and direct certification requirements.

    (a) Direct certification requirements. State agencies are required 
to meet the direct certification performance benchmarks set forth in 
paragraph (b) of this section for directly certifying children who are 
members of households receiving assistance under SNAP. A State agency 
that fails to meet the benchmark must develop and submit to FNS a 
continuous improvement plan (CIP) to fully meet the requirements of 
this paragraph and to improve direct certification for the following 
school year in accordance with the provisions in paragraphs (e), (f), 
and (g) of this section.
    (b) Direct certification performance benchmarks. State agencies 
must meet performance benchmarks for directly certifying for free 
school meals children who are members of households receiving 
assistance under SNAP. The performance benchmarks are as follows:
    (1) 80% for the school year beginning July 1, 2011;
    (2) 90% for the school year beginning July 1, 2012; and
    (3) 95% for the school year beginning July 1, 2013, and for each 
school year thereafter.
    (c) Data elements required for direct certification rate 
calculation. Each State agency must provide FNS with specific data 
elements each year, as follows:
    (1) Data Element #1--The number of children who are members of 
households receiving assistance under SNAP that are directly certified 
for free school meals as of the last operating day in October, 
collected and reported in the same manner and timeframes as specified 
in Sec.  245.11(i).
    (2) Data Element #2--The unduplicated count of children ages 5 to 
17 years old who are members of households receiving assistance under 
SNAP at any time during the months of July, August, or September. This 
data element must be provided by the SNAP State agency, per 7 CFR 
272.8(a)(5), and reported to FNS and to the State agency administering 
the NSLP in the State by December 1st each year, in accordance with 
guidelines provided by FNS.
    (3) Data Element #3--The count of the number of children who are 
members of households receiving assistance under SNAP who attend a 
school operating under the provisions of 7 CFR 245.9 in a year other 
than the base year. The proxy for this data element must be established 
each school year through the State's data matching efforts between SNAP 
records and student enrollment records for these special provision 
schools operating in a non-base year. Such matching efforts must occur 
in or close to October each year, but no later than the last operating 
day in October. State agencies must report this data element to FNS by 
December 1st each year, in accordance with guidelines provided by FNS.
    (d) State notification. For each school year, FNS will notify State 
agencies that fail to meet the direct certification performance 
benchmark.
    (e) Continuous improvement plan required. A State agency having a 
direct certification rate with SNAP that is less than the direct 
certification performance benchmarks set forth in paragraph (b) of this 
section must submit to FNS for approval, within 60 days of 
notification, a CIP in accordance with paragraph (f) of this section.
    (f) Continuous improvement plan required components. CIPs must 
include, at a minimum:
    (1) The specific measures that the State will use to identify more 
children who are eligible for direct certification,

[[Page 4696]]

including improvements or modifications to technology, information 
systems, or databases;
    (2) A multiyear timeline for the State to implement these measures;
    (3) Goals for the State to improve direct certification results for 
the following school year; and
    (4) Information about the State's progress toward implementing 
other direct certification requirements, as provided in FNS guidance.
    (g) Continuous improvement plan implementation. A State must 
implement its CIP according to the timeframes in the approved plan.
* * * * *

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

    5. The authority citation for 7 CFR Part 272 continues to read as 
follows:

    Authority:  7 U.S.C. 2011-2036.

    6. Section 272.8 is amended by adding a new paragraph (a)(5) to 
read as follows:


Sec.  272.8  State income and eligibility verification system.

* * * * *
    (a) * * *
    (5) State agencies must provide information to FNS and to the State 
agencies administering the National School Lunch Program for the 
purpose of direct certification of children for school meals as 
described in Sec.  245.12(c)(2) of this chapter. In addition, State 
agencies must execute a data exchange and privacy agreement in 
accordance with Sec.  272.8(a)(4) and Sec.  272.1(c).
* * * * *

    Note: Appendix A, a sample of a completed copy of the proposed 
form FNS-834, State Agency (NSLP/SNAP) Direct Certification Rate 
Data Element Report, will not be published in the Code of Federal 
Regulations. It is published here for informational purposes only.


    Dated: January 17, 2012.
Audrey Rowe,
Administrator, Food and Nutrition Service.
BILLING CODE 3410-30-P

Appendix A: Sample of Completed FNS-834, State Agency (NSLP/SNAP) 
Direct Certification Rate Data Element Report. For Informational 
Purposes Only

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[FR Doc. 2012-1835 Filed 1-30-12; 8:45 am]
BILLING CODE 3410-30-C