[Federal Register Volume 78, Number 213 (Monday, November 4, 2013)]
[Proposed Rules]
[Pages 65890-65903]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-25922]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

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.

========================================================================


Federal Register / Vol. 78, No. 213 / Monday, November 4, 2013 / 
Proposed Rules

[[Page 65890]]



DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 245

[FNS-2011-0027]
RIN 0584-AE16


National School Lunch Program and School Breakfast Program: 
Eliminating Applications Through Community Eligibility as Required by 
the Healthy, Hunger-Free Kids Act of 2010

AGENCY: Food and Nutrition Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This rule proposes to amend the eligibility regulations for 
free and reduced price meals under the National School Lunch Program 
(NSLP) and School Breakfast Program (SBP) to codify the statutory 
provision that establishes the community eligibility provision, a 
reimbursement option for eligible local educational agencies and 
schools that wish to offer free school meals to all children in high 
poverty schools without collecting household applications. This 
proposed rule reflects statutory requirements that were implemented 
through policy guidance following enactment of the Healthy, Hunger-Free 
Kids Act of 2010 (HHFKA). Implementation of this proposed rule would 
align the regulations with the statutory provision that establishes 
administrative and operational requirements for State agencies, local 
educational agencies, and schools.

DATES: To be assured of consideration, comments on this proposed rule 
must be received by January 3, 2014.

ADDRESSES: The Food and Nutrition Service (FNS), USDA, invites 
interested persons to submit written comments on this proposed rule. 
Comments must be submitted through one of the following methods:
     Preferred method: Comments on the provisions in this rule 
must be received on or before January 3, 2014 to be assured of 
consideration. Go to http://www.regulations.gov. Follow the online 
instructions for submitting comments.
     Mail: Mailed comments on this proposed rule must be 
postmarked on or before January 3, 2014 to be assured of consideration. 
Send mailed comments to William Wagoner, Policy and Program Development 
Branch, Child Nutrition Division, Food and Nutrition Service, 
Department of Agriculture, 3101 Park Center Drive, Room 1212, 
Alexandria, Virginia 22302-1594.
    Comments sent by other methods will not be accepted. All comments 
sent by the methods listed above 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. 
FNS will make the comments publicly available on the Internet via 
http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: William Wagoner or Marisol Aldahondo, 
Policy and Program Development Branch, Child Nutrition Division, Food 
and Nutrition Service, USDA, 3101 Park Center Drive, Room 1212, 
Alexandria, Virginia 22302; telephone: (703) 305-2590.

SUPPLEMENTARY INFORMATION: 

Background

    Section 104(a) of the HHFKA (Pub. L. 111-296) amended section 
11(a)(1) of the Richard B. Russell National School Lunch Act (NSLA) (42 
U.S.C. 1759a(a)(1)) by adding a new subparagraph (F) to establish the 
community eligibility provision, also known as the community 
eligibility option. The community eligibility provision is a 4-year 
reimbursement alternative for high poverty local educational agencies 
(LEAs) and schools participating in the NSLP and SBP. It is intended to 
improve access to free school meals in eligible high poverty LEAs and 
schools, and eliminate the administrative burden associated with 
collecting household applications.
    This proposed rule would amend the regulations in Sec.  245.9, 
Special Assistance Certification and Reimbursement Alternatives, to 
include the community eligibility provision. In addition, this rule 
would make minor editorial changes in the current regulations for all 
special assistance provisions to achieve consistency.
    Currently, Sec.  245.9 uses the term ``school food authority'' for 
the provisions 1, 2 and 3. For the community eligibility provision, 
however, the NSLA uses the term ``local educational agency'', which is 
a broader entity in a school district that often includes or performs 
school food authority functions in addition to those unrelated to 
administration of the Child Nutrition Program. Therefore, this proposed 
rule refers to the ``local educational agency'' as defined in Sec.  
245.2 to describe the requirements for the provisions 1, 2 and 3, and 
the community eligibility provision. This editorial change does not 
indicate a change in the regulatory requirements for the provisions 1, 
2 and 3, nor how these special assistance provisions are monitored. For 
example, counting and claiming responsibilities for the Provision 2 
schools would continue to be the responsibility of the school food 
authority.
    To use community eligibility, eligible LEAs and schools would be 
required to have a minimum percentage of identified students, who are 
students certified for free meals through means other than individual 
household applications (e.g., students directly certified through the 
Supplemental Nutrition Assistance Program (SNAP)) in the school year 
prior to implementing the provision, as required by Sections 
11(a)(1)(F)(i) and (ii) of the NSLA, as amended. In addition, in 
accordance with Section 11(a)(1)(F)(ii), LEAs and schools would serve 
free lunches and breakfasts to all students, and cover with non-Federal 
funds any costs of providing free meals to all students that exceed the 
Federal reimbursement. As provided for in Section 11(a)(1)(F)(vi), no 
household applications for free and reduced price meals would be 
collected because meal reimbursement would be based on claiming 
percentages derived from the identified student percentage, as provided 
for in Section 11(a)(F)(iii) and (iv). The claiming percentages used in 
the first year would be valid for a period of four school years but 
could be increased in the second, third or fourth year if the 
identified student percentage rises. An eligible LEA would be able to 
elect the community eligibility provision on behalf of a single school, 
a select group of schools, or all schools under its jurisdiction, in 
accordance with Section 11(a)(1)(F)(ii)(I).

[[Page 65891]]

    FNS has phased in the community eligibility provision over a three 
year period as required by the amendments made by HHFKA to Section 
11(a)(a)(F)(viii) and (ix) of the NSLA. Community eligibility was made 
available in eligible LEAs and schools in three States (Illinois, 
Kentucky and Michigan) starting with the school year beginning July 1, 
2011. An additional four States (Ohio, New York, District of Columbia, 
and West Virginia) were added for the school year beginning July 1, 
2012. Four more States (Florida, Georgia, Maryland and Massachusetts) 
were added for the school year beginning July 1, 2013. Community 
eligibility will be available nationwide to all eligible LEAs and 
schools for the school year beginning July 1, 2014.
    This proposed rule mirrors the memoranda on community eligibility 
issued by FNS during the phased-in implementation. As required by the 
law, FNS issued guidance within 90 days of enactment of the HHFKA to 
implement the statutory requirements for community eligibility (see 
memorandum SP 23-2011 dated March 15, 2011). Additional memoranda 
followed to further explain the statutory requirements. State and local 
operators must continue to follow FNS memoranda and guidance on 
community eligibility, as applicable, while the rulemaking process is 
under way.
    The following memoranda (available on the FNS Web site at http://www.fns.usda.gov/cnd/governance/policy.htm) address the community 
eligibility requirements established in section 11(a)(1)(F) of the 
NSLA, as amended:
     Memorandum SP 23-2011 (March 15, 2011), Community 
Eligibility Option: Guidance and Process for Selection of States for 
School Year 2011-2012.
     Memorandum SP 12-2012 (February 9, 2012), Community 
Eligibility Option: Guidance and Procedures for Selection of States for 
School Year 2012-2013 (Includes Frequently Asked Questions).
     Memorandum SP 24-2012 (April 10, 2012), Interim Review 
Guidance for States with Local Educational Agencies Electing the 
Community Eligibility Option.
     Memorandum SP 15-2013 (December 7, 2012), Community 
Eligibility Option: Guidance and Procedures for Selection of States for 
School Year 2013-2014 (includes Frequently Asked Questions).
    [cir] Attachment A: Information for State Agency Participation.
    [cir] Attachment B: Monthly Federal Reimbursement Estimator.

In addition to issuing the above guidance, FNS has worked with the 
phase-in States to provide individual assistance and guidance. FNS has 
also conducted a number of webinars and monthly conference calls for 
the phase-in States.
    FNS will evaluate participation in the community eligibility 
provision and the impact on eligible LEAs and schools in States 
selected during the phase-in period. Data collection began in fall, 
2012 and the final report will be completed in December, 2013. FNS 
expects the community eligibility provision to improve access to school 
meals in high poverty areas, reduce administrative burden, and increase 
program efficiency by utilizing readily available and current data to 
certify eligible students for meal benefits.
    This proposed rule would amend the regulations in Sec.  245.9, 
Special assistance certification and reimbursement alternatives, by 
redesignating several paragraphs to add a new paragraph (f) and a new 
paragraph (l) for the community eligibility requirements. For 
consistency in the regulatory text, the proposed rule refers to the 
``local educational agency'' to describe the requirements for 
provisions 1, 2 and 3, and the community eligibility provision.

Community Eligibility Definitions

    For purposes of community eligibility, the proposed rule at Sec.  
245.9(f)(1) defines the terms ``enrolled students'', ``identified 
students'' and ``identified student percentages'' as follows:

Enrolled Students

    Under the proposal, the term ``enrolled students'' would mean 
students who are enrolled in and attending schools participating in the 
community eligibility provision and who have access to at least one 
meal service daily. Half-day students who have access to either 
breakfast or lunch would be included in the count of enrolled students. 
Students who do not have access to either breakfast or lunch due to the 
times they are attending school would not be included in the count of 
enrolled students.

Identified Students

    Under this proposed rule, the term ``identified students'' would 
mean low-income children who are certified for free school meals 
without the use of a household application. Section 11(a)(1)(F)(i), as 
amended by HHFKA, defines identified students as ``students certified 
based on documentation of benefit receipt or categorical eligibility as 
described in Sec.  245.6a(c)(2)'' of Program eligibility regulations in 
7 CFR part 245. This refers to students directly certified for free 
meals through documentation provided by the following programs:
     Supplemental Nutrition Assistance Program (SNAP);
     Temporary Assistance to Needy Families (TANF);
     Food Distribution Program on Indian Reservations (FDPIR); 
and
     Medicaid (in States and LEAs participating in an FNS 
demonstration project to test the potential for direct certification 
with Medicaid).
    The term identified students would also include the following 
students, as defined in Sec.  245.2:
     Homeless children as defined under section 725(2) of the 
McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a(2));
     Runaway and homeless youth served by programs established 
under the Runaway and Homeless Youth Act (42 U.S.C. 5701);
     Migrant children as defined under section 1309 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6399);
     Foster children certified through means other than a 
household application;
     Children enrolled in a Federally-funded Head Start Program 
or a comparable State funded Head Start Program or pre-kindergarten 
program;
     Children enrolled in an Even Start Program; and
     Non-applicant students approved by local education 
officials, such as a principal, based on available information.

Identified Student Percentage

    This proposed rule would define the term ``identified student 
percentage'' as the percentage determined by dividing the number of 
``identified students'' as of a specified period of time by the number 
of ``enrolled students'' as of the same period of time and multiplying 
the quotient by 100.

[[Page 65892]]

[GRAPHIC] [TIFF OMITTED] TP04NO13.000

    For a group of schools, the identified student percentage would be 
calculated by taking the total of the identified students for that 
group of schools and dividing that total by the total student 
enrollment for that group of schools. Only schools that are in the same 
LEA would be grouped together for purposes of determining community 
eligibility.

Implementation

    The proposed rule at Sec.  245.9(f)(2) would allow LEAs to elect 
the community eligibility provision for all schools or for certain 
schools meeting the eligibility criteria on or after July 1, 2014. 
Eligible LEAs and schools may operate the community eligibility 
provision for one or more 4-year cycles. Extensions are discussed 
further in this preamble under the heading New 4-year Cycles.

Eligibility Criteria

    To participate in the community eligibility provision, LEAs (other 
than a residential child care institution, as that term is set forth in 
the definition of ``School'' in Sec.  210.2) and schools would be 
required to meet the requirements of Sec.  245.9(f)(3), i.e., meet the 
minimum identified student percentage requirements, participate in both 
the NSLP and SBP, and comply with all community eligibility provision 
procedures, as set forth in Sec.  245.9(f)(4) of the proposed rule.
    To be eligible for community eligibility, an LEA or school would be 
required to have an identified student percentage of at least 40 
percent based on data as of April 1st of the prior school year. This 
percentage reflects both the number of identified students and the 
number of enrolled students as of April 1 of prior school year data.
    Section 11(a)(1)(F)(viii)(II) of the NSLA, as amended, authorizes 
the Department to establish a threshold that is less than 40 percent 
for each school year beginning on or after July 1, 2014. However, the 
Department does not intend to lower the threshold for school year 2014-
2015. The Department would consider data from the final community 
eligibility evaluation, along with program operational data and 
experience from nationwide implementation in determining if a future 
change to the threshold is warranted. Any future change to the 
threshold would be communicated in advance of implementation, through 
the Federal Register.
    Schools already offering free meals under Provision 2 or Provision 
3 would be able to elect the community eligibility provision, and 
schools under Provision 1 would also be able to convert to this 
provision. The conversion could take place during base or non-base 
years as long as the State or the LEA is able to demonstrate that the 
minimum identified student percentage threshold is met as of April 1 of 
the prior school year. Provision 1 schools in Puerto Rico and the 
Virgin Islands, where a statistical survey procedure is allowed in lieu 
of eligibility determinations, would be able to participate in the 
community eligibility provision. For those schools, updated direct 
certification data would be needed to determine the current percentage 
of identified students and all other requirements of the proposed rule 
would need to be met.

Community Eligibility Provision Procedures

    This rule at Sec.  245.9(f)(4) outlines proposed community 
eligibility provision procedures. The procedures include election 
deadline, State agency approval, service of meals at no charge, 
household applications, meal claiming percentages, multiplier factor, 
cost differential, new 4-year cycles, and grace years.

Election Deadline

    Under proposed Sec.  245.9(f)(4)(i), any LEA intending to elect the 
community eligibility provision for the following year for some or all 
of its schools would be required to submit to the State agency 
documentation demonstrating that the LEA or school meets the minimum 
identified student percentage threshold, as described earlier under 
Eligibility criteria. Such documentation would include, at a minimum, 
the counts of identified and enrolled students, as of April 1 of the 
prior school year. LEAs would be required to submit documentation no 
later than June 30 to begin community eligibility in the school year 
beginning July 1.

State Agency Review

    Prior to authorizing an LEA to participate in community eligibility 
provision for some or all of its schools, Sec.  245.9(f)(4)(ii) of the 
proposed rule would require the State agency to review the identified 
student percentage documentation submitted by the LEA to ensure the LEA 
or school meets the minimum identified student percentage, participates 
in both the NSLP and SBP, and has a record of administering the meal 
program in accordance with program regulations, as indicated by the 
most recent administrative review.
    While the decision to participate in the community eligibility 
provision rests with the LEA, the State agency is responsible for 
providing technical assistance and assuring continued program 
integrity. Thus, the State agency would be required to confirm the 
LEA's eligibility to participate in the community eligibility 
provision.

Meal Counts and Meals at No Charge

    Under Sec.  245.9(f)(4)(iii) of the proposal, the LEA would be 
required to ensure participating schools offer free reimbursable 
breakfasts and free reimbursable lunches to all students in 
participating schools during the 4-year cycle and count the number of 
reimbursable breakfasts and lunches served to students daily.

Household Applications

    Under proposed Sec.  245.9(f)(4)(iv), an LEA would not be permitted 
to collect applications for free and reduced price school meals on 
behalf of children in schools participating in the community 
eligibility provision. Any LEA seeking to obtain socio-economic data 
from students would be required to develop, conduct and fund this 
effort totally separate from and not under the auspices of the NSLP and 
SBP. Because costs associated with obtaining the socio-economic data 
would not be allowable Program costs, nonprofit school food service 
account funds could not be used for this purpose.
    Based on feedback from the States implementing the community 
eligibility provision during the phase-in period, the absence of socio-
economic data is cited as the largest barrier to electing the 
provision. Currently, LEAs use aggregate, non-identifying, eligibility 
information collected from school meals applications as a socio-
economic indicator for multiple purposes, including funding formulas 
for Federal and State education programs. Program regulations in 7 CFR 
Part 245 allow the use of aggregate, non-identifying information for 
such purposes, and also allow the use of individual student eligibility 
by authorized persons for specific purposes.
    Consistent with discussions the Department has had with the U.S.

[[Page 65893]]

Department of Education (DoE), DoE is developing guidance on how to use 
data collected without applications through community eligibility to 
determine the distribution of Title I funds to schools, which preserves 
the burden reduction intent of community eligibility. However, Title I 
is not the only assistance funding that uses NSLP socio-economic data, 
as LEAs may rely on this data for the distribution of other services to 
children or areas in high need.
    Before an LEA decides to collect separate applications to obtain 
socio-economic data, the State agency child nutrition staff is 
encouraged to work with State funding experts to assess the need for 
school meal program application data, and to identify alternate sources 
of socio-economic data. Replacing the collection of socio-economic data 
through NSLP with another collection system is contrary to the 
statutory goal of reducing paperwork for households and schools through 
community eligibility. If the LEA determines that it is absolutely 
necessary to collect socio-economic data to assist with the 
disbursement of other education-related funds, such application process 
would be developed and managed totally separate from the School 
Nutrition Programs, and not under the auspices of the National School 
Lunch Program. It is expected that the form/request for household 
information for non-Program purposes would clarify its purpose, and 
affirmatively state that receipt of school meal benefits would not be 
affected by a household's decision to complete and return the form/
request.

Free and Paid Claiming Percentages

    Under proposed Sec.  245.9(f)(4)(v), reimbursement for breakfasts 
and lunches meeting Program requirements would be based on free and 
paid claiming percentages applied to the total number of reimbursable 
lunches and breakfasts served, respectively, each month. To determine 
the free claiming percentage, LEAs would multiply the identified 
student percentage by a multiplier factor of 1.6, as required by the 
NSLA. If the product of this calculation exceeds 100 percent, the free 
claiming percentage is capped at 100 percent. The difference between 
the free claiming percentage and 100 percent represents the paid 
claiming percentage. Because community eligibility schools do not 
collect household applications for school meals, the multiplier factor 
of 1.6 is intended to estimate the number of free and reduced price 
meals that would had been served at the participating school based on 
income eligibility and categorical eligibility if applications were 
collected.

Multiplier Factor

    Consistent with section 11(a)(1)(F)(vii) of the NSLA, as amended, 
the multiplier factor is 1.6, until otherwise determined by the 
Secretary. For each school year beginning on or after July 1, 2014, the 
law allows the Secretary to change the multiplier factor to a number 
between 1.3 and 1.6, and to apply a different multiplier factor for 
different schools or LEAs. However, schools electing community 
eligibility would maintain the same multiplier factor for an entire 4-
year cycle. This proposed provision is found at Sec.  245.9(f)(4)(vi).
    Although the amendments to the NSLA made by HHFKA would allow the 
Secretary to change the multiplier factor on July 1, 2014, the 
Department does not intend to change it for school year 2014-2015. The 
Department would consider data from the final community eligibility 
evaluation, along with program operational data and experience from 
nationwide implementation in determining if a future change to the 
multiplier factor is warranted. Any change to the multiplier factor 
would be communicated in advance of implementation, through the Federal 
Register.

Selection of the Identified Student Percentage

    In the first year of a 4-year cycle, the LEA would use the 
identified student percentage as of April 1 of the prior school year. 
In the second, third, and fourth year of the cycle, the LEA would have 
discretion to use either (a) the identified student percentage from the 
year prior to year 1 of the four-year cycle or (b) the identified 
student percentage from the preceding year, whichever is higher. For 
example, if an LEA elects community eligibility for the school year 
2014-2015, the selection would be as follows:

    For Year 1 (SY 2014-2015): percentage as of April 1, 2014 
(school year prior to implementing the community eligibility 
provision);
    For Year 2 (SY 2015-2016): percentage as of April 1, 2014 or 
April 1, 2015;
    For Year 3 (SY 2016-2017): percentage as of April 1, 2014 or 
April 1, 2016; and
    For Year 4 (SY 2017-2018): percentage as of April 1, 2014 or 
April 1, 2017.

    Due to variations in the point in time for monthly updates in State 
and local systems, under this proposed rule the identified student 
percentage must be representative of the identified students and the 
student enrollment as of April 1. Updates could be done before or after 
April 1 to account for differences in operational procedures, but the 
data would have to be representative of this date. For example, if a 
State or local direct certification system provides monthly updates of 
directly certified students on the 5th of each month, data from the 
April 5 updates may be used to develop the identified student 
percentage if it is representative of April 1.

Calculating the Claiming Percentages

    As stated earlier, the LEA would multiply the applicable identified 
student percentage by a factor of 1.6 to calculate the free claiming 
percentage. The difference between the free claiming percentage and 100 
percent represents the paid claiming percentage. An example of 
calculating the free and paid claiming percentages used for Year 1 
follows:

    Year 1 (School Year July 1, 2014-June 30, 2015):

Identified student percentage as of April 1, 2014 (school year prior 
to Year 1): 45%
Identified student percentage x multiplier factor: 45% x 1.6 = 72%
Free claiming percentage: 72%
Paid claiming percentage (100% minus the free claiming percentage): 
28%

    The claiming percentages used in Year 1 would be valid for the 4-
year community eligibility cycle. However, in the second, third and 
fourth year, the identified student percentage may be calculated each 
year (as discussed earlier) to determine if an increase has occurred 
from the year prior to the first year of community eligibility. An LEA 
or school may re-calculate its claiming percentages in the second, 
third or fourth year to reflect the higher identified student 
percentage. As shown in the next example, if the identified student 
percentage rises in the second, third or fourth year, there would be a 
corresponding increase in the free claiming percentage and decrease in 
the paid claiming percentage.

    Year 2 (School Year July 1, 2015-June 30, 2016):

Identified student percentage (as of April 1, 2014) used for school 
year prior to Year 1: 45%
Identified student percentage as of April 1, 2015: 47%
Identified student percentage x multiplier factor: 47% x 1.6 = 75.2%
Free claiming percentage: 75.2%
Paid claiming percentage (100% minus the free claiming percentage): 
24.8%

Calculating the Claim for Reimbursement

    Under the proposal, the LEA would determine the number of free 
lunches to claim for reimbursement by multiplying

[[Page 65894]]

the free claiming percentage by the total number of reimbursable 
lunches served. To determine the number of paid lunches to claim for 
reimbursement, the LEA would multiply the paid claiming percentage by 
the total number of reimbursable lunches served. Similar calculations 
are made to determine the number of free and paid breakfasts to claim 
for reimbursement.

Non-Federal Funding Sources

    The proposed rule at Sec.  245.9(f)(4)(vii) would require the LEA 
or school to pay, with funds from non-Federal sources, the difference 
between the cost of serving lunches and breakfasts at no charge to all 
participating children and Federal reimbursement. This is consistent 
with the existing requirements for Provision 2 and 3, the other two 
reimbursement alternatives available under Sec.  245.9. The use of non-
Federal funds would be necessary if the total amount of Federal 
reimbursement through the community eligibility provision does not 
cover the costs of serving all students free meals. Consistent with 
regular Program administration, funds other than Federal reimbursement 
available to the nonprofit school food service account would be used to 
make up the difference. Such funds generally include other school food 
service revenue such as revenue from a la carte sales, etc. The non-
Federal funds used for community eligibility would have to be allocated 
for this purpose and could not be assigned to meet other Federal 
requirements.
    When considering whether to participate in community eligibility, 
LEAs and schools should consider the participation level (e.g., 
individual school, group of schools within the LEA, or the entire LEA), 
the anticipated level of Federal reimbursement, and the non-Federal 
resources available.

New 4-Year Cycle

    Under Sec.  245.9(f)(4)(viii) of the proposal, participating LEAs 
or schools that meet the identified student percentage of 40 percent as 
of April 1 in Year 4 of the 4-year cycle would be able, with the State 
agency's concurrence, to immediately begin another 4-year cycle after 
the initial cycle concludes. For example, schools that elect community 
eligibility beginning July 1, 2014 would have to meet the 40 percent 
threshold as of April 1, 2018 to qualify for another 4-year cycle. The 
identified student percentage as of April 1, 2018 would be used to 
calculate the claiming percentages for Year 1 of the new cycle.

Grace Year

    Under Sec.  245.9(f)(4)(ix) of this proposed rule, participating 
LEAs and schools that fall within 10 percentage points lower than the 
established threshold of 40 percent as of April 1 in Year 4 of the 4-
year cycle, would be allowed to continue community eligibility for a 
grace year (one year outside of the 4-year cycle). At least a 30 
percent identified student percentage would be required to qualify for 
a grace year. Reimbursement for schools in a grace year would be based 
on the identified student percentage as of April 1 in year 4 of the 
current 4-year cycle. For example, the claiming percentages for 
participating schools in a grace year would be calculated as follows:

Year 4 identified student percentage as of April 1, 2018: 35%
Identified student percentage x multiplier factor: 35% x 1.6 = 56%
Free claiming percentage: 56%
Paid claiming percentage: 44%

    LEAs or schools that reach the required 40 percent threshold of 
identified students as of April 1 of the grace year would be able to 
begin a new community eligibility 4-year cycle in the following school 
year. Those that do not meet the threshold as of April 1 of the grace 
year would be required to return to regular Program administration, 
including collecting household applications in the following school 
year.

Notification and Reporting Requirements

    Section 11(a)(1)(F)(x) of the NSLA, as amended, includes several 
provisions which, in concert, encourage State agencies to promote and 
disseminate information about community eligibility. Under the statute, 
State agencies are required to publish a list of schools and notify 
eligible or potentially eligible LEAs of the community eligibility 
provision no later than May 1. In order for the State agency to meet 
the publication and notification deadline, the proposal would require 
the list of schools and the notification of eligible or potentially 
eligible LEAs to occur no later than April 15. The April 15 deadline is 
intended to give State agencies enough time to obtain and post the 
required information within the period specified by the law. The 
proposed deadlines and requirements are discussed in more detail below 
and appear in the proposed regulatory text under paragraphs Sec.  
245.9(f)(5) through (f)(8).

List of Schools

    To assist State agencies in disseminating information about 
community eligibility, Sec.  245.9(f)(5) of this proposal would require 
LEAs to submit to the State agency by April 15, a list of schools 
eligible or potentially eligible for the community eligibility 
provision. The State agency may exempt LEAs from this requirement if 
the State agency already collects this information. The lists would be 
required to include:
     Schools with an identified student percentage of at least 
40 percent;
     Schools with an identified student percentage of at least 
30 percent but less than 40 percent; and
     Schools that are currently in the fourth year community 
eligibility with an identified student percentage of at least 30 
percent but less than 40 percent.
    The above lists of schools may be obtained by the State agency at 
any time during the current school year, but not later than April 15. 
Since this requirement is intended as part of a public notification and 
outreach effort, local and State agencies would be permitted to use 
data reflecting either the identified student percentage or direct 
certifications as a percentage of enrollment, as an indicator of 
potential eligibility or eligibility. LEAs or State agencies are 
encouraged to use existing data sources to meet this requirement. For 
example, data collected through the frequent matching activities with 
the Supplemental Nutrition Assistance Program may be used to fulfill 
the notification requirements. Additional information regarding 
notification data is discussed in this preamble under the heading 
Notification data.

Notification of Local Educational Agencies

    Under Sec.  245.9(f)(6) of the proposal, State agencies would be 
required to notify eligible or potentially eligible LEAs by April 15, 
of their status for community eligibility and the procedures to elect 
this reimbursement option. Based on the most current identified student 
data available district wide, States agencies would notify:
     LEAs with an identified student percentage of at least 40 
percent district wide, of the opportunity to elect community 
eligibility in the subsequent year; the estimated cash assistance the 
LEA would receive, e.g., a blended per meal rate; and the procedures to 
participate in community eligibility;
     LEAs with an identified student percentage that is less 
than 40 percent district wide but greater than or equal to 30 percent, 
that they may be eligible to

[[Page 65895]]

participate in community eligibility in the subsequent year if they 
meet the eligibility requirements set forth in Sec.  245.9 (f)(3) of 
this proposal;
     LEAs currently using community eligibility district wide, 
of the options available in establishing claiming percentages for next 
school year; and
     LEAs currently in year 4 with an identified student 
percentage district wide that is less than 40 percent but greater than 
or equal to 30 percent, of the grace year eligibility. The LEAs would 
also be notified of the estimated cash assistance they would receive 
during the grace year, and the procedures to maintain eligibility and 
election.
    State agencies are encouraged to use existing data to effect the 
LEA notification requirement. For example, State agencies are able to 
determine each LEA's identified student percentage based on the FNS-
742, School Food Authority Verification Summary Report. This 
information is submitted to the State agency by March 1. With this 
information, State agencies could readily notify eligible and 
potentially eligible LEAs of their status for the community eligibility 
provision.

Public Notification Requirements

    Section 11(a)(1)(F)(x) of the NSLA, as amended, requires each State 
agency to publish the list of schools described previously under List 
of schools, and to submit to the Department the list of LEAs receiving 
notices as described previously under Notification of local educational 
agencies.
    This proposed rule at Sec.  245.9(f)(7) would require State 
agencies to make both the list of schools and the list of LEAs readily 
accessible on the State agency Web site in a format prescribed by FNS. 
FNS intends to develop a template for State agencies to use in 
displaying the required information.
    In lieu of having the State agencies submit the list of LEAs to the 
Department for publication, the FNS intends to develop a Community 
Eligibility Provision Web site which would link to the applicable 
portion of the State agencies' Web sites that identify both the list of 
schools and the list of LEAs.

Notification Data

    The proposed rule, at Sec.  245.9(f)(8), would require State 
agencies and LEAs to obtain data reflective of the current school year 
when identifying schools and LEAs that are eligible or near eligible 
for community eligibility. State agencies and LEAs would be required to 
use the identified student percentage, as defined in the proposed Sec.  
245.9(f)(1).
    As mentioned earlier, LEA-wide identified student percentage data 
are readily available as both the numbers of identified students and 
enrolled students are collected and reported on the FNS-742, School 
Food Authority Verification Summary Report. However, school-specific 
data may not be as readily available to the State agency.
    If school-specific identified student data are not readily 
available, State agencies would be permitted to use the number of 
direct certifications as a proxy for identified students when 
identifying schools to notify, as required under proposed Sec.  
245.9(f)(5). To calculate the identified student percentage using proxy 
data, divide the number of students directly certified through the 
Supplemental Nutrition Assistance Program and other assistance 
programs, if applicable, by the number of enrolled students.
    If direct certification counts are used in the identified student 
percentage calculation to meet the proposed notification requirements, 
the data must be clearly identified as data not fully reflective of the 
number of identified students. Further, if the data are not 
representative of April 1 of the current school year, the data must 
include a notation that the data are intended for informational 
purposes and do not confer eligibility for community eligibility. This 
proposed provision is found in Sec.  245.9(f)(8) of the proposed 
regulation.

Other Uses of the Free Claiming Percentage

    As required in Sec.  245.9(f)(9) of the proposed regulation, when 
community eligibility is in place in all or a group of schools in an 
LEA, an individual school's eligibility for other Child Nutrition 
Programs, such as Fresh Fruit and Vegetable Program, Child and Adult 
Care Food Program, Summer Food Service Program, Afterschool Snacks, and 
Seamless Summer Option, would be determined by the school's free 
claiming percentage (as discussed earlier in the rule under the heading 
Free and Paid Claiming Percentages). No household applications would be 
required. Institutions or sites in the boundaries of the individual 
community eligibility school would be permitted to use the school's 
free claiming percentage (identified student percentage multiplied by 
1.6) to determine area eligibility under these programs.

Record Retention

    Under the proposal, LEAs and schools would be required to keep 
documentation and records related to methodology used to calculate the 
identified student percentage (for each school year if applicable) and 
meet existing recordkeeping requirements in Parts 210, 220 and 245. 
Failure to maintain records would result in the State agency requiring 
the LEA and/or school(s) to return to standard meal counting and 
claiming procedures because the level of reimbursement could not be 
justified. This provision is found at Sec.  245.9(h)(3).

Administrative Reviews of Community Eligibility Schools

    When conducting the administrative reviews of community eligibility 
schools, the State agency must verify the identified student percentage 
used during the year in which a review is conducted. In addition, the 
State agency must review the documentation and records from each year 
used to establish the identified student percentage. Applicable 
provisions in Sec.  210.18 and FNS guidance must be followed when 
reviewing schools using community eligibility. This proposed provision 
is found at Sec.  245.9(i). Additional information on administrative 
review procedures will be provided under a separate proposed 
rulemaking.

Ending Use of Community Eligibility

    Existing regulations at Sec.  245.9(i) sets forth requirements for 
Provision 1, 2, and 3 schools wishing to return to standard meal 
counting and claiming procedures. Provision 1, 2, and 3 schools may 
return to standard notification, certification and counting procedures 
at any time if standard procedures better suit the school's Program 
needs. The LEA must notify the State agency of the return to standard 
procedures.
    Under section 11(a)(1)(F)(ii)(II) of the NSLA, as amended, a 
participating LEA or school would be able to cease community 
eligibility and return to standard notification, certification and 
counting procedures for the following year by notifying the State 
agency not later than June 30.
    The proposed rule at Sec.  245.9(j) would consolidate the existing 
and new requirements for all special assistance LEAs and schools, i.e., 
LEAs and schools participating in Provision 1, 2, 3 or community 
eligibility. Under the proposal, special assistance LEAs or schools 
would be able to cease a special provision option and return to 
standard notification, certification and counting procedures at any 
time during the school year. The LEA would be required to notify the 
State agency prior to the change and seek State agency guidance and 
concurrence to resume standards

[[Page 65896]]

procedures. To return to standard procedures in the next school year, 
the LEA would notify the State agency no later than June 30.

Transferring a Student's Eligibility for Free Meals Under the Special 
Assistance Provisions

    This proposed rule at Sec.  245.9(l) would ensure that students 
transferring from a community eligibility school, or a special 
provision school, to a school using standard counting and claiming 
procedures in the same LEA continue to receive free meals for up to 10 
operating days. This is intended to avoid interruption in nutrition 
benefits for a student while the receiving school is determining 
individual eligibility status. For transfers between LEAs, the 
receiving LEA may also choose to provide the transferred student free 
meals for up to 10 operating days.

LEA Best Practices

    To implement community eligibility successfully and encourage all 
children to benefit from universal free school meals, LEAs are 
encouraged to:
     Consider and plan for potential issues surrounding the 
absence of individual free and reduced price data for other education 
purposes and communicate with those impacted.
     Inform students and parents that free meals (breakfast and 
lunch) will be offered to all enrolled students under the community 
eligibility provision.
     Implement the community eligibility provision in a way 
that results in full student participation and not in overt-
identification of low-income students;
     Communicate effectively to all students and households the 
nutrition benefits of school meals; and
     Be aware of potential overt identification issues when 
offering a la carte foods.

Procedural Matters

Executive Order 12866 and Executive Order 13563

    This proposed rule has been reviewed by the Office of Management 
and Budget (OMB) in conformance with Executive Order 12866 and has been 
determined to be Not Significant.

Regulatory Impact Analysis

    This rule has been designated as not significant by the Office of 
Management and Budget; therefore, no Regulatory Impact Analysis is 
required.

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 proposed rule would not have a 
significant economic impact on a substantial number of small entities. 
This proposed rule would establish an alternative reimbursement option 
for LEAs and schools in high poverty areas, and would eliminate the 
requirement to collect free and reduced price household applications in 
participating schools during the period of participation in the 
community eligibility provision. Therefore, FNS does not expect that 
the proposed rule will have a significant economic impact on 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 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, 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) that would result in 
expenditures for State, local, or 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

    The NSLP and SBP are listed in the Catalog of Federal Domestic 
Assistance Programs under 10.555 and 10.553, respectively. 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), these programs are 
included in the scope of Executive Order 12372, which requires 
intergovernmental consultation with State and local officials. The 
Child Nutrition Programs are federally funded Programs administered at 
the State level. FNS headquarters and regional office staff engage in 
ongoing formal and informal discussions with State and local officials 
regarding Program operational issues. This structure of the Child 
Nutrition Programs allows State and local agencies to provide feedback 
that contributes to the development of meaningful and feasible Program 
requirements.

Executive Order 13132

    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.
1. Prior Consultation With State Officials
    FNS headquarters and regional offices have formal and informal 
discussions with State agency officials on an ongoing basis regarding 
the Child Nutrition Programs and policy issues. Prior to drafting this 
proposed rule, FNS held several conference calls and webinars with the 
State agencies to discuss the phased-in implementation of the community 
eligibility provision as prescribed by the HHFKA. FNS also shared 
information with State officials at national, regional and state level 
conferences. These opportunities allowed for exchange of information 
that aided in the development of this proposed rule. Issues identified 
during the phased-in implementation of the community eligibility 
provision were also taken into consideration.
2. Nature of Concerns and the Need To Issue This Rule
    State agencies identified the absence of non-identifying household 
information for other education related purposes, such as Title I 
funding allocation, as an issue. The HHFKA does not allow LEAs and 
schools to collect household applications for free and reduced price 
meals while participating in the community eligibility provision. This 
alternative reimbursement option is designed to increase access to 
school meals while maximizing the use of existing information and 
eliminating the burden associated with collecting household 
applications.
3. Extent to Which the Department Meets Those Concerns
    FNS has considered the concerns raised by stakeholders. We have 
attempted to balance the statutory requirement prohibiting the use of

[[Page 65897]]

household applications for the purpose of identifying students eligible 
for free and reduced price meals in the community eligibility provision 
with the reported need of LEAs and schools to access household 
information for other education-related purposes. The preamble to this 
rule explains that LEAs and schools are allowed to develop alternative 
methods to collect household socio-economic data and lists a few 
restrictions intended to ensure that such collection of data is 
conducted separately from the NSLP and SBP. In addition, FNS has 
communicated with the Department of Education on several occasions, and 
with the Federal Communication Commission to provide information to 
assist them in the development of their community eligibility guidance 
materials related to funding distribution under their assistance 
programs.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed 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, appeal procedures in Sec.  210.18(q) and Sec.  
235.11(f) of this chapter must be exhausted.

 Executive Order 13175

    Executive Order 13175 requires Federal agencies to consult and 
coordinate with Tribes on a government-to-government basis on policies 
that have Tribal implications, including regulations, legislative 
comments or proposed legislation, and other policy statements or 
actions that have substantial direct effects on one or more Indian 
Tribes, on the relationship between the Federal Government and Indian 
Tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian Tribes. In spring 2011, FNS offered 
five opportunities for consultation with Tribal officials or their 
designees to discuss the impact of the Healthy, Hunger-Free Kids Act of 
2010 on Indian tribes or Indian Tribal governments. FNS followed up 
with a conference call on February 13, 2013, and has scheduled 
additional calls for May 22, 2013; August 21, 2013; and November 6, 
2013. These consultation sessions have provided and will continue to 
provide the opportunity to address Tribal concerns related to school 
meals. No concerns about the community eligibility provision have been 
expressed by the Indian Tribal governments.
    The impact of this proposed rule on Tribal members is expected to 
be positive. The community eligibility provision facilitates access to 
free school meals in high-need LEAs and schools, and enhances program 
efficiency by eliminating the need to collect household applications. 
Providing free meals to all students through community eligibility 
would support Tribal efforts to reduce obesity and diabetes in their 
communities by providing nutritional balanced meals and helping 
children develop healthful eating habits early in life.
    USDA will respond in a timely and meaningful manner to all Tribal 
government requests for consultation concerning this rule and will 
provide additional venues, such as webinars and teleconferences, to 
host collaborative conversations with Tribal officials or their 
designees concerning ways to improve this rule in Indian country. We 
are unaware of any current Tribal laws that could be in conflict with 
the proposed rule. We request that commenters address any concerns in 
this regard in their responses.

 Civil Rights Impact Analysis

    FNS has reviewed this proposed rule in accordance with 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 age, race, color, national origin, sex, or disability. A careful 
review of the rule's intent and provisions revealed that this proposed 
rule is not intended to reduce a child's ability to participate in the 
National School Lunch Program, School Breakfast Program, Fresh Fruit 
and Vegetable Program, or Special Milk Program. The community 
eligibility provision provides all children enrolled in and attending 
the eligible schools access to free school meals.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
Part 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 collection is a revision of a currently 
approved collection for Determining Eligibility for Free and Reduced 
Price Meals, OMB control 0584-0026 (7 CFR Part 245). The 
current approval for the information collection burden associated with 
7 CFR Part 245 expires on April 30, 2016. This revision consists of the 
proposed rule, National School Lunch Program and School Breakfast 
Program: Eliminating Applications through Community Eligibility as 
Required by the Healthy, Hunger-Free Kids Act of 2010. The proposed 
rule is intended to improve school meal program access for low-income 
children and reduce paperwork for households and program 
administrators. The current collection burden inventory for Determining 
Eligibility for Free and Reduced Price Meals is 965,645. This revision 
will reduce reporting burden by 6,571 hours and increase recordkeeping 
burden by 80 hours for an overall reduction of 6,491 hours, resulting 
in a total collection burden inventory of 959,154 hours. 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.
    Written comments on the information collection in this proposed 
rule must be received by February 3, 2014.
    Send written comments to the Office of Information and Regulatory 
Affairs, OMB, Attention: Desk Officer for FNS, Washington, DC 20503. 
Please also send a copy of your comments to Margaret Applebaum, Program 
Analysis and Monitoring Branch, Child Nutrition Division, 3101 Park 
Center Drive, Room 640, Alexandria, VA 22302. For further information, 
or for copies of the information collection requirements, please 
contact Margaret Applebaum at the address indicated above. Comments 
will also be accepted through the Federal eRulemaking Portal. Go to 
http://www.regulations.gov, and follow the online instructions for 
submitting comments electronically.
    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

[[Page 65898]]

use of appropriate automated, electronic, mechanical, or other 
technological collection techniques or other forms of information 
technology.
    All responses to this notice will be summarized and included in the 
request for Office of Management and Budget (OMB) approval, and will 
become a matter of public record.
    Title: National School Lunch Program and School Breakfast Program: 
Eliminating Applications through Community Eligibility as Required by 
the Healthy, Hunger-Free Kids Act of 2010.
    OMB Number: 0584-0026.
    Expiration Date: April 30, 2016.
    Type of Request: Revision of a currently approved collection.
    Abstract: The Food and Nutrition Service administers the National 
School Lunch Program, the School Breakfast Program, and the Special 
Milk Program as mandated by the Richard B. Russell National School 
Lunch Act (NSLA), as amended (42 U.S.C. 1751, et seq.), and the Child 
Nutrition Act of 1966, as amended (42 U.S.C. 1771, et seq.). As 
provided in 7 CFR Part 245, schools participating in these meal 
programs must make free and reduced price meals available to eligible 
children.
    This rule proposes to amend the eligibility regulations for free 
and reduced price meals under the National School Lunch Program (NSLP) 
and School Breakfast Program (SBP) to codify the statutory provision 
that establishes the community eligibility provision, a reimbursement 
option for eligible local educational agencies (LEAs) and schools that 
wish to offer free school meals to all children in high poverty schools 
without collecting household applications for a period of four years. 
Eligibility to participate in the provision is based on an identified 
student percentage (ISP) derived from the claiming percentages of 
students eligible for free meals who are not subject to verification as 
prescribed in section Sec.  245.6a(c)(2). Participating LEAs and 
schools will receive meal reimbursement based on the ISP derived from 
the claiming percentages.
    This collection obtains information on LEAs and schools that fall 
in one of the following categories of the community eligibility 
provision: Eligible to participate (ISP 40% or greater), nearly 
eligible (ISP between 30-40%), currently electing (ISP 40% or greater), 
or grace year eligible (in fourth year with ISP between 30-40%) and 
State agencies that must make the information collected publically 
available. For those eligible and electing to participate in the 
provision, this collection also eliminates certain LEA and household 
reporting and administrative burdens associated with applications for 
free and reduced price meals.
    This proposed rule is requesting a revision in the burden hours. As 
a result of program changes, the revisions result in an overall 
reduction of 6,491 hours from current approved burden (decrease of 
6,571 reporting burden and slight increase of 80 hours of recordkeeping 
burden).
    The average burden per response and the annual burden hours for 
reporting and recordkeeping are explained below and summarized in the 
charts which follow.
    Affected Public: Individuals/Households, Local Educational 
Agencies, and State Agencies
    Estimated Number of Respondents: 8,278,357
    Estimated Number of Responses per Respondent: 2.21
    Estimated Total Annual Responses: 18,322,111
    Estimated Time per Response: 0.258
    Estimate Total Annual Burden on Respondents: 959,154
    Current OMB Inventory: 965,645
    Difference (Burden Revisions Requested): -6,491
    Refer to the following tables for estimated total annual reporting 
and recordkeeping burden per each type of respondent:

                Estimated Annual Recordkeeping Burden for 0584-0026, Determining Eligibility for Free and Reduced Price Meals, 7 CFR 245
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Estimated                    Average       Average                                  Difference
                                       Section           number of   Frequency of     annual       burden per      Annual       Previous       due to
                                                        respondents    response      responses      response    burden hours   total hours   rulemaking
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Recordkeeping (State Agencies)
--------------------------------------------------------------------------------------------------------------------------------------------------------
State Agencies review and       245.9(f)(4)(ii)......            56             9           500          0.080            40             0            40
 confirm LEAs eligibility to
 participate in provision.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Recordkeeping (Local Education Agency)
--------------------------------------------------------------------------------------------------------------------------------------------------------
LEAs maintain documentation     245.9(h)(3)..........           500             1           500          0.080            40             0            40
 related to methodology used
 to calculate the identified
 student percentage and
 determine eligibility.
Total Recordkeeping Burden for  .....................           556          1.80          1000         12.5              80  ............  ............
 Proposed Rule.
Total Existing Recordkeeping    .....................  ............  ............  ............  .............         6,059  ............  ............
 Burden for Part 245.
Total Recordkeeping Burden for  .....................  ............  ............  ............  .............         6,139  ............  ............
 Part 245 with Proposed Rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 65899]]


                  Estimated Annual Reporting Burden for 0584-0026, Determining Eligibility for Free and Reduced Price Meals, 7 CFR 245
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Estimated                    Average       Average                                  Difference
                                       Section           number of   Frequency of     annual       burden per      Annual       Previous       due to
                                                        respondents    response      responses      response    burden hours   total hours   rulemaking
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Reporting (State Agencies)
--------------------------------------------------------------------------------------------------------------------------------------------------------
State agency notify LEAs of     245.9(f)(6)..........            56            85          4769         0.050            239             0           239
 their community eligibility
 status as applicable.
State agency to make            245.9(f)(7)..........            56             1            56         0.017              1             0             1
 publically available the
 names of LEAs and schools
 receiving notifications.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Reporting (Local Education Agency)
--------------------------------------------------------------------------------------------------------------------------------------------------------
LEAs submit to State agency     245.9(f)(4)(i).......           500             1           500         0.033             17             0            17
 documentation of acceptable
 identified student percentage
 of LEA/school electing the
 provision.
LEA submit to State agency for  245.9(f)(5)..........         5,159             1         5,159         0.0167            86             0            86
 publication a list of
 potentially eligible schools
 and their eligibility status;
 unless otherwise exempted by
 State agency.
LEAs amend free and reduced     245.9(g)(1)..........           500             1           500         0.250            125             0           125
 policy statement and certify
 that schools meet eligibility
 criteria.
LEAs notify households of       245.6(c)(6)(i).......        20,358           306     6,231,886         0.02         124,638       125,148          -510
 approval of meal benefit
 applications.
LEAs must notify households in  245.6(c)(6)(ii)......        20,358           145     2,942,097         0.020         58,842        62,574        -3,732
 writing that children are
 eligible for free meals based
 on direct certification and
 that no application is
 required.
LEAs provide written notice to  245.6(c)(7)..........        20,358            17       345,256         0.020          6,905         7,092          -187
 each household of denied
 benefits.
LEA must enter into written     245.6(j).............        20,358             1        20,358         0.166          3,379         3,462           -83
 agreement with the agency
 receiving children's free and
 reduced price eligibility
 information.
LEAs must determine sample      245.6a(c)............        20,358             1        20,358         0.330          6,718         6,883          -165
 size of households to verify
 eligibility.
LEAs notify households of       245.6a(f)............        20,358            12       249,531         0.250         62,383        62,574          -191
 selection for verification.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Reporting (Household)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Households complete             245.6(a).............     8,236,529             1     8,236,529         0.070        576,557       578,343        -1,786
 application form for free or
 reduced price meal benefits.
Households assemble written     245.6a(a)(7)(i)......       189,235             1       189,235         0.500         94,617        95,000          -383
 evidence for verification of
 eligibility and send to SFA.
Households cooperate with       245.6a(a)(7)(ii).....         1,892             1         1,892         0.167            316           317            -1
 collateral contacts for
 verification of eligibility.
Total Reporting Burden for      .....................     8,256,943             2    18,248,125         0.051        934,823  ............  ............
 Proposed Rule.
Total Existing Reporting        .....................  ............  ............  ............  .............       959,586  ............  ............
 Burden for Part 245.
Total Reporting Burden          .....................  ............  ............  ............  .............       (6,571)  ............  ............
 Decrease for Part 245.
Total Reporting Burden for      .....................  ............  ............  ............  .............       953,015  ............  ............
 Part 245 with Proposed Rule.
--------------------------------------------------------------------------------------------------------------------------------------------------------


          Summary of Burden (OMB 0584-0026) 7 CFR 245
------------------------------------------------------------------------
 
------------------------------------------------------------------------
TOTAL NO. RESPONDENTS...................................       8,278,357
AVERAGE NO. RESPONSES PER RESPONDENT....................           2.213
TOTAL ANNUAL RESPONSES..................................      18,322,111

[[Page 65900]]

 
AVERAGE HOURS PER RESPONSE..............................           0.258
TOTAL BURDEN HOURS FOR PART 245 WITH REVISIONS..........         959,154
CURRENT OMB INVENTORY FOR PART 245......................         965,645
DIFFERENCE (BURDEN REVISIONS REQUESTED).................         (6,491)
------------------------------------------------------------------------

E-Government Act Compliance

    FNS 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.

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.

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

0
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.

0
2. In Sec.  245.6, amend paragraph (b)(1)(v) by adding a third sentence 
at the end of the paragraph to read as follows.


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

* * * * *
    (b) * * *
    (1) * * *
    (v) * * * Local educational agencies or schools electing the 
community eligibility provision under Sec.  245.9(f), are required to 
conduct direct certification only in the year prior to the first year 
of a cycle or, if seeking to update the identified student percentage 
in the second, third or fourth year of a cycle.
* * * * *
0
3. In Sec.  245.9:
0
a. Redesignate paragraph (k) as paragraph (m) and redesignate 
paragraphs (f) through (j) as paragraphs (g) through (k);
0
b. Add new paragraphs (f) and (l);
0
c. Revise newly redesignated paragraphs (g), (i), (j) and (k);
0
d. Revise the introductory text for newly redesignated paragraph (h) 
and add paragraph (h)(3);
0
e. Remove the words ``school food authority'' whenever they appear in 
Sec.  245.9 and add, in their place, the words ``local educational 
agency'';
0
f. Remove the words ``school food authorities'' whenever they appear in 
Sec.  245.9 and add, in their place, the words ``local educational 
agencies'';
0
g. Remove the words ``school food authority's'' whenever they appear in 
Sec.  245.9 and add, in their place, the words ``local educational 
agency's'';
0
h. Remove the words ``paragraph (g)'' whenever they appear in Sec.  
245.9 and add, in their place, the words ``paragraph (h)'';
0
i. Remove the words ``paragraphs (g) and (h)'' whenever they appear in 
Sec.  245.9 and add, in their place, the words ``paragraphs (h) and 
(i)''; and
0
j. Remove the words ``paragraph (k)'' whenever they appear in Sec.  
245.9 and add, in their place, the words ``paragraph (m)''.
    The revisions and additions read as follows:


Sec.  245.9  Special assistance certification and reimbursement 
alternatives.

* * * * *
    (f) Community eligibility. The community eligibility provision is a 
4-year reimbursement option for eligible high poverty local educational 
agencies and schools. Under this provision, a local educational agency 
may participate for all schools in the local educational agency or for 
only some schools. Participating local educational agencies must offer 
free breakfasts and lunches for four successive years to all children 
attending participating schools and receive meal reimbursement based on 
claiming percentages, as described in paragraph (f)(4)(v) of this 
section.
    (1) Definitions. For the purposes of this paragraph,
    (i) Enrolled students means students who are enrolled in and 
attending schools participating in the community eligibility provision 
and who have access to at least one meal service (breakfast or lunch) 
daily.
    (ii) Identified students means students who are not subject to 
verification as prescribed in Sec.  245.6a(c)(2). Identified students 
are students approved for free meals based on documentation of their 
receipt of benefits from SNAP, TANF, the Food Distribution Program on 
Indian Reservations, or Medicaid where applicable. The term identified 
students also includes a homeless child, a migrant child, a runaway 
child or a Head Start Child, as these terms are defined in Sec.  245.2. 
In addition, the term includes foster children certified for free meals 
through means other than an application for free and reduced price 
school meals. The term does not include students who are categorically 
eligible based on submission of an application for free and reduced 
price school meals.
    (iii) Identified student percentage means a percentage determined 
by dividing the number of identified students as of a specified period 
of time by the number of enrolled students as defined in paragraph 
(f)(1)(i) of this section as of the same period of time and multiplying 
the quotient by 100. The identified student percentage may be 
determined by an individual participating school, a group of 
participating schools in the local educational agency, or in the 
aggregate for the entire local educational agency if all schools 
participate, following procedures established in FNS guidance.
    (2) Implementation. A local educational agency may elect the 
community eligibility provision for all schools or for certain schools 
meeting the requirements of this section beginning on or after July 1, 
2014. Community eligibility may be implemented for one or more 4-year 
cycles.
    (3) Eligibility criteria. To be eligible to participate in the 
community eligibility provision, local educational agencies (other than 
a residential child care institution, as that term is set forth in the 
definition of ``School'' in Sec.  210.2) and schools must meet the 
eligibility criteria set forth in this paragraph.
    (i) Minimum identified student percentage. A local educational 
agency or school must have an identified student percentage of at least 
40 percent, as of April 1 of the school year prior to participating in 
the community eligibility provision, unless otherwise specified by FNS.
    (ii) Lunch and breakfast program participation. A local educational 
agency or school must participate in the National School Lunch Program 
and School Breakfast Program, under Parts 210 and 220 of this title.
    (iii) Compliance. A local educational agency or school must comply 
with the procedures and requirements specified

[[Page 65901]]

in paragraph (f)(4) of this section to participate in the community 
eligibility provision.
    (4) Community eligibility provision procedures.
    (i) Election deadline. A local educational agency that intends to 
elect the community eligibility provision for the following year for 
all schools or on behalf of certain schools must submit to the State 
agency documentation demonstrating the LEA or school meets the 
identified student percentage, as specified under paragraph (f)(3)(i) 
of this section. Such documentation must be submitted no later than 
June 30 and must include, at a minimum, the counts of identified 
students and enrolled students as of April 1 of the prior school year.
    (ii) State agency concurrence. A local educational agency must 
obtain State agency concurrence to elect the community eligibility 
provision.
    (iii) Meals at no charge. A local educational agency must ensure 
participating schools offer free reimbursable breakfasts and lunches to 
all students attending participating schools during the 4-year cycle, 
and count the number of reimbursable breakfasts and lunches served to 
students daily.
    (iv) Household applications. A local educational agency must not 
collect applications for free and reduced price school meals on behalf 
of children in schools participating in the community eligibility 
provision. Any local educational agency seeking to obtain socio-
economic data from children receiving free meals under this section 
must develop, conduct and fund this effort totally separate from and 
not under the auspices of the National School Lunch Program and School 
Breakfast Program.
    (v) Free and paid claiming percentages. Reimbursement is based on 
free and paid claiming percentages applied to the total number of 
reimbursable lunches and breakfasts served each month, respectively. 
Reduced price students are accounted for in the free claiming 
percentage eliminating the need for a separate percentage.
    (A) To determine the free claiming percentage, multiply the 
applicable identified student percentage by a factor of 1.6, or as 
otherwise specified by FNS. The product of this calculation may not 
exceed 100 percent. The difference between the free claiming percentage 
and 100 percent represents the paid claiming percentage. The applicable 
identified student percentage means:
    (1) In the first year of participation in the community eligibility 
provision, the identified student percentage as of April 1 of the prior 
school year.
    (2) In the second, third, and fourth year of the 4-year cycle, the 
higher of the identified student percentage as of April 1 of the prior 
school year or the identified student percentage as of April 1 of the 
year prior to the first year of community eligibility.
    (B) To determine the number of lunches to claim for reimbursement, 
multiply the free claiming percentage by the total number of 
reimbursable lunches served to determine the number of free lunches to 
claim for reimbursement. The paid claiming percentage is multiplied by 
the total number of reimbursable lunches served to determine the number 
of paid lunches to claim for reimbursement. In the breakfast meal 
service, the free and paid claiming percentages are multiplied by the 
total number of reimbursable breakfasts served to determine the number 
of free and paid breakfasts to claim for reimbursement, respectively.
    (vi) Multiplier factor. A 1.6 factor must be used for an entire 4-
year cycle to calculate the percentage of lunches and breakfasts to be 
claimed at the Federal free rate.
    (vii) Cost differential. The local educational agency of a school 
participating in community eligibility must pay, with funds from non-
Federal sources, the difference between the cost of serving lunches and 
breakfasts at no charge to all participating children and Federal 
reimbursement.
    (viii) New 4-year cycle. To begin a new 4-year cycle, local 
educational agencies or schools must establish a new identified student 
percentage as of April 1 of the fourth year of the previous cycle. If 
the local educational agency or school meets the eligibility criteria 
set forth in paragraph (f)(3) of this section, a new 4-year cycle may 
begin, subject to State agency concurrence.
    (ix) Grace year. A local educational agency or school in the fourth 
year of a community eligibility cycle with an identified student 
percentage of less than 40 percent but equal to or greater than 30 
percent as of April 1 may continue using community eligibility for a 
grace year that is outside of the 4-year cycle. If the local 
educational agency or school regains the 40 percent threshold as of 
April 1 of the grace year, the State agency may authorize a new 4-year 
cycle for the following school year. If the local educational agency or 
school does not regain the required threshold as of April 1 of the 
grace year, it must return to collecting household applications in the 
following school year in accordance with paragraph (j) of this section. 
Reimbursement in a grace year is determined by multiplying the 
identified student percentage at the local educational agency or school 
as of April 1 of the fourth year of the previous cycle by the 1.6 
factor, or the factor as otherwise established by FNS.
    (5) Identification of potential community eligibility schools. No 
later than April 15 of each school year, each local educational agency 
must submit to the State agency a list(s) of schools as described in 
this paragraph. The State agency may exempt local educational agencies 
from this requirement if the State agency already collects the required 
information. The list(s) must include:
    (i) Schools with an identified student percentage of at least 40 
percent;
    (ii) Schools with an identified student percentage that is less 
than 40 percent but greater than or equal to 30 percent; and
    (iii) Schools currently in year 4 of the community eligibility 
provision with an identified student percentage that is less than 40 
percent but greater than or equal to 30 percent.
    (6) State agency notification requirements. No later than April 15 
of each school year, the State agency must notify the local educational 
agencies described in this paragraph about their community eligibility 
status. Each State agency must notify:
    (i) Local educational agencies with an identified student 
percentage of at least 40 percent district wide, of the potential to 
participate in community eligibility in the subsequent year; the 
estimated cash assistance the local educational agency would receive, 
e.g., a blended per meal rate; and the procedures to participate in 
community eligibility.
    (ii) Local educational agencies with an identified student 
percentage that is less than 40 percent district wide but greater than 
or equal to 30 percent, that they may be eligible to participate in 
community eligibility in the subsequent year if they meet the 
eligibility requirements set forth in paragraph (f)(3) of this section 
as of April 1.
    (iii) Local educational agencies currently using community 
eligibility district wide, of the options available in establishing 
claiming percentages for next school year.
    (iv) Local educational agencies currently in year 4 with an 
identified student percentage district wide that is less than 40 
percent but greater than or equal to 30 percent, of the grace year 
eligibility.
    (7) Public notification requirements. By May 1 of each school year, 
the State agency must make the following

[[Page 65902]]

information readily accessible on its Web site in a format prescribed 
by FNS:
    (i) The names of schools identified in paragraph (f)(5) of this 
section, grouped as follows: schools with an identified student 
percentage of least 40 percent, schools with an identified student 
percentage of less than 40 percent but greater than or equal to 30 
percent, and schools currently in year 4 of the community eligibility 
provision with an identified student percentage that is less than 40 
percent but greater than or equal to 30 percent.
    (ii) The names of local educational agencies receiving State agency 
notification as required under paragraph (f)(6) of this section, 
grouped as follows: local educational agencies with an identified 
student percentage of at least 40 percent district wide, local 
educational agencies with an identified student percentage that is less 
than 40 percent district wide but greater than or equal to 30 percent, 
local educational agencies currently using community eligibility 
district wide, and local educational agencies currently in year 4 with 
an identified student percentage district wide that is less than 40 
percent but greater than or equal to 30 percent.
    (8) Notification data. For purposes of fulfilling the requirements 
in paragraphs (f)(5) and (f) (6), the State agency must:
    (i) Obtain data representative of the current school year, and
    (ii) Use the identified student percentage as defined in paragraph 
(f)(1) of this section. If school-specific identified student 
percentage data are not readily available by school, use direct 
certifications as a percentage of enrolled students, i.e., the 
percentage derived by dividing the number of students directly 
certified under Sec.  245.6(b) by the number of enrolled students as 
defined in paragraph (f)(1) as an indicator of potential eligibility. 
If direct certification data are used, the State agency must clearly 
indicate that the data provided does not fully reflect the number of 
identified students.
    (iii) If data are not as of April 1 of the current school year, 
ensure the data includes a notation that the data are intended for 
informational purposes and do not confer eligibility for community 
eligibility. Local educational agencies must meet the eligibility 
requirements specified in paragraph (f)(3) of this section to 
participate in community eligibility.
    (9) Other Uses of the Free Claiming Percentage. For purposes of 
determining a school's or site's eligibility to participate in a Child 
Nutrition Program, a community eligibility provision school's free 
claiming percentage, i.e., the product of the school's identified 
student percentage multiplied by 1.6, or as otherwise established by 
FNS guidance, serves as a proxy for free and reduced price 
certification data.
    (g) Policy statement requirement. A local educational agency that 
elects to participate in the special assistance provisions or the 
community eligibility provision set forth in this section must:
    (1) Amend its Free and Reduced Price Policy Statement, specified in 
Sec.  245.10 of this part, to include a list of all schools 
participating in each of the special assistance provisions specified in 
this section. The following information must also be included for each 
school:
    (i) The initial school year of implementing the special assistance 
provision;
    (ii) The school years the cycle is expected to remain in effect;
    (iii) The school year the special assistance provision must be 
reconsidered; and
    (iv) The available and approved data that will be used in 
reconsideration, as applicable.
    (2) Certify that the school(s) meet the criteria for participating 
in each of the special assistance provisions, as specified in 
paragraphs (a), (b), (c), (d), (e) or (f) of this section, as 
appropriate.
    (h) Recordkeeping. Local educational agencies that elect to 
participate in the special assistance provisions set forth in this 
section must retain implementation records for each of the 
participating schools. Failure to maintain sufficient records will 
result in the State agency requiring the school to return to standard 
meal counting and claiming procedures and/or fiscal action. 
Recordkeeping requirements include, as applicable:
* * * * *
    (3) Records for the community eligibility provision. Local 
educational agencies must ensure records are maintained, including: 
data used to calculate the identified student percentage, annual 
selection of the identified student percentage, total number of 
breakfasts and lunches served daily, percentages used to claim meal 
reimbursement, non-Federal funding sources used to cover any excess 
meal costs, and school-level information provided to the State agency 
for publication if applicable. Such documentation must be made 
available at any reasonable time for review and audit purposes.
    (i) Availability of documentation. Upon request, the local 
educational agency must make documentation available for review or 
audit to document compliance with the requirements of this section. 
Depending on the certification or reimbursement alternative used, such 
documentation includes, but is not limited to, enrollment data, 
participation data, identified student percentages, available and 
approved socioeconomic data that was used to grant an extension, if 
applicable, or other data. In addition, upon request from FNS, local 
educational agencies under Provision 2 or Provision 3, or State 
agencies must submit to FNS all data and documentation used in granting 
extensions including documentation as specified in paragraphs (c) and 
(e) of this section. Data used to establish a new cycle for the 
community eligibility provision must also be available for review.
    (j) Restoring standard meal counting and claiming. Under Provisions 
1, 2, or 3 or community eligibility provision, a local educational 
agency may restore a school to standard notification, certification and 
counting procedures at any time during the school year or for the 
following school year if standard procedures better suit the school's 
program needs. Prior to the change taking place, but no later than June 
30, the local educational agency must:
    (1) Notify the State agency of the intention to stop participating 
in a special assistance certification and reimbursement alternative 
under this section and seek State agency guidance and approval 
regarding the restoration of standard operating procedures.
    (2) Notify the public and meet the certification and verification 
requirements of Sec.  245.6 and Sec.  245.6a in affected schools.
    (k) Puerto Rico and Virgin Islands. A local educational agency in 
Puerto Rico and the Virgin Islands, where a statistical survey 
procedure is permitted in lieu of eligibility determinations for each 
child, may: maintain their standard procedures in accordance with Sec.  
245.4, select Provision 2 or Provision 3, or elect the community 
eligibility provision provided the applicable eligibility requirements 
as set forth in paragraphs (a), (b), (c), (d), (e) and (f) of this 
section are met. For the community eligibility provision, updated 
direct certification data must be available to determine the identified 
student percentage.
    (l) Transferring eligibility for free meals. For student transfers 
within a local educational agency, a student's access to free meals 
under the special provisions specified in this section must be extended 
by a receiving school operating under the standard counting and 
claiming procedures for up to 10

[[Page 65903]]

operating school days. For student transfers between local educational 
agencies, the free meals may be offered for up to 10 operating school 
days at the discretion of the receiving local educational agency.
* * * * *

     Dated: October 24, 2013.
Audrey Rowe,
Administrator, Food and Nutrition Service.
[FR Doc. 2013-25922 Filed 11-1-13; 8:45 am]
BILLING CODE 3410-30-P