[Federal Register Volume 88, Number 185 (Tuesday, September 26, 2023)]
[Rules and Regulations]
[Pages 65778-65794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20294]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 245

[FNS-2022-0044]
RIN 0584-AE93


Child Nutrition Programs: Community Eligibility Provision--
Increasing Options for Schools

AGENCY: Food and Nutrition Service (FNS), Department of Agriculture 
(USDA).

ACTION: Final rule.

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SUMMARY: This final rule amends the Community Eligibility Provision 
(CEP) regulations by lowering the minimum identified student percentage 
(ISP) from 40 percent to 25 percent. Lowering the minimum ISP will give 
States and schools greater flexibility to offer meals to all enrolled 
students at no cost when financially viable. As a result of this rule, 
more schools are eligible to participate in CEP and experience the 
associated benefits, such as increasing students' access to healthy, 
no-cost school meals; eliminating unpaid meal charges; reducing stigma; 
and streamlining Program administration and meal service operations.

DATES: This rule is effective October 26, 2023.

FOR FURTHER INFORMATION CONTACT: Michelle Frey, Branch Chief, Policy 
Design Branch, School Meals Policy Division--4th Floor, Food and 
Nutrition Service, 1320 Braddock Place, Alexandria, VA 22314, 
telephone: 703-305-2590.

SUPPLEMENTARY INFORMATION:

I. Background

    The Community Eligibility Provision (CEP) is an option for eligible 
schools to offer meals at no cost to all enrolled students without 
collecting household applications. Authorized by the Healthy, Hunger-
Free Kids Act of 2010 (HHFKA) and codified in regulations at 7 CFR 
245.9(f), CEP is a reimbursement alternative for eligible local 
educational agencies (LEAs) and schools participating in both the 
National School Lunch Program (NSLP) and School Breakfast Program 
(SBP).\1\ CEP eliminates the need for schools to collect household 
income applications by sharing eligibility data between specific 
Federal assistance programs, which can reduce administrative burden for 
both schools and families.
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    \1\ On July 29, 2016, the U.S. Department of Agriculture (USDA) 
published the final 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 
[81 FR 50194, July 29, 2016], which codified CEP requirements that 
were implemented through statute and policy guidance, at Sec.  
245.9(f).
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    To be eligible for CEP, an individual school, group of schools, or 
LEA must meet or exceed the established, minimum identified student 
percentage (ISP) in the school year prior to implementing CEP. The ISP 
is the percentage of enrolled students who are certified for free 
school meals without submitting a household application, such as those 
directly certified through specific Federal benefits programs (e.g., 
the Supplemental Nutrition Assistance Program (SNAP) and the Food 
Distribution Program on Indian Reservations (FDPIR)). For CEP, students 
who are certified for free meals without a household application are 
``identified students'' (42 U.S.C. 1759a(a)(1)(F)(i); 7 CFR 
245.9(f)(1)(ii)) \2\ The ISP is calculated by dividing the total number 
of identified students by the total number of enrolled students:
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    \2\ Identified students include students living in households 
participating in SNAP, Temporary Assistance for Needy Families, and 
FDPIR. Identified students also include those who are homeless, 
migrant, runaway, in foster care, or enrolled in Head Start. In some 
States, students are directly certified through Medicaid direct 
certification demonstration projects. Students in States 
participating in the Medicaid direct certification demonstration 
projects are only included in the ISP if they are certified for free 
meals (not reduced price meals).
[GRAPHIC] [TIFF OMITTED] TR26SE23.000

    Under current regulations, the minimum ISP is 40 percent; 
therefore, to be eligible for CEP, an individual school, group of 
schools, or LEA must have an ISP greater than, or equal to, 40 percent 
(ISP >=40 percent) as of April 1 of the school year prior to 
implementing CEP (7 CFR 245.9(f)(3)(i)).
    The ISP determines eligibility to participate in CEP and is also 
the basis of Federal reimbursements for meals served to students in CEP 
schools. The National School Lunch Act (NSLA) gives the Secretary 
discretion to establish a CEP ``multiplier'' between 1.3 and 1.6 that 
is used to determine the percentage of meals that CEP schools claim at 
the free and paid reimbursement rate levels (42 U.S.C. 
1759a(a)(1)(F)(vii)(II)(aa)). To promote CEP financial viability, USDA 
codified a multiplier of 1.6 (7 CFR 245.9(f)(4)(vi)). The ISP is 
multiplied by 1.6 to calculate the percentage of meals reimbursed at 
the Federal free rate. Any remaining meals, up to 100 percent, are 
reimbursed at the Federal paid rate.\3\
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    \3\ CEP schools only claim meals at the free and paid 
reimbursement rates. CEP schools do not claim reduced price meals.

% Meals reimbursed at Federal free rate = ISP x 1.6
% Meals reimbursed at Federal paid rate = 100-% meals reimbursed at 
Federal free rate

    CEP requires that LEAs must pay, with non-Federal funds, any costs 
of offering free meals to all students that exceed the Federal 
assistance provided. If all operating costs are covered by the Federal 
assistance provided, then LEAs are not required to contribute non-
Federal funds (7 CFR 245.9(f)(4)(vii)).
    On March 23, 2023, USDA published a proposed rule in the Federal 
Register (88 FR 17406), seeking to lower the minimum ISP to 25 percent, 
and make related, conforming changes to CEP regulatory text at 7 CFR 
245.9(f).

[[Page 65779]]

    As described in detail in the proposed rule, CEP benefits children, 
families, schools, and communities. Schools participating in CEP often 
experience an increase in the number of students accessing the SBP and 
NSLP, resulting in more children benefiting from the advantages these 
Programs offer.\4\ Research demonstrates that access to school meals at 
no cost improves students' diet quality and academic performance and 
can reduce social stigma and food insecurity.\5\ Researchers have 
observed that ``CEP exposure is associated with an almost five percent 
decline in households classified as food insecure.'' \6\ LEAs have also 
reported that CEP reduces administrative burden and eliminates unpaid 
meal debt in schools.\7\ Lastly, CEP improves Program integrity by 
simplifying administration and lowering error rates in certifying 
students.<SUP>8 9</SUP>
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    \4\ USDA's first comprehensive study since CEP became available 
nationwide compared the impact of CEP participation in school 
districts that elected CEP to similar non-participating school 
districts. The study showed about 7% and 12% higher student 
participation in NSLP and SBP, respectively, in schools under CEP 
compared to eligible but non-participating schools. U.S. Department 
of Agriculture. (2022). USDA Community Eligibility Provision 
Characteristics Study, School Year 2016-2017. OMB #0584-0612, 
expiration 9/30/2019. Available at: https://www.fns.usda.gov/cn/usda-cep-characteristics-study-sy-2016-17.
    \5\ Cohen JFW, Hecht AA, McLoughlin GM, Turner L, Schwartz MB. 
Universal School Meals and Associations with Student Participation, 
Attendance, Academic Performance, Diet Quality, Food Security, and 
Body Mass Index: A Systematic Review. Nutrients. 2021 Mar 
11;13(3):911. Diet quality and food security (pp. 6-9); Academic 
performance (p. 10). Available at: https://pubmed.ncbi.nlm.nih.gov/33799780/.
    \6\ National Bureau of Economics. (2022). The Effect of Free 
School Meals on Household Food Purchases: Evidence from the 
Community Eligibility Provision. Available at: https://www.nber.org/papers/w29395. ``CEP exposure'' is the probability that a household 
has a child enrolled at a CEP school, based on schools' CEP 
participation, household zip codes, and school attendance areas.
    \7\ U.S. Department of Agriculture. (2022). USDA Community 
Eligibility Provision Characteristics Study, School Year 2016-2017. 
OMB #0584-0612, expiration 9/30/2019. Available at https://www.fns.usda.gov/cn/usda-cep-characteristics-study-sy-2016-17 (p. 
43).
    \8\ U.S. Department of Agriculture. (2014). Community 
Eligibility Provision Evaluation Final Report. Available at: http://www.fns.usda.gov/sites/default/files/CEPEvaluation.pdf (p. 127-135).
    \9\ Milfort et al. (2021). Third Access, Participation, 
Eligibility, and Certification Study. Prepared by Westat, Inc., 
Contract No. AG-3198-K-15-0054. Alexandria, VA: U.S. Department of 
Agriculture, Food and Nutrition Service, Office of Policy Support, 
Project Officer: Conor McGovern. Available online at: https://fns-prod.azureedge.us/sites/default/files/resource-files/APECIII-Vol1.pdf (p. 8-14 through 9-3).
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    This final rule lowers the minimum ISP from 40 percent to 25 
percent and makes conforming changes to ISP-related requirements (i.e., 
grace year eligibility and identification/notification/publication 
requirements). Electing CEP is a voluntary decision made by LEAs based 
on their unique student populations. Prior to participating in CEP, LEA 
decisionmakers should consider student nutrition, educational, 
administrative, and financial factors. This rule does not impose any 
new requirements on LEAs or schools. Through this final rule an 
increased number of LEAs, schools, and groups of schools will be 
eligible to offer all students lunches and breakfasts at no-cost when 
it is financially viable. This final rule supports State and local 
choices to expand the availability of no-cost school meals for all 
students through programs supported by State or local funding.
    USDA solicited public comments on the proposed change to lower the 
minimum ISP to 25 percent. In addition, USDA requested public comments 
on the following questions:
    (1) To what extent are LEAs that would be newly eligible under this 
proposed rule expected to elect CEP?
    (2) What sources of non-Federal funds are available to support LEAs 
electing CEP at lower ISPs?
    (3) In a typical year, how much time do LEAs spend on 
administrative duties that may be eliminated by electing CEP (e.g., 
processing applications, managing unpaid meal charges, conducting 
verification)? What administrative activities are included in that 
estimate?
    (4) To what extent are administrative cost savings a factor in 
determining whether to elect CEP?
    (5) How do State policies related to offering free school meals for 
all students influence the likelihood of CEP election among newly 
eligible LEAs?
    Public comments received in response to the proposed rule helped 
inform the development of this final rule.

II. Public Comments and USDA Response

    During the 45-day comment period (March 23-May 8, 2023), USDA 
received a total of 10,625 comments, including 849 unique submissions 
and four form letters representing 8,689 submissions. Of the 10,625 
comments, 1,087 were duplicate or non-germane submissions, resulting in 
9,538 relevant comments. All comments, except non-germane comments, are 
posted online at www.regulations.gov (see docket FNS-2022-0044, Child 
Nutrition Programs: Community Eligibility Provision-Increasing Options 
for Schools). Relevant comments were submitted by Members of Congress, 
State and local government entities and elected officials, school 
districts and school staff, advocacy organizations, nongovernmental 
organizations, and other stakeholders, including food banks, healthcare 
and health insurance organizations and healthcare professionals, 
professional and trade associations, the research community, faith-
based organizations, and individual commenters and members of the 
public. USDA greatly appreciates the thoughtful comments provided. 
These comments were essential to the development of this final rule.
    Overall, including the form letters, almost 97 percent of comments 
supported the proposed rule (9,220 of 9,538) and less than 1 percent 
opposed it (14 of 9,538); the remaining comments were mixed, offered 
conditional support, or were neutral, in that they were generally 
supportive of lowering the minimum ISP to 25 percent, but also 
discussed additional considerations for school meals and school 
nutrition departments.
    Comments in favor of lowering the minimum ISP to 25 percent cited 
benefits to children, families, schools, communities, and Program 
operators. Supporters noted that lowering the minimum ISP would 
increase student access to school meals and improve children's food 
security, health, and academic performance. Many comments also 
supported the proposal for its administrative benefits to school 
districts and schools.
    Comments opposed to lowering the minimum ISP primarily focused on 
concerns about school finances and funding to support CEP or argued 
that the proposed 25 percent threshold was chosen arbitrarily and could 
expand CEP to schools serving communities that do not need assistance.
    Comments offering mixed or conditional support generally agreed 
with lowering the threshold, but also urged USDA to take additional 
measures to support and expand CEP (e.g., increase the CEP multiplier 
or make school meals available at no cost to students nationwide). The 
following discussion is a detailed summary of public comments by topic.

Minimum ISP

Proposed Change
    Under current regulations, the minimum ISP required to elect CEP is 
40 percent; therefore, to be eligible for CEP, an LEA, group of 
schools, or school must have an ISP greater than, or equal to, 40 
percent (ISP >=40 percent) as of April 1 of the school year prior to 
implementing CEP (7 CFR 245.9(f)(3)(i)). USDA proposed to amend 7 CFR

[[Page 65780]]

245.9(f)(3)(i) to require an LEA, group of schools, or school to have 
an ISP of at least 25 percent, as of April 1 of the prior school year, 
to participate in CEP. Individual schools participating in CEP as part 
of a group would be permitted to have an ISP lower than 25 percent, 
provided that the group's aggregate ISP is at least 25 percent.
Public Comments
    USDA received 9,220 comments that were generally supportive of 
lowering the minimum ISP threshold to 25 percent. Commenters supporting 
the lower threshold included: Members of Congress; State and local 
agencies; school districts and school staff; advocacy groups, trade 
associations, and individuals. Many commenters reasoned that the 
proposed change would expand CEP, allowing more students access to 
free, nourishing school meals. Further, commenters highlighted that 
expanding CEP could benefit numerous stakeholders by reducing hunger 
and food insecurity, improving students' academic performance, 
increasing equity, reducing families' financial burdens, and 
streamlining school meal operations.
    Many commenters who supported the rule discussed the importance of 
feeding schoolchildren equitably and supporting families. Numerous 
commenters, including advocacy groups, a food bank, trade associations, 
and individuals, noted that access to nutritious school meals is 
important to ensure educational equity, improve learning outcomes, and 
advance children's intellectual and physical development. Some 
individual commenters asserted that student hunger has a significant 
impact on academic performance and outcomes. A form letter campaign 
emphasized that hungry schoolchildren cannot learn effectively, and 
that CEP helps to alleviate the negative impact of hunger on learning. 
Several commenters, including an advocacy group and individuals, 
expressed support for the proposed rule because, for many children, 
school meals are the only nutritious meals they have access to each 
day. Similarly, an advocacy group commented that CEP helps feed 
schoolchildren, while also increasing attendance and improving academic 
outcomes. Another advocacy group asserted that, without CEP, thousands 
of students would go hungry at school. One advocacy group cited 
research which found that universal school meals improved academic 
performance, reduced suspension among students, reduced household 
spending on groceries, and improved dietary quality at home. Similarly, 
some commenters, including a trade association and individuals, stated 
that lowering the minimum ISP would decrease children's and families' 
food insecurity.
    School staff and a few individual commenters said that lowering the 
minimum ISP to 25 percent would benefit their school districts because 
they are unable to participate in CEP at the 40 percent threshold, but 
they know students in their communities experience widespread food 
insecurity. A school district reported that 69 percent of their 
students receive free and reduced price meals, but only three of 18 
schools in the district qualify for CEP (two of which barely meet the 
40 percent threshold). Further, commenters, including a school board, 
suggested that lowering the minimum ISP would improve communities' 
attitudes toward school meals and school nutrition programs.
    A couple of commenters, including a State and a local agency, noted 
that reducing the minimum ISP increases access and makes school meals 
more equitable among rural, Tribal, and underserved communities. Many 
commenters discussed the historical disadvantages, particularly food 
insecurity, faced by rural and underserved communities. For example, an 
advocacy group emphasized that ``Black and Brown communities experience 
food insecurity at higher rates'' than their White counterparts due to 
systemic racial injustice. Some commenters reasoned that CEP has been 
useful in minimizing these disadvantages through access to free meals, 
especially among Latino and Black children. Additionally, a few 
commenters with first-hand CEP experience, including a school and an 
advocacy group, stated that when meals were available at no cost to all 
students, significantly more students opted to participate in school 
meals and the school culture improved. Notably, a form letter campaign 
said that expanding access to CEP is a ``great step forward'' to 
improve equity, accessibility, and nutrition in school meals.
    Many commenters, including a State agency, an advocacy group, a 
professional association, and individuals, stated that CEP helps reduce 
the prevalence of unpaid meal debt, and some commenters, including a 
school and individual commenters, cited the elimination of unpaid meal 
charges and student meal debt as a primary reason they support lowering 
the minimum ISP. Many commenters, including a local government, school 
districts, a trade association, individuals, and a form letter 
campaign, expressed support for decreasing the minimum ISP, as it would 
provide ``peace of mind'' to parents and children by eliminating the 
cost of school meals.
    Commenters also support lowering the minimum ISP because it reduces 
administrative burden and gives school districts more options for 
operating school meal programs to best serve their communities. Several 
commenters, including a State agency and local agency, school districts 
and schools, a trade association and an individual, supported lowering 
the minimum ISP because it would significantly reduce administrative 
burden. A couple of State agencies said that the proposed change would 
help their States' small and rural schools, which serve many critical 
roles for isolated, rural communities and often struggle with higher 
per-meal administrative costs because of their small size. Commenters 
also recognized that expanding CEP would help schools and school 
nutrition staff operate the SBP and NSLP more efficiently and would 
allow them to focus more on local purchasing, farm-to-school 
initiatives, and scratch cooking. Additionally, many commenters, 
including a local agency, schools and school staff, advocacy groups, a 
trade association, and individuals, expressed support for the proposal 
because lowering the minimum ISP would give schools greater flexibility 
in operational decisions, in addition to providing more enrolled 
students with no-cost meals.
    While still supportive, commenters discussed how funding to operate 
school meal programs via CEP at the proposed 25 percent minimum ISP 
would be challenging. Several commenters asserted that the proposed 
lower minimum ISP will not be financially viable for many school 
districts without a concurrent increase in the CEP multiplier. A few 
commenters suggested that to offset the burden of costs, USDA should 
allow statewide CEP participation so that CEP administration and any 
costs can be shared among school districts within a State and are not 
placed on individual school districts.
    In addition, several supportive commenters expressed concerns about 
the loss of free and reduced price eligibility data--frequently used 
for education funding--that occurs in CEP schools when applications are 
eliminated. For example, an advocacy group commented that schools that 
do not process school meal applications will need to navigate how to 
adjust policies that previously relied on household application data 
but

[[Page 65781]]

reasoned that this is true at any ISP level. Other commenters 
recommended that USDA work with other Federal partners to assess 
alternative poverty measures.
    Despite overwhelming support for lowering the minimum ISP to 25 
percent, approximately 300 commenters, including a State agency, 
advocacy groups, and individuals, provided mixed feedback or 
conditional support. Many noted that successful implementation of CEP 
in schools with lower ISPs requires additional funding. A school staff 
commenter expressed concern that the proposed change to CEP would lead 
communities and school boards to believe it is financially viable for 
districts with a 25 percent ISP to elect CEP. Some commenters suggested 
increasing the CEP multiplier, while others thought the rule did not go 
far enough, suggesting further lowering the minimum ISP, eliminating 
the minimum ISP completely in States where there is identified State 
funding to support CEP, and providing universal school meals at no cost 
to all students nationwide.
    Though most commenters supported lowering the minimum ISP to 25 
percent, 14 commenters expressed opposition to the proposed change. 
Many commenters opposed to lowering the minimum ISP expressed concern 
that expanding CEP might financially burden schools and school 
nutrition programs in cases where Federal reimbursements fall short of 
Program operating costs. Of these, about half expressed that the 
proposed lower minimum ISP would not be financially viable without 
increasing the CEP multiplier. Opposing commenters, including a school 
district and individual commenters, remarked that the proposed change 
would not encourage more schools to implement CEP because of its 
economic infeasibility. Similar to commenters with mixed feedback on 
the rule, a school district asserted that the CEP multiplier needs to 
be increased from 1.6 to at least 2.0 or higher. The district added 
that lowering the minimum ISP, without increasing the multiplier, would 
only assist schools that have the financial means to help pay the 
``nutrition bills.'' An individual commenter expressed concern that the 
lower minimum ISP would not simplify determinations for severe need 
payments in the SBP or allow more schools to participate in CEP. The 
commenter concluded by expressing concern that the 25 percent minimum 
ISP was chosen arbitrarily. One commenter expressed concern about 
government overreach and suggested that State and local agencies are 
better suited to address free meals. Another individual stated that the 
proposed rule promotes socialism, adding that social services should be 
involved to provide meals while simultaneously assessing students' home 
environments. Finally, a school nutrition director stated that 
expanding CEP to a student population that does not have an economic 
need is not an efficient use of funds, and an advocacy group asserted 
that lowering the minimum ISP significantly expands CEP in a way that 
is inconsistent with the intent of the Federal meal programs because it 
could result in more middle- and upper-income students receiving 
taxpayer-funded meals.
    Thirty commenters responded to the question, ``to what extent are 
LEAs that would be newly eligible under this proposed rule expected to 
elect CEP?'' Of these, the majority provided estimates of the number of 
schools expected to be newly eligible. Some commenters shared that, 
although more schools would be eligible, they would likely not elect 
CEP without an increase to the CEP multiplier. Other commenters 
responded that newly eligible schools in their States would elect CEP 
due to the availability of State funding to cover any costs that exceed 
Federal assistance. One State agency did not indicate how many more 
schools would participate in CEP, but expressed concern that many newly 
eligible schools may not initially understand the financial impacts of 
electing CEP at a lower ISP threshold.
    Additionally, approximately 15 commenters responded to the 
question, ``what sources of non-Federal funds are available to support 
LEAs electing CEP at lower ISPs?'' The majority of commenters 
responding to this question indicated there is State or local funding 
available to help cover costs. A State agency said that non-Federal 
sources in their State include angel funds (local or community 
donations). Another State reported there are no State funds available 
to pay for the cost of meals not covered by Federal assistance. 
Finally, an advocacy group emphasized that, for their area, the 
availability of State and local funds varies greatly based on school-
level factors, such as enrollment and student participation in school 
meal programs.
USDA Response
    USDA concurs with commenters who stated that lowering the minimum 
ISP is expected to significantly benefit students, families, schools, 
and communities. USDA's CEP Characteristics Study found that LEAs 
participating in CEP reported multiple perceived benefits, including 
increased student participation, decreased financial burden on 
families, elimination of unpaid meal debt, reduced administrative 
burden, and decreased stigma for students in need.\10\ USDA also 
understands that lowering the minimum ISP to 25 percent is expected to 
result in more schools being eligible for CEP; yet, without additional 
State or local funding, electing CEP at lower ISPs may not be 
financially viable for many schools.
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    \10\ U.S. Department of Agriculture. (2022). USDA Community 
Eligibility Provision Characteristics Study, School Year 2016-2017. 
OMB #0584-0612, expiration 9/30/2019. Available at https://www.fns.usda.gov/cn/usda-cep-characteristics-study-sy-2016-17.
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    Non-CEP LEAs and schools that serve high proportions of low-income 
children are expending already-constrained resources to collect and 
process school meal applications to ensure low-income students have 
access to free or reduced price meals. Lowering the minimum ISP to 25 
percent provides an opportunity for more LEAs with high proportions of 
low-income students--especially those with non-Federal funds available 
to support school meals--to capitalize on CEP's administrative and 
operational benefits, while maintaining CEP's intent to provide schools 
serving high poverty areas with opportunity to offer healthy, no-cost 
school meals to all students. This is particularly applicable to LEAs 
and schools in States with healthy school meals for all initiatives; in 
these States, students already have access to meals at no cost and now 
the lower minimum ISP will allow more schools to experience the 
administrative and operational benefits of CEP.
    Healthy school meals for all initiatives, supported by State 
funding, are gaining momentum across the nation. Currently, eight 
States have permanent policies in place, more than 20 States are 
actively pursuing healthy school meals for all legislation, and 63 
percent of voters nationwide support legislation that would make school 
meals permanently available to all

[[Page 65782]]

students at no cost.\11\ These initiatives align with USDA's priority 
to tackle food and nutrition insecurity: USDA is leveraging all 
resources to ensure consistent and equitable access to healthy, safe, 
affordable foods essential to optimal health and well-being.\12\ 
Expanding schools' access to CEP--and providing students access to a 
nourishing breakfast and lunch each school day--is an important action 
USDA can take to support those efforts.
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    \11\ Food Research and Action Center, Healthy School Meals for 
All website. Available at: https://frac.org/healthy-school-meals-for-all.
    \12\ U.S. Department of Agriculture, Priorities website. 
Available at: https://www.usda.gov/
priorities#:~:text=Tackling%20Food%20and%20Nutrition%20Insecurity,-
At%20USDA%2C%20we.
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    USDA acknowledges that lowering the minimum ISP is not accompanied 
by additional funding and that, for the most part, school districts and 
schools that are newly eligible under the 25 percent threshold may need 
additional non-Federal funds for CEP to be financially viable. However, 
USDA supports CEP expansion in States and localities where non-Federal 
funding is available to support healthy school meals at no charge for 
all students.
    As detailed earlier, the CEP multiplier is used to calculate the 
percentage of breakfasts and lunches to be claimed and reimbursed at 
the Federal free rate at CEP schools. Section 11(a)(1)(F)(vii)(II) of 
the NSLA provides the Secretary the option to establish the CEP 
multiplier between 1.3 and 1.6. Accordingly, USDA established 1.6 as 
the multiplier to be used to determine CEP claiming percentages for an 
entire 4-year CEP cycle (7 CFR 245.9(f)(4)(vi)). Increasing the 
multiplier to provide more funding to CEP schools (in the form of a 
higher free claiming percentage) would require Congressional action; 
USDA does not have statutory authority to increase the multiplier any 
further. Similarly, USDA does not have the authority to allow a 
statewide CEP option. Section 11(a)(1)(F)(x) of the NSLA requires CEP 
to be elected at the LEA-level.
    Electing CEP is a local decision, not a Federal mandate; as a 
result, the financial viability of participating in CEP must be 
evaluated based on the unique circumstances of each individual school 
district. If the total amount of Federal assistance available does not 
fully cover the cost of offering all students meals at no charge, LEAs 
must contribute non-Federal funds (7 CFR 245.9(f)(4)(vii)). The use of 
non-Federal funds is not required if all operating costs are covered by 
the Federal reimbursement and other assistance provided under the NSLA 
and the Child Nutrition Act of 1966 (42 U.S.C. 1759a 
(a)(1)(F)(ii)(I)(bb)). Additionally, school food authorities (SFAs) may 
use excess funds in the non-profit school food service account to 
support CEP (7 CFR 210.14(a)).
    When deciding whether to elect CEP, eligible schools must consider 
their ability to provide meals at no cost and cover their operating 
costs with Federal assistance and any other available funds, including 
State and/or local funds. USDA has an updated estimator tool to help 
LEAs determine if CEP is financially viable, and to help assess LEA 
groupings to optimize Federal reimbursements. The estimator tool is 
available at the CEP Resource Center (https://www.fns.usda.gov/cn/community-eligibility-provision-resource-center).
    With respect to concerns regarding the loss of free and reduced 
price eligibility data, USDA understands that many entities have 
historically relied on data from free and reduced price school meal 
applications as a school- or school district-based poverty measure and/
or means of allocating education funding. Since CEP's inception in 
2011, USDA has worked extensively to ensure that State agencies and 
eligible LEAs are aware of alternative means of assessing socioeconomic 
status. USDA has coordinated meetings and webinars to share best 
practices related to assessing socioeconomic status in the absence of 
household applications.\13\ In addition, USDA worked with the National 
Forum on Education Statistics to develop a guide on alternative 
measures of socioeconomic status for use in education data systems.\14\ 
USDA continues to work with the U.S. Department of Education's National 
Center for Education Statistics, on an ongoing basis, to discuss and 
identify school-based poverty measures that have potential to serve as 
alternatives to free and reduced price application data. USDA 
encourages stakeholders at the State and local levels to pursue similar 
conversations to ensure that electing CEP, and the loss of application 
data, does not result in reduced education funding or benefits to CEP 
school districts, schools, or students.
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    \13\ Visit the CEP Resource Center for more information: 
Community Eligibility Provision Resource Center [bond] Food and 
Nutrition Service (usda.gov).
    \14\ National Forum on Education Statistics (2015). Forum Guide 
to Alternative Measures of Socioeconomic Status in Education Data 
Systems (NFES 2015-158). U.S. Department of Education. Washington, 
DC: National Center for Education Statistics. Available at: http://nces.ed.gov/pubs2015/2015158.pdf.
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    USDA has discretion to establish a minimum ISP that is lower than 
40 percent (42 U.S.C. 1759a(a)(1)(F)(viii)(II)). In addition to public 
comments, to determine an appropriate threshold, USDA considered 
operational factors, including characteristics of LEAs currently 
eligible and near eligible to elect CEP, and analyzed the composition 
of the ISP and the proportion of free and reduced price students at 
varying ISP levels. Based on these analyses, a minimum ISP of 25 
percent results in at least 40 percent of meals reimbursed at the free 
rate (25 percent x 1.6 = 40 percent). Schools where at least 40 percent 
of the lunches served to students in the second preceding school year 
were free or reduced price qualify as severe need schools and receive 
an additional reimbursement (42 U.S.C. 1773(d)(1)(A); 7 CFR 
220.9(d)(2)). Aligning the CEP threshold with the severe need payments 
threshold provides consistency because all CEP-eligible schools will 
qualify for severe need reimbursements. In addition, CEP's positive 
impact on school breakfast participation further supports the SBP.\15\
---------------------------------------------------------------------------

    \15\ USDA's CEP Characteristics Study found that SBP 
participation increased by about 12 percent in LEAs operating CEP 
(compared to similar, eligible LEAs that did not elect CEP). U.S. 
Department of Agriculture (2022). USDA Community Eligibility 
Provision Characteristics Study, School Year 2016-2017. OMB #0584-
0612, expiration 9/30/2019. Available at https://www.fns.usda.gov/cn/usda-cep-characteristics-study-sy-2016-17.
---------------------------------------------------------------------------

    Given the broad stakeholder support for lowering the minimum ISP to 
25 percent--and the potential benefit to children, families, schools, 
and communities--USDA is adopting the lower, 25 percent minimum ISP in 
this final rule. Accordingly, this final rule amends the CEP provisions 
at 7 CFR 245.9(f)(3)(i) to reflect a 25 percent minimum ISP.

Conforming Amendments to Grace Year and Identification/Notification 
Requirements

Proposed Change
    To conform with the proposed 25 percent ISP threshold in 7 CFR 
245.9(f)(3), USDA proposed to amend 7 CFR 245.9(f)(4)(ix), the 
regulations governing grace years, to allow an LEA, group of schools, 
or school in the fourth year of the 4-year CEP cycle with an ISP of 
less than 25 percent but equal to or greater than 15 percent (as of 
April 1 of the fourth year of a CEP cycle) to continue using CEP for an 
additional ``fifth year'' or a ``grace year'' beyond the 4-year CEP 
cycle. In addition, USDA

[[Page 65783]]

proposed to amend 7 CFR 245.9(f)(5) and (6), the regulations governing 
LEA and State agency identification and notification requirements, and 
7 CFR 245.9(f)(7)(i) and (ii), the regulations governing State agency 
public notification requirements. USDA only proposed changes to the 
numbers (i.e., 40 percent to 25 percent, 30 percent to 15 percent) 
consistent with the proposed lower threshold and statutory requirements 
(42 U.S.C. 1759a(a)(1)(F)(v)(I), (a)(1)(F)(x)); no additional 
substantive changes were proposed.
Public Comments
    USDA received eight comments pertaining to these conforming changes 
and all comments were supportive. A State agency noted that the grace 
year flexibility would allow schools an extra year to attempt to meet 
the 25 percent ISP threshold to remain on CEP. In addition, an advocacy 
group suggested that USDA should require States to use the actual 
counts of identified students as opposed to proxy data to ensure more 
accurate lists and notifications.
USDA Response
    USDA appreciates one commenter's suggestion to change requirements 
related to the data that States use for notification purposes. However, 
this rulemaking only changes the numbers (e.g., 40 percent to 25 
percent, 30 percent to 15 percent) consistent with the lower ISP 
threshold and statutory requirements (42 U.S.C. 1759a(a)(1)(F)(v)(I), 
(a)(1)(F)(x)); no additional substantive changes are made by this 
rulemaking. Therefore, under this final rule, USDA will continue to 
allow States to use proxy data for CEP notification purposes. 
Consistent with current requirements, actual counts of identified 
students must be used for CEP elections.
    Given the support for these changes and the statutory requirement 
that these provisions conform to the final threshold, this final rule 
modifies the following regulations to align with the 25 percent ISP 
threshold in 7 CFR 245.9(f)(3):
    <bullet> 7 CFR 245.9(f)(4)(ix), the regulations governing the use 
of CEP for a grace year;
    <bullet> 7 CFR 245.9(f)(5) and (6), the regulations governing LEA 
and State agency identification and notification requirements; and
    <bullet> 7 CFR 245.9(f)(7)(i) and (ii), the regulations governing 
State agency public notification requirements.

Comments on Other CEP-Related Items

Healthy School Meals for All
Public Comments
    Approximately 330 commenters discussed healthy school meals for all 
initiatives; many of those commenters, including a professional 
association and individuals, expressed general support for providing 
all students with no-cost, healthy school meals. Several commenters, 
including a trade association and a form letter campaign, stated that 
the proposed rule is an improvement on existing CEP requirements and 
represents a positive step toward universal, no-cost meals for all 
students. A form letter campaign applauded the proposed CEP expansion 
and its potential to enable more schools and districts across the 
country to provide school meals at no charge to all students, closing a 
gap in healthy food access for many children and families, especially 
those in need. However, some commenters, including school staff, 
advocacy groups, and individuals, noted that a nationwide program 
making school meals available at no charge for all students would be 
preferable over lowering the minimum ISP.
    Several commenters highlighted that the proposed change to CEP 
would support the growing number of States choosing to invest funding 
to provide no-cost school meals to all children. A few commenters, 
including a school district and individuals, commented that lowering 
the minimum ISP to 25 percent would give States and schools greater 
flexibility to choose to invest non-Federal funds to offer no-cost 
meals to all enrolled students. An individual representing a non-profit 
organization stated that the proposed change creates an ``easier entry 
point'' for States to adopt their own universal, no-cost meals policies 
in a more balanced and sustainable way. The commenter continued, 
declaring that a lower minimum ISP would support the growing number of 
States that are choosing to invest their own funds to provide free 
school meals to all students, through maximizing LEA use of CEP in 
combination with State-specific initiatives. Conversely, one State 
agency shared that, in their State, State funding is not available to 
encourage lower ISP schools to adopt CEP, and concerns exist regarding 
whether some schools have sufficient financial support to be able to 
implement CEP at lower ISPs.
    Approximately 15 commenters responded to the question, ``how do 
State policies related to offering free school meals for all students 
influence the likelihood of CEP election among newly eligible LEAs?'' A 
couple of commenters stated that the proposed rule provides more 
options to LEAs and State agencies in those States that incentivize CEP 
adoption through State legislation. Some commenters, including State 
agencies and advocacy groups, asserted that LEAs in States with 
existing healthy school meals for all legislation, or significant non-
Federal funding sources, will see an increase in CEP participation 
because they do not have to reconcile significant budgetary gaps. One 
State agency commented that the State's policies neither require nor 
discourage districts to participate in CEP, and another State agency 
noted that LEAs will need to assess how current application-based 
reimbursements compare to CEP's direct certification-based 
reimbursements because eliminating applications may affect school 
districts and States differently, depending on their policies. 
Additionally, one State agency asserted that without State funding to 
support free school meal programs, newly eligible LEAs would not be 
likely to participate in CEP because it would not be financially 
viable.
USDA Response
    USDA anticipates that LEAs most likely to elect CEP at the 25 
percent ISP are those in States that have committed to offering healthy 
school meals for all through State funding. Numerous public comments 
submitted by States support this assumption. The Colorado Department of 
Education confirmed that, to opt-in to the State's Healthy School Meals 
for All Program and receive additional State funding, qualifying 
schools are required to elect CEP. In its comment, the Minnesota 
Department of Education noted that, while the State will not require 
school districts to participate in CEP under the recently passed 
Minnesota Free School Meals Program, it anticipates ``schools will be 
interested in adopting CEP at a lower threshold to have the option to 
streamline meal counting and claiming.'' A recent publication from the 
Food Research and Action Center has also found that States offering 
free meals to all students in school year (SY) 2022-23 experienced 
significant increases in CEP uptake.\16\
---------------------------------------------------------------------------

    \16\ Food Research & Action Center. Community Eligibility: The 
Key to Hunger-Free Schools, School Year 2022-23 (May 2023). 
Available at: https://frac.org/wp-content/uploads/cep-report-2023.pdf.
---------------------------------------------------------------------------

    USDA estimates that as many as 2,090 schools in 471 LEAs across 
California, Colorado, Maine, Minnesota, and New Mexico, all of which 
have implemented

[[Page 65784]]

healthy school meals for all policies for SY 2023-24, would elect to 
participate in CEP under the 25 percent ISP.\17\ Estimates are based on 
the School Food Authority Verification Collection Report, found at: 
https://www.fns.usda.gov/form/school-food-authority-sfa-verification-collection-report. Specifically, the analysis used 2023 data related to 
student enrollment, direct certification, free and reduced price 
claiming percentages, and CEP participation status.\18\
---------------------------------------------------------------------------

    \17\ USDA only included States with permanent legislation at the 
time of the analysis.
    \18\ Data from FNS-742: School Food Authority Verification 
Collection Report, available at: https://www.fns.usda.gov/form/school-food-authority-sfa-verification-collection-report.
---------------------------------------------------------------------------

    A recent report on CEP uptake showed that the number of students in 
schools participating in CEP has increased annually since 2014, with 
the greatest increases occurring more recently.\19\ In SY 2021-22, 
there were 16.2 million students in CEP schools; in SY 2022-23, there 
were 19.9 million. California was the greatest contributor, adding more 
than 1.3 million students to the total enrolled in CEP schools. The 
percentage of eligible schools adopting CEP also increased from 75.3 
percent to 99.5 percent in California during this time. In all but one 
of the seven States offering free meals to all students during SY 2022-
23 through State funding (California, Connecticut, Maine, Nevada, New 
Mexico, Vermont), the percentage of eligible schools participating in 
CEP was 92 percent or higher. The percentage of participating eligible 
CEP schools in Massachusetts, the remaining State, was 87 percent. High 
CEP participation rates in States providing free school meals to all 
students is consistent with the feedback submitted in public comments 
and supports USDA's assumption that school districts in these States 
are most likely to benefit from, and take advantage of, the 25 percent 
ISP.
---------------------------------------------------------------------------

    \19\ Community Eligibility: The Key to Hunger-Free Schools 
(School Year 2022-2023). May 2023. Food Research and Action Center. 
Available at: https://frac.org/cep-report-2023.
---------------------------------------------------------------------------

    USDA is fully committed to ensuring all children have access to 
healthy school meals. Lowering the minimum ISP provides States and LEAs 
greater flexibility to combine CEP with State initiatives to simplify 
Program administration, reduce burden, and offer meals to all students 
at no charge.
Costs & Cost Savings
Public Comments
    LEAs assume significant responsibility to administer school meal 
programs and, in response to the proposed rule, respondents submitted 
several comments and questions related to costs and cost savings. One 
advocacy group stated that reducing the minimum ISP--even to zero--will 
not appreciably drive up Federal costs because reimbursements are tied 
to the ISP, and that schools or districts with lower ISPs will receive 
lower Federal reimbursements and will have to cover remaining costs 
with non-Federal funds. Another advocacy group commented that the lower 
minimum ISP would result in additional government spending annually.
    Numerous commenters stated that, in general, CEP helps reduce 
administrative costs. Many commenters, including Members of Congress, a 
State agency, a local government, school districts, advocacy groups, 
and form letter campaigns, said that CEP helps reduce administrative 
and paperwork costs, and streamlines Program operations for LEAs and 
schools. Some commenters, including advocacy groups and a form letter 
campaign, added that administrative cost savings allow school officials 
to focus resources on core SBP and NSLP mission-oriented tasks, such as 
planning and preparing healthy meals for students. Similarly, some 
commenters, including State and local agencies, advocacy groups, and a 
trade association, remarked that the reduced administrative burden from 
CEP helps schools focus on investing in operations and meal program 
improvements, such as scratch cooking or farm-to-school programs. One 
staff member of a public charter school noted that if the school were 
eligible for CEP, the school would save a minimum of $50,000 per year 
in administrative staff costs. Commenters remarked that CEP reduces 
costs for schools because, as a result of increased student 
participation, it leverages economies of scale in food purchasing and 
preparation. An advocacy group and a trade association concluded that 
administrative savings resulting from CEP help schools combat rising 
food prices, focus on serving quality meals, and invest in school 
nutrition programs. Furthermore, a State explained that by reducing 
administrative costs, CEP helps ensure a greater share of each meal 
reimbursement is spent directly on food and food preparation. Some 
commenters, including an advocacy group and a trade association, 
asserted that lowering the minimum ISP would reduce State costs 
associated with expanding school meal access and would help sustain 
recently enacted healthy school meals for all programs, if State fiscal 
conditions change.
    An advocacy group suggested that schools with higher ISPs can adopt 
CEP without relying on non-Federal funds because administrative savings 
often offset the loss of revenue from student payments but recognized 
that may not be the case for districts with lower ISPs. Another 
advocacy group stated that expansion of CEP will pay for itself by 
reducing administrative burden and increasing Program efficiency. A 
school district warned that access to CEP may not reduce paperwork as 
much as expected because paperwork will still be required for other 
Federal programs.
    Six commenters responded to the question: ``In a typical year, how 
much time do LEAs spend on administrative duties that may be eliminated 
by electing CEP (e.g., processing applications, managing unpaid meal 
charges, conducting verification)? What administrative activities are 
included in that estimate?'' Two State agencies commented generally 
that CEP would reduce LEAs' time spent on processing applications and 
verification activities. In addition, two State agencies acknowledged 
that the time spent on applications varies by school district size, 
with one estimating the number of hours would vary from as few as 12 
hours per school year to almost 50 percent of a full-time equivalent. 
One school district reported that hundreds of hours of work are spent 
each year processing free and reduced price applications, including 
dealing with unpaid meal debt and other activities. Similarly, another 
school district estimated that 490 hours per year are dedicated to the 
application process. One school district reported that, after adopting 
CEP at several (but not all) schools, time spent on processing 
applications was cut ``nearly in half.''
    Six commenters responded to the question, ``to what extent are 
administrative cost savings a factor in determining whether to elect 
CEP?'' Some of the commenters stated that administrative cost savings 
were a determining factor, while others depended more on cafeteria 
operations or the capacity to serve no-cost meals as a primary factor 
in deciding to elect CEP.
USDA Response
    USDA analyzed administrative data and relied on information from 
public comments and stakeholder engagement, to examine the economic 
impacts (i.e., costs) of lowering the minimum ISP to 25 percent. 
Historically, CEP has not been a significant driver of Federal costs. 
CEP became available nationwide in SY 2014-15; during that school year 
and in subsequent school years, the number of schools electing CEP--
and, as a result, students in CEP schools--

[[Page 65785]]

grew significantly. However, since the CEP multiplier is designed to, 
on average, mirror the free and reduced price percentage, claiming 
meals merely shifted from free and reduced price-based claiming to ISP-
based claiming with no significant impact on Federal costs.
    The number of students in CEP schools more than doubled, from 6.5 
million in SY 2014-2015 to 13.7 million in SY 2018-2019. During this 
same time period, the annual growth rate in school meal earnings (i.e., 
costs) was about 3 percent.\20\ Most of the annual growth was due to an 
annual inflation rate of 2.2 to 3 percent during this period. USDA 
anticipates that CEP uptake as a result of the 25 percent minimum ISP 
will be significantly smaller than typical, historical year-over-year 
CEP increases due to the financial considerations LEAs must weigh when 
deciding to elect CEP at lower ISPs. Therefore, based on these 
analyses, USDA does not agree with the commenter that indicated there 
would be large increases in Federal Government spending from this CEP 
expansion.
---------------------------------------------------------------------------

    \20\ USDA limited its analysis to fiscal year (FY) 2015-FY 2019 
due to the impacts of nationwide child nutrition waivers, which were 
provided to ensure access to meals through the Child Nutrition 
Programs as communities responded to the COVID-19 pandemic. Cash 
payments for NSLP and SBP were $15.6 billion in FY 2015 and $17.4 
billion in FY 2019.
---------------------------------------------------------------------------

    The decision to elect CEP is the result of a cost-benefit analysis 
specific to eligible LEAs. State initiatives, such as healthy school 
meals for all, make it easier for LEAs to elect CEP due to the 
additional State funding. Administrative cost savings associated with 
CEP are a significant factor that may make CEP economically viable for 
many LEAs, as indicated in several comments.
    USDA estimates administrative cost savings of $103,869, based on a 
total annual reduction of 5,679 burden hours and a $18.29 median hourly 
rate for Office and Administrative Support Occupations in Educational 
Services.\21\ Actual decreases in administrative burden will vary by 
LEA based on factors such as student enrollment, current percentage of 
students eligible for free and reduced price meals, local wage rates, 
and current mode of operation before electing CEP (e.g., Provision 2 or 
3). Though some commenters indicated that systems may need to be 
updated or reprogrammed to accommodate the new minimum ISP for CEP, 
USDA expects that these costs would be limited to one-time, system 
modification costs.
---------------------------------------------------------------------------

    \21\ For a full discussion of the impacts of this final rule on 
information collection requirements, please refer to the Paperwork 
Reduction Act section.
---------------------------------------------------------------------------

    USDA understands that newly eligible school districts and schools 
may have questions about implementing CEP at a lower ISP. USDA plans to 
issue guidance related to the lower minimum ISP to help LEAs and 
schools make informed decisions about electing CEP. USDA, in 
collaboration with Federal and State agency partners, stands ready to 
provide support, customer service, and technical assistance to school 
districts interested in electing CEP at all eligibility levels.

Procedural Matters

Executive Orders 12866 and 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 final rule has been determined to be not significant 
and was not reviewed by the Office of Management and Budget (OMB) in 
conformance with Executive Order 12866.
Regulatory Impact Analysis
    This final rule has been designated as not significant by the 
Office of Management and Budget. Therefore, no Regulatory Impact 
Analysis is required.
Regulatory Flexibility Act
    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies 
to analyze the impact of rulemaking on small entities and consider 
alternatives that would minimize any significant impacts on a 
substantial number of small entities. Pursuant to that review, it has 
been certified that this final rule would not have a significant impact 
on a substantial number of small entities. The provisions of this final 
rule are intended to reflect the operational needs of LEAs of all 
sizes. No specific additional burdens are placed on small LEAs seeking 
to operate CEP. USDA's 2022 CEP Characteristics Study found that 36 
percent of LEAs participating in CEP in SY 2016-17 were single-school 
LEAs; 32 percent of participating LEAs were in rural areas; and 83 
percent served fewer than 5,000 students.\22\ For smaller LEAs, the 
decision to elect CEP may be a simpler process and/or involve gaining 
approvals from fewer governing bodies. Additionally, CEP is an optional 
provision, and there is no requirement for LEAs to participate.
---------------------------------------------------------------------------

    \22\ U.S. Department of Agriculture (2022). USDA Community 
Eligibility Provision Characteristics Study, School Year 2016-2017. 
OMB #0584-0612, expiration 9/30/2019. Available at https://www.fns.usda.gov/cn/usda-cep-characteristics-study-sy-2016-17.
---------------------------------------------------------------------------

    Currently, many small LEAs participate in CEP; in SY 2016-17, 1,939 
of the 4,263 school districts (45 percent) electing CEP had enrollments 
of 999 or less.\23\
---------------------------------------------------------------------------

    \23\ Ibid.
---------------------------------------------------------------------------

Unfunded Mandates Reform Act
    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA) 
established 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 UMRA, USDA 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 $146 million or more (when adjusted for 
inflation; gross domestic product (GDP) deflator source: Table 1.1.9 at 
https://www.bea.gov/iTable) in any one year. When such a statement is 
needed for a rule, section 205 of UMRA generally requires USDA to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, more cost-effective, or least burdensome 
alternative that achieves the objectives of the rule.
    This final rule contains no Federal mandates (under the regulatory 
provisions of Title II of URMA) for State, local and Tribal 
governments, or the private sector, of $146 million or more in any one 
year. Therefore, this final rule is not subject to the requirements of 
sections 202 and 205 of UMRA.
Executive Order 12372
    The NSLP and SBP are assigned Assistance Listing Numbers--NSLP 
(10.555) and SBP (10.553)--and are subject to Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials (see 2 CFR chapter IV).\24\ Since the child nutrition 
programs are State-administered, USDA's FNS Regional Offices have 
formal and informal discussions with

[[Page 65786]]

State and local officials, including representatives of Indian Tribal 
Organizations, on an ongoing basis regarding program requirements and 
operations. This provides USDA with the opportunity to receive regular 
input from program administrators and contributes to the development of 
feasible program requirements.
---------------------------------------------------------------------------

    \24\ Assistance listings are detailed public descriptions of 
Federal programs that provide grants, loans, scholarships, 
insurance, and other types of assistance awards. More information is 
available at: https://sam.gov/content/home.
---------------------------------------------------------------------------

Federalism Summary Impact Statement
    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's considerations in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132.
    The Department has determined that this final rule does not have 
federalism implications. Electing CEP is a local decision, not a 
Federal mandate, and lowering the minimum ISP from 40 percent to 25 
percent does not limit State or local policymaking discretion. 
Furthermore, this final rule does not impose substantial or direct 
compliance costs on State and local governments. Therefore, under 
section 6(b) of the Executive order, a Federalism summary impact 
statement is not required.
Executive Order 12988, Civil Justice Reform
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This 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 implementation. However, USDA does not expect 
significant inconsistencies between this final rule and existing State 
or local regulations regarding the provision of school food service 
operations under CEP. This final rule would permit schools to elect CEP 
if their ISP is greater than or equal to 25 percent. Per statutory 
requirements outlined in the NSLA, State agencies operating the Federal 
school meal programs may not bar an eligible LEA from CEP 
participation. Additionally, States may not set an eligibility 
threshold lower than an ISP of 25 percent for participation in CEP. 
This final rule is not intended to have retroactive effect. Prior to 
any judicial challenge to the provisions of this final rule or the 
application of its provisions, all applicable administrative procedures 
must be exhausted.
Civil Rights Impact Analysis
    USDA has reviewed the final rule, in accordance with Departmental 
Regulation 4300-004, ``Civil Rights Impact Analysis,'' to identify and 
address any major civil rights impacts the final rule might have on 
participants on the basis of age, race, color, national origin, sex, 
and disability. The FNS Civil Rights Division finds that the current 
mitigation and outreach strategies outlined in the regulations and this 
Civil Rights Impact Analysis (CRIA) provide ample consideration to 
participants' ability to participate in the NSLP and SBP. The 
promulgation of this final rule will expand access to no-cost meals for 
all enrolled students at participating CEP schools by lowering the 
minimum participation threshold. As previously outlined, the final rule 
is likely to impact the growing number of minority students and 
families attending participating schools that face a greater risk of 
food insecurity and health disparities by providing sustained 
nutritious food and reducing families' paperwork burdens. The changes 
implemented by this final rule are likely to impact participating LEAs 
and SFAs by providing greater flexibility to offer no-cost meals to 
students, which would further support eliminating unpaid meal debt, 
minimizing stigma, streamlining meal service operations, and reducing 
paperwork for school nutrition staff.
Executive Order 13175: Consultation and Coordination With Indian Tribal 
Governments
    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. USDA provides regularly 
scheduled consultation sessions as a venue for collaborative 
conversations with Tribal officials or their designees. This rule was 
discussed during the consultation on May 23, 2023. Tribal members 
supported this rule and indicated their belief that lowering the 
minimum ISP will increase access to the program. USDA is unaware of any 
current Tribal laws that could be in conflict with the final rule.
Paperwork Reduction Act
    The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. Chap. 35; 5 
CFR part 1320) requires that the Office of Management and Budget (OMB) 
approve all collection of information requirements by a Federal agency 
before they can be implemented. Respondents are not required to respond 
to any collection of information unless it displays a current, valid 
OMB Control Number. This rulemaking expands access to the Community 
Eligibility Provision (CEP) by lowering the minimum identified student 
percentage (ISP) participation threshold from 40 percent to 25 percent, 
which would give States and schools greater flexibility to choose to 
invest non-Federal funds to offer no-cost meals to all enrolled 
students. As a result, more students, families, and schools will have 
an opportunity to experience the benefits of CEP, including access to 
meals at no cost, eliminating unpaid meal charges, minimizing stigma, 
reducing paperwork for school nutrition staff and families, and 
streamlining meal service operations.
    In accordance with the PRA, this final rule would revise existing 
information collection requirements, which are subject to review and 
approval by the Office of Management and Budget. These existing 
information collection requirements are currently approved under OMB 
Control Number 0584-0026, 7 CFR Part 245--Determining Eligibility for 
Free & Reduced Price Meals and Free Milk in Schools, which expired on 
July 31, 2023 (a renewal of OMB Control Number 0584-0026 has been 
submitted to OMB for review). Revisions to the currently approved 
information collection requirements will result in a decrease in burden 
on State and local program operators, as well as participating 
households. To ensure that the review of this final rule does not 
interfere with the renewal of OMB Control Number 0584-0026, FNS is 
requesting a new OMB Control Number for the existing information 
requirements that are impacted by this final rule. Therefore, the 
provisions outlined in this rule will initially be shown as increases 
to the information collection inventory. After OMB has approved the 
information collection requirements submitted in conjunction with the 
final rule and after the renewal of OMB Control Number 0584-0026 is 
completed, FNS will merge these requirements and their burden into OMB 
Control Number 0584-0026. When the two information collection requests 
are merged, the decrease in burden

[[Page 65787]]

noted above will be fully captured in OMB Control Number 0584-0026.
    In connection to this final rule, USDA published a proposed rule, 
Child Nutrition Programs: Community Eligibility Provision-Increasing 
Options for Schools, on March 23, 2023, which provided notice to the 
public of the forthcoming changes to CEP. In addition, a notice for the 
proposed rule's impact on information collection requirements and their 
associated burden was embedded in the proposed rule. The proposed rule 
solicited public comments on the proposed changes to the existing 
information collection requirements that are being finalized via this 
final rule. In response to the notice, FNS did not receive any comments 
specific to the estimated number of respondents or burden hours 
associated with the collection of information requirements addressed in 
the PRA section of the proposed rule, yet a few general comments 
submitted indicated that State agencies may have to update or reprogram 
systems to accommodate the proposed minimum ISP.
    FNS recognizes that State agencies have systems in place that may 
maintain CEP data, such as ISP data for LEAs under their jurisdiction. 
Systems may be used to assist program administrators to efficiently 
meet the collection of information requirements that are impacted by 
this rulemaking. For example, systems may be used to help State 
agencies meet the reporting requirement to inform LEAs of their CEP 
eligibility status, as well as meet the recordkeeping requirement that 
requires State agencies to review ISP documentation that is submitted 
by LEAs (7 CFR 245.9(f)(6) and (f)(4)(ii), respectively). When 
estimating the burden associated with information collection 
requirements, FNS takes into consideration the various methods that may 
be used to meet such requirements, including the use of information 
technology. FNS did not change the estimated burden associated with 
meeting CEP information collection requirements in response to the 
comments received about system updates or reprogramming; however, FNS 
expects and acknowledges some State agencies may experience a one-time 
cost associated with system modifications. The estimated cost 
associated with such modifications is included in the One Time Annual 
Cost subsection below.
    The estimated numbers of respondents, responses, and burden hours 
for the information collection requirements that were included in the 
March 23, 2023, proposed rule are being revised via this final rule. 
Revisions are not due to public comments received on the proposed rule; 
instead, they are based on more recent data that became available after 
publication of the proposed rule. Using more recent data, FNS re-
evaluated the number of schools in States that have committed to 
offering healthy school meals for all children that would be eligible 
to elect CEP in accordance with the lowered identified student 
percentage threshold. FNS also analyzed a recent publication from the 
Food Research and Action Center that indicated States offering free 
meals to all students in SY 2022-2023 experienced significant increases 
in CEP uptake and analyzed trends in CEP participation in recent years. 
As a result, FNS has obtained more accurate and recent data that better 
reflects the number of respondents that will comply with the collection 
of information requirements that are impacted by this final rule. 
Accordingly, FNS updated the estimated number of respondents, 
responses, and burden hours associated with the collections of 
information that are included in this final rule to reflect the most 
recent and accurate data available.
    In addition to updating the estimated number of respondents, 
responses, and burden hours for the information collection requirements 
addressed in this rulemaking with the use of more recent data, FNS is 
making a technical correction to a typographical error that was 
identified in the proposed rule's PRA section. Specially, the table 
that represented the reporting requirements impacted by this rulemaking 
and their associated burden indicated an estimated 628,673 burden hours 
were currently approved under OMB Control Number 0584-0026. The correct 
number of burden hours currently approved under OMB Control Number 
0584-0026 for the reporting requirements impacted by this rulemaking is 
approximately 643,824 burden hours. FNS has made the correction in the 
reporting table below by replacing 628,673 burden hours with 643,824 
burden hours for the number of currently approved burden hours 
associated with the reporting requirements impacted by this rulemaking.
    FNS now estimates that this final rule will have an estimated 
3,454,060 respondents, 12,064,195 responses, and 624,833 burden hours. 
This is a decrease of 31,128 respondents, 107,072 responses, and 5,374 
burden hours in comparison to the estimations included in the proposed 
rule.
    The burden estimates associated with the collections of information 
addressed in this final rule are contingent upon OMB approval under the 
PRA. When the information collection request associated with the final 
rule is approved, the USDA will publish a separate notice in the 
Federal Register announcing OMB's approval.
    Comments on the information collection requirements addressed in 
this final rule may be submitted. Comments must be received by October 
26, 2023. Send comments to Office of Information and Regulatory 
Affairs, OMB, Attention: Desk Officer for FNS, Washington, DC 20403, 
Fax: 202-395-7285, or email to <a href="/cdn-cgi/l/email-protection#355a5c47546a464057585c46465c5a5b755a58571b505a451b525a43"><span class="__cf_email__" data-cfemail="600f0912013f1315020d091313090f0e200f0d024e050f104e070f16">[email protected]</span></a>. Please also 
send a copy of your comments to School Meals Policy Division, Food and 
Nutrition Service, 1320 Braddock Place, Alexandria, VA 22314. For 
further information, please contact Wesley Gaddie at 
<a href="/cdn-cgi/l/email-protection#6c1b091f000915420b0d080805092c500d4c041e090a51" http: usda.gov">usda.gov</a>">wesley.gaddie@usda.gov</a>.
    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information shall have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the collection of information on those who 
are to respond, including 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 OMB approval. All comments 
will also become a matter of public record.
    Title: Community Eligibility Provision: Increasing Options for 
Schools.
    Form Number: None.
    OMB Control Number: 0584-NEW.
    Expiration Date: Not Yet Determined.
    Type of Request: New Collection.
    Abstract: This is a new information collection that revises the 
existing information collection request approved under OMB Control 
Number 0584-0026. Below is a summary of the changes in the final rule 
and the accompanying reporting and recordkeeping requirements that will 
impact the burden that program requirements have on state administering 
agencies, local education agencies (LEAs), and participating 
households. FNS has updated the number of respondents, responses, and 
burden hours associated with the collection of information requirements 
included in the final rule since publication of the proposed rule Child 
Nutrition Programs: Community

[[Page 65788]]

Eligibility Provision-Increasing Options for Schools, published on 
March 23, 2023. Revisions are based on more recent and accurate data 
that became available after the publication of the proposed rule. In 
addition, because FNS received comments on the proposed rule indicating 
that State agencies may experience a one-time cost associated with 
system modifications, an estimated cost for updating and reprogramming 
State systems is included in the One Time Annual Cost subsection below.
    Participating in the CEP is a voluntary decision made by local 
school districts. To be eligible for CEP under current program 
regulations, an LEA, group of schools, or school must ensure that at 
least 40 percent of enrolled students are identified students, 
participate in both the National School Lunch Program and the School 
Breakfast Program, and serve lunches and breakfasts to all enrolled 
students at no charge.
    Identified students are certified for free school meals without 
submitting a household application, such as those directly certified 
through the Supplemental Nutrition Assistance Program (SNAP). This 
final rule will expand access to CEP by lowering the required 
identified student percentage. This will provide more schools with an 
additional option for offering no-cost meals to students without 
requiring households to submit applications for free or reduced price 
meals.
    This final rule would amend 7 CFR 245.9(f)(3)(i) to require a LEA, 
group of schools, or school to have an identified student percentage of 
at least 25 percent, as of April 1 of the school year prior to 
participating in CEP. Individual schools participating in CEP as part 
of a group would be permitted to have an ISP lower than 25 percent, 
provided that the group's aggregate ISP is at least 25 percent.

Reporting

State Agencies
    The changes in this final rule impact the existing reporting 
requirement currently approved under OMB Control Number 0584-0026 and 
found at 7 CFR 245.9(f)(6), that requires State agencies to notify LEAs 
of their CEP status. USDA expects that the number of LEAs that must be 
notified will increase by 5,131, based on the finalized changes and 
more recent and accurate data that became available after publication 
of the proposed rule.
    USDA estimates the 54 State agency respondents will be required to 
notify approximately 95 additional LEAs each year, and that it takes 
approximately three minutes (.050 hours) to complete this reporting 
requirement for each record. The reporting requirement adds a total of 
257 annual burden hours and 5,131 responses into the new information 
collection request. Once this new collection is merged into OMB Control 
Number 0584-0026, USDA expects that an additional 257 hours and 5,131 
responses will be added to the collection.
LEAs
    The changes in this rule will impact the existing reporting 
requirements currently approved under OMB Control Number 0584-0026 for 
LEAs.
    USDA estimates that 471 additional LEAs will elect CEP and will be 
required to fulfill the reporting requirement at 7 CFR 245.9(f)(4)(i), 
that requires LEAs to submit to the State agency documentation of an 
acceptable identified student percentage of the LEA/school electing the 
provision. This collection of information requirement is currently 
approved under OMB Control Number 0584-0026. This estimation is being 
updated from what was published in the proposed rule on March 23, 2023, 
to reflect more recent and accurate data that became available after 
publication of the proposed rule, along with the other estimations 
regarding the impact of PRA requirements in this section.
    For this final rule, USDA estimates that the 471 LEA respondents 
will be required to submit identified student percentage data when 
electing CEP each year and that it takes approximately 15 minutes (.25 
hours) to complete this reporting requirement for each record. The 
reporting requirement adds an estimated total of 118 annual burden 
hours and 471 responses into the new information collection request. 
Once this new collection is merged into OMB Control Number 0584-0026, 
USDA expects that an additional 118 hours and 471 responses will be 
added to the collection.
    USDA expects that as a result of the changes, more LEAs electing 
CEP will be electing CEP for all schools in the LEA, or district wide. 
This will result in a decrease in the number of LEAs required to 
process free and reduced price meal applications and conduct 
verification.
    USDA estimates 471 fewer LEAs than currently approved under OMB 
Control Number 0584-0026 will be required to fulfill the requirement at 
7 CFR 245.6(c)(6)(i), that requires LEAs to notify households of 
approval of meal benefit applications. USDA estimates that 14,869 LEA 
respondents will be required to notify 219 households of approval of 
meal benefit applications each year and that it takes approximately one 
minute (.02 hours) to complete this reporting requirement for each 
record. The reporting requirement adds a total of 65,126 annual burden 
hours and 3,256,311 responses into the new information collection 
request. Once this new collection is merged into OMB Control Number 
0584-0026, USDA expects that there will be an approximate decrease of 
2,288 hours and 114,364 responses.
    USDA estimates 471 fewer LEAs than currently approved under OMB 
Control Number 0584-0026 will be required to fulfill the requirement at 
7 CFR 245.6(c)(6)(ii), that requires LEAs to notify households in 
writing that children are eligible for free meals based on direct 
certification and that no application is required. USDA estimates that 
14,869 LEA respondents will be required to notify 332 households in 
writing that children are eligible for free meals based on direct 
certification and that no application is required each year and that it 
takes approximately one minute (.02 hours) to complete this reporting 
requirement for each record. The reporting requirement adds a total of 
98,730 annual burden hours and 4,936,508 responses into the new 
information collection request. Once this new collection is merged into 
OMB Control Number 0584-0026, USDA expects that there will be an 
approximate decrease of 3,186 hours and 159,268 responses.
    USDA estimates 471 fewer LEAs than currently approved under OMB 
Control Number 0584-0026 will be required to fulfill the requirement at 
7 CFR 245.6(c)(7), that requires LEAs to provide written notice to each 
household of denied free or reduced price benefits. USDA estimates that 
14,869 LEA respondents will be required to provide written notice to 
approximately 12 households denied free or reduced price benefits each 
year and that it takes approximately one minute (.02 hours) to complete 
this reporting requirement for each record. The reporting requirement 
adds a total of 3,438 annual burden hours and 171,886 responses into 
the new information collection request. Once this new collection is 
merged into OMB Control Number 0584-0026, USDA expects that there will 
be an approximate decrease of 110 hours and 5,518 responses.
    USDA estimates 471 fewer LEAs than currently approved under OMB 
Control Number 0584-0026 will be required to fulfill the requirement at 
7 CFR 245.6a(f), that requires LEAs to notify households of selection 
for verification. USDA estimates that 14,869 LEA respondents will be 
required to notify

[[Page 65789]]

approximately seven households of selection for verification and that 
it takes approximately 15 minutes (.25 hours) to complete this 
reporting requirement for each record. The reporting requirement adds a 
total of 24,162 annual burden hours and 96,649 responses into the new 
information collection request. Once this new collection is merged into 
OMB Control Number 0584-0026, USDA expects that there will be an 
approximate decrease of 930 hours and 3,720 responses.
    USDA estimates 471 fewer LEAs than currently approved under OMB 
Control Number 0584-0026 will be required to fulfill the requirement at 
7 CFR 245.6a(j), that requires LEAs to provide households that failed 
to confirm eligibility with 10 days' notice for receiving a reduction 
or termination of free or reduced price meal benefit. USDA estimates 
that 14,869 LEA respondents will be required to provide approximately 
three households that failed to confirm eligibility with 10 days' 
notice for receiving a reduction or termination of free or reduced 
price meal benefits and that it takes approximately six minutes (.1 
hours) to complete this reporting requirement for each record. The 
reporting requirement adds a total of 3,940 annual burden hours and 
39,403 responses into the new information collection request. Once this 
new collection is merged into OMB Control Number 0584-0026, USDA 
expects that there will be an approximate decrease of 131 hours and 
1,304 responses.
    USDA estimates that 5,131 more LEAs than currently approved under 
OMB Control Number 0584-0026 will fulfill the requirement at 7 CFR 
245.9(f)(5), that requires LEAs to submit to the State agency for 
publication a list of eligible and potentially eligible schools and 
their eligibility status, unless otherwise exempted by the State 
agency. USDA estimates that 5,131 LEA respondents will be required to 
submit to the State agency for publication a list of eligible and 
potentially eligible schools and their eligibility status each year and 
that it takes approximately five minutes (.08 hours) to complete this 
reporting requirement for each record. The reporting requirement adds a 
total of 410 annual burden hours and 5,131 responses into the new 
information collection request. Once this new collection is merged into 
OMB Control Number 0584-0026, USDA expects that 410 hours and 5,131 
responses will be added to the collection.
    USDA estimates that 471 more LEAs than currently approved under OMB 
Control Number 0584-0026 will fulfill the requirement at 7 CFR 
245.9(g), that requires LEAs to amend free and reduced policy 
statements and certify that schools meet the eligibility criteria when 
electing CEP and that it takes approximately six minutes (.1 hours) to 
complete this reporting requirement for each record. The reporting 
requirement adds a total of 47 annual burden hours and 471 responses 
into the new information collection request. Once this new collection 
is merged into OMB Control Number 0584-0026, USDA expects that an 
additional 47 hours and 471 responses will be added to the collection.
Households
    Since households attending schools participating in CEP are not 
required to submit applications, USDA estimates that, with the changes, 
108,941 fewer households than currently approved under OMB Control 
Number 0584-0026 will be required to fulfill the requirement at 
245.6(a)(1), that requires households to complete an application form 
for free or reduced price meal benefits. USDA estimates that 3,439,137 
household respondents will be required to submit applications and that 
it takes approximately seven minutes (.110 hours) to complete this 
reporting requirement for each record. The reporting requirement adds a 
total of 378,305 annual burden hours and 3,439,137 responses into the 
new information collection request. Once this new collection is merged 
into OMB Control Number 0584-0026, USDA expects that there will be an 
approximate decrease of 11,984 hours and 108,941 responses.
    Households attending schools participating in CEP are also not 
required to assemble written evidence for verification of eligibility 
for free and reduced price meals and send to LEA. USDA estimates that 
3,082 fewer households than currently approved under OMB Control Number 
0584-0026 will be required to fulfill the requirement at Sec.  245.6a 
(a)(7)(i), that requires households to assemble written evidence for 
verification of eligibility for free and reduced price meals and send 
to the LEA. USDA estimates that 97,287 household respondents will be 
required to assemble written evidence for verification of eligibility 
for free and reduced price meals and that it takes approximately 30 
minutes (.5 hours) to complete this reporting requirement for each 
record. The reporting requirement adds a total of 48,644 annual burden 
hours and 97,287 responses into the new information collection request. 
Once this new collection is merged into OMB Control Number 0584-0026, 
USDA expects that there will be an approximate decrease of 1,542 hours 
and 3,082 responses.

Recordkeeping

State Agencies
    The changes in this final rule will impact the existing 
recordkeeping requirement currently approved under OMB Control Number 
0584-0026 and found at 7 CFR 245.9(f)(4)(ii), that require State 
agencies to review and confirm LEAs' eligibility to participate in CEP. 
USDA expects that State agencies will need to review an additional 471 
LEAs with schools newly electing CEP, based on the changes in this rule 
and after analyzing more recent and accurate CEP participation data 
that became available after USDA published the proposed rule. USDA 
estimates that 54 State Agency respondents will be required to review 
and confirm LEAs' eligibility to participate in Provision 1, 2, or 3 or 
the Community Eligibility Provision for approximately 471 LEAs electing 
CEP each year and that it takes approximately five minutes (.08 hours) 
to complete this recordkeeping requirement for each record. The 
recordkeeping requirement adds a total of 38 annual burden hours and 
471 responses into the new information collection request. Once this 
new collection is merged into OMB Control Number 0584-0026, USDA 
expects that an additional 38 hours and 471 responses will be added to 
the collection.
LEAs
    The changes in this final rule will impact the existing reporting 
requirements currently approved under OMB Control Number 0584-0026 for 
LEAs. USDA expects that as a result of the changes, more LEAs electing 
CEP will be electing CEP for all schools in the LEA, or district wide. 
This will result in a decrease in the number of LEAs required to 
maintain documentation substantiating eligibility determinations. USDA 
estimates 471 fewer LEAs than currently approved under OMB Control 
Number 0584-0026 will be required to fulfill the requirement at 7 CFR 
245.6(e) to maintain documentation substantiating eligibility 
determinations for three years after the end of the fiscal year. USDA 
estimates that 14,869 LEA respondents will be required to maintain 
documentation related to substantiating eligibility determinations for 
three years after the end of the fiscal year and that it takes 
approximately 5 minutes (.08 hours) to complete this recordkeeping 
requirement for each record. The recordkeeping requirement adds a total

[[Page 65790]]

of 1,190 annual burden hours and 14,869 responses into the new 
information collection request. Once this new collection is merged into 
OMB Control Number 0584-0026, USDA expects that there will be an 
approximate decrease of 37 hours and 471 responses.
    USDA expects that as a result of the changes, 471 more LEAs than 
currently approved under OMB Control Number 0584-0026 will elect CEP 
and be required to fulfill the recordkeeping requirement at 7 CFR 
245.9(h)(3) that LEAs maintain documentation related to the methodology 
used to calculate the identified student percentage and determine 
eligibility for the CEP. USDA estimates that 471 LEA respondents will 
be required to maintain documentation related to methodology used to 
calculate the identified student percentage and determine eligibility 
and that it takes approximately 55 minutes (.910 hours) to complete 
this recordkeeping requirement for each record. The recordkeeping 
requirement adds a total of 429 annual burden hours and 471 responses 
into the new information collection request. Once this new collection 
is merged into OMB Control Number 0584-0026, USDA expects that an 
additional 429 hours and 471 responses will be added to the collection.
    USDA does not expect lowering the threshold to participate in CEP 
to an ISP of 25 percent to impact the approved public notification 
requirements at 7 CFR 245.9(f)(7). While this rule will increase the 
number of schools eligible for the CEP, the burden for states to notify 
LEAs of their community eligibility status due to the increased number 
of eligible schools is already captured above in the reporting 
requirements at 7 CFR 245.9(f)(6). Making these lists publicly 
available will not take any additional time than is currently approved 
under OMB Control Number 0584-0026. Accordingly, this requirement is 
not addressed in this information collection.

One Time Annual Cost

    In recognition that State agencies may have to update or reprogram 
systems to accommodate the proposed minimum ISP, FNS is adding an 
estimated one-time, system modification cost, which will be included in 
the information collection request associated with this final rule. FNS 
received 2 comments that State agencies may modify existing systems in 
response to this rulemaking. In addition, FNS met with another State 
agency on August 16, 2023, and discussed how lowering the minimum ISP 
would impact that State's system. FNS received feedback indicating 
updates to State systems could be done efficiently and in time to allow 
LEAs the opportunity to implement CEP at the lower ISP threshold soon 
after the final rule was effective, and encouraged FNS to allow mid-
year election.
    Given the wide variation of systems in place, programming and 
maintenance costs across State agencies varies. After considering 
feedback and analyzing different systems States have in place, FNS is 
including an estimated one-time cost of $2,000 per State agency to make 
system modifications in response to the lowered ISP. As a result of the 
proposals outlined in this final rule, FNS estimates that this 
collection is expected to have $108,000 in costs related to system 
modifications, which will be added as a one-time, annual cost to the 
information collection requirements associated with the final rule, OMB 
Control Number 0584-00XX.

Summary

    As a result of the proposals outlined in this final rule, FNS 
estimates that this new information collection will have 3,454,060 
respondents, 12,064,195 responses, and 624,833 burden hours. The 
average burden per response and the annual burden hours are explained 
below and summarized in the charts which follow. Once the information 
collection requirement (ICR) for the final rule is approved and the 
requirements and associated burden for this new information collection 
are merged into the existing collection, FNS estimates that the burden 
for OMB Control Number 0584-0026 will decrease by 384,522 responses and 
18,908 burden hours. The collection will also have a one-time increase 
of $108,000 in annual costs related to system modifications.
Reporting
    Respondents (Affected Public): Individual/Households; and State, 
Local and Tribal Government. The respondent groups identified include 
households, State Agencies and LEAs.
    Estimated Number of Respondents: 3,454,060.
    Estimated Number of Responses per Respondent: 3.49.
    Estimated Total Annual Responses: 12,048,384.
    Estimated Time per Response: 0.052 (approximately 3 minutes).
    Estimate Total Annual Burden on Respondents: 623,177 hours.
Recordkeeping
    Respondents (Affected Public): State, Local and Tribal Government. 
The respondent groups identified include State Agencies and LEAs.
    Estimated Number of Respondents: 14,923.
    Estimated Number of Responses per Respondent: 1.06.
    Estimated Total Annual Responses: 15,811.
    Estimated Time per Response: .105 (approximately 6 minutes).
    Estimate Total Annual Burden on Respondents: 1,656 hours.
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E-Government Act Compliance

    The Department 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 in 7 CFR Part 245

    Civil rights, Food assistance programs, Grant programs--education, 
Grant programs--health, Infants and children, Milk, Reporting and 
recordkeeping requirements, School breakfast and lunch programs.

    Accordingly, 7 CFR part 245 is amended as follows:

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.


Sec.  245.9  [Amended]

0
2. In Sec.  245.9, in paragraph (f), remove ``40 percent'' and ``30 
percent'' wherever they appear and add in their places ``25 percent'' 
and ``15 percent'', respectively.

Cynthia Long,
Administrator, Food and Nutrition Service.
[FR Doc. 2023-20294 Filed 9-25-23; 8:45 am]
BILLING CODE 3410-30-P


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