[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR215.13a]

[Page 79-82]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 215--SPECIAL MILK PROGRAM FOR CHILDREN--Table of Contents
 
Sec. 215.13a  Determining eligibility for free milk in child-care institutions.

    (a) General. Child care institutions which operate pricing programs 
may elect to make free milk available, as set forth in Sec. 215.7(d)(2), 
to children who meet the approved eligibility criteria. Such child care 
institutions shall determine the children who are eligible for free milk 
and assure that there is no physical segregation of, or other 
discrimination against, or overt identification of, children unable to 
pay the full price for milk.
    (b) Action by State agencies and FNSROs. Each State agency, or FNSRO 
where applicable, upon application for the program by a child care 
institution operating a pricing program, and annually thereafter, shall 
require the institution to state whether or not it wishes to serve free 
milk to eligible children at times that milk is provided under the 
Program. It shall annually require each child care institution electing 
to provide free milk to submit a free milk policy statement and shall 
provide such institutions with a prototype free milk policy statement 
and a copy of the State's family-size income standards for determining 
eligibility for free meals and milk under the National School Lunch and 
School Breakfast Programs to assist the institutions in meeting its 
responsibilities.
    (c) Action by institutions. Each child care institution which 
operates a pricing program shall inform the State agency, or FNSRO where 
applicable, at the time it applies for Program participation and at 
least annually thereafter, whether or not it wishes to provide free 
milk. Institutions electing to provide free milk shall annually submit a 
written free milk policy statement for determining free milk eligibility 
of children under their jurisdiction, which shall contain the items 
specified in paragraph (d) of this section. Such institutions shall not 
be approved for Program participation of their agreements renewed unless 
the free milk policy has been reviewed and approved. Pending approval or 
a revision of a policy statement, the existing policy shall remain in 
effect.
    (d) Policy statement. A free milk policy statement as required in 
paragraph (c) of this section shall contain the following:
    (1) The specific criteria to be used in determining eligibility for 
free milk. These criteria shall give consideration to economic need as 
reflected by family size and income. The criteria used by the child-care 
institution may not result in the eligibility of children from families 
whose incomes exceed the State's family-size income standards for 
determining eligibility for free meals under the National School Lunch 
and School Breakfast Programs.

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    (2) The method by which the child-care institution will collect 
information from families in order to determine a child's eligibility 
for free milk.
    (3) The method by which the child-care institution will collect milk 
payments so as to prevent the overt identification of children receiving 
free milk.
    (4) A hearing procedure substantially like that outlined in part 245 
of this chapter.
    (5) An assurance that there will be no discrimination against free 
milk recipients and no discrimination against any child on the basis of 
race, color, or national origin.
    (e) Public announcement of eligibility criteria. Each child care 
institution which elects to make free milk available under the Program 
shall annually make a public announcement of the availability of free 
milk to children who meet the approved eligibility criteria to the 
information media serving the area from which its attendance is drawn. 
The public announcement must also state that milk is available to all 
children in attendance without regard to race, color, or national 
origin.
    (f) Is a Privacy Act notice required on the free milk application? 
Each free milk application must include substantially the following 
statement: ``Unless you include your child's case number for the Food 
Stamp Program, the Food Distribution Program on Indian Reservations (or 
other identifier for the Food Distribution Program on Indian 
Reservations) or the Temporary Assistance for Needy Families Program, 
you must include the social security number of the adult household 
member signing the application or indicate that the household member 
does not have a social security number. This is required by section 9 of 
the National School Lunch Act. The social security number is not 
mandatory, but the application cannot be approved if a social security 
number is not given or an indication is not made that the signer does 
not have a social security number. The social security number will be 
used in the administration and enforcement of the program.''
    (g) Disclosure of program eligibility information to State Medicaid 
(Medicaid) and the State Children's Health Insurance Program (SCHIP) 
Program eligibility information about children eligible for free milk 
may be disclosed to Medicaid and SCHIP as described in this section.
    (1) Who decides whether to disclose program eligibility information 
to Medicaid and/or SCHIP? The State agency may elect to allow child care 
institutions to disclose children's free milk eligibility information to 
Medicaid and SCHIP. Child care institutions may then elect to do so. 
Children's program eligibility information may only be disclosed to 
Medicaid or SCHIP when both the State agency and the child care 
institution so elect, the parent/guardian does not decline to have their 
eligibility information disclosed as described in paragraph (g)(5), and 
the requirements in this paragraph (g) are met.
    (2) What information may we disclose for use by Medicaid and SCHIP? 
The State agency or child care institution, as appropriate, may disclose 
children's names, eligibility status (whether they are eligible for free 
milk), and any other eligibility information obtained through the free 
milk application or obtained through direct certification to persons 
directly connected with the administration of Medicaid or SCHIP.
    (3) Who are persons ``directly connected'' with the administration 
of Medicaid and SCHIP? State employees and persons authorized under 
Federal and State Medicaid and SCHIP requirements to carry out initial 
processing of Medicaid or SCHIP applications or to make eligibility 
determinations are persons directly connected with the administration of 
Medicaid and SCHIP for purposes of disclosure of children's free milk 
eligibility information.
    (4) What are the restrictions on how Medicaid and SCHIP use 
children's free milk eligibility information? Medicaid and SCHIP 
agencies and health insurance program operators receiving children's 
free milk eligibility information may only use the information to seek 
to enroll children in Medicaid or SCHIP. The Medicaid and SCHIP 
enrollment process may include targeting and identifying children from 
low-income households who are potentially eligible for Medicaid or SCHIP 
for the purpose of seeking to enroll them in Medicaid or SCHIP.

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    (5) Must we notify households of potential disclosure to Medicaid or 
SCHIP? The State agency or child care institution, as appropriate, must 
notify parents/guardians that their children's free milk eligibility 
information will be disclosed to Medicaid and/or SCHIP unless the 
parent/guardian elects not to have their information disclosed. 
Additionally, the State agency or sponsor, as appropriate, must give 
parents/guardians an opportunity to elect not to have their information 
disclosed to Medicaid or SCHIP. Only the parent or guardian who is a 
member of the household or family for purposes of the free and reduced 
price meal or free milk application may decline the disclosure of 
eligibility information. The notification must inform parents/guardians 
that they are not required to consent to the disclosure, that the 
information, if disclosed, will be used to identify children eligible 
for and to seek to enroll children in a health insurance program, and 
that their decision will not affect their children's eligibility for 
free milk. The notification may be included in the letter/notice to 
parents/guardians that accompanies the free milk application, on the 
application itself or in a separate notice provided to parents/
guardians. The notice must give parents/guardians adequate time to 
respond. For children determined eligible through direct certification, 
the notice of potential disclosure may be included in the document 
informing parents/guardians of their children's eligibility for free 
milk through direct certification.
    (6) May social security numbers be disclosed? The State agency or 
child care institution, as appropriate, may disclose social security 
numbers to any programs or persons authorized to receive all program 
eligibility information under this paragraph (g), provided parents/
guardians have not declined to have their information disclosed. However 
State agencies and child care institutions that plan to disclose social 
security numbers must give notice of the planned use of the social 
security numbers. This notice must be in accordance with section 7(b) of 
the Privacy Act of 1974 (5 U.S.C. 552a note). The application must 
include substantially the following language for disclosures of social 
security numbers to Medicaid or SCHIP: ``The social security number may 
also be disclosed to Medicaid and the State Children's Health Insurance 
Program for the purpose of identifying and seeking to enroll eligible 
children in one of these health insurance programs.'' This language is 
in addition to the notice required in paragraph (f) of this section. 
State agencies and child care institutions are responsible for drafting 
the appropriate notice for disclosures of social security numbers.
    (7) Are agreements required before disclosing program eligibility 
information? The State agency or child care institution, as appropriate, 
must have a written agreement with the State or local agency or agencies 
administering Medicaid or SCHIP prior to disclosing children's free milk 
eligibility information. At a minimum, the agreement must:
    (i) Identify the health insurance program or health agency receiving 
children's eligibility information;
    (ii) Describe the information that will be disclosed;
    (iii) Require that the Medicaid or SCHIP agency use the information 
obtained and specify that the information must only be used to seek to 
enroll children in Medicaid or SCHIP;
    (iv) Describe how the information will be protected from 
unauthorized uses and disclosures;
    (v) Describe the penalties for unauthorized disclosure; and
    (vi) Be signed by both the Medicaid or SCHIP program or agency and 
the State agency or child care institution, as appropriate.
    (8) What are the penalties for unauthorized disclosure or misuse of 
information? In accordance with section 9(b)(2)(C)(v) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(C)(v)), any 
individual who publishes, divulges, discloses or makes known in any 
manner, or to any extent not authorized by statute or this section, any 
information obtained under this paragraph (g) will be fined not more 
than $1,000 or imprisoned for up to 1 year, or both.
    (9) What are the State agency's responsibilities regarding 
disclosures? State agencies that elect to allow disclosure

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of children's free milk eligibility information to Medicaid or SCHIP, as 
provided in this paragraph (g), must ensure that any child care 
institution acting in accordance with that option:
    (i) Has a written agreement with the State or local agency or 
agencies administering health insurance programs for children under 
titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq. 
and 1397aa et seq.) that requires the health agencies to use children's 
free milk eligibility information to seek to enroll children in those 
health insurance programs; and
    (ii) Notifies each household of the information that will be 
disclosed, that the information disclosed will be used only to seek to 
enroll children in Medicaid or SCHIP and provides each parent/guardian 
with an opportunity to elect not to have the information disclosed.

(Sec. 11, Pub. L. 95-166, 91 Stat. 1337 (42 U.S.C. 1772, 1753, 1766); 
sec. 5, Pub. L. 95-627, 92 Stat. 3619 (42 U.S.C. 1772))

[Amdt. 14, 41 FR 31176, July 27, 1976, as amended by Amdt. 16, 43 FR 
1060, Jan. 6, 1978; 44 FR 10700, Feb. 23, 1979; Amdt. 17, 44 FR 33047, 
June 8, 1979; 66 FR 2201, Jan. 11, 2001]