School Lunch Reimbursement

The Commission issued a rule providing for the reimbursement of school lunch programs within the Compact region on February 27, 1998, following a period for notice and comment.[1]  Under the rule, school lunch programs receive reimbursement for increases in their costs if they can document the increases and trace the cause to the Commission’s regulations.[2]

The “hold-harmless” theory behind the reimbursement somewhat resembles that for the WIC exemption—even though the Commission’s analysis showed that its over-order price regulation was unlikely actually to increase the costs of school lunches, school lunch programs are nevertheless so important to the public interest that an exemption is justified to prevent any possible adverse impact.  The Commission concluded that the public interest favored the creation of a school lunch exemption, limited to documented increases; this qualification distinguishes the treatment of school lunches from that of WIC, for which no documented increase is required.  The Commission subsequently undertook further rulemaking proceedings to extend the exemption, which had initially been established for only a year, through the life of the underlying price regulation.[3]