(1) From the state school aid fund money appropriated in section 11, there is allocated an amount not to exceed $100,000,000.00 for 2023-2024, and from the school meals reserve fund money appropriated in section 11, there is allocated an amount not to exceed $25,000,000.00 for 2022-2023 and an amount not to exceed $60,000,000.00 for 2023-2024 for the purpose of making payments to participating entities to provide free school lunch and breakfast to public school pupils in grades pre-K to 12.

    (2) In order to receive funding from this section, a participating entity must participate in the National School Lunch Program and must do all of the following:

    (a) Provide reimbursable breakfasts and reimbursable lunches at no cost to all students for any school breakfast program or school lunch program operated by the participating entity.

    (b) Except for 2022-2023, submit information regarding the number of reimbursable breakfasts and reimbursable lunches served in a manner prescribed by the department.

    (c) Maximize federal reimbursement for reimbursable breakfasts and reimbursable lunches by operating under the CEP if the participating entity has an identified student percentage greater than or equal to the minimum requirement to be eligible to participate in the CEP. For purposes of this subdivision, all eligible participating entities must elect CEP on behalf of a single school, a group or groups of schools, or all schools in the participating entity, as applicable, in a manner that maximizes federal reimbursement.

    (d) The participating entity meets all applicable state and federal standards in its school breakfast and lunch programs, as determined by the department.

    (e) The participating entity takes all efforts to maximize and implement policies that require parents or guardians to fill out relevant family income information, in a manner prescribed by the department, for the purposes of determining student eligibility for federal free or reduced cost meal reimbursement rates and CEP eligibility determinations.

    (f) By not later than February 1, 2024, all school meal debt has been forgiven by the participating entity, as determined by the department.

    (3) Participating entities are encouraged to offer meals that meet students’ dietary restrictions, including the provision of gluten-free meals, vegetarian meals, vegan meals, and, upon request, kosher meals, halal meals, and meals meeting any allergy restrictions as confirmed by a doctor’s note.

    (4) For each eligible participating entity, the department shall pay an amount equal to the following:

    (a) The amount equal to the federal rate per student paid per pupil per free breakfast and lunch under the Child Nutrition Act of 1966, 42 USC 21 1771 to 1793, and the Richard B. Russell National School Lunch Act, 42 USC 1751 to 1769j, multiplied by the number of breakfasts and lunches provided by the participating entity to students, less the federal revenue received by the participating entity under the school breakfast program and the school lunch program under the Child Nutrition Act of 1966, 42 USC 21 1771 to 1793, and the Richard B. Russell National School Lunch Act, 42 USC 1751 to 1769j, and other state lunch payments received under section 31d.

    (b) The amount equal to the federal rate per student paid per pupil per free breakfast and lunch under the Child Nutrition Act of 1966, 42 USC 21 1771 to 1793, and the Richard B. Russell National School Lunch Act, 42 USC 1751 to 1769j, multiplied by the number of breakfasts and lunches provided by the participating entity, as applicable, to children participating in the Great Start Readiness Program under section 32d at the participating entity, less all other federal and state lunch payments made for those children. For purposes of this subdivision, compliance with 7 C.F.R. § 226.9 is required. The department shall assign rates of reimbursement pursuant to 7 C.F.R. § 226.9, at least annually, on the basis of family size and income information reported by each eligible participating entity. Assigned rates of reimbursement must be adjusted annually to reflect changes in the national average payment rates.

    (5) Notwithstanding section 17b, the department may make payments under this section on a schedule determined by the department.

    (6) As used in this section:

    (a) “CEP” means the Community Eligibility Provision under the Richard B. Russell National School Lunch Act, 42 USC 1751 to 1769j.

    (b) “Participating entity” means a district, intermediate district, or the Michigan Schools for the Deaf and Blind.

    (7) In addition to the appropriations in section 11, if the amount allocated in subsection (1) is not sufficient to fully reimburse districts for meals as required in this section, there is appropriated from the school meals reserve fund created in section 30e the amount necessary to fully fund these reimbursements.