The "School Meal Modernization and Hunger Elimination Act" aims to significantly expand access to free and reduced-price school meals by enhancing direct certification processes and establishing universal meal programs. It mandates that schools, including those operated by the Bureau of Indian Education, directly certify additional categories of low-income children for meal benefits. These new categories include children placed with caregivers by child welfare agencies, those receiving adoption or kinship guardianship assistance, children in specific low-income housing situations, and those receiving Supplemental Security Income (SSI).

The bill also improves the eligibility process for children who transfer between school districts, ensuring their meal eligibility is honored and, in some cases, extended for an additional year, particularly for children living with grandparent or relative caregivers. Furthermore, it introduces a retroactive reimbursement mechanism, requiring local educational agencies to adjust meal claims and reimburse families for payments made before a child's eligibility for free or reduced-price meals was determined or changed.

A key provision is the expansion of Medicaid direct certification, requiring states to enter agreements by July 1, 2025, to automatically certify eligible children for free or reduced-price meals based on their Medicaid enrollment and income levels. The Commissioner of Social Security is also mandated to share data with local educational agencies to facilitate direct certification for children receiving SSI. To support these efforts, the bill allocates $28 million for grants and technical assistance to states and Tribal organizations, prioritizing those with the lowest direct certification rates, to improve their systems and processes.

The legislation significantly enhances the Community Eligibility Option (CEO) by increasing the multiplier from 1.6 to 2.5 for school years beginning July 1, 2025, making it easier for more schools in high-poverty areas to offer free meals to all students. Additionally, it establishes statewide free universal school meal demonstration projects in up to five selected states, starting by July 1, 2026. These projects will provide free meals to all students in participating schools, with federal and required non-federal funding ensuring a high reimbursement rate for meals served.

The bill outlines criteria for state selection for these demonstration projects, emphasizing childhood poverty levels and existing direct certification performance. It also mandates a comprehensive report by September 30, 2030, to evaluate the impact of these universal meal programs on various factors, including academic achievement, food insecurity, and school finances. Finally, the bill amends reporting requirements for states needing improvement in direct certification, ensuring transparency and accountability in their progress.