[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3874 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 480

105th CONGRESS

  2d Session

                               H. R. 3874

_______________________________________________________________________

                                 AN ACT

 To amend the National School Lunch Act and the Child Nutrition Act of 
 1966 to provide children with increased access to food and nutrition 
    assistance, to simplify program operations and improve program 
   management, to extend certain authorities contained in those Acts 
           through fiscal year 2003, and for other purposes.

_______________________________________________________________________

                             July 21, 1998

            Received; read twice and placed on the calendar
                                                       Calendar No. 480
105th CONGRESS
  2d Session
                                H. R. 3874


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 21, 1998

            Received; read twice and placed on the calendar

_______________________________________________________________________

                                 AN ACT


 
 To amend the National School Lunch Act and the Child Nutrition Act of 
 1966 to provide children with increased access to food and nutrition 
    assistance, to simplify program operations and improve program 
   management, to extend certain authorities contained in those Acts 
           through fiscal year 2003, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Child Nutrition 
and WIC Reauthorization Amendments of 1998''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Effective date.
          TITLE I--AMENDMENTS TO THE NATIONAL SCHOOL LUNCH ACT

Sec. 101. Provision of commodities.
Sec. 102. Nutritional and other program requirements.
Sec. 103. Special assistance.
Sec. 104. Miscellaneous provisions and definitions.
Sec. 105. Summer food service program for children.
Sec. 106. Commodity distribution program.
Sec. 107. Child and adult care food program.
Sec. 108. Meal supplements for children in afterschool care.
Sec. 109. Universal free breakfast pilot projects.
Sec. 110. Training and technical assistance.
Sec. 111. Compliance and accountability.
Sec. 112. Information clearinghouse.
Sec. 113. Accommodation of the special dietary needs of individuals 
                            with disabilities.
        TITLE II--AMENDMENTS TO THE CHILD NUTRITION ACT OF 1966

Sec. 201. State administrative expenses.
Sec. 202. Special supplemental nutrition program for women, infants, 
                            and children.
Sec. 203. Nutrition education and training program.

SEC. 2. EFFECTIVE DATE.

    This Act, and the amendments made by this Act, shall take effect on 
October 1, 1998, or the date of the enactment of this Act, whichever 
occurs later.-

          TITLE I--AMENDMENTS TO THE NATIONAL SCHOOL LUNCH ACT

SEC. 101. PROVISION OF COMMODITIES.

    Section 6 of the National School Lunch Act (42 U.S.C. 1755) is 
amended--
            (1) in subsection (b), by striking ``authorized under 
        subsection (c)'' and inserting ``required under subsections (c) 
        and (e)'';
            (2) by striking subsections (c) and (d); and
            (3) by redesignating subsections (e), (f), and (g) as 
        subsections (c), (d), and (e), respectively.

SEC. 102. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

    (a) State or Local Health and Safety Inspections.--Section 9 of the 
National School Lunch Act (42 U.S.C. 1758) is amended by adding at the 
end the following:
    ``(h) If the food service operations of a school participating in 
the school lunch program under this Act or the school breakfast program 
under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) are 
not required by State or local law to undergo health and safety 
inspections, then the school shall twice during each school year obtain 
State or local health and safety inspections to ensure that meals 
provided under such programs are prepared and served in a healthful and 
safe environment.''.
    (b) Single Permanent Agreements Between State Agencies and School 
Food Authorities; Common Claiming Procedures.--Section 9 of such Act 
(42 U.S.C. 1758), as amended by this Act, is further amended by adding 
at the end the following:
    ``(i)(1) If a single State agency administers the school lunch 
program under this Act, the school breakfast program under section 4 of 
the Child Nutrition Act of 1966 (42 U.S.C. 1773), the summer food 
service program for children under section 13 of this Act, or the child 
and adult care food program under section 17 of this Act, then such 
agency--
            ``(A) shall require each school food authority to submit a 
        single agreement with respect to the operation of such programs 
        by such authority; and
            ``(B) shall require a common claiming procedure with 
        respect to meals and supplements served under such programs.
    ``(2) The agreement described in paragraph (1)(A) shall be a 
permanent agreement that may be amended as necessary.''.

SEC. 103. SPECIAL ASSISTANCE.

    (a) School Eligibility Requirements for Payments.--Section 11(a)(1) 
of the National School Lunch Act (42 U.S.C. 1759a(a)(1)) is amended--
            (1) in subparagraph (C)--
                    (A) in clause (i)(I), by striking ``3 successive 
                school years'' each place it appears and inserting ``4 
                successive school years''; and
                    (B) in clauses (ii) and (iii), by striking ``3-
                school-year period'' each place it appears and 
                inserting ``4-school-year period''; and
            (2) in subparagraph (D)--
                    (A) in clause (i)--
                            (i) by striking ``3-school-year period'' 
                        each place it appears and inserting ``4-school-
                        year period''; and
                            (ii) by striking ``2 school years'' and 
                        inserting ``4 school years'';
                    (B) in clause (ii)--
                            (i) by striking the first sentence; and
                            (ii) by striking ``5-school-year period'' 
                        each place it appears and inserting ``4-school-
                        year period''; and
                    (C) in clause (iii), by striking ``5-school-year 
                period'' and inserting ``4-school-year period''.
    (b) Adjustments to Payment Rates.--
            (1) In general.--Section 11(a)(3)(B) of such Act (42 U.S.C. 
        1759a(a)(3)(B)) is amended--
                    (A) in the first sentence, by striking ``The 
                annual'' and inserting ``(i) The annual''; and
                    (B) in the third sentence--
                            (i) by striking ``The adjustments'' and 
                        inserting the following:
    ``(ii) The adjustments''; and
                            (ii) by inserting ``through April 30, 
                        1999,'' after ``under this paragraph''; and
                            (iii) by adding at the end the following:
    ``(iii) For the period beginning on May 1, 1999, and ending on June 
30, 1999, the national average payment rates for meals and supplements 
shall be adjusted to the nearest lower cent increment and shall be 
based on the unrounded amounts used to calculate the rates in effect on 
July 1, 1998.
    ``(iv) For July 1, 1999, and each subsequent July 1, the national 
average payment rates for meals and supplements shall be adjusted to 
the nearest lower cent increment and shall be based on the unrounded 
amount for the preceding 12-month period.''.
            (2) Conforming amendments.--Section 4(b) of the Child 
        Nutrition Act of 1966 (42 U.S.C. 1773(b)) is amended--
            (1) in the second sentence of paragraph (1)(B), by striking 
        ``adjusted to the nearest one-fourth cent,''; and
            (2) in paragraph (2)(B)(ii), by striking ``to the nearest 
        one-fourth cent''.

SEC. 104. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

    (a) Adjustments to Reimbursement Rates for Certain States and 
Territories.--Section 12(f) of the National School Lunch Act (42 U.S.C. 
1760(f)) is amended--
            (1) by striking ``school breakfasts and lunches'' and 
        inserting ``breakfasts, lunches, suppers, and supplements'';
            (2) by striking ``sections 4 and 11'' and inserting 
        ``sections 4, 11, 13, and 17''; and
            (3) by striking ``lunches and breakfasts'' each place it 
        appears and inserting ``meals''.
    (b) Buy American Requirement.--Section 12 of the National School 
Lunch Act (42 U.S.C. 1760) is amended by adding at the end the 
following:
    ``(n) Buy American Requirement.--
            ``(1) In general.--For purposes of providing meals under 
        the school lunch program under this Act or the school breakfast 
        program under section 4 of the Child Nutrition Act of 1966 (42 
        U.S.C. 1773), the Secretary shall require schools located in 
        the contiguous United States to purchase, to the extent 
        practicable, only food products that are produced in the United 
        States.
            ``(2) Additional requirement.--The requirement of paragraph 
        (1) shall also apply to recipient agencies in Hawaii only with 
        respect to food products that are grown in Hawaii in sufficient 
        quantities to meet the needs of meals provided under the school 
        lunch program under this Act or the school breakfast program 
        under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 
        1773).
            ``(3) Definition.--As used in this subsection, the term 
        `food products that are produced in the United States' means--
                    ``(A) unmanufactured food products that are grown 
                or produced in the United States; and
                    ``(B) manufactured food products that are 
                manufactured in the United States substantially from 
                agricultural products grown or produced in the United 
                States.''.

SEC. 105. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

    (a) Definition of Private Nonprofit Organizations.--Section 
13(a)(7)(B) of the National School Lunch Act (42 U.S.C. 1761(a)(7)(B)) 
is amended--
            (1) in clause (i), to read as follows:
            ``(i) operate not more than 25 sites, with not more than 
        300 children being served at any one site (or, with a waiver 
        granted by the State agency under standards developed by the 
        Secretary, not more than 500 children being served at any one 
        site);'';
            (2) by striking clauses (ii) and (iii); and
            (3) by redesignating clauses (iv), (v), (vi), and (vii) as 
        clauses (ii), (iii), (iv), and (v), respectively.
    (b) Offer Versus Serve.--Section 13(f)(7) of such Act (42 U.S.C. 
1761(f)(7)) is amended in the first sentence by striking ``attending a 
site on school premises operated directly by the authority''.
    (c) Food Service Management Companies.--
            (1) Contracting for provision of meals or management of 
        program.--Section 13(l)(1) of such Act (42 U.S.C. 1761(l)(1)) 
        is amended--
                    (A) in the first sentence--
                            (i) by striking ``(other than private 
                        nonprofit organizations eligible under 
                        subsection (a)(7))''; and
                            (ii) by striking ``only with food service 
                        management companies registered with the State 
                        in which they operate'' and inserting ``with 
                        food service management companies''; and
                    (B) by striking the last sentence.
            (2) Registration.--Section 13(l)(2) of such Act (42 U.S.C. 
        1761(l)(2)) is amended--
                    (A) in the first sentence of the matter preceding 
                subparagraph (A), by striking ``shall'' and inserting 
                ``may''; and
                    (B) by striking all after the first sentence.
            (3) Other provisions.--Section 13(l) of such Act (42 U.S.C. 
        1761(l)) is amended--
                    (A) by striking paragraph (3); and
                    (B) by redesignating paragraphs (4) and (5) as 
                paragraphs (3) and (4), respectively.
    (d) Reauthorization of Program.--Section 13(q) of such Act (42 
U.S.C. 1761(q)) is amended by striking ``1998'' and inserting ``2003''.

SEC. 106. COMMODITY DISTRIBUTION PROGRAM.

    Section 14(a) of the National School Lunch Act (42 U.S.C. 1762a(a)) 
is amended in the matter preceding paragraph (1) by striking ``1998'' 
and inserting ``2003''.-

SEC. 107. CHILD AND ADULT CARE FOOD PROGRAM.

    (a) Eligibility of Institutions.--Section 17(a)(1) of the National 
School Lunch Act (42 U.S.C. 1766(a)(1)) is amended to read as follows:
            ``(1) an institution (except a school or family or group 
        day care home sponsoring organization) or family or group day 
        care home--
                    ``(A)(i) shall be licensed, or otherwise have 
                approval, by the appropriate Federal, State, or local 
                licensing authority; or
                    ``(ii) shall be in compliance with appropriate 
                procedures for renewing participation in the program, 
                as prescribed by the Secretary, unless the State has 
                information indicating that the institution or family 
                or group day care home's license will not be renewed;
                    ``(B) if Federal, State, or local licensing or 
                approval is not available-----
                            ``(i) shall meet any alternate approval 
                        standards established by the appropriate State 
                        or local governmental agency; or
                            ``(ii) shall meet any alternate approval 
                        standards established by the Secretary after 
                        consultation with the Secretary of Health and 
                        Human Services; or
                    ``(C) if the institution provides care to school 
                children outside of school hours and Federal, State, or 
                local licensing or approval is not required for such 
                institution, shall meet State or local health and 
                safety standards; and''.
    (b) Categorical Eligibility for Even Start Program Participants.--
Section 17(c)(6)(B) of such Act (42 U.S.C. 1766(c)(6)(B)) is amended by 
striking ``1997'' and inserting ``2003''.
    (c) Tax Exempt Status of Eligible Institutions; Removal of 
Notification Requirement for Incomplete Applications.--Section 17(d)(1) 
of such Act (42 U.S.C. 1766(d)(1)) is amended--
            (1) by inserting after the third sentence the following: 
        ``An institution moving toward compliance with the requirement 
        for tax exempt status shall be allowed to participate in the 
        program for a period of not more than 6 months unless it can 
        demonstrate to the satisfaction of the State agency that its 
        inability to obtain tax exempt status within the 6-month period 
        is beyond the control of the institution in which case the 
        State agency may grant a single extension not to exceed 90 
        days.''; and
            (2) by striking the last sentence.
    (d) Use of Funds for Audits of Participating Institutions.--Section 
17(i) of such Act (42 U.S.C. 1766(i)) is amended by striking ``2 
percent'' and inserting ``1 percent''.
    (e) Permanent Authorization of Demonstration Project.--Section 
17(p) of such Act (42 U.S.C. 1766(p)) is amended by striking paragraphs 
(4) and (5).
    (f) Transfer of Homeless Programs.--
            (1) In general.--Section 17 of such Act (42 U.S.C. 1766) is 
        amended by adding at the end the following:
    ``(q) Participation by Emergency Shelters.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, an emergency shelter shall be eligible to 
        participate in the program authorized under this section in 
        accordance with the terms and conditions applicable to eligible 
        institutions described in subsection (a).
            ``(2) Licensing requirements.--The licensing requirements 
        contained in subsection (a)(1) shall not apply to emergency 
        shelters or sites operated by such shelters under the program.
            ``(3) Additional requirements.--
                    ``(A) Health and safety standards.--An emergency 
                shelter and each site operated by such shelter shall 
                comply with State or local health and safety standards.
                    ``(B) Meal reimbursement.--
                            ``(i) Limitation.--An emergency shelter may 
                        claim reimbursement--
                                    ``(I) only for meals and 
                                supplements served to children who have 
                                not attained the age of 13 and who are 
                                residing at an emergency shelter; and
                                    ``(II) for not more than 3 meals, 
                                or 2 meals and a supplement, per child 
                                per day.
                            ``(ii) Rate.--A meal or supplement eligible 
                        for reimbursement shall be reimbursed at the 
                        rate at which free meals and supplements are 
                        reimbursed under subsection (c).
                            ``(iii) No charge.--A meal or supplement 
                        claimed for reimbursement shall be served 
                        without charge.
            ``(4) Definition of emergency shelter.--As used in this 
        subsection, the term `emergency shelter' has the meaning given 
        such term in section 321(2) of the Stewart B. McKinney Homeless 
        Assistance Act (42 U.S.C. 11351(2)).''.
            (2) Conforming amendments.--(A) Section 13(a)(3)(C) of such 
        Act (42 U.S.C. 1761(a)(3)(C)) is amended--
                    (i) in clause (i), by adding ``or'' at the end;
                    (ii) by striking clause (ii); and
                    (iii) by redesignating clause (iii) as clause (ii).
            (B) Section 17B of such Act (42 U.S.C. 1766b) is hereby 
        repealed.
    (g) Participation by ``At Risk'' Child Care Programs.--Section 17 
of such Act (42 U.S.C. 1766), as amended by this Act, is further 
amended by adding at the end the following:
    ``(r) `At Risk' Child Care.--
            ``(1) In general.--Subject to the conditions in this 
        subsection, institutions that provide care to at risk school 
        children during after-school hours, weekends, or holidays 
        during the regular school year may participate in the program 
        authorized under this section. Unless otherwise specified in 
        this subsection, all other provisions of this section shall 
        apply to these institutions.
            ``(2) At risk school children.--Children ages 12 through 18 
        who live in a geographical area served by a school enrolling 
        elementary students in which at least 50 percent of the total 
        number of children enrolled are certified eligible to receive 
        free or reduced price school meals under this Act or the Child 
        Nutrition Act of 1966 shall be considered at risk.
            ``(3) Supplement reimbursement.--
                    ``(A) Limitation.--Only supplements served to at 
                risk school children during after-school hours, 
                weekends, or holidays during the regular school year 
                may be claimed for reimbursement. Institutions may 
                claim reimbursement for only one supplement per child 
                per day.
                    ``(B) Rate.--Eligible supplements shall be 
                reimbursed at the rate for free supplements under 
                subsection (c)(3).
                    ``(C) No charge.--All supplements claimed for 
                reimbursement shall be served without charge.''.

SEC. 108. MEAL SUPPLEMENTS FOR CHILDREN IN AFTERSCHOOL CARE.

    Section 17A of the National School Lunch Act (42 U.S.C. 1766a) is 
amended--
            (1) in subsection (a)(2)(C) to read as follows:
                    ``(C) operate afterschool programs with an 
                educational or enrichment purpose.''; and
            (2) in subsection (b), by striking ``served to children'' 
        and all that follows and inserting ``served to children who are 
        not more than 18 years of age.''.

SEC. 109. UNIVERSAL FREE BREAKFAST PILOT PROJECTS.

    Section 18(i) of the National School Lunch Act (42 U.S.C. 1769(i)) 
is amended to read as follows:
    ``(i) Universal Free Breakfast Pilot Projects.--
            ``(1) In General.--
                    ``(A) Grants to states.--(i) Subject to the 
                availability of advance appropriations under paragraph 
                (8), the Secretary shall make grants to not more than 5 
                States to conduct pilot projects in elementary schools 
                under school food authorities located in each such 
                State--
                            ``(I) to reduce paperwork;
                            ``(II) to simplify meal counting 
                        requirements; and
                            ``(III) to make changes that will increase 
                        participation in the school breakfast program.
                    ``(ii) The Secretary shall select States to receive 
                grants under clause (i), and make grants to such 
                States, in the first fiscal year for which 
                appropriations are made to carry out this subsection.
                    ``(B) Grants to school food authorities; duration 
                of pilot projects.--(i)(I) A State receiving a grant 
                under subparagraph (A) shall make grants to school food 
                authorities to carry out the pilot projects described 
                in such subparagraph.
                    ``(II) The State shall select school food 
                authorities to receive grants under clause (i), and 
                make grants to such authorities, in the first fiscal 
                year for which the State receives amounts under a 
                grant.
                    ``(ii) A school food authority receiving amounts 
                under a grant to conduct a pilot project described in 
                subparagraph (A) shall conduct such project for the 3-
                year period beginning in the first fiscal year in which 
                the authority receives amounts under a grant from the 
                State.
                    ``(C) Participation limitation.--A school food 
                authority conducting a pilot project under this 
                paragraph shall ensure that some elementary schools 
                under such authority do not participate in the pilot 
                project.
            ``(2) Waiver authority.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary may waive the 
                requirements of this Act and the Child Nutrition Act of 
                1966 (42 U.S.C. 1771 et seq.) relating to counting of 
                meals, applications for eligibility, and related 
                requirements that would preclude the Secretary from 
                making a grant to conduct a pilot project under 
                paragraph (1).
                    ``(B) Non-waivable requirements.--The Secretary may 
                not waive a requirement under subparagraph (A) if the 
                waiver would prevent a program participant, a potential 
                recipient, or a school from receiving all of the 
                benefits and protections of this Act, the Child 
                Nutrition Act of 1966, or a Federal statute or 
                regulation that protects an individual constitutional 
                right or a statutory civil right.
            ``(3) Requirements for participation in pilot.--To be 
        eligible to participate in a pilot project under this 
        subsection--
                    ``(A) a State--
                            ``(i) shall submit an application to the 
                        Secretary at such time and in such manner as 
                        the Secretary shall establish; and
                            ``(ii) shall provide such information 
                        relative to the operation and results of the 
                        pilot as the Secretary may reasonably require; 
                        and
                    ``(B) a school food authority--
                            ``(i) shall agree to serve all breakfasts 
                        at no charge to all children in participating 
                        elementary schools;
                            ``(ii) shall not have a history of 
                        violations of this Act or the Child Nutrition 
                        Act of 1966 (42 U.S.C. 1771 et seq.); and
                            ``(iii) shall meet any other requirement 
                        that the Secretary may reasonably require.
            ``(4) Selection of pilot elementary schools.--To the extent 
        practicable, a State shall select school food authorities to 
        participate in the pilot program under this subsection in a 
        manner that will provide for an equitable distribution among 
        the following types of elementary schools:
                    ``(A) Urban and rural elementary schools.
                    ``(B) Elementary schools of varying family income 
                levels.
            ``(5) Reimbursement rates.--A school food authority 
        conducting a pilot project under this subsection shall receive 
        reimbursement for each breakfast served under the pilot in an 
        amount equal to the rate for free breakfasts established under 
        section 4(b)(1)(B) of the Child Nutrition Act of 1966 (42 
        U.S.C. 1773(b)(1)(B)).
            ``(6) Commodity entitlement.--A school food authority 
        conducting a pilot project under this subsection shall receive 
        commodities in the amount of at least 5 cents per breakfast 
        served under the pilot. The value of such commodities shall be 
        deducted from the amount of cash reimbursement described in 
        paragraph (5).
            ``(7) Evaluation of pilot project.--
                    ``(A) In general.--The Secretary, acting through 
                the Administrator of the Food and Nutrition Service, 
                shall conduct an evaluation of the pilot projects in 
                each of the school food authorities selected for 
                participation. Such evaluation shall include--
                            ``(i) a determination of the effect of 
                        participation in the pilot project on the 
                        academic achievement, tardiness and attendance, 
                        and dietary intake of participating children 
                        that is not attributable to changes in 
                        educational policies and practices; and
                            ``(ii) a determination of the effect that 
                        participation by elementary schools in the 
                        pilot projects has on the proportion of 
                        students who eat breakfast.
                    ``(B) Report.--Upon completion of the pilot 
                projects and the evaluation, the Secretary shall submit 
                to the Committee on Education and the Workforce of the 
                House of Representatives and the Committee on 
                Agriculture, Nutrition, and Forestry of the Senate a 
                report containing the evaluation of the pilot required 
                under subparagraph (A).
            ``(8) Reimbursement requirement under breakfast program.--
        (A) Except as provided in subparagraph (B), a school 
        participating in a pilot project under this subsection shall 
        receive a total Federal reimbursement under the school 
        breakfast program in an amount equal to the total Federal 
        reimbursement for the school in the prior year under such 
        program (adjusted for inflation and fluctuations in 
        enrollment).
            ``(B) Funds required for the pilot project in excess of the 
        level of reimbursement received by the school in the prior year 
        (adjusted for inflation and fluctuations in enrollment) may be 
        taken from any non-Federal source or from amounts appropriated 
        to carry out this subsection. If no appropriations are made for 
        the pilot projects, schools may not conduct the pilot projects.
            ``(9) Authorization of appropriations.--
                    ``(A) In general.--There are authorized to be 
                appropriated such sums as may be necessary to carry out 
                this subsection.
                    ``(B) Requirement.--No amounts may be provided 
                under this subsection unless specifically provided in 
                appropriations Acts.''.

SEC. 110. TRAINING AND TECHNICAL ASSISTANCE.

    Section 21(e)(1) of the National School Lunch Act (42 U.S.C. 1769b-
1(e)(1)) is amended by striking ``1998'' and inserting ``2003''.

SEC. 111. COMPLIANCE AND ACCOUNTABILITY.

    Section 22(d) of the National School Lunch Act (42 U.S.C. 1769c(d)) 
is amended by striking ``1996'' and inserting ``2003''.

SEC. 112. INFORMATION CLEARINGHOUSE.

    (a) Authority to Establish and Maintain Clearinghouse.--Section 
26(a) of the National School Lunch Act (42 U.S.C. 1769g(a)) is amended 
by striking ``shall'' and inserting ``may''.
    (b) Nongovernmental Organization.--Section 26(b) of such Act (42 
U.S.C. 1769g(b)) is amended in the matter preceding paragraph (1) by 
inserting after ``shall be selected on a competitive basis'' the 
following: ``, except that, notwithstanding any other provision of law, 
the Secretary may enter into a contract for the services of any 
organization with which the Secretary has previously entered into a 
contract under this section without such organization competing for 
such new contract, if such organization has performed satisfactorily 
under such prior contract and otherwise meets the criteria established 
in this subsection,''.
    (c) Limitation on Amount Provided Under the Contract.--Section 26 
of such Act (42 U.S.C. 1769g) is amended--
            (1) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (2) by inserting after subsection (b) the following:
    ``(c) Limitation on Amount Provided Under the Contract.--The 
Secretary may provide to the organization described in subsection (b) 
an amount not to exceed $150,000 in each of fiscal years 1999 through 
2003.''.
    (d) Funding.--Section 26(e) of such Act (42 U.S.C. 1769g(e)) (as so 
redesignated) is amended to read as follows:
    ``(e) Funding.--
            ``(1) In general.--There are authorized to be appropriated 
        $150,000 for each of the fiscal years 1999 through 2003 to 
        carry out this section.
            ``(2) Requirement.--No amounts may be provided for the 
        clearinghouse under this section unless specifically provided 
        in appropriations Acts.''.

SEC. 113. ACCOMMODATION OF THE SPECIAL DIETARY NEEDS OF INDIVIDUALS 
              WITH DISABILITIES.

    Section 27 of the National School Lunch Act (42 U.S.C. 1769h) is 
amended to read as follows:

``SEC. 27. ACCOMMODATION OF THE SPECIAL DIETARY NEEDS OF INDIVIDUALS 
              WITH DISABILITIES.

    ``(a) In General.--The Secretary may carry out activities to help 
accommodate the special dietary needs of individuals with disabilities 
who are participating in a covered program. Such activities may 
include--
            ``(1) developing and disseminating to State agencies 
        guidance and technical assistance materials;
            ``(2) conducting training of State agencies and eligible 
        entities; and
            ``(3) providing grants to State agencies and eligible 
        entities.
    ``(b) Definitions.--As used in this section:
            ``(1) Individuals with disabilities.--The term `individuals 
        with disabilities' has the meaning given the term `individual 
        with a disability' as defined in section 7(8) of the 
        Rehabilitation Act of 1973 (29 U.S.C. 706(8)).
            ``(2) Covered program.--The term `covered program' means--
                    ``(A) the school lunch program authorized under 
                this Act;
                    ``(B) the school breakfast program authorized under 
                section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 
                1773); and
                    ``(C) any other program authorized under this Act 
                or the Child Nutrition Act of 1966 (except for section 
                17) that the Secretary determines is appropriate.
            ``(3) Eligible entity.--The term `eligible entity' means a 
        school food authority, institution, or service institution that 
        participates in a covered program.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for each of the fiscal years 
1999 through 2003 to carry out this section.''.

        TITLE II--AMENDMENTS TO THE CHILD NUTRITION ACT OF 1966

SEC. 201. STATE ADMINISTRATIVE EXPENSES.

    (a) Reallocation of Amounts.--Section 7(a)(5)(B) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1776(a)(5)(B)) is amended--
            (1) by striking ``(i)'';
            (2) by striking the second sentence and all that follows; 
        and
            (3) by adding at the end the following: ``The Secretary 
        shall then allocate, for purposes of administration costs, any 
        remaining amounts among States that demonstrate a need for such 
        amounts.''.
    (b) Elimination of 10 Percent Transfer Limitation.--Section 7(a)(6) 
of such Act (42 U.S.C. 1776(a)(6)) is amended to read as follows:
    ``(6) Funds available to States under this subsection and under 
section 13(k)(1) of the National School Lunch Act may be used by State 
agencies for the costs of administration of the programs authorized 
under this Act (except for the programs authorized under sections 17 
and 21) and the National School Lunch Act without regard to the basis 
on which such funds were earned and allocated.''.
    (c) Reauthorization of Program.--Section 7(g) of such Act (42 
U.S.C. 1776(g)) is amended by striking ``1998'' and inserting ``2003''.

SEC. 202. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, 
              AND CHILDREN.

    (a) Additional Requirements for Applicants.--
            (1) Physical presence requirement.--Section 17(d)(3) of the 
        Child Nutrition Act of 1966 (42 U.S.C. 1786(d)(3)) is amended 
        by adding at the end the following:
    ``(C)(i) Except as provided in clause (ii), each applicant to the 
program shall be physically present at each certification determination 
in order to determine eligibility under the program.
    ``(ii) A local agency may waive the requirement of clause (i)--
            ``(I) if required to do so by requirements under the 
        Americans with Disabilities Act;
            ``(II) with respect to a child who was present at the 
        initial certification visit and who is receiving on-going 
        health care from a provider other than such local agency, if 
        the agency determines that the requirement of clause (i) would 
        present a barrier to participation; or
            ``(III) with respect to a child (aa) who was present at the 
        initial certification visit, (bb) who was present at a 
        certification determination within the 1-year period ending on 
        the date of the certification determination described in clause 
        (i), and (cc) who has one or more parents who work, if the 
        agency determines that the requirement of clause (i) would 
        cause a barrier to participation.''.
            (2) Income documentation requirement.--Section 17(d)(3) of 
        the Child Nutrition Act of 1966 (42 U.S.C. 1786(d)(3)), as 
        amended by paragraph (1), is further amended by adding at the 
        end the following:
    ``(D)(i) Except as provided in clause (ii), in order to be eligible 
for the program, each applicant to the program shall provide--
            ``(I) documentation of household income; or
            ``(II) documentation of participation in a program 
        described in clauses (ii) and (iii) of paragraph (2)(A).
    ``(ii)(I) A State agency may waive the requirement of clause (i)--
            ``(aa) with respect to an applicant for whom the necessary 
        documentation is not available; or
            ``(bb) with respect to an applicant, such as homeless women 
        or children, for whom the agency determines the requirement of 
        clause (i) would present a barrier to participation.
    ``(II) The Secretary shall prescribe regulations to carry out 
division (aa).''.
    (b) Education and Educational Materials Relating to Effects of Drug 
and Alcohol Use.--Section 17(e)(1) of such Act (42 U.S.C. 1786(e)(1)) 
is amended by adding at the end the following: ``A local agency 
participating in the program shall provide education or educational 
materials relating to the effects of drug and alcohol use by a 
pregnant, postpartum, or breastfeeding woman on the developing child of 
the woman.''.
    (c) Distribution of Nutrition Education Materials to State Agencies 
Administering the Commodity Supplemental Food Program.--Section 17(e) 
of such Act (42 U.S.C. 1786(e)) is amended--
            (1) by redesignating paragraphs (4) and (5) as paragraphs 
        (5) and (6), respectively; and
            (2) by inserting after paragraph (3) the following:
    ``(4) The Secretary may provide nutrition education materials, 
including breastfeeding promotion materials, developed with funds 
appropriated to carry out the program under this section in bulk 
quantity to State agencies administering the commodity supplemental 
food program authorized under sections 4(a) and 5 of the Agriculture 
and Consumer Protection Act of 1973 at no cost to that program.''.
    (d) Identification of Recipients Participating at More Than One 
Site.--Section 17(f) of such Act (42 U.S.C. 1786(f)) is amended by 
adding at the end the following:
    ``(23) Each State agency shall implement a system designed to 
identify recipients who are participating at more than one site under 
the program.''.
    (e) Identification of High Risk Vendors; Compliance 
Investigations.--
            (1) In general.--Section 17(f) of such Act (42 U.S.C. 
        1786(f)), as amended by this Act, is further amended by adding 
        at the end the following:
    ``(24) Each State agency--
            ``(A) shall identify vendors that have a high probability 
        of program abuse; and
            ``(B) shall conduct compliance investigations of such 
        vendors.''.
            (2) Regulations.--Not later than March 1, 1999, the 
        Secretary of Agriculture shall promulgate final regulations to 
        carry out section 17(f)(24) of such Act (42 U.S.C. 
        1786(f)(24)), as added by paragraph (1).
    (f) Reauthorization of Program.--Section 17(g)(1) of such Act (42 
U.S.C. 1786(g)(1)) is amended in the first sentence by striking ``1995 
through 1998'' and inserting ``1999 through 2003''.
    (g) Purchase of Breast Pumps.--Section 17(h)(1)(C) of such Act (42 
U.S.C. 1786(h)(1)(C)) is amended--
            (1) by striking ``(C)'' and inserting ``(C)(i)''; and
            (2) by adding at the end the following:
    ``(ii)(I) Notwithstanding any other provision of this section, with 
respect to fiscal year 2000 and subsequent fiscal years, a State agency 
may use amounts made available under clause (i) for the purchase of 
breast pumps.
    ``(II) A State agency that exercises the authority of subclause (I) 
shall expend from amounts allocated for nutrition services and 
administration an amount for the purchase of breast pumps that is not 
less than the amount expended for the purchase of breast pumps from 
amounts available for nutrition services and administration for the 
prior fiscal year.''.
    (h) Nutrition Services and Administration.--
            (1) Allocation of amounts.--Section 17(h)(2)(A) of such Act 
        (42 U.S.C. 1786(h)(2)(A)) is amended in the first sentence by 
        striking ``1995 through 1998'' and inserting ``1999 through 
        2003''.
            (2) Level of per participant expenditure.--Section 
        17(h)(2)(B)(ii) of such Act (42 U.S.C. 1786(h)(2)(B)(ii)) is 
        amended by striking ``15 percent'' and inserting ``10 percent 
        (except that the Secretary may establish a higher percentage 
        for small State agencies)''.
    (i) Conversion of Amounts for Food Benefits to Amounts for 
Nutrition Services and Administration.--Section 17(h)(5)(A) of such Act 
(42 U.S.C. 1786(h)(5)(A)) is amended in the matter preceding clause (i) 
by striking ``achieves'' and all that follows through ``such State 
agency may'' and inserting ``submits a plan to reduce average food 
costs per participant and to increase participation above the level 
estimated for such State agency, such State agency may, with the 
approval of the Secretary,''.
    (j) Infant Formula Procurement.--Section 17(h)(8)(A) of such Act 
(42 U.S.C. 1786(h)(8)(A)) is amended by adding at the end the 
following:
    ``(iii) A State agency using a competitive bidding system for 
infant formula shall award contracts to the bidder offering the lowest 
net price unless the State agency demonstrates to the satisfaction of 
the Secretary that the weighted average retail price for different 
brands of infant formula in the State does not vary by more than 5 
percent.''.
    (k) Infrastructure and Breastfeeding Promotion/Support 
Activities.--Section 17(h)(10)(A) of such Act (42 U.S.C. 
1786(h)(10)(A)) is amended by striking ``For each of fiscal years 1995 
through 1998,'' and inserting ``For each fiscal year through 2003,''.
    (l) Consideration of Price Levels of Retail Stores for 
Participation in the Program.--
            (1) In general.--Section 17(h) of such Act (42 U.S.C. 
        1786(h)) is amended by adding at the end the following:
    ``(11)(A) For the purpose of promoting efficiency and to contain 
costs under the program, a State agency shall, in selecting a retail 
store for participation in the program, take into consideration the 
prices that the store charges for foods under the program as compared 
to the prices that other stores charge for such foods.
    ``(B) The State agency shall establish procedures to insure that a 
retail store selected for participation in the program does not 
subsequently raise prices to levels that would otherwise make the store 
ineligible for selection in the program.''.
            (2) Regulations.--Not later than March 1, 1999, the 
        Secretary of Agriculture shall promulgate final regulations to 
        carry out section 17(h)(11)(A) of the Child Nutrition Act of 
        1966 (42 U.S.C. 1786(h)(11)(A)), as added by paragraph (1).
    (m) Management Information System Plan.--Section 17(h) of such Act 
(42 U.S.C. 1786(h)), as amended by this Act, is further amended by 
adding at the end the following:
    ``(12)(A) In consultation with State agencies, retailers, and other 
interested persons, the Secretary shall establish a long range plan for 
the development and implementation of management information systems 
(including electronic benefit transfers) to be used in carrying out the 
program.
    ``(B) Not later than 2 years after the date of the enactment of 
this paragraph, the Secretary shall submit to the Committee on 
Education and the Workforce of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate a 
report on actions taken to carry out subparagraph (A).
    ``(C) Prior to the date of the submission of the report of the 
Secretary required under subparagraph (B), the cost of systems or 
equipment that may be required to test management information systems 
(including electronic benefit transfers) for the program may not be 
imposed on a retail food store.''.
    (n) Use of Funds in Preceding and Subsequent Fiscal Years.--
            (1) In general.--Clauses (i) and (ii) of section 
        17(i)(3)(A) of such Act (42 U.S.C. 1786(i)(3)(A)(i) and (ii)) 
        are amended to read as follows:
            ``(i) not more than 1 percent (except as provided in 
        subparagraph (C)) of the amount of funds allocated to a State 
        agency under this section for supplemental foods for a fiscal 
        year, and not more than 1 percent of the amount of funds 
        allocated to a State agency under this section for nutrition 
        services and administration for a fiscal year, may be expended 
        by the State agency for allowable expenses incurred under this 
        section for supplemental foods and nutrition services and 
        administration, respectively, during the preceding fiscal year; 
        and
            ``(ii)(I) a State agency may expend, from amounts allocated 
        to the agency for nutrition services and administration, an 
        amount equal to not more than 1 percent of the total amount of 
        funds allocated to the agency under this section for a fiscal 
        year for allowable expenses incurred under this section for 
        nutrition services and administration during the subsequent 
        fiscal year; and
            ``(II) with the prior approval of the Secretary, a State 
        agency may expend, from amounts allocated to the agency for 
        nutrition services and administration, an amount equal to not 
        more than one-half of 1 percent of the total amount of funds 
        allocated to the agency under this section for a fiscal year 
        for the development of a management information system, 
        including an electronic benefit transfer system, during the 
        subsequent fiscal year.''.
            (2) Conforming amendments.--Section 17 of such Act (42 
        U.S.C. 1786) is amended--
                    (A) in subsection (h)(10)(A) (as amended by this 
                Act), by inserting after ``nutrition services and 
                administration funds'' the following: ``and food 
                benefit funds''; and
                    (B) in subsection (i)(3)--
                            (i) by striking subparagraphs (C) through 
                        (G); and
                            (ii) by redesignating subparagraph (H) as 
                        subparagraph (C).
    (o) Farmers Market Nutrition Program.--
            (1) Matching fund requirement.--Section 17(m)(3) of such 
        Act (42 U.S.C. 1786(m)(3)) is amended in both the first and 
        second sentences by striking ``total'' each place it appears 
        and inserting ``administrative''.
            (2) Ranking criteria for state plans.--Section 17(m)(6) of 
        such Act (42 U.S.C. 1786(m)(6)) is amended--
                    (A) by striking subparagraph (F); and
                    (B) by redesignating subparagraph (G) as 
                subparagraph (F).
            (3) Reauthorization of Program.--Section 17(m)(9)(A) of 
        such Act (42 U.S.C. 1786(m)(9)(A)) is amended by striking 
        ``1996 through 1998'' and inserting ``1999 through 2003''.
    (p) Disqualification of Certain Vendors.--
            (1) In general.--Section 17 of such Act (42 U.S.C. 1786) is 
        amended by adding at the end the following:
    ``(o) Disqualification of Vendors Convicted of Trafficking or 
Illegal Sales.--
            ``(1) In general.--Except as provided in paragraph (5), the 
        State agency shall permanently disqualify a vendor convicted of 
        trafficking in food instruments (including any voucher, draft, 
        check, or access device, including an electronic benefit 
        transfer card or personal identification number, issued in lieu 
        of a food instrument pursuant to the provisions of this 
        section), or selling firearms, ammunition, explosives, or 
        controlled substances (as defined in section 102 of the 
        Controlled Substances Act) in exchange for food instruments.
            ``(2) Notice of disqualification.--The State agency shall 
        provide the vendor with notification of the disqualification 
        and shall make such disqualification effective on the date of 
        receipt of the notice of disqualification.
            ``(3) Prohibition on receipt of lost revenues.--A vendor 
        shall not be entitled to receive any compensation for revenues 
        lost as a result of the disqualification under this subsection.
            ``(4) Hardship exception in lieu of disqualification.--
                    ``(A) In general.-- A State agency may permit a 
                vendor that would otherwise be disqualified under 
                paragraph (1) to continue to redeem food instruments or 
                otherwise provide supplemental foods to participants if 
                the State agency determines, in its sole discretion 
                according to criteria established by the Secretary, 
                disqualification of the vendor would cause hardship to 
                participants in the program authorized under this 
                section.
                    ``(B) Civil money penalty.--Whenever a State agency 
                authorizes a vendor that would otherwise be 
                disqualified to redeem food instruments or provide 
                supplemental foods in accordance with subparagraph (A), 
                the State agency shall assess the vendor a civil money 
                penalty in lieu of a disqualification.
                    ``(C) Amount.-- The State agency shall determine 
                the amount of the civil penalty according to criteria 
                established by the Secretary.''.
            (2) Regulations.--
                    (A) In general.--Not later than March 1, 1999, the 
                Secretary of Agriculture shall promulgate final 
                regulations to carry out section 17(o) of such Act (42 
                U.S.C. 1786(o)), as added by paragraph (1).
                    (B) Additional requirement.--The final regulations 
                described in subparagraph (A) shall include criteria 
                for determining the amount of civil money penalties in 
                lieu of disqualification and for making hardship 
                determinations under such section.
    (q) Study and Report by Economic Research Service.--Section 17 of 
such Act (42 U.S.C. 1786), as amended by this Act, is further amended 
by adding at the end the following:
    ``(p) Study and Report by Economic Research Service.--
            ``(1) Study.--The Secretary, acting through the 
        Administrator of the Economic Research Service, shall conduct a 
        study on the effect of cost containment practices established 
        by States under the program for the selection of vendors and 
        approved food items (other than infant formula) on the 
        following:
                    ``(A) Program participation.
                    ``(B) Access and availability of prescribed foods.
                    ``(C) Voucher redemption rates and actual food 
                selections by participants.
                    ``(D) Participants on special diets or with 
                specific food allergies.
                    ``(E) Participant use and satisfaction of 
                prescribed foods.
                    ``(F) Achievement of positive health outcomes.
                    ``(G) Program costs.
            ``(2) Report.--Not later than 3 years after the date of the 
        enactment of the Child Nutrition and WIC Reauthorization 
        Amendments of 1998, the Administrator shall submit to the 
        Secretary of Agriculture, the Committee on Education and the 
        Workforce of the House of Representatives, and the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate a report 
        containing the results of the study conducted under paragraph 
        (1).''.
    (r) Collection and Use of Penalties From Vendor and Recipient Fraud 
and Abuse.--Section 17 of such Act (42 U.S.C. 1786), as amended by this 
Act, is further amended by adding at the end the following:
    ``(q) Use of Penalties From Vendor and Recipient Fraud and Abuse.--
Amounts collected from penalties from vendors and recipients relating 
to violations of any provision of this section (including any 
regulation established to carry out this section) for fraud and abuse 
under the program may be used for nutrition services and administration 
and food benefits only for the 1-year period beginning on the date on 
which amounts under the penalty are received.''.
    (s) Maximum Amount of Fine for Certain Violations Under the 
Program.--Section 17 of such Act (42 U.S.C. 1786), as amended by this 
Act, is further amended by adding at the end the following:
    ``(r) Maximum Amount of Fine for Certain Violations Under the 
Program.--The maximum amount of a fine with respect to the 
embezzlement, willful misapplication, stealing, obtaining by fraud, or 
trafficking in food instruments of funds, assets, or property that are 
of a value of $100 or more under the program shall be $25,000.''.
    (t) Criminal Forfeiture.--Section 17 of such Act (42 U.S.C. 1786), 
as amended by this Act, is further amended by adding at the end the 
following:
    ``(s) Criminal Forfeiture.--
            ``(1) In general.--In imposing a sentence on a person 
        convicted of an offense in violation of any provision of this 
        section (or any regulation promulgated under this section), a 
        court shall order, in addition to any other sentence imposed 
        under this section, that the person forfeit to the United 
        States all property described in paragraph (2).
            ``(2) Property subject to forfeiture.--All property, real 
        and personal, used in a transaction or attempted transaction, 
        to commit, or to facilitate the commission of, a violation 
        (other than a misdemeanor) of any provision of this section (or 
        any regulation promulgated under this section), or proceeds 
        traceable to a violation of any provision of this section (or 
        any regulation promulgated under this section), shall be 
        subject to forfeiture to the United States under paragraph (1).
            ``(3) Interest of owner.--No interest in property shall be 
        forfeited under this subsection as the result of any act or 
        omission established by the owner of the interest to have been 
        committed or omitted without the knowledge or consent of the 
        owner.
            ``(4) Proceeds.--The proceeds from any sale of forfeited 
        property and any monies forfeited under this subsection shall 
        be used--
                    ``(A) first, to reimburse the Department of Justice 
                for the costs incurred by the Department to initiate 
                and complete the forfeiture proceeding;
                    ``(B) second, to reimburse the Department of 
                Agriculture Office of Inspector General for any costs 
                the Office incurred in the law enforcement effort 
                resulting in the forfeiture;
                    ``(C) third, to reimburse any Federal or State law 
                enforcement agency for any costs incurred in the law 
                enforcement effort resulting in the forfeiture; and
                    ``(D) fourth, by the State agency to carry out the 
                approval, reauthorization, and compliance 
                investigations of vendors.''.

SEC. 203. NUTRITION EDUCATION AND TRAINING PROGRAM.

    Section 19(i) of the Child Nutrition Act of 1966 (42 U.S.C. 
1788(i)) is amended--
            (1) by striking paragraphs (1) and (2);
            (2) by redesignating paragraphs (3), (4), and (5) as 
        paragraphs (1), (2), and (3), respectively; and
            (3) in paragraph (1) (as redesignated)--
                    (A) in the paragraph heading, by striking ``1997 
                through 2002 '' and inserting ``1999 through 2003''; 
                and
                    (B) by amending subparagraph (A) to read as 
                follows:
                    ``(A) In general.--There are authorized to be 
                appropriated to carry out this section such sums as are 
                necessary for fiscal years 1999 through 2003.''.

            Passed the House of Representatives July 20, 1998.

            Attest:

                                                ROBIN H. CARLE,

                                                                 Clerk.