House Report 105-633 - CHILD NUTRITION AND WIC REAUTHORIZATION AMENDMENTS OF 1998

[House Report 105-633]
[From the U.S. Government Publishing Office]

105th Congress Report
HOUSE OF REPRESENTATIVES

2d Session 105-633
_______________________________________________________________________

CHILD NUTRITION AND WIC REAUTHORIZATION AMENDMENTS OF 1998

_______

July 20, 1998.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______________________________________________________________________

Mr. Goodling, from the Committee on Education and the Workforce,
submitted the following

R E P O R T

together with

ADDITIONAL AND DISSENTING VIEWS

[To accompany H.R. 3874]

[Including cost estimate of the Congressional Budget Office]

The Committee on Education and the Workforce, to whom was
referred the bill (H.R. 3874) to amend the Child Nutrition Act
of 1966 to make improvements to the special supplemental
nutrition program for women, infants, and children and to
extend the authority of that program through fiscal year 2003,
having considered the same, report favorably thereon with
amendments and recommend that the bill as amended do pass.
The amendments are as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:

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.

Section 11(a)(3)(B) of the National School Lunch Act (42 U.S.C.
1759a(a)(3)(B)) is amended in the third sentence by striking ``to the
nearest one-fourth cent'' and all that follows through ``shall be
computed''.

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) Authorization of appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
this subsection.''.

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 1 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 1 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 five
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) 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).
(n) 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''.
(o) 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.
(p) 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).''.
(q) 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.''.
(r) 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.''.
(s) 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.''.

Amend the title so as to read:

A bill 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.

Committee Action

The Subcommittee on Early Childhood, Youth and Families
held two hearings in Washington, DC, on child nutrition: March
10, 1998, and March 17, 1998.
The March 10, 1998, hearing focused on child nutrition
programs. The Subcommittee received testimony from Mr. Ed
Cooney, Deputy Administrator of Special Nutrition Programs,
Food, Nutrition and Consumer Services, U.S. Department of
Agriculture, Washington, D.C.; Mr. Bob Robinson, Issue Area
Director, General Accounting Office, Washington, D.C.; Ms.
Melinda Turner, Director of Food Services, Owsely County
Schools, Booneville, Kentucky; Mr. Richard DeBurgh, Director of
Food Services, Glendale Unified School District, La Crescenta,
California; Ms. Joyce Holmes Benjamin, Associate
Superintendent, Oregon Department of Education, Salem, Oregon;
Ms. Sharon Cox, President, Montgomery County Council of PTAs,
Montgomery County, Maryland; and Mr. John Murphy, Section
Chief, North Carolina Department of Public Instruction,
Raleigh, North Carolina.
The March 17, 1998, hearing focused on the Special
Supplemental Nutrition Program for Women, Infants, and Children
(WIC). The Subcommittee received testimony from Ms. Denise
Ferris, President, National Association of WIC Directors,
Charleston, West Virginia; Mr. Robert Robinson, Issue Area
Director, Government Accounting Office, Washington, D.C.; Ms.
Darlene Jenkins, WIC Participant and Breastfeeding Counselor,
Dover, Delaware; Ms. Claire Regan, Senior Director, Scientific
and Regulatory Affairs, Grocery Manufacturers of America,
Washington, D.C.; Mr. Robert Greenstein, Executive Director,
Center on Budget and Policy Priorities, Washington, D.C.; and
Ms. Betty Touchon, WIC Program Manager, Ukiah, California.

Introduction of the WIC reauthorization amendments of 1998

On May 14, 1998, Mr. Mike Castle (R-DE) introduced H.R.
3874, the WIC Reauthorization Amendments of 1998.

Legislative action

On May 21, 1998, the Subcommittee on Early Childhood, Youth
and Families favorably ordered reported the bill to the full
Committee on Education and the Workforce by a voice vote.
On June 4, 1998, the Committee on Education and the
Workforce assembled to consider H.R. 3874, the WIC
Reauthorization Amendments of 1998. H.R. 3874, as amended, was
favorably reported by the Committee on Education and the
Workforce by a vote of 36-1.

Purpose

It is the purpose of this legislation to extend and amend
expiring child nutrition programs and to make improvements in
Federal child nutrition programs to enhance their effectiveness
in providing nutrition services to program participants. H.R.
3874 would primarily accomplish this goal by increasing
flexibility for State and local providers, expanding nutrition
services in afterschool care programs in order to reduce
juvenile crime, drug and alcohol abuse and teen pregnancy and
reducing program fraud and abuse in the WIC program.

Summary

Title I of H.R. 3874 modifies the National School Lunch
Act. It extends and modifies the Summer Food Service Program
and makes modest changes to the Child and Adult Care Food
Program. The bill also extends the authorization of the
commodity distribution program and modifies an existing
demonstration project to provide for a discretionary pilot
project on universal breakfasts. This pilot project would be
funded out of discretionary funds specifically provided for in
Appropriations Acts. This Title also provides additional
Federal support for access to snacks for youth participating in
afterschool programs. Finally, Title I would provide additional
flexibility to States in administering child nutrition
programs.
Title II of H.R. 3874 extends and amends the Special
Supplemental Nutrition Program for Women, Infants and Children
and State administrative expenses. It contains important
changes that protect the integrity of the WIC program and
provides additional flexibility to States in administering the
program.

Committee Views

Background

Child nutrition programs are authorized in two acts--the
National School Lunch Act (originally enacted in 1946) and the
Child Nutrition Act (originally enacted in 1966). Four of the
major child nutrition programs are authorized through fiscal
year 1998 and would be reauthorized through fiscal year 2003 in
the Committee's bill. They are the Special Supplemental
Nutrition Program for Women, Infants, and Children (the WIC
program), the Summer Food Service program, assistance for State
administrative expenses, and commodity assistance. The three
largest entitlement child nutrition programs (the School Lunch
program, the School Breakfast program and the Child and Adult
Care Food program) are permanently authorized. The most recent
child nutrition reauthorization legislation was enacted in
1994: The Healthy Meals for Healthy Americans Act (P.L. 103-
448).
Federal involvement with child nutrition originated with
the donation of surplus commodities to schools in the 1930s. At
the end of World War II, concern over the number of draftees
failing their physical examinations due to nutrition related
deficiencies prompted Congress to enact the National School
Lunch Act. This Act established the School Lunch Program that
provided grants to schools to implement and operate lunch
programs. These grants, coupled with continued commodity
assistance and a school milk program established in the early
1950s, formed the extent of Federal support through 1961.
However, many schools with large proportions of poor children
could not afford to participate in the School Lunch program. In
response to this Congress, in 1962, added special assistance
grants targeted on schools drawing children from low-income
areas.
In 1966, Congress further extended Federal support for
child nutrition with enactment of the Child Nutrition Act,
citing the successes achieved in the School Lunch program. This
law established a program for children in pre-school programs
operated by schools and a pilot School Breakfast program. It
also authorized funds for food service equipment assistance and
State administrative expenses. The 1966 Act was quickly
followed by 1968 amendments authorizing a special food
assistance program for children without access to meal service
programs in schools, either because they were too young or in
summer programs. As with the 1966 law, this program was
targeted on low-income areas.
By 1970, Congress had authorized all of the current meal
service programs and began a series of adjustments to assure
that meals would be available to all children, particularly
lower-income children. In 1970, special assistance funding for
free and reduced-price school meals was extended to meals
served to needy children in all participating schools, and
uniform Federal income guidelines were established to determine
children's eligibility for free and reduced-price meals.
Throughout the 1940s, 1950s and 1960s, Federal assistance to
child nutrition programs had been available to States in the
form of grants allocated by enrollment and student
participation. However, there was no system of guaranteed
Federal reimbursements based on the number of meals served.
This changed in 1972-1973, when Congress established the
system of ``performance funding'' that exists today--guaranteed
per-meal reimbursements were established, with higher payments
for meals served free or at a reduced price. In the remainder
of the 1970s, Congress increased meal subsidy rates and
required that they be inflation indexed, established a
guaranteed minimum level of commodity assistance, made the
School Breakfast program permanent, and created separate
programs for summer and child care providers with their own
guaranteed reimbursement rates. In 1972, the WIC program was
established as a pilot project, which was expanded to a
national program in the mid-1970s. However, this period of
expansion ended in 1980 and no new major child nutrition
programs have been authorized since that time. Major child
nutrition amendments in 1980 and 1981 significantly cut back
Federal subsidy rates, lowered income eligibility standards for
free and reduced-price meals, and scaled back the Summer Food
Service and Special Milk programs.
From 1982 through 1993, Congress gradually added to Federal
child nutrition support. In six laws, it increased school
breakfast subsidies and added a program of school breakfast
start-up and expansion grants (both aimed at raising the number
of participating schools) and created several small new
programs and demonstration projects (including programs for
homeless children, disabled adults in day care, and children in
after-school programs). These measures also included a number
of provisions to ease the administrative and paperwork burden
on schools and other providers, require new dietary standards
for meals, establish a system to ensure program accountability,
and encourage cost containment in the WIC program. In the most
recent major child nutrition legislation, amendments in the
1996 welfare reform law significantly restructured the way
assistance is provided to day care homes under the Child and
Adult Care Food program.
The primary purpose of this legislation is to extend and
amend the four major expiring authorizations: WIC, State
administrative expenses, the Summer Food Service program and
the commodity assistance program. As reported by the Committee
on Education and the Workforce, H.R. 3874, the Child Nutrition
and WIC Reauthorization Amendments of 1998, also continues
efforts to streamline programs, reduce the paperwork burden on
local providers, insure program integrity and provide important
nutrition services to program participants. The provisions in
this bill were developed in a bipartisan manner and included
important changes proposed by the nutrition community and the
U.S. Department of Agriculture in its authorization proposal.
This bill, H.R. 3666, was introduced by Representative
Martinez, Ranking Member of the Early Childhood, Youth and
Families Subcommittee, along with 14 other Members of Congress,
on behalf of the Administration. The Committee believes these
changes will improve the effectiveness of Federal child
nutrition programs in providing vital nutrition services to our
nation's children. The following text outlines the highlights
of H.R. 3874 and its changes to our nation's important child
nutrition programs.

State Flexibility in Managing WIC Funding

Since 1989, the Child Nutrition Act has included three
provisions giving States flexibility in managing their WIC
funding. The Committee believes that they should be revised to
give State WIC agencies more flexibility. In addition, the
House Appropriations Committee has limited the amount of unused
WIC funding that States may retain and spend in the next fiscal
year, and the Administration has requested that similar limits
be placed on States' ability to keep unused WIC dollars. When
States retain more funding than they actually need to provide
support to program participants, it reduces the ability of the
Department of Agriculture to provide such funds to States with
additional need. The Committee's bill includes limits on
States' authority to retain unused funding for their own use in
the next fiscal year.
Current law allows States to convert Federal dollars
provided for food to funding for nutrition services and
administration (NSA) so that full services (food as well as
nutrition education, breastfeeding promotion services, etc.)
can be provided to program participants should the number of
participating individuals be increased because of lower food
costs. This generally happens when a State lowers its WIC food
costs through cost containment initiatives (e.g. rebates from
food suppliers) and can serve more people with its Federal WIC
allocation.
This conversion authority is limited. States can convert
food funding to cover nutrition services and administration
costs and spend it based on their estimate of the number of new
participants they will add due to estimated increased savings
on food costs. However, if after having spent the converted
funding, they fail (for whatever reason) to add the full number
of persons they estimated when they converted funding, a
portion of their spending will be ``disallowed.'' This means
that State funds will have to make up the difference. As a
result, States can be discouraged from using the flexibility
provided by the current conversion authority for fear that they
will end up with unallowable nutrition services and
administration costs that must be covered by State dollars. And
States' reluctance to bear the risk of converting food dollars
to spending for nutrition services and administration can, in
effect, mean that they may not be able to take the steps
necessary to increase their caseloads and use all the Federal
money provided to them.
The Committee's bill would grant States more flexibility by
easing the risk States take if they exercise conversion
authority. Under the bill, a State securing an increase in cost
containment savings would, with the Secretary's approval of its
estimates, be able to convert a portion of any projected
increase in food cost savings to nutrition services and
administration funding. States that convert a portion of their
cost containment savings in food dollars to spending for
nutrition services and administration would be held harmless if
the increase in WIC participation that the State anticipated
did not fully materialize.
However, the Committee recognizes that accountability for
this new conversion authority must be ensured. In order to
prevent this expanded conversion authority from being used to
substantially shift food money to nutrition services and
administration spending without increased cost containment
savings and participation, the Committee's bill also would give
the Secretary authority to reduce a State's nutrition services
and administration allocation if its actual nutrition services
and administration expenditures exceed its per participant
grant for nutrition services and administration by more than 10
percent (as opposed to 15 percent in current law).
The WIC statute presently allows States to retain unused
food and nutrition services and administration money and spend
it in the subsequent fiscal year. Under this authority, they
may retain up to 1 percent of their grant--or up to 3 or 5
percent when implementing new cost containment measures.
However, the fiscal year 1998 appropriations act for the WIC
program effectively limits this authority to 1 percent of
nutrition services and administration money only.
The Committee, the Administration, and the Appropriations
Committee are concerned that the current authority to spend
money in the next fiscal year is too broad, particularly with
regard to States' authority to retain and spend unused food
money rather than return it for reallocation among States so
that they can serve more women, infants and children. The
Committee's bill would repeal this authority, thereby
increasing the amount of money that can be reallocated among
the States.
The Committee does, however, recognize that authority to
spend unused nutrition services and administration money in the
next year is important so that States continue to have some
flexibility to manage their WIC funds efficiently. The
Committee's bill would allow States to spend nutrition services
and administration funding only up to an amount equal to one
percent of their total WIC grant. States also would be able to
spend an additional amount of nutrition services and
administration funds (equal to one-half percent of their total
grant) for development of management information and electronic
benefit transfer systems--with prior approval by the Secretary.
Current authority to spend as much as 3 percent or 5 percent of
a State's food grant in the next year would be ended.
Current law also allows States to use up to 1 percent of
their WIC food grant to cover food expenditures incurred in the
prior year. No similar authority exists with regard to
nutrition services and administration funds. If a State incurs
unexpected nutrition services and administration costs not
covered by its grant, the overage must be covered with State
funds.
In order to further increase State flexibility, the
Committee's bill would extend the authority to spend money to
cover prior year costs by allowing States to spend up to 1
percent of their nutrition services and administration grant to
cover unanticipated nutrition services and administration costs
incurred in the prior year.
The Committee has also given States the flexibility to use
food dollars to purchase breast pumps. Studies have
demonstrated the benefits of breastfeeding to the long term
health of infants. Currently breast pumps can only be purchased
using nutrition services and administrative dollars. This
limits the number of pumps available for breastfeeding women
participating in the WIC program. For those women who return to
work after the birth of their child, the lack of a breast pump
can result in a decision to stop breastfeeding. This
legislation would allow States to purchase additional breast
pumps to serve the needs of program participants. However, the
Committee remains concerned about the excessive use of food
dollars for this purpose. Therefore, the bill would prevent
States from using food dollars to purchase breast pumps until
the State reached the same level of breast pump expenditures
through nutrition services and administration funds as they had
in the previous year. The Committee delays the effective date
of this provision for one year in order to allowStates to
establish a baseline date on breast pump purchases with nutrition
services and administrative dollars. This provision will provide States
with additional flexibility at the same time it continues to focus food
dollars on the purchase of nutritional supplements for participants.

Preventing Fraud and Abuse in the WIC Program

In March, 1998, the Surveys and Investigations Staff of the
House Committee on Appropriations submitted a critical report
on the WIC program. The report makes four major points,
particularly regarding the vulnerability of the WIC program to
fraud and abuse. It notes that the level of unspent money every
year is above a reasonable level. It maintains that the full
range of effective controls on the cost of WIC food package has
not been implemented in many States. It points out the
potential for issuance of benefits to ineligible persons,
especially because of the lack of income documentation
requirements. Finally, it criticizes the limited extent of
investigative oversight of WIC vendors and recipients to
prevent trafficking and other abuses.
The report's finding as to the level of unspent funds are
addressed in the Committee bill provisions dealing with
flexibility for WIC agencies. However, the Committee has
several concerns related to fraud and abuse in the WIC program.
The Committee has, therefore, included in H.R. 3874 several
provisions to ensure that participation in the WIC program is
limited to those who are truly eligible and to curb fraud and
abuse:
The physical presence of all applicants and
recipients would be required at each certification and
recertification of eligibility, unless waived under
certain limited conditions.
Income documentation would be required, unless waived
under certain limited conditions.
State agencies would be required to implement systems
to identify individuals participating at more than one
WIC site.
State agencies would be required to identify high-
risk vendors and follow up with compliance
investigations.
Vendors convicted of trafficking would be permanently
disqualified from participation in the WIC program (or,
in some cases, be subject to a monetary fine).
State agencies would be encouraged to pursue fraud
and abuse through a change in rules allowing them to
keep and use additional recouped funds.
The maximum fine for WIC program violations would be
more than doubled.
Those convicted of trafficking or other serious
violations would face forfeiture of any property
involved in the violation.
State agencies would be required to take into account
the prices charged by vendors when approving them for
participation in the program.
It is important to note that the bill's provisions
regarding physical presence requirements include specific
flexibility to deal with the difficulties encountered by
working parents. Under the bill, local agencies are permitted
to waive the physical presence requirement for children of
working parents, if the children were present at initial
certification, have been recertified at least once in the past
year, and the requirement would present a barrier to
participation. This provision will ensure that children are not
denied WIC benefits due to the inability of their parents, due
to work constraints, transportation difficulties, and other
problems, to ensure the physical presence of their children for
recertification every six months. However, the Committee does
expect children to be present for recertification at least once
each year.
The Committee also recognizes the effectiveness of WIC cost
containment strategies pursued by State WIC agencies. In
addition to the changes governing the WIC program noted above,
the Committee's bill would require a study of cost containment
practices so that those that are most useful can be identified.
This study will examine the impact of cost containment
practices such as State selection of vendors and approved food
items on program participation, access and availability of
prescribed foods, voucher redemption rates and actual food
selections by participants, achievement of positive health
outcomes and program costs.

Miscellaneous WIC Issues

There are several other WIC issues which are not addressed
in this legislation but which the Committee believes deserve
additional attention.
The Committee recognizes that WIC helps to assure normal
growth in children, reduced levels of anemia, increased
immunization rates, improved access to regular health care and
strengthened diets. WIC blood work testing is currently
required at certification, which generally does not coincide
with the usual schedule of well-child pediatric care visits.
This results in enrollment and recertification delays,
duplicative testing, and extra physical visits.
The Committee endorses the Department's current effort to
conform WIC's blood work requirements to the Centers for
Disease Control and Prevention's periodicity schedule. The
Committee expects the final rules on the coordination of blood
work schedules to be issued by March 1, 1999 and will be
closely monitoring the Department's progress on these
regulations.
The Committee also recognizes the importance of addressing
the ethnic and cultural eating patterns of WIC participants and
strongly endorses the Department's current effort to provide
guidelines to local agencies regarding food substitutions to
accommodate ethnic and cultural eating patterns. Such
guidelines should assure that the food substitutions will
accommodate the supplemental nutritional needs of WIC
participants. The Committee urges the Department to proceed
expeditiously to complete its final guidelines regarding this
matter.

State and Local Flexibility Provisions

This bill includes language to require States, where a
single State agency administers multiple child nutrition
programs, to provide a single permanent agreement between the
State and the school food authority to provide meals under all
such programs. The bill also requires a single form for school
food authorities to claim reimbursements for meals served
through these programs.
It is the intent of the Committee to simplify and
streamline local administration of child nutrition programs.
Under current law, school districts can be required to apply
separately to provide school breakfasts and lunches, child care
nutrition and summer food service program meals. This often
duplicative process is time consuming and inefficient. It is
the opinion of the Committee that the flexibility provisions
outlined above will have a significant and positive impact on
cost savings at the local level.
Under the Committee bill, State agencies administering
school meal programs will develop a single agreement for school
districts to participate in the several programs. This
agreement will be permanent and subject only to amendment if
service factors change. For example, a school food authority
providing meals under the Summer Food Service Program will need
only to submit updates of service site information each year as
a continuing sponsor.
The Committee's amendment would also require the use of a
single claim form that incorporates sections for claims for all
meals served. At its simplest, this would mean adding sections
from each current form to a single form.
The Committee believes that the consolidated agreements and
single claim forms provided in the bill allow additional
flexibility for States and school districts. States may
consolidate program accountability reviews for schools running
multiple programs. This will result in savings at the State
level in that State agency staff will be able to coordinate
reviews among the programs. States may conduct additional
reviews as necessary where there is a concern about compliance
or for new sponsors, as current law provides.
School districts could operate all programs under the same
meal pattern requirements. Schools would also have the same
menu planning options for the Summer Food Service Program that
school meals enjoy. This simplifies the menu planning process
and maintains consistency among programs. It also simplifies
program oversight at the State level.
The bill also provides States with greater flexibility in
how they use Federal funds for State administrative expenses.
Currently there is a 10 percent cap on the amount of funds that
can be transferred between nutrition programs. The Committee
removes this cap in order to allow States to move funds where
they are needed most. The demand for audits, compliance reviews
and technical assistance change from program to program from
year to year. Providing States with flexibility to move funds
to where they are needed most will allow them to operate
programs more efficiently. The Committee urges States to use
caution in transferring funds between programs.

Summer Food Service Program

The Summer Food Service Program provides important
nutrition services to our nation's low-income children. For
many years, sponsor participation in this program has been
limited due to past program abuse by certain types of sponsors.
As a result, some low income areas have been unserved or
underserved and children do not have access to nutritious
meals. This legislation modifies current law to encourage
additional private non-profit organizations to become sponsors
of summer food service programs.
In April, 1997, the General Accounting Office (GAO) issued
a study on the Summer Food Service Program that reported
substantial problems among program operators. GAO found
evidence of food waste caused by inadequate storage and
spoilage, deliberate dumping, poor quality food, adult food
consumption or offsite consumption by children, improper
bidding procedures and indications of kickbacks and bribes,
failure to meet meal pattern requirements, and payments for
unserved meals. Most of the abuses appeared to involve private,
nonprofit program operators that served substantial numbers of
children at many sites and who used private food service
companies for food delivery.
As a result of this report, Congress enacted legislation
that placed restrictions on participation of private,
nonprofits in 1977. This legislation was intended to improve
program administration, increase monitoring and tighten program
requirements. The 1977 amendments placed restrictions on the
operation of programs that used private food service management
companies, or vendors for meal service. In 1981, the Omnibus
Budget Reconciliation Act barred these sponsors from the
program completely by restricting the sponsorship of summer
programs to public and private nonprofit school food
authorities, local municipal or county governments, and public
and private nonprofit residential summer camps. As a result of
changes enacted in 1981, program participation dropped by
approximately 500,000 children--from 1.9 million in 1981 to 1.4
million in 1982.
Beginning in 1988, Congress amended the law to allow
private non-profit summer food program sponsors to participate
in the program. This was done as part of the Hunger Prevention
Act of 1988. One provision of this law created a five State
demonstration project for private, nonprofit summer food
program sponsors. Their participation, in these five States,
was limited to low-income areas where public sponsors did not
operate programs. Additional restrictions were placed on these
sponsors to insure there were no recurrences of the fraud and
abuse outlined in the 1977 GAO report. In 1989, Congress
permitted all States to allow private, nonprofit summer food
sponsors to participate in the program as long as they met the
restrictions set forth in the demonstration project.
Additional restrictions have been lifted over the years in
recognition of the fact that States are doing a better job of
overseeing Summer program sponsors and past abuses committed by
this group of sponsors have not reappeared. The legislation
reported by the Committee removes the last barriers to full
participation by these sponsors through the following changes
to the law:
Allows private, nonprofit organizations participating in
the Summer Food Program to operate 25 sites with a maximum
total of 300 children at each site. Removes the current
limitation, which prohibits them from serving more than 2500
children.
Eliminates the March 1 ``indication of interest''
requirement which allows private nonprofit sponsors to
participate in the Summer Food Program only in an area where
school or government sponsors have not indicated an interest in
running a program by March 1. The Committee does, however,
retain the priority for schools should more than one sponsor
apply to operate a Summer Food Program.
Removes the restriction that prevents private nonprofit
organizations in the Summer Food Program from contracting with
commercial or nonprofit entities for meal services. Currently
they can only self-prepare meals or buy them from public
entities.
Revises the vendor registration requirement under the
Summer Food Program. Currently all commercial entities that
wish to provide meals to sponsors must register with State
agencies. This provision makes registration allowable, but not
mandatory.
It is the intent of the Committee that the removal of these
barriers will increase access of low income children to
nutritious meals during the summer months when they are not in
school. The Committee wants to make it clear that the
performance of private, nonprofit sponsors will be closely
monitored once these restrictions have been removed. Should
past abuses be repeated, the Committee will move swiftly to
reinstate these barriers.

Buy American Provisions

The Committee bill incorporates language similar to that
proposed by the U.S. Department of Agriculture which requires
schools in the contiguous States participating in the National
School Lunch and School Breakfast Programs to purchase,
whenever possible, only food products that are produced in the
United States for those programs. The Committee believes this
is an important addition to the law in view of health concerns
that have been raised regarding imported foods.
Although Hawaii is exempt from ``Buy American'' provisions,
the bill eliminates this exemption with respect to food
products that are grown in Hawaii in sufficient quantities to
meet the needs of meals provided under the school lunch and
breakfast programs.
Finally, the bill includes a definition of ``food products
that are produced in the United States.'' The Committee
included this definition for a variety of reasons. First, we
felt it was important to assist local schools in determining
which products qualify under this new requirement. Second, the
Committee believes it is important to make sure that ``food
products that are produced in the United States'' means
products are produced `substantially' from agricultural
products grown in the United States. Under the ``Buy America
Act'' substantially means over 51 percent from American
products. However, the Department of Agriculture has been using
a definition of ``food products that are produced in the United
States'' that includes products which are canned and labeled in
the United States, but may have 100 percent foreign
ingredients. By adding this definition, the bill serves both
the needs of schools that purchase these products and American
agriculture.

Improvements to the Child and Adult Care Food Program

The Committee bill also includes several improvements to
the Child and Adult Care Food Program.
First, the Committee has tightened language that permits
institutions in the Child and Adult Care Food Program moving
towards tax-exempt status to participate in the program. Under
current law, such institutions can ``move toward'' tax-exempt
status for years. The Committee believes institutions seeking
such status should do so as quickly as possible. As such,
participation for such institutions is limited to no more than
six months unless they can demonstrate that failure to get tax-
exempt status is beyond their control.
Second, the Committee has removed a provision in current
law that has discouraged schools from operating day care
programs. Under current law, schools operating day care
programs were required to meet any Child and Adult Care Food
Program licensing or approve requirements, or alternative
approval standards where no State or local licensing or
approval requirements exist. Since schools are alreadytrusted
to care for children throughout the school day, the Committee believes
this extra requirement is unnecessary and burdensome. It has,
therefore, eliminated this requirement for schools.
This Committee believes the Child and Adult Care Food
program provides important nutritional supplements to children
in child care settings. The Committee wants to point out that
it will be closely monitoring this program. Recent reports by
the Inspector General of the U.S. Department of Agriculture
raise serious concerns regarding program integrity. For
example, Operation ``Kiddie Care,'' a program operated by the
Inspector General to determine the extent of fraud in the child
care program, uncovered significant weaknesses in program
delivery. During the first phase of their reviews, they found
11 of 12 sponsors seriously deficient in their delivery of
services. Out of 43 audits and investigations in 21 States,
they found 33 sponsors to be so seriously deficient in program
administration that they will be subject to termination from
the program if they fail to correct deficiencies. Finally, as
the result of 26 investigations for program fraud, 10 sponsors
were terminated from the program. The Committee strongly
encourages States to step up their efforts to eliminate fraud
and abuse in this important program, especially by redirecting
their audit funds to compliance investigations.

Afterschool Care Provisions

The Committee is very concerned about the problem of
juvenile crime facing our nation. Earlier this year, the
Committee reported, and the House passed, H.R. 1818, the
Juvenile Crime Control and Delinquency Prevention Act. This
legislation focused primarily on the prevention of juvenile
crime. During Subcommittee hearings on this legislation, it
became clear that afterschool programs not only prevented
juvenile crime, they contributed to reduced drug and alcohol
abuse and prevented teen pregnancy.
The Committee believes afterschool programs, which operate
between the end of the school day and the time when parents
return home from work, provide a quality alternative to
juveniles with too much time on their hands. The Committee also
recognizes that children involved in such programs may need a
snack to hold them over until their evening meal. Therefore,
the Committee, in an effort to encourage afterschool programs,
has made several modifications to current law to allow for
Federal support for the provision of a snack to children
participating in such programs.
The first provision would allow for Federal reimbursements
for a snack for children up to age 18 who are participating in
afterschool care programs operated by schools. In addition,
more schools will be able to offer snacks because participation
in the afterschool snack program will no longer be limited to
schools that were operating afterschool programs prior to May
15, 1989. This is a modification of a provision currently
contained in the School Lunch Act which provides snacks for
children up through age 12 who are participating in afterschool
care programs operated by schools prior to May 15, 1989. The
Committee believes such afterschool care programs need to
address some of the factors related to youth involvement in
juvenile activities, such as educational difficulties. As such
only those programs which have an educational or enrichment
purpose and which are organized primarily for the purpose of
providing child care services would qualify under this section.
The second provision would amend the Child and Adult Care
Food Program to permit schools and public and non-profit
organizations operating afterschool programs for at-risk youth
in low-income areas to be reimbursed for a snack. Such programs
can also serve youth up through age 18. The Committee believes
the main purpose of such programs shall be the care and
supervision of participating youth.

Demonstration Projects

H.R. 3874, as reported by the Committee, makes permanent
one demonstration project and modifies another.
Under current law, a demonstration project has been
operating in Iowa and Kentucky. This project allows for-profit
child care providers to participate in the Child and Adult Care
Food Program as long as 25 percent of their children are
eligible for free and reduced-price meals under the School
Lunch Program. In other States, only those for-profit child
care providers with twenty-five percent of their children
receiving subsidies under Title XX of the Social Security Act
are eligible to participate in this program. H.R. 3874 makes
permanent this demonstration project.
Section 18 of the National School Lunch Act also contains a
discretionary pilot project to examine the impact of a
universal lunch and breakfast demonstration project on
paperwork reduction, reducing application and meal counting
requirements, and increasing program participation. H.R. 3874
modifies this provision to focus it on the School Breakfast
program. The Committee believes that breakfast is an important
meal for students. There have been studies that suggest eating
breakfast improves students' academic achievement and classroom
behavior. Should a majority of Congress decide to expand the
Federal School Breakfast Program, the Committee believes we
must examine the effect of this policy. In addition to
examining the impact of achievement and classroom behavior, the
Committee expects this pilot project to examine the impact of
universal breakfast on the dietary intake of participants and
on over-all program participation. Specifically, the Committee
will want to know if a universal breakfast program has an
impact on the number of children who actually eat breakfast as
opposed to simply encouraging those children who already eat
breakfast at home to eat at school. In addition, the Committee
expects the evaluation of the pilot project to take into
account other factors that could impact any of these areas,
such as schoolwide educational reforms.
The Committee expects any school operating a pilot project
as part of this demonstration program to receive a total
Federal reimbursement under the schoolbreakfast 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). Funds required for the pilot project in excess of such
reimbursements may be taken from any non-Federal source or from amounts
specifically provided for this project in appropriations acts. If
appropriations for the pilot projects are not specifically provided for
in appropriations Acts, the Committee does not expect the Department of
Agriculture to conduct, or schools to participate in, such pilot
projects.
H.R. 3874, the ``Child Nutrition and WIC Reauthorization
Amendments of 1998'' as reported by the Committee on Education
and the Workforce on June 4, 1998.

Section-by-Section Analysis

Section 1 contains the short title and table of contents.
Section 2 sets forth the effective date of this Act and
amendments to it, to be October 1, 1998.

TITLE I--AMENDMENTS TO THE NATIONAL SCHOOL LUNCH ACT

Section 101 makes technical amendments to Section 6 of the
Act relating to the provision of commodity assistance.
Section 102(a) amends Section 9 of the Act to require that
schools participating in the school lunch or school breakfast
program and preparing meals on-site obtain, twice during each
school year, State or local health and safety inspections--if
they are not required to undergo health and safety inspections
by State or local law.
Section 102(b) further amends Section 9 of the Act to
require that, to the extent that a single State agency
administers the school lunch program, the school breakfast
program, the summer food service program, and the child and
adult care food program in a State, school food authorities
submit a single agreement with respect to the programs they
operate and use a common procedure when claiming reimbursement
for meals and snacks served. The single agreement is to be
permanent, but is to be amended as necessary.
Section 103 amends Section 11 of the Act to require that,
when reimbursement rates are indexed for inflation, all
resultant rates will be rounded down to the nearest whole cent.
Section 104(a) amends Section 12(f) of the Act to permit,
in Alaska and Hawaii, the adjustment of reimbursement rates for
the summer food service program to take into account differing
costs.
Section 104(b) amends Section 12 of the Act to add a new
subsection (n) containing a ``Buy American'' requirement. The
new subsection would require schools in the contiguous States
participating in the school lunch and breakfast programs to
purchase, to the extent practicable, only food products
produced in the United States. It also requires that schools in
Hawaii purchase, to the extent practicable, food products grown
in Hawaii in sufficient quantities to meet schools' needs.
Section 105(a) amends Section 13 of the Act to permit
private nonprofit summer food service program sponsors that
operate not more than 25 sites, with not more than 300 children
served at any one site--unless a waiver is granted by the State
agency under standards developed by the Secretary.
Section 105(b) amends Section 13 of the Act to permit
schools operating a summer food service program off school
grounds to receive reimbursement for meals served when the
child does not take an item offered as part of the meal.
Section 105(c) amends Section 13 of the Act to permit
private nonprofit summer food service program sponsors to
contact with private vendors, to make registration of private
vendors in the summer food service program a State option, and
to remove a requirement that private nonprofit summer food
service program sponsors may participate only in areas where a
public entity has not indicated it will run a program by March
1 of any year.
Section 105(d) amends Section 13 of the Act to extend the
appropriations authorization for the summer food service
program through fiscal year 2003.
Section 106 amends Section 14 of the Act to extend the
appropriations authorization for commodity distribution
assistance through fiscal year 2003.
Section 107(a) amends section 17 of the Act to allow, in
those instances in which State or local licensing or approval
is not required, outside school hours care institutions to
participate in the child and adult care food program if they
meet State or local health and safety standards.
Section 107(b) amends Section 17 of the Act to extend Even
Start participants' categorical eligibility under the child and
adult care food program.
Section 107(c) amends Section 17 of the Act to allow
private institutions participating in the child and adult care
food program and moving towards tax-exempt status to
participate for not more than six months. If they can
demonstrate that failure to obtain tax-exempt status is beyond
their control, they may receive a single extension of up to 90
days. This subsection also removes a requirement that
institutions applying for the child and adult care food program
receive a notice of an incomplete application within 15 days.
Section 107(d) amends Section 17 of the Act to reduce the
set-aside of money to be granted States for audits under the
child and adult care food program--from 2% to 1% of program
dollars.
Section 107(e) amends Section 17 of the Act to permanently
authorize a demonstration project--operating in Iowa and
Kentucky--under which for-profit child care centers are allowed
to participate in the child and adult care food program if
their enrollment is at least 25% children eligible for free and
reduced-price meals.
Section 107(f) amends Sections 17 and 17B of the Act to add
a new subsection (q), which would combine all nutrition
programs for homeless children under the aegis of the child and
adult care food program.
Section 107(g) amends Section 17 of the Act to add a new
subsection (r), which would allow reimbursements under the
child and adult care food program for snacks served free in
afterschool programs to at-risk children through age 18 in
lower-income areas.
Section 108 amends Section 17A of the Act to allow schools
to receive reimbursements for snacks served to children through
age 18 in afterschool programs. Programs would be required to
have an education or enrichment purpose.
Section 109 amends Section 18(i) of the Act to remove from
the demonstration project authorized under subsection (i)
provisions relating to school lunches and establish a
discretionary elementary school breakfast demonstration
project.
Section 110 amends Section 21 of the Act to extend the
appropriations authorization for training and technical
assistance through fiscal year 2003.
Section 111 amends Section 22 of the Act to extend the
appropriations authorization for program compliance and
accountability operations through fiscal year 2003.
Section 112 amends Section 26 of the Act to extend and make
discretionary the appropriations authorization for an
information clearinghouse.
Section 113 amends Section 27 of the Act to revise
provisions governing the Secretary in carrying out activities
to help accommodate the special dietary needs of individuals
with disabilities and authorizes appropriations for these
activities.

TITLE II--AMENDMENTS TO THE CHILD NUTRITION ACT

Section 201(a) amends Section 7 of the Act to make
provisions dealing with assistance for State administrative
expenses consistent with provisions combining nutrition
programs for homeless children in the child and adult care food
programs contained in Section 107(f) of the bill.
Section 201(b) amends Section 7 of the Act to eliminate the
10% limit on transferring funds provided for State
administrative expenses among child nutrition programs.
Section 201(c) amends Section 7 of the Act to extend the
appropriations authorization for assistance for State
administrative expenses through fiscal year 2003.
Section 202(a) amends Section 17 of the Act to require the
physical presence of each applicant for the WIC program at each
certification determination and allows local WIC agencies to
waive the requirement in certain instances when it would create
a barrier to participation. It also amends Section 17 to
require program applicants to provide documentation of
household income or participation in an income-tested program
and allows State WIC agencies to waive the requirement in
certain instances where the requirement would present a barrier
to participation.
Section 202(b) amends Section 17 of the Act to require WIC
agencies to provide education or educational materials relating
to the effects of drug and alcohol abuse by a pregnant,
postpartum, or breastfeeding woman on the woman's developing
child.
Section 202(c) amends Section 17 of the Act to allow the
distribution of nutrition education materials (including
breastfeeding promotion materials) developed for the WIC
program to State agencies administering the commodity
supplemental food program.
Section 202(d) amends Section 17 of the Act to require
State WIC agencies to implement systems designed to identify
recipients participating at more than one site.
Section 202(e) amends Section 17 of the Act to require
State WIC agencies to identify vendors with a high probability
of program abuse and to monitor these vendors through follow-up
compliance investigations.
Section 202(f) amends Section 17 of the Act to extend the
authorization of appropriations for the WIC program through
fiscal year 2003.
Section 202(g) amends Section 17 of the Act to allow State
agencies to purchase breast pumps, beginning in fiscal year
2000, with food benefit funds--so long as they do not reduce
their purchase of breast pumps from nutrition services and
administration funds.
Section 202(h)(1) amends Section 17 of the Act to extend
the authority for the formula allocation of WIC funds by the
Secretary among the States through fiscal year 2003.
Section 202(h)(2) amends Section 17 of the Act to allow the
Secretary to reduce a State's nutrition services and
administration grant if actual expenditures on nutrition
services and administration exceed the State's grant for
nutrition services and administration by more than 10%. An
exception is allowed for small State agencies.
Section 202(i) amends Section 17 of the Act to revise
provisions of law that allow State WIC agencies to convert
funds provided for food benefits to funds for nutrition
services and administration. States would be allowed to convert
funds based on their estimates of increased participation and
increased cost containment savings--as approved by the
Secretary--without a penalty if the estimates are not fully
realized.
Section 202(j) amends Section 17 of the Act to require that
State WIC agencies grant infant formula rebate contracts to
bidders with the lowest net price offer.
Section 202(k) (as supplemented by Section 202(m)(2))
amends Section 17 of the Act to extend, through fiscal year
2003, the requirement to use up to $10 million of unspent WIC
funding to support infrastructure and breastfeeding support
activities.
Section 202(l) amends Section 17 of the Act to require
State WIC agencies to consider the prices that stores charge
for foods provided under the WIC program when selecting
retailers as approved vendors for the program.
Section 202(m) amends Section 17 of the Act to allow State
WIC agencies to use not more than 1 percent of funds provided
for food and not more than 1 percent of funds provided for
nutrition services and administration for expenses incurred in
the preceding fiscal year. This subsection also amends Section
17 to allow State WIC agencies to retain funds for nutrition
services and administration and use them in the subsequent
fiscal year--up to an amount equal to 1 percent of their total
grant. State agencies also would be allowed to retain nutrition
services and administration funds--up to an additional one-half
of 1 percent of their total grant, with the Secretary's
approval--for use in the subsequent fiscal year to develop
management information and electronic benefit transfer systems.
Section 202(n)(1) amends Section 17 of the Act to revise
the State matching requirements for the WIC farmers' market
nutrition program. The required match would be 30 percent of
the administrative portion of the farmers' market nutrition
program grant--as opposed to 30 percent of the total grant.
Section 202(n)(2) amends Section 17 of the Act to eliminate
legislatively stipulated ranking criteria for States' farmers'
market nutrition program applications.
Section 202(n)(3) amends Section 17 of the Act to extend
the appropriations authorization for the WIC farmers' market
nutrition program through fiscal year 2003.
Section 202(o) amends Section 17 of the Act to require the
permanent disqualification of vendors convicted of trafficking
in WIC food benefits or selling firearms, ammunition,
explosives, or controlled substances. Civil money penalties
would be allowed if permanent disqualification would harm WIC
program recipients.
Section 202(p) amends Section 17 of the Act to add a new
subsection (p) that would require the Secretary, through the
Economic Research Service, to conduct a study on the effect of
State cost containment practices for the selection of vendors
on program participation, access to and availability of
prescribed foods, voucher redemption rates and food selections
by recipients, participants with special diets or food
allergies, participant use of and satisfaction with prescribed
foods, achievement of positive health outcomes, and program
costs.
Section 202(q) amends Section 17 of the Act to add a new
subsection (q) that would allow State WIC agencies to use funds
collected from penalties and claims against recipients and
vendors through the one-year period following the date the
funds are received.
Section 202(r) amends Section 17 of the Act to add a new
subsection (r) raise maximum fine for WIC violations from
$10,000 to $25,000.
Section 202(s) amends Section 17 of the Act to add a new
subsection (s) that would provide for forfeiture of property
involved in serious violation of WIC program rules.
Section 203 amends Section 17 of the Act to extend the
appropriations authorization for the nutrition education and
training program through fiscal year 2003 at such sums as are
necessary.

Explanation of Amendments

The Amendment in the Nature of a Substitute is explained in
the body of this report.

Application of Law to the Legislative Branch

Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. This bill amends and reauthorizes the National School
Lunch Act and the Child Nutrition Act of 1966. The bill does
not prevent legislative branch employees from receiving the
benefits of this legislation.

Unfunded Mandate Statement

Section 423 of the Congressional Budget and Impoundment
Control Act requires a statement of whether the provisions of
the reported bill include unfunded mandates.This bill amends
and reauthorizes the National School Lunch Act and the Child Nutrition
Act of 1966. The bill does not contain any unfunded mandates.

Statement of Oversight Findings and Recommendations of the Committee

In compliance with clause 2(l)(3)(A) of rule XI and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the body of this report.

Statement of Oversight Findings of the Committee on Government Reform
and Oversight

With respect to the requirement of clause 2(l)(3)(D) of
rule XI of the Rules of the House of Representatives, the
Committee has received no report of oversight findings and
recommendations from the Committee on Government Reform and
Oversight on the subject of H.R. 3874.

Constitutional Authority

The National School Lunch Act, the Child Nutrition Act of
1966, and this bill, H.R. 3874, are constitutional under the
spending clause of the constitution, Article 1, section 8,
clause 1.

Committee Estimate

Clause 7 of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 3874. However, clause 7(d) of that rule provides that this
requirement does not apply when the Committee has included in
its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 403 of the Congressional Budget Act.

Budget Authority and Congressional Budget Office Cost Estimate

With respect to the requirements of clause 2(l)(3)(B) of
rule XI of the House of Representatives and section 308(a) of
the Congressional Budget Act of 1974 and with respect to
requirements of 2(l)(3)(C) of rule XI of the House of
Representatives and section 403 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for H.R. 3874 from the Director of the Congressional Budget
Act:

U.S. Congress,
Congressional Budget Office,
Washington, DC, June 23, 1998.
Hon. William F. Goodling,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3874, the Child
Nutrition and WIC Reauthorization Amendments of 1998.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sheila Dacey.
Sincerely,
June E. O'Neill, Director.
Enclosure.

H.R. 3874--Child Nutrition and WIC Reauthorization Amendments of 1998

Summary: H.R. 3874 would reauthorize child nutrition
programs and the Special Supplemental Nutrition Program for
Women, Infants, and Children (WIC). H.R. 3874 would provide
authorizations of $3.9 billion for fiscal year 1999 and about
$19.6 billion over the 1999-2003 period, not including
adjustments for inflation.
In addition, H.R. 3874 would newly provide reimbursement
for snacks served to youth in after-school programs in schools
and low-income areas, lower reimbursement rates for meals
served free and at a reduced price in schools and child care
centers, and reduce funding to states for conducting audits of
nutrition programs in child care centers. Those changes would
slightly increase direct spending for 1999 but decrease direct
spending by $68 million over the 1999-2003 period. Enactment of
the bill also would result in increased revenues, although the
amount is likely to be insignificant. Because the bill's
enactment would affect both direct spending and receipts, pay-
as-you-go procedures would apply.
H.R. 3874 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
The bill would, however, impose new requirements on state and
local governments that administer child nutrition programs
totaling $8 million in fiscal 1999 and $202 million for the
1999-2003 period. Under UMRA, such requirements would not be
mandates because they are a result of complying with grant
conditions or because states have the ability to offset their
costs by amending the programs.
Estimated cost to the Federal Government: The estimated
budgetary effect of H.R. 3874 is summarized in Table 1. The
costs of this legislation fall within budget function 600
(income security).

TABLE 1. SUMMARY OF ESTIMATED BUDGETARY EFFECTS OF H.R. 3874
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION

Without Adjustments for Inflation

Authorization under current law:
Estimated authorization level \1\..................... 4,000 82 82 82 82 72
Estimated outlays..................................... 3,985 354 82 82 82 74
Proposed changes:
Estimated authorization level \1\..................... ....... 3,936 3,922 3,922 3,922 3,932
Estimated outlays..................................... ....... 3,650 3,924 3,927 3,927 3,931
Authorizations under H.R. 3874:
Estimated authorization level \1\..................... 4,000 4,018 4,004 4,004 4,004 4,004
Estimated outlays..................................... 3,985 4,004 4,006 4,009 4,009 4,005

With Adjustments for Inflation

Authorizations under current law:
Estimated authorization level \1\..................... 4,000 85 88 90 93 86
Estimated outlays..................................... 3,985 356 87 89 92 87
Proposed changes:
Estimated authorization level \1\..................... ....... 4,019 4,096 4,192 4,287 4,399
Estimated outlays..................................... ....... 3,725 4,092 4,191 4,285 4,392
Authorizations under H.R. 3874:
Estimated authorization level \1\..................... 4,000 4,104 4,184 4,282 4,380 4,485
Estimated outlays..................................... 3,985 4,081 4,179 4,280 4,377 4,478

DIRECT SPENDING

Baseline spending under current law:
Budget Authority...................................... 8,779 9,266 9,786 10,333 10,383 11,464
Estimated outlays..................................... 8,702 9,176 9,689 10,231 10,789 11,358
Change:
Budget authority...................................... ....... -8 -32 -27 -27 -27
Estimated outlays..................................... ....... 4 -21 -18 -17 -16
Spending under H.R. 3874:
Budget authority...................................... 8,779 9,258 9,754 10,306 10,866 11,437
Outlays............................................... 8,702 9,180 9,668 10,213 10,772 11,342

CHANGES IN REVENUES

Estimated revenues........................................ ....... (\2\) (\2\) (\2\) (\2\) (\2\)
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is the amount appropriated for that year.
\2\ Less than $500,000.

Basis of estimate: Tables 2 and 3 detail the effects of
H.R. 3874 on authorizations of appropriations.

TABLE 2. ESTIMATED EFFECTS OF H.R. 3874 ON APPROPRIATIONS, WITHOUT ADJUSTMENTS FOR INFLATION
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
----------------------------------------------------------------------------------------------------------------
Authorizations Under Current Law

WIC:
Budget authority...................................... 3,924 ....... ....... ....... ....... .......
Estimated outlays..................................... 3,914 273 ....... ....... ....... .......
Economic Research Service:
Estimated authorization level \1\..................... 72 72 72 72 72 72
Estimated outlays..................................... 68 72 72 72 72 72
Nutritional Education and Training Program:
Estimated authorization level \1\..................... 4 10 10 10 10 0
Estimated outlays..................................... 3 9 10 10 10 2
Universal Breakfast Pilot:
Estimated authorization level......................... ....... ....... ....... ....... ....... .......
Estimated outlays..................................... ....... ....... ....... ....... ....... .......
Total authorizations under current law:
Estimated authorization level \1\..................... 4,000 82 82 82 82 72
Estimated outlays..................................... 3,985 354 82 82 82 74

Changes Under H.R. 3874

WIC:
Estimated authorization level......................... ....... 3,928 3,928 3,928 3,928 3,928
Estimated outlays..................................... ....... 3,654 3,928 3,928 3,928 3,928
Economic Research Service:
Estimated authorization level......................... ....... 2 0 0 0 0
Estimated outlays..................................... ....... 1 ....... 0 0 0
Nutritional Education and Training Program:
Estimated authorization level......................... ....... -6 -6 -6 -6 4
Estimated outlays..................................... ....... -5 -6 -6 -6 3
Universal Breakfast Pilot:
Estimated authorization level......................... ....... 13 ....... ....... ....... .......
Estimated outlays..................................... ....... (\2\) 2 5 5 1
Total changes:
Estimated authorization level......................... ....... 3,936 3,922 3,922 3,922 3,932
Estimated outlays..................................... ....... 3,650 3,924 3,927 3,927 3,931

Total Authorization Under H.R. 3874

Estimated authorization level \1\..................... 4,000 4,018 4,004 4,004 4,004 4,004
Estimated outlays..................................... 3,985 4,004 4,006 4,009 4,009 4,005
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is the amount appropriated for that year.
\2\ Less than $500,000.

TABLE 3. ESTIMATED EFFECTS OF H.R. 3874 ON APPROPRIATIONS, WITH ADJUSTMENTS FOR INFLATION
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
----------------------------------------------------------------------------------------------------------------
Authorizations Under Current Law

WIC:
Budget authority...................................... 3,924 ....... ....... ....... ....... .......
Estimated outlays..................................... 3,941 273 ....... ....... ....... .......
Economic Research Service:
Estimated authorization level......................... 72 75 78 80 83 86
Estimated outlays..................................... 68 74 77 79 82 85
Nutritional Education and Training Program:
Estimated authorization level......................... 4 10 10 10 10 0
Estimated outlays..................................... 3 9 10 10 10 2
Universal Breakfast Pilot:
Estimated authorization level......................... ....... ....... ....... ....... ....... .......
Estimated outlays..................................... ....... ....... ....... ....... ....... .......
Total authorizations under current law :
Estimated authorization level......................... 4,000 85 88 90 93 86
Estimated outlays..................................... 3,985 356 87 89 92 87

Changes Under H.R. 3874

WIC:
Estimated authorization level......................... ....... 4,010 4,102 4,198 4,293 4,395
Estimated outlays..................................... ....... 3,729 4,096 4,191 4,286 4,388
Economic Research Service:
Estimated authorization level......................... ....... 2 0 0 0 0
Estimated outlays..................................... ....... 1 (^{1) 0 0 0
Nutritional Education and Training Program:
Estimated authorization level......................... ....... -6 -6 -6 -6 4
Estimated outlays..................................... ....... -5 -6 -6 -6 3
Universal Breakfast Pilot:
Estimated authorization level......................... ....... 13 ....... ....... ....... .......
Estimated outlays..................................... ....... (^{1) 2 5 5 1
Total changes:
Estimated authorization level......................... ....... 4,019 4,096 4,192 4,287 4,399
Estimated outlays..................................... ....... 3,725 4,092 4,191 4,285 4,392

Total Authorizations Under H.R. 3874

Estimated authorization level......................... 4,000 4,104 4,184 4,282 4,380 4,485
Estimated outlays..................................... 3,985 4,081 4,179 4,280 4,377 4,478
----------------------------------------------------------------------------------------------------------------
^{1 Less than $500,000.

Spending subject to appropriations: Title I would authorize
such sums as are necessary for a universal free breakfast pilot
project. The project would examine the effect of serving all
breakfasts free for three years in selected elementary schools.
Breakfasts would be reimbursed at the rate for meals served
free. A pilot project involving 36 schools for a 3-year period
would cost $3 million for meals and $10 million for evaluation
over the 1999-2003 period according to information provided by
the Food and Nutrition Service. Significantly more than 36
schools could participate if more funds were appropriated. A
similar pilot project was authorized for 1996 to 1998 but was
not funded.
Title II of the bill would extend the authorization of the
Special Supplemental Nutritional Program for Women, Infants,
and Children at such sums as may be necessary for fiscal years
1999 through 2003. The WIC program provides food and other
support to low-income pregnant, post-partum and breast-feeding
women, infants, and children up to age five. The bill would
make several changes to the underlying authorization of WIC.
However, most of these changes would not have significant
budgetary effects.
In reauthorizing the farmers' market nutrition program
within the WIC program, the bill would reduce the state match
rate required for participation from 30 percent of total costs
to 30 percent of administrative costs. Currently, about $12
million of the total $3.9 billion WIC appropriation is set
aside for the farmers' market nutrition program. Although data
on the administrative portion of this program are not
available, CBO estimates that in order to maintain the current
level of funding from both federal and nonfederal sources,
about $3.5 million more than the 1998 amount would need to be
authorized annually for the program.
The bill would require the Economic Research Service to
study and prepare a report on the effect of cost-containment
practices employed by the states. This report would be due
three years after the bill's enactment. Based on information
from the Economic Research Service, the costs of this study are
estimated at $1.5 million from 1999-2003.
Finally, the bill would amend the Nutritional Education and
Training program, which provides funds to train food service
personnel and to instruct students, teachers, and parents about
nutrition and health. The program is currently authorized
through fiscal year 2002 at $10 million per year. H.R. 3874
would authorize such sums as may be necessary for fiscal years
1999 through 2003. In fiscal year 1998, $4 million was
appropriated for this program. CBO assumes that, under the new
authorization provision, this level of funding would continue
for 1999-2003.
Direct spending and revenues: H.R. 3874 would make several
changes to the National School Lunch Act and the Child
Nutrition Act resulting in a net decrease in direct spending
over the 1999-2003 period. These programs provide subsidies to
schools and child care programs to help provide meals to
children. CBO's estimates of the bill's effects on direct
spending, by provision, are detailed in Table 4 and explained
below.

TABLE 4. ESTIMATED EFFECTS OF H.R. 3874 ON DIRECT SPENDING
[By fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
5- year 10-year
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 total total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Round down reimbursement rates:
Budget authority.................................. -6 -38 -42 -44 -45 -46 -47 -48 -48 -49 -175 -413
Outlays........................................... -2 -35 -41 -44 -45 -46 -47 -48 -48 -49 -167 -404
Adjust Summer Food Program reimbursement rates for
Alaska and Hawaii:
Budget authority.................................. (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 1 3
Outlays........................................... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 1 3
Expand private, nonprofit participation in the Summer
Food Program:
Budget authority.................................. (\1\) (\1\) 1 1 1 1 1 1 1 1 3 7
Outlays........................................... (\1\) (\1\) 1 1 1 1 1 1 1 1 2 6
Expand offer versus serve:
Budget authority.................................. (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 1 3
Outlays........................................... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 1 3
Reinstate categorical eligibility for Even Start
participants:
Budget authority.................................. 1 1 1 1 1 0 0 0 0 0 5 5
Outlays........................................... 1 1 1 1 1 (\1\) 0 0 0 0 5 5
Reduce 2 percent audit funds to 1 percent:
Budget authority.................................. -15 -15 -16 -17 -18 -19 -19 -21 -22 -23 -80 -183
Outlays........................................... -5 -6 -6 -6 -7 -7 -7 -8 -8 -8 -29 -67
Make Kentucky-Iowa demonstration permanent:
Budget authority.................................. 4 4 4 4 4 4 4 4 5 5 20 42
Outlays........................................... 3 4 4 4 4 4 4 4 5 5 19 41
Transfer homeless programs to CACFP:
Budget authority.................................. (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 1 1 2 4
Outlays........................................... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) 1 1 2 4
Provide snacks for teens in low-income areas:
Budget authority.................................. 1 1 1 1 1 2 2 2 2 2 6 14
Outlays........................................... (\1\) 1 1 1 1 1 2 2 2 2 6 14
Provide after-school snacks through the School Lunch
Program:
Budget authority.................................. 7 14 24 26 28 30 32 35 38 40 98 273
Outlays........................................... 5 13 22 25 27 30 32 34 37 40 93 266
Spending from WIC fines and penalties:
Budget authority.................................. (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\)
Outlays........................................... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\)
Interactions:
Budget authority.................................. (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) -1 -2
Outlays........................................... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) -1 -2
Total:
Budget authority.................................. -8 -32 -27 -27 -27 -27 -26 -26 -24 -23 -120 -246
Outlays........................................... 4 -21 -18 -17 -16 -16 -14 -13 -11 -9 -68 -130
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.

Note.--Details may not sum to totals due to rounding.

Round Down Reimbursement Rates. Section 103 would lower the
reimbursement rate for meals served free or for a reduced price
in schools and day care centers. Under current law, the
reimbursement rates for those meals are adjusted for inflation
each year and then rounded to the nearest quarter cent. The
bill would require those rates (except for lunches) to be
rounded down to the nearest whole cent. The reimbursement rate
for free and reduced lunches has two components: the
reimbursement rate for a full-price meal plus a special
assistance rate. Each of those rates would be rounded down to
the nearest cent and then summed. On average, schools would
receive one cent less reimbursement for each lunch served and
one-half cent less reimbursement for every other meal served.
The provision would take effect July 1, 1999, and would reduce
federal outlays by $2 million in 1999, and $49 million by 2008.
Adjust Summer Food Reimbursement Rates for Alaska and
Hawaii. Section 104 would allow the Secretary of Agriculture to
set higher reimbursement rates for the Summer Food Service
program in Alaska, Hawaii, and territories where the cost of
providing meals is greater than in the rest of the states.
Under current law, the Secretary may set higher rates in all
the other Child Nutrition programs. The authority to adjust
rates is currently used only in Alaska and Hawaii. Based on the
number of meals served in Alaska and Hawaii and the size of the
adjustment the Secretary makes in the other child nutrition
programs, the provision would cost less than $500,000 a year.
Expand Private, NonProfit Participation in the Summer Food
Program. Section 105(a) would allow private, nonprofit sponsors
to operate more sites in the Summer Food Service program.
Current law limits a private, nonprofit sponsor to 5 urban
sites, 20 rural sites, and 20 sites in total. The proposal
would raise the limit to 25 sites of any type. In 1997 there
were about 600 private, nonprofit sponsors operating 2,200
sites. Only 13 percent of sponsors operate more than 5 sites,
and only 6 percent of sponsors operate more than 10 sites,
according to a Food and Nutrition Service (FNS) internal study.
FNS officials report that about a dozen rural sponsors and a
couple of urban sponsors have expressed interest in exceeding
the limits under current law. The estimate assumes that 10
rural sponsors add 5 additional sites and 4 urban sponsors add
5 to 10 sites for a total of 80 new sites serving 5,000 new
participants by 2001. The provision would increase outlays by
less than $500,000 in 1999 and 2000 and by about $1 million
each year thereafter.
Expand Offer versus Serve. Section 105(b) would allow all
school-sponsored Summer Food Service program sites to receive
reimbursement for a meal even if a child does not accept every
component of the meal. Current law allows such reimbursement
only if the program is sited at a school. This provision would
extend the authority to programs that schools operate at other
sites, such as parks or community centers. Based on discussions
with federal officials, we assume that the provision would make
the program marginally more attractive to sponsor. We assume a
1 percent increase in participation in school-sponsored
programs that are not school-based. This change would result in
an increase of less than $500,000 a year.
Reinstate Categorical Eligibility for Even Start
Participants. Section 107(b) reinstates categorical eligibility
for free meals in the Child and Adult Care Food Program (CACFP)
for Even Start participants. Under this provision, children
would not have to meet income guidelines because the Even Start
Program does not have any specific income guidelines. Program
data show that while most families enrolled in Even Start have
very low incomes, 8 percent of families have an annual income
of between $15,000 and $20,000, and an additional 9 percent
have income over $20,000. Most of the children in those
families would not meet the income eligibility limit for free
meals. Program data indicates that between 10 and 15 percent of
the approximately 50,000 children enrolled in Even Start would
be eligible for free meals under the provision despite having
incomes that exceed the program limits. The provision would
increase federal outlays by $1 million annually.
Reduce 2 Percent Audit Funds to 1 Percent. Section 107(d)
would reduce the funds available to states to conduct audits of
CACFP. Under current law, each state receives an annual payment
equaling 2 percent of the CACFP funds it spent in the second
preceding fiscal year. The proposal would halve that payment.
The funding is used by the states to conduct audits of
participating CACFP institutions. Generally, states do not
spend all of thefunding available to them: in 1995 states spent
$15 million out of $23 million available; in 1996 states spent $15
million out of $26 million available. The proposal would cut the funds
available to states by $15 million in 1999 rising to $23 million by
2008. Because a portion of that funding would not have been used
anyway, spending would decrease by only an estimated $5 million in 1999
and $8 million by 2008.
Make Kentucky-Iowa Demonstration Permanent. Section 107(e)
would permanently authorize a demonstration project that allows
expanded participation by for-profit providers in CACFP in
Kentucky and Iowa. Current law allows most for-profit providers
to participate in CACFP only if at least 25 percent of the
children at the center receive Title XX funds. In Kentucky and
Iowa, a for-profit provider can also participate if at least 25
percent of the children enrolled meet the income eligibility
criteria for free and reduced meals (185 percent of poverty).
The pilot project was funded at $3.7 million in 1998. We
estimate that funding would increase each year by 2.7 percent,
the projected increase in the CACFP reimbursement rate. The
provision would increase federal costs by $4 million to $5
million a year.
Transfer Homeless Programs to CACFP. Section 107(f) would
consolidate two programs that provide meals to homeless
children into CACFP. The Homeless Children Nutrition program
serves children under age 7 in homeless shelters up to three
meals and one snack per day. About 1 million meals were served
through that program in 1997. The Summer Food Homeless program
serves children under age 19 in homeless shelters up to two
meals a day during summer months. About 100,000 meals were
served through that program in 1997. The consolidated program
would serve homeless children under age 13 up to three meals a
day through CACFP. On balance, this program would provide
reimbursement for more meals, mostly due to additional meals
served to children between the ages of 6 and 12 year-round
instead of just in the summer. The provision would cost less
than $500,000 a year through 2006, and about $1 million in 2007
and 2008.
Provide Snacks for Teens in Low-Income Areas. Section
107(g) would allow centers that care for youth between the ages
of 12 and 18 in low-income areas to participate in CACFP.
Centers in areas where at least 50 percent of the enrolled
students are certified eligible for free or reduced meals could
be reimbursed for one snack per child per day. Reimbursement
would be at the rate for free snacks and all snacks would be
served free. Reimbursement would be available for snacks served
after school, on holidays, and on weekends.
CBO estimates that, after the initial year, about 10,000
youths would participate in the programs, rising to 15,000 by
2008. About 500,000 children between the ages of 6 and 12
currently participate in CACFP. Data from the Survey of Income
and Program Participation indicate that for every 20 children
between the ages of 6 and 12 who are in care, one child between
the ages of 13 and 18 is in care. If after-school programs
serving children ages 13-18 participate at the same rate as
those serving younger children, then 25,000 additional youths
could participate daily. Because the program could operate only
in low-income areas, CBO estimates that only 40 percent of
those children (10,000) would be eligible to participate. This
number is assumed to grow by 5.5 percent a year, the projected
rate of growth for snacks served in CACFP.
After-school programs would be reimbursed for 1 million
snacks in 1999, 2 million in 2000, and 3 million by 2008. The
estimate assumes that programs would operate 200 days a year on
average. The school lunch program operates 180 days, but this
program can also operate on weekends and holidays. Each snack
would be reimbursed at about 50 cents for an annual cost of $1
million to $2 million once the provision is phased-in.
Provide After-School Snacks through the School Lunch
Program. Section 108 would allow schools that operate a school
lunch program to receive reimbursement for snacks served to
children in after-school care programs. Under current law, a
school can receive reimbursement for after-school snacks only
if it establishes a child care center and participates in
CACFP. Many school-based after-school programs do not
participate in CACFP, partly because they are not willing or
able to meet state requirements for child care centers. The
provision would make it significantly easier for schools to
receive reimbursement for snacks served to children after
school, because schools would not have to apply as child care
centers through a separate federal program. Only after-school
programs which have an educational or enrichment purpose and
are organized primarily for the purpose of providing care could
participate.
In 1999, about 16,000 after-school programs could
potentially participate in the new snack program. In 1991,
there were about 13,500 after-school programs in public and
private schools according to a Department of Education (ED)
study. About 97 percent of public schools and 45 percent of
private schools participate in the school lunch program. CBO
estimates that 10,600 sites had both a school lunch program and
an after-school program. Participation in CACFP by after-school
programs has grown by 9 percent each year in recent years.
School enrollment grew about 2 percent a year in the early
1990s. CBO projects that the number of after-school programs
would grow by the average of those two rates, or 5.5 percent a
year.
The estimate assumes that 60 percent of eligible programs,
or 9,600 programs, would participate. This is slightly less
than the 70 percent rate at which schools participate in the
school breakfast program. Wealthier schools are generally
somewhat less likely to participate in the child nutrition
programs, and ED data indicate that the schools withafter-
school programs are somewhat wealthier than average. About 2,800
school-based after-school programs already receive reimbursement for
snacks through the CACFP, so 6,800 additional after-school programs
would participate.
The new program could serve 60 million new snacks in 1999,
and 95 million by 2008. If the new programs are the average
size of programs already participating in CACFP (45 children)
and operate the same number of days a year as lunch and
breakfast programs (180 days) then the program would subsidize
56 million snacks in 1999. Because children between the ages of
13 to 18 could also participate in the new program, the number
of new snacks would be 5 percent higher. CBO projects the
number of snacks would grow at the same rate projected for all
snacks in CACFP.
Assuming the income of the new participants is the same as
for CACFP, 58 percent of the snacks would receive reimbursement
at the free rate, 8 percent at the reduced-price rate, and the
remainder at the paid rate. CBO assumes that participation
would increase gradually so the first year cost would be $6
million, about one-third of the cost of a fully implemented
program. By 2001, the first year we expect the program would be
fully phased in, the cost would be $23 million; the cost would
rise to $39 million by 2008.
Spending from WIC Fines and Penalties. Section 202 would
require state agencies to permanently disqualify from
participating in the WIC program vendors who are convicted of
trafficking in food instruments or selling firearms in exchange
for food instruments. If disqualifying a vendor would pose a
hardship to program participants, the vendor could remain in
the program but would be assessed a civil money penalty by the
state. In addition, states could impose fines on venders and
participants who are found guilty of fraud against the program.
These penalties and fines could be spent by the state on
nutrition services, administrative expenses, and food benefit
assistance. Finally, the bill would require courts to order
persons convicted of violating any WIC provisions to forfeit
all property used in the transaction that resulted in the
violation. The proceeds from a sale of the forfeited property
would be used to reimburse federal and state agencies for costs
incurred in the forfeiture proceedings. This section would
increase both direct spending and receipts, but the amount is
likely to be insignificant.
Pay-as-you-go considerations: Section 252 of the Balanced
Budget and Emergency Deficit Control Act sets up pay-as-you-go
procedures for legislation affecting direct spending or
receipts. The net changes in outlays and governmental receipts
that are subject to pay-as-you-go procedures are shown in Table
5. For the purposes of enforcing pay-as-you-go procedures, only
the effects in the budget year and the succeeding four years
are counted.

TABLE 5. SUMMARY OF PAY-AS-YOU-GO EFFECTS OF H.R. 3874
[By fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays.............................................. - 4 -21 -18 -17 -16 -16 -14 -13 -11 -9
Changes in receipts............................................. - (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) (\1\)
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ = Less than $500,000.

Estimated impact on State, local, and tribal governments:
Although Title I of the bill, which would reauthorize child
nutrition programs, would impose new requirements on states and
local education agencies, these requirements would not be
mandates as defined in UMRA. Specifically, the bill would:
Require local food service operations to undergo two annual
health and safety inspections if state or local laws did not
require it. Information from the American School Food Service
Association (ASFSA) indicates that such inspections are
required in all but two or three states. CBO estimates that
local education agencies in the affected states would incur new
costs of approximately $1 million a year.
Require inflation adjustments for free and reduced price
meals served in schools and day care centers to be rounded down
to the nearest whole cent. CBO estimates that local education
agencies would receive $2 million less in fiscal 1999 and $167
million less over the 1999-2003 period as the result of this
provision.
Reduce funds allocated for state audits under the Child and
Adult Care Food Programs from 2 percent to 1 percent of funds
spent on the program in the second preceding fiscal year. CBO
estimates that states would receive $5 million less in fiscal
1999 and $30 million less for the 1999-2003 period as the
result of this provision.
Section 421(5)(B)(ii) of UMRA provides that new grant
conditions and reductions in federal funding for certain
entitlement programs, including child nutrition programs, are
mandates if the state, local, or tribal governments that
participate in the program lack the authority toamend their
financial or programmatic responsibilities to continue providing
required services under the program. Based on information from ASFSA
and the Congressional Research Service, CBO assumes that states and
local education agencies do, in general, have the authority to amend
their financial and programmatic responsibilities to offset the costs
imposed on them by this legislation. In addition to the flexibility
under current law, the bill would grant additional flexibility by
consolidating certain administrative requirements on states and local
education agencies.
Title II of the bill, which would reauthorize the Special
Supplemental Nutrition Program for Women, Infants, and
Children, would also impose new requirements on the state and
local agencies that administer the program. CBO estimates that
the net costs of these new requirements, which would be the
result of complying with grant conditions, would not be
significant because many states are already complying. The bill
would also reduce the state match rate requirement for
participation in the Farmer's Market Nutrition program from 30
percent of total costs to 30 percent of administrative costs.
CBO estimates that this change could save states $3.5 million
annually.
Estimated impact on the private sector: H.R. 3874 contains
no private-sector mandates as defined in UMRA.
Estimate prepared by: Federal costs: Valerie Baxter, Sheila
Dacey, and Christina Hawley Sadoti; revenues: Hester Grippando;
impact on State, local, and tribal governments: Marc Nicole;
impact on the private sector: Bruce Vavrichek.
Estimate approved by: Paul N. Van de Water, Assistant
Director for Budget Analysis.

Rollcall Votes

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (existing law proposed
to be omitted is enclosed in black brackets, new matter is
printed in italic, existing law in which no change is proposed
is shown in roman):

NATIONAL SCHOOL LUNCH ACT

* * * * * * *

direct federal expenditures

Sec. 6. (a) * * *
(b) The Secretary shall deliver, to each State participating
in the school lunch program under this Act, commodities valued
at the total level of assistance [authorized under subsection
(c)] required under subsections (c) and (e) for each school
year for the school lunch program in the State, not later than
September 30 of the following school year.
[(c) Notwithstanding any other provision of law, the
Secretary, until such time as a supplemental appropriation may
provide additional funds for the purpose of subsection (b) of
this section, shall use funds appropriated by section 32 of the
Act of August 24, 1935 (7 U.S.C. 612c) to make any payments to
States authorized under such subsection. Any section 32 funds
utilized to make such payments shall be reimbursed out of any
supplemental appropriation hereafter enacted for the purpose of
carrying out subsection (b) of this section and such
reimbursement shall be deposited into the fund established
pursuant to section 32 of the Act of August 24, 1935, to be
available for the purposes of said section 32.
[(d) Any funds made available under subsection (b) or (c) of
this section shall not be subject to the State matching
provisions of section 7 of this Act.]
[(e)] (c)(1)(A) The national average value of donated foods,
or cash payments in lieu thereof, shall be 11 cents, adjusted
on July 1, 1982, and each July 1 thereafter to reflect changes
in the Price Index for Food Used in Schools and Institutions.
The Index shall be computed using 5 major food components in
the Bureau of Labor Statistics' Producer Price Index (cereal
and bakery products, meats, poultry and fish, dairy products,
processed fruits and vegetables, and fats and oils). Each
component shall be weighed using the same relative weight as
determined by the Bureau of Labor Statistics.

* * * * * * *

[(f)] (d) Beginning with the school year ending June 30,
1981, the Secretary shall not offer commodity assistance based
upon the number of breakfasts served to children under section
4 of the Child Nutrition Act of 1966.
[(g)] (e)(1) Subject to paragraph (2), in each school year
the Secretary shall ensure that not less than 12 percent of the
assistance provided under section 4, this section, and section
11 shall be in the form of commodity assistance provided under
this section, including cash in lieu of commodities and
administrative costs for procurement of commodities under this
section.

* * * * * * *

NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS

Sec. 9. (a) * * *

* * * * * * *

(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.
(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.

* * * * * * *

SPECIAL ASSISTANCE

Sec. 11. (a)(1) * * *

* * * * * * *

(3)(A) * * *

* * * * * * *

(B) The annual adjustment under this paragraph shall reflect
changes in the cost of operating meal programs under this Act
and the Child Nutrition Act of 1966, as indicated by the change
in the series for food away from home of the Consumer Price
Index for all Urban Consumers, published by the Bureau of Labor
Statistics of the Department of Labor. Each annual adjustment
shall reflect the changes in the series for food away from home
for the most recent 12-month period for which such data are
available. The adjustments made under this paragraph shall
becomputed [to the nearest one-fourth cent, except that adjustments to
payment rates for meals and supplements served to individuals not
determined to be eligible for free or reduced price meals and
supplements shall be computed] to the nearest lower cent increment and
based on the unrounded amount for the preceding 12-month period.

* * * * * * *

MISCELLANEOUS PROVISIONS AND DEFINITIONS

Sec. 12. (a) * * *

* * * * * * *

(f) In providing assistance for [school breakfasts and
lunches] breakfasts, lunches, suppers, and supplements served
in Alaska, Hawaii, Guam, American Samoa, Puerto Rico, the
Virgin Islands of the United States, and the Commonwealth of
the Northern Mariana Islands, the Secretary may establish
appropriate adjustments for each such State to the national
average payment rates prescribed under [sections 4 and 11]
sections 4, 11, 13, and 17 of this Act and section 4 of the
Child Nutrition Act of 1966, to reflect the differences between
the costs of providing [lunches and breakfasts] meals in those
States and the costs of providing [lunches and breakfasts]
meals in all other States.

* * * * * * *

(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.

SUMMER FOOD SERVICE PROGRAM FOR CHILDREN

Sec. 13. (a)(1) * * *

* * * * * * *

(3) Eligible service institutions entitled to participate in
the program shall be limited to those that--
(A) * * *

* * * * * * *

(C)(i) conduct a regularly scheduled food service for
children from areas in which poor economic conditions
exist; or
[(ii) conduct a regularly scheduled food service
primarily for homeless children; or]
[(iii)] (ii) qualify as camps; and

* * * * * * *

(7)(A) * * *
(B) As used in this paragraph, the term ``private nonprofit
organizations'' means those organizations that--
[(i)(I) serve a total of not more than 2,500 children
per day at not more than 5 sites in any urban area,
with not more than 300 children being served at any 1
site (or, with a waiver granted by the State under
standards developed by the Secretary, not more than 500
children being served at any 1 site); or
[(II) serve a total of not more than 2,500 children
per day at not more than 20 sites in any rural area,
with not more than 300 children being served at any 1
site (or, with a waiver granted by the State under
standards developed by the Secretary, not more than 500
children being served at any 1 site);
[(ii) use self-preparation facilities to prepare
meals, or obtain meals from a public facility (such as
a school district, public hospital, or State
university) or a school participating in the school
lunch program under this Act;
[(iii) operate in areas where a school food authority
or the local, municipal, or county government has not
indicated by March 1 of any year that such authority or
unit of local government will operate a program under
this section in such year;]
(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);
[(iv)] (ii) exercise full control and authority over
the operation of the program at all sites under their
sponsorship;
[(v)] (iii) provide ongoing year-around activities
for children or families;
[(vi)] (iv) demonstrate that such organizations have
adequate management and the fiscal capacity to operate
a program under this section; and
[(vii)] (v) meet applicable State and local health,
safety, and sanitation standards.

* * * * * * *

(f)(1) * * *

* * * * * * *

(7) Offer versus serve.--A school food authority
participating as a service institution may permit a
child [attending a site on school premises operated
directly by the authority] to refuse one or more items
of a meal that the child does not intend to consume,
under rules that the school uses for school meals
programs. A refusal of an offered food item shall not
affect the amount of payments made under this section
to a school for the meal.

* * * * * * *

(l)(1) Service institutions [(other than private nonprofit
organizations eligible under subsection (a)(7))] may contract
on a competitive basis [only with food service management
companies registered with the State in which they operate] with
food service management companies for the furnishing of meals
or management of the entire food service under the program,
except that a food service management company entering into a
contract with a service institution under this section may not
subcontract with a single company for the total meal, with or
without milk, or for the assembly of the meal. The Secretary
shall prescribe additional conditions and limitations governing
assignment of all or any part of a contract entered into by a
food service management company under this section. Any food
service management company shall, in its bid, provide the
service institution information as to its meal capacity. [The
State shall, upon award of any bid, review the company's
registration to calculate how many remaining meals the food
service management company is equipped to prepare.]
(2) Each State [shall] may provide for the registration of
food service management companies. [For the purposes of this
section, registration shall include, at a minimum--
[(A) certification that the company meets applicable
State and local health, safety, and sanitation
standards;
[(B) disclosure of past and present company owners,
officers, and directors, and their relationship, if
any, to any service institution or food service
management company that received program funds in any
prior fiscal year;
[(C) records of contract terminations or
disallowances, and health, safety, and sanitary code
violations, in regard to program operations in prior
fiscal year; and
[(D) the addresses of the company's food preparation
and distribution sites.
No food service management company may be registered if the
State determines that such company (i) lacks the administrative
and financial capability to perform under the program, or (ii)
has been seriously deficient in its participation in the
program in prior fiscal years.
[(3) In order to ensure that only qualified food service
management companies contract for services in all States, the
Secretary shall maintain a record of all registered food
service management companies that have been seriously deficient
in their participation in the program and may maintain a record
of other registered food service management companies, for the
purpose of making such information available to the States.]
[(4)] (3) In accordance with regulations issued by the
Secretary, positive efforts shall be made by service
institutions to use small businesses and minority-owned
businesses as sources of supplies and services. Such efforts
shall afford those sources the maximum feasible opportunity to
compete for contracts using program funds.
[(5)] (4) Each State, with the assistance of the Secretary,
shall establish a standard form of contract for use by service
institutions and food service management companies. The
Secretary shall prescribe requirements governing bid and
contract procedures for acquisition of the services of food
service management companies, including, but not limited to,
bonding requirements (which may provide exemptions applicable
to contracts of $100,000 or less), procedures for review of
contracts by States, and safeguards to prevent collusive
bidding activities between service institutions and food
service management companies.

* * * * * * *

(q) For the fiscal year beginning October 1, 1977, and each
succeeding fiscal year ending before October 1, [1998] 2003,
there are hereby authorized to be appropriated such sums as are
necessary to carry out the purposes of this section.

COMMODITY DISTRIBUTION PROGRAM

Sec. 14. (a) Notwithstanding any other provision of law, the
Secretary, during the period beginning July 1, 1974, and ending
September 30, [1998] 2003, shall--
(1) * * *

* * * * * * *

CHILD AND ADULT CARE FOOD PROGRAM

Sec. 17. (a) The Secretary may carry out a program to assist
States through grants-in-aid and other means to initiate and
maintain nonprofit food service programs for children in
institutions providing child care. For purposes of this
section, the term ``institution'' means any public or private
nonprofit organization providing nonresidential child care,
including, but not limited to, child care centers, settlement
houses, recreational centers, Head Start centers, and
institutions providing child care facilities for children with
handicaps; and such term shall also mean any other private
organization providing nonresidential day care services for
which it receives compensation from amounts granted to the
States under title XX of the Social Security Act (but only if
such organization receives compensation under such title for at
least 25 percent of its enrolled children or 25 percent of its
licensed capacity, whichever is less). In addition, the term
``institution'' shall include programs developed to provide day
care outside school hours for schoolchildren, and public or
nonprofit private organizations that sponsor family or group
day care homes. Reimbursement may be provided under this
section only for meals or supplements served to children not
over 12 years of age (except that such age limitation shall not
be applicable for children of migrant workers if 15 years of
age or less or for children with handicaps). The Secretary may
establish separate guidelines for institutions that provide
care to school children outside of school hours. For purposes
of determining eligibility--
[(1) no institution, other than a family or group day
care home sponsoring organization, or family or group
day care home shall be eligible to participate in the
program unless it has Federal, State, or local
licensing or approval, or is complying with appropriate
renewal procedures as prescribed by the Secretary and
the State has no information indicating that the
institution's license will not be renewed; or where
Federal, State, or local licensing or approval is not
available, it receives funds under title XX of the
Social Security Act or otherwisedemonstrates that it
meets either any applicable State or local government licensing or
approval standards or approval standards established by the Secretary
after consultation with the Secretary of Health and Human Services;
and]
(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

* * * * * * *

(c)(1) * * *

* * * * * * *

(6)(A) * * *
(B) Subparagraph (A) shall apply only with respect to the
provision of benefits under this section for the period
beginning September 1, 1995, and ending September 30, [1997]
2003.
(d)(1) Any eligible public institution shall be approved for
participation in the child care food program upon its request.
Any eligible private institution shall be approved for
participation if it (A) has tax exempt status under the
Internal Revenue Code of 1986 or, under conditions established
by the Secretary, is moving toward compliance with the
requirements for tax exempt status, or (B) is currently
operating a Federal program requiring nonprofit status. Family
or group day care homes need not have individual tax exempt
certification if they are sponsored by an institution that has
tax exempt status, or, under conditions established by the
Secretary, such institution is moving toward compliance with
the requirements for tax exempt status or is currently
operating a Federal program requiring nonprofit status. 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. An institution applying for participation under this
section shall be notified of approval or disapproval in writing
within thirty days after the date its completed application is
filed. [If an institution submits an incomplete application to
the State, the State shall so notify the institution within
fifteen days of receipt of the application.]

* * * * * * *

(i) The Secretary shall make available for each fiscal year
to States administering the child care food program, for the
purpose of conducting audits of participating institutions, an
amount up to [2] 1 percent of the funds used by each State in
the program under this section, during the second preceding
fiscal year.

* * * * * * *

(p)(1) * * *

* * * * * * *

[(4) Such project shall--
[(A) commence not earlier than May 1, 1990, and not
later than June 30, 1990; and
[(B) terminate on September 30, 1998.
[(5) Notwithstanding paragraph (4)(B), the Secretary shall
continue until September 30, 1998, the two pilot projects
established under this subsection to the extent, and in such
amounts, as are provided for in advance in appropriations
Acts.]
(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 givensuch term in section 321(2) of the Stewart
B. McKinney Homeless Assistance Act (42 U.S.C. 11351(2)).
(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. 17A. MEAL SUPPLEMENTS FOR CHILDREN IN AFTERSCHOOL CARE.

(a) General Authority.--
(1) * * *
(2) Eligible schools.--For the purposes of this
section, the term ``eligible elementary and secondary
schools'' means schools that--
(A) * * *

* * * * * * *

[(C) are participating in the child care food
program under section 17 on May 15, 1989.]
(C) operate afterschool programs with an
educational or enrichment purpose.
(b) Eligible Children.--Reimbursement may be provided under
this section only for supplements [served to children--
[(1) who are not more than 12 years of age; or
[(2) in the case of children of migrant workers or
children with handicaps, who are not more than 15 years
of age.] served to children who are not more than 18
years of age.

* * * * * * *

[SEC. 17B. HOMELESS CHILDREN NUTRITION PROGRAM.

[(a) In General.--The Secretary shall conduct projects
designed to provide food service throughout the year to
homeless children under the age of 6 in emergency shelters.
[(b) Agreements To Participate in Projects.--
[(1) In general.--The Secretary shall enter into
agreements with State, city, local, or county
governments, other public entities, or private
nonprofit organizations to participate in the projects
conducted under this section.
[(2) Eligibility requirements.--The Secretary shall
establish eligibility requirements for the entities
described in paragraph (1) that desire to participate
in the projects conducted under this section. The
requirements shall include the following:
[(A) Each private nonprofit organization
shall operate not more than 5 food service
sites under the project and shall serve not
more than 300 homeless children at each such
site.
[(B) Each site operated by each such
organization shall meet applicable State and
local health, safety, and sanitation standards.
[(c) Project Requirements.--
[(1) In general.--A project conducted under this
section shall--
[(A) use the same meal patterns and receive
reimbursement payments for meals and
supplements at the same rates provided to child
care centers participating in the child care
food program under section 17 for free meals
and supplements; and
[(B) receive reimbursement payments for meals
and supplements served on Saturdays, Sundays,
and holidays, at the request of the sponsor of
any such project.
[(2) Modification.--The Secretary may modify the meal
pattern requirements to take into account the needs of
infants.
[(3) Homeless children eligible for free meals
without application.--Homeless children under the age
of 6 in emergency shelters shall be considered eligible
for free meals without application.
[(d) Funding Priorities.--From the amount described in
subsection (g), the Secretary shall provide funding for
projects carried out under this section for a particular fiscal
year (referred to in this subsection as the ``current fiscal
year'') in the following order of priority, to the maximum
extent practicable:
[(1) The Secretary shall first provide the funding to
entities and organizations, each of which--
[(A) received funding under this section or
section 18(c) (as in effect on the day before
the date of enactment of this section) to carry
out a project for the preceding fiscal year;
and
[(B) is eligible to receive funding under
this section to carry out the project for the
current fiscal year;
to enable the entity or organization to carry out the
project under this section for the current fiscal year
at the level of service provided by the project during
the preceding fiscal year.
[(2) From the portion of the amount that remains
after the application of paragraph (1), the Secretary
shall provide funds to entities and organizations, each
of which is eligible to receive funding under this
section, to enable the entity or organization to carry
out a new project under this section for the
currentfiscal year, or to expand the level of service provided by a
project for the current fiscal year over the level provided by the
project during the preceding fiscal year.
[(e) Notice.--The Secretary shall advise each State of the
availability of the projects conducted under this subsection
for States, cities, counties, local governments, and other
public entities, and shall advise each State of the procedures
for applying to participate in the project.
[(f) Plan To Allow Participation in the Child and Adult Care
Food Program.--Not later than September 30, 1996, the Secretary
shall submit to the Committee on Education and Labor of the
House of Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate a plan describing--
[(1) how emergency shelters and homeless children who
have not attained the age of 6 and who are served by
the shelters under the program might participate in the
child and adult care food program authorized under
section 17 by September 30, 1998; and
[(2) the advantages and disadvantages of the action
described in paragraph (1).
[(g) Funding.--
[(1) In general.--In addition to any amounts made
available under section 7(a)(5)(B)(i)(I) of the Child
Nutrition Act of 1966 (42 U.S.C. 1776(a)(5)(B)(i)(I))
and any amounts that are otherwise made available for
fiscal year 1995, out of any moneys in the Treasury not
otherwise appropriated, the Secretary of the Treasury
shall provide to the Secretary to carry out this
section $1,800,000 for fiscal year 1995, $2,600,000 for
fiscal year 1996, $3,100,000 for fiscal year 1997,
$3,400,000 for fiscal year 1998, and $3,700,000 for
fiscal year 1999 and each succeeding fiscal year. The
Secretary shall be entitled to receive the funds and
shall accept the funds.
[(2) Insufficient number of applicants.--The
Secretary may expend less than the amount described in
paragraph (1) for a fiscal year if there is an
insufficient number of suitable applicants to carry out
projects under this section for the fiscal year. Any
funds made available under this subsection to carry out
the projects for a fiscal year that are not obligated
to carry out the projects in the fiscal year shall
remain available until expended for purposes of
carrying out the projects.
[(h) Definition of Emergency Shelter.--As used in this
section, the term ``emergency shelter'' has the meaning
provided the term in section 321(2) of the Stewart B. McKinney
Homeless Assistance Act (42 U.S.C. 11351(2)).]

PILOT PROJECTS

Sec. 18. (a) * * *

* * * * * * *

[(i)(1) Subject to the availability of advance appropriations
under paragraph (8), the Secretary shall make grants to a
limited number of schools to conduct pilot projects in 2 or
more States approved by the Secretary to--
[(A) reduce paperwork;
[(B) reduce application and meal counting
requirements; and
[(C) make changes that will increase participation in
the school lunch and school breakfast programs.
[(2)(A) 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) The Secretary may not waive a requirement under
subparagraph (A) if the waiver would prevent a program
participant, a potential program 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.
[(C) No child otherwise eligible for free or reduced price
meals under section 9 or under section 4 of the Child Nutrition
Act of 1966 (42 U.S.C. 1773) shall be required to pay more
under a program carried out under this subsection for such a
meal than the child would otherwise pay under section 9 or
under section 4 of the Child Nutrition Act of 1966 (42 U.S.C.
1771 et seq.), respectively.
[(3) To be eligible to receive a grant to conduct a pilot
project under this subsection, a school shall--
[(A) submit an application to the Secretary at such
time, in such manner, and accompanied by such
information as the Secretary may reasonably require,
including, at a minimum, information--
[(i) demonstrating that the program carried
out under the project differs from programs
carried out under subparagraph (C), (D), or (E)
of section 11(a)(1);
[(ii) demonstrating that at least 40 percent
of the students participating in the school
lunch program at the school are eligible for
free or reduced price meals;
[(iii) demonstrating that the school operates
both a school lunch program and a school
breakfast program;
[(iv) describing the funding, if any that the
school will receive from non-Federal sources to
carry out the pilot project;
[(v) describing and justifying the additional
amount, over the most recent prior year
reimbursement amount received under the school
lunch program and the school breakfast program
(adjusted for inflation and fluctuations in
enrollment), that the school needs from the
Federal government to conduct the pilot; and
[(vi) describing the policy of the school on
a la carte and competitive foods;
[(B) not have a history of violations of this Act or
the Child Nutrition Act of 1966 (42 U.S.C. 1771 et
seq.); and
[(C) meet any other requirement that the Secretary
may reasonably require.
[(4) To the extent practicable, the Secretary shall select
schools to participate in the pilot program under this
subsection ina manner that will provide for an equitable
distribution among the following types of schools:
[(A) Urban and rural schools.
[(B) Elementary, middle, and high schools.
[(C) Schools of varying income levels.
[(5)(A) Except as provided in subparagraph (B), a school
conducting a pilot project under this subsection shall receive
commodities in an amount equal to the amount the school
received in the prior year under the school lunch program under
this Act and under the school breakfast program under section 4
of the Child Nutrition Act of 1966, adjusted for inflation and
fluctuations in enrollment.
[(B) Commodities required for the pilot project in excess of
the amount of commodities received by the school in the prior
year under the school lunch program and the school breakfast
program may be funded from amounts appropriated to carry out
this section.
[(6)(A) Except as provided in subparagraph (B), a school
conducting a pilot project under this subsection shall receive
a total Federal reimbursement under the school lunch program
and school breakfast program in an amount equal to the total
Federal reimbursement for the school in the prior year under
each 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.
[(7)(A) The Secretary shall require each school conducting a
pilot project under this subsection to submit to the Secretary
documentation sufficient for the Secretary, to the extent
practicable, to--
[(i) determine the effect that participation by
schools in the pilot projects has on the rate of
student participation in the school lunch program and
the school breakfast program, in total and by various
income groups;
[(ii) compare the quality of meals served under the
pilot project to the quality of meals served under the
school lunch program and the school breakfast program
during the school year immediately preceding
participation in the pilot project;
[(iii) summarize the views of students, parents, and
administrators with respect to the pilot project;
[(iv) compare the amount of administrative costs
under the pilot project to the amount of administrative
costs under the school lunch program and the school
breakfast program during the school year immediately
preceding participation in the pilot project;
[(v) determine the reduction in paperwork under the
pilot project from the amount of paperwork under the
school lunch and school breakfast programs at the
school; and
[(vi) determine the effect of participation in the
pilot project on sales of, and school policy regarding,
a la carte and competitive foods.
[(B) Not later than January 31, 1998, the Secretary shall
submit to the Committee on Education and Labor of the House of
Representatives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate a report containing--
[(i) a description of the pilot projects approved by
the Secretary under this subsection;
[(ii) a compilation of the information received by
the Secretary under paragraph (1) as of this date from
each school conducting a pilot project under this
subsection; and
[(iii) an evaluation of the program by the Secretary.
[(8) There are authorized to be appropriated to carry out
this subsection $9,000,000 for each fiscal year during the
period beginning October 1, 1995, and ending July 31, 1998.]
(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) Authorization of appropriations.--There are
authorized to be appropriated such sums as may be
necessary to carry out this subsection.

* * * * * * *

SEC. 21. TRAINING, TECHNICAL ASSISTANCE, AND FOOD SERVICE MANAGEMENT
INSTITUTE.

(a) * * *

* * * * * * *

(e) Authorization of Appropriations.--
(1) Training activities and technical assistance.--
There are authorized to be appropriated to carry out
subsection (a)(1) $3,000,000 for fiscal year 1990,
$2,000,000 for fiscal year 1991, and $1,000,000 for
each of fiscal years 1992 through [1998] 2003.

* * * * * * *

SEC. 22. COMPLIANCE AND ACCOUNTABILITY.

(a) * * *

* * * * * * *

(d) Authorization of Appropriations.--There is authorized to
be appropriated for purposes of carrying out the compliance and
accountability activities referred to in subsection (c)
$3,000,000 for each of the fiscal years 1994 through [1996]
2003.

* * * * * * *

SEC. 26. INFORMATION CLEARINGHOUSE.

(a) In General.--The Secretary [shall] may enter into a
contract with a nongovernmental organization described in
subsection (b) to establish and maintain a clearinghouse to
provide information to nongovernmental groups located
throughout the United States that assist low-income individuals
or communities regarding food assistance, self-help activities
to aid individuals in becoming self-reliant, and other
activities that empower low-income individuals or communities
to improve the lives of low-income individuals and reduce
reliance on Federal, State, or local governmental agencies for
food or other assistance.
(b) Nongovernmental Organization.--The nongovernmental
organization referred to in subsection (a) shall be selected on
a competitive basis, 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 performedsatisfactorily under such prior
contract and otherwise meets the criteria established in this
subsection, and shall--
(1) * * *

* * * * * * *

(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.
[(c)] (d) Audits.--The Secretary shall establish fair and
reasonable auditing procedures regarding the expenditures of
funds to carry out this section.
[(d) Funding.--Out of any moneys in the Treasury not
otherwise appropriated, the Secretary of the Treasury shall pay
to the Secretary to provide to the organization selected under
this section, to establish and maintain the information
clearinghouse, $200,000 for each of fiscal years 1995 and 1996,
$150,000 for fiscal year 1997, and $100,000 for fiscal year
1998. The Secretary shall be entitled to receive the funds and
shall accept the funds.]
(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. 27. GUIDANCE AND GRANTS FOR ACCOMMODATING SPECIAL DIETARY NEEDS
OF CHILDREN WITH DISABILITIES.

[(a) Definitions.--As used in this section:
[(1) Children with disabilities.--The term ``children
with disabilities'' means individuals, each of whom
is--
[(A) a participant in a covered program; and
[(B) an individual with a disability, as
defined in section 7(8) of the Rehabilitation
Act of 1973 (29 U.S.C. 706(8)) for purposes of
section 504 of the Rehabilitation Act of 1973
(29 U.S.C. 794).
[(2) Covered program.--The term ``covered program''
means--
[(A) the school lunch program established
under this Act;
[(B) the school breakfast program established
under section 4 of the Child Nutrition Act of
1966 (42 U.S.C. 1773); and
[(C) any other program established under this
Act or the Child Nutrition Act of 1966 (42
U.S.C. 1771 et seq.) that the Secretary
determines is appropriate.
[(3) Eligible entity.--The term ``eligible entity''
means a school food service authority, or an
institution or organization, that participates in a
covered program.
[(b) Guidance.--
[(1) Development.--The Secretary, in consultation
with the Attorney General and the Secretary of
Education, shall develop and approve guidance for
accommodating the medical and special dietary needs of
children with disabilities under covered programs in a
manner that is consistent with section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. 794).
[(2) Timing.--In the case of the school lunch program
established under this Act and the school breakfast
program established under section 4 of the Child
Nutrition Act of 1966 (42 U.S.C. 1773), the Secretary
shall develop the guidance as required by paragraph (1)
not later than 150 days after the date of enactment of
this section.
[(3) Distribution.--Not later than 60 days after the
date that the development of the guidance relating to a
covered program is completed, the Secretary shall
distribute the guidance to school food service
authorities, and institutions and organizations,
participating in the covered program.
[(4) Revision of guidance.--The Secretary, in
consultation with the Attorney General and the
Secretary of Education, shall periodically update and
approve the guidances to reflect new scientific
information and comments and suggestions from persons
carrying out covered programs, recognized medical
authorities, parents, and other persons.
[(c) Grants.--
[(1) In general.--Subject to the availability of
appropriations provided in advance to carry out this
subsection, the Secretary shall make grants on a
competitive basis to State educational agencies for
distribution to eligible entities to assist the
eligible entities with nonrecurring expenses incurred
in accommodating the medical and special dietary needs
of children with disabilities in a manner that is
consistent with section 504 of the Rehabilitation Act
of 1973 (29 U.S.C. 794).
[(2) Additional assistance.--Subject to paragraph
(3)(A)(iii), assistance received through grants made
under this subsection shall be in addition to any other
assistance that State educational agencies and eligible
entities would otherwise receive.
[(3) Allocation by secretary.--
[(A) Preference.--In making grants under this
subsection for any fiscal year, the Secretary
shall provide a preference to State educational
agencies that, individually--
[(i) submit to the Secretary a plan
for accommodating the needs described
in paragraph (1), including a
description of the purpose of the
project for which the agency seeks such
a grant, a budget for the project, and
a justification for the budget;
[(ii) provide to the Secretary data
demonstrating that the State served by
the agency has a substantial percentage
of children with medical or special
dietary needs, and information
explaining the basis for the data; or
[(iii) demonstrate to the
satisfaction of the Secretary that the
activities supported through such a
grant will be coordinated with
activities supported under other
Federal, State, and local programs,
including--
[(I) activities carried out
under title XIX of the Social
Security Act (42 U.S.C. 1396 et
seq.);
[(II) activities carried out
under the Individuals with
Disabilities Education Act (20
U.S.C. 1400 et seq.); and
[(III) activities carried out
under section 19 of the Child
Nutrition Act of 1966 (42
U.S.C. 1788) or by the food
service management institute
established under section 21.
[(B) Reallocation.--The Secretary shall act
in a timely manner to recover and reallocate to
other States any amounts provided to a State
educational agency under this subsection that
are not used by the agency within a reasonable
period (as determined by the Secretary).
[(C) Applications.--The Secretary shall allow
State educational agencies to apply on an
annual basis for assistance under this
subsection.
[(4) Allocation by state educational agencies.--In
allocating funds made available under this subsection
within a State, the State educational agency shall give
a preference to eligible entities that demonstrate the
greatest ability to use the funds to carry out the plan
submitted by the State in accordance with paragraph
(3)(A)(i).
[(5) Maintenance of effort.--Expenditures of funds
from State and local sources to accommodate the needs
described in paragraph (1) shall not be diminished as a
result of grants received under this subsection.
[(6) Authorization of appropriations.--There are
authorized to be appropriated $1,000,000 for each of
fiscal years 1995 through 1998 to carry out this
subsection.]

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.
----------

CHILD NUTRITION ACT OF 1966

* * * * * * *

STATE ADMINISTRATIVE EXPENSES

Sec. 7. (a)(1) * * *

* * * * * * *

(5)(A) * * *
(B)[(i)] In the fiscal year 1991 and each succeeding fiscal
year, any amounts appropriated that are not obligated or
expended during such fiscal year and are not carried over for
the succeeding fiscal year under subparagraph (A) shall be
returned to the Secretary. [From any amounts returned to the
Secretary under the preceding sentence:
[(I) The Secretary shall allocate, for the purpose of
providing grants on an annual basis to public entities
and private nonprofit organizations participating in
projects under section 17B of the National School Lunch
Act, not more than $4,000,000 in fiscal year 1995 and
each subsequent fiscal year. Subject to the maximum
allocation for the projects for each fiscal year, at
the beginning of fiscal year 1995 and each subsequent
fiscal year, the Secretary shall allocate, from funds
available under this section that have not been
otherwise allocated to the States, an amount equal to
the estimates by the Secretary of funds to be returned
under this clause, but not less than $1,000,000 in each
fiscal year. To the extent that amounts returned to the
Secretary are less than estimated or are insufficient
to meet the needs of the projects, the Secretary may,
subject to the maximum allocations established in this
subclause, allocate amounts to meet the needs of the
projects from funds available under this section that
have not been otherwise allocated to States.
[(II) After making the allocations under subclause
(I), the Secretary shall allocate, for purposes of
administrative costs, any remaining amounts among
States that demonstrate a need for such amounts.
[(ii) In any fiscal year in which amounts returned to the
Secretary under the first sentence of clause (i) are
insufficient to provide the complete allocation described in
clause (i)(I), all of such amounts shall be allocated for the
purpose described in clause (i)(I).] The Secretary shall then
allocate, for purposes of administrationcosts, any remaining
amounts among States that demonstrate a need for such amounts.
[(6) Funds available to States under this subsection and
under section 13(k)(1) of the National School Lunch Act shall
be used for the costs of administration of the programs for
which the allocations are made, except that States may transfer
up to 10 percent of any of the amounts allocated among such
programs.]
(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.

* * * * * * *

(g) For the fiscal year beginning October 1, 1977, and each
succeeding fiscal year ending before October 1, [1998] 2003,
there are hereby authorized to be appropriated such sums as may
be necessary for the purposes of this section.

* * * * * * *

SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN

Sec. 17. (a) * * *

* * * * * * *

(d)(1) * * *

* * * * * * *

(3)(A) * * *

* * * * * * *

(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.
(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).
(e)(1) The State agency shall ensure that nutrition education
and drug abuse education is provided to all pregnant,
postpartum, and breastfeeding participants in the program and
to parents or caretakers of infant and child participants in
the program. The State agency may also provide nutrition
education and drug abuse education to pregnant, postpartum, and
breastfeeding women and to parents or caretakers of infants and
children enrolled at local agencies operating the program under
this section who do not participate in the program. 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.

* * * * * * *

(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.
[(4)] (5) The State agency--
(A) * * *

* * * * * * *

[(5)] (6) Each local agency shall maintain and make available
for distribution a list of local resources for substance abuse
counseling and treatment.
(f)(1) * * *

* * * * * * *

(23) Each State agency shall implement a system designed to
identify recipients who are participating at more than 1 site
under the program.
(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.
(g)(1) There are authorized to be appropriated to carry out
this section $2,158,000,000 for the fiscal year 1990, and such
sums as may be necessary for each of the fiscal years [1995
through 1998] 1999 through 2003. As authorized by section 3 of
the National School Lunch Act, appropriations to carry out the
provisions of this section may be made not more than 1 year in
advance of the beginning of the fiscal year in which the funds
will become available fordisbursement to the States, and shall
remain available for the purposes for which appropriated until
expended.

* * * * * * *

(h)(1)(A) * * *

* * * * * * *

(C)(i) In any fiscal year, amounts remaining from amounts
appropriated for such fiscal year under subsection (g)(1) and
from amounts appropriated under such section for the preceding
fiscal year, after carrying out subparagraph (A), shall be made
available for food benefits under this section, except to the
extent that such amounts are needed to carry out the purposes
of subsections (g)(4) and (g)(5).
(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.
(2)(A) For each of the fiscal years [1995 through 1998] 1999
through 2003, the Secretary shall allocate to each State agency
from the amount described in paragraph (1)(A) an amount for
costs of nutrition services and administration on the basis of
a formula prescribed by the Secretary. Such formula--
(i) * * *

* * * * * * *

(B)(i) * * *
(ii) If a State agency's per participant expenditure for
nutrition services and administration is more than [15 percent]
10 percent (except that the Secretary may establish a higher
percentage for small State agencies) higher than its per
participant grant for nutrition services and administration
without good cause, the Secretary may reduce such State
agency's operational level for costs of nutrition services and
administration.

* * * * * * *

(5)(A) Subject to subparagraph (B), in any fiscal year that a
State agency [achieves, through use of acceptable measures,
participation that exceeds the participation level estimated
for such State agency under paragraph (2)(A)(ii)(I), such State
agency may] 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, convert amounts allocated for
food benefits for such fiscal year for costs of nutrition
services and administration to the extent that such conversion
is necessary--
(i) * * *

* * * * * * *

(8)(A)(i) * * *

* * * * * * *

(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 five percent.

* * * * * * *

(10)(A) [For each of fiscal years 1995 through 1998,] For
each fiscal year through 2003, the Secretary shall use for the
purposes specified in subparagraph (B), $10,000,000 or the
amount of nutrition services and administration funds and food
benefit funds for the prior fiscal year that has not been
obligated, whichever is less.

* * * * * * *

(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.
(i)(1) * * *

* * * * * * *

(3)(A) Notwithstanding paragraph (2) and subject to
subparagraphs (B) and (C)--
[(i) not more than 1 percent (except as provided in
subparagraph (H)) of the amount of funds allocated to a
State agency under this section for supplemental foods
for a fiscal year may be expended by the State agency
for expenses incurred under this section for
supplemental foods during the preceding fiscal year;
and
[(ii) not more than 1 percent of the amount of funds
allocated to a State agency for a fiscal year under
this section maybe expended by the State agency during
the subsequent fiscal year.]
(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
fornutrition 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.

* * * * * * *

[(C) The total amount of funds transferred from any fiscal
year under clauses (i) and (ii) of subparagraph (A) shall not
exceed 1 percent of the amount of the funds allocated to a
State agency for such fiscal year.
[(D) For State agencies implementing cost containment
measures as defined in subsection (h)(9), not more than 5
percent of the amount of funds allocated under this section to
such a State agency for supplemental foods for the fiscal year
in which the system is implemented, and not more than 3 percent
of the amount of funds allocated to such a State agency for the
fiscal year following the fiscal year in which the system is
implemented, may be expended by the State agency for expenses
incurred under this section for supplemental foods during the
succeeding fiscal year.
[(E) Notwithstanding any other provision in this paragraph
and paragraph (2) a State agency may, subject to the approval
of the Secretary under subparagraph (F), expend not more than 3
percent of the amount of funds allocated to such agency for
supplemental foods for the fiscal year 1991 for expenses
incurred under this section for supplemental foods during the
fiscal year 1990.
[(F) Each State agency which intends to use the authority
provided in subparagraph (E) shall request approval from the
Secretary in advance and shall submit a plan showing how the
State's caseload will be managed to meet funding limitations.
The Secretary shall review and make determinations on such
plans on an expedited basis.
[(G) No State can use the authority provided under
subparagraph (E) to increase the caseload level above the
highest level to date in fiscal year 1990.]
[(H)] (C) The Secretary may authorize a State agency to
expend not more than 3 percent of the amount of funds allocated
to a State under this section for supplemental foods for a
fiscal year for expenses incurred under this section for
supplemental foods during the preceding fiscal year, if the
Secretary determines that there has been a significant
reduction in infant formula cost containment savings provided
to the State agency that would affect the ability of the State
agency to at least maintain the level of participation by
eligible participants served by the State agency.

* * * * * * *

(m)(1) * * *

* * * * * * *

(3) The Secretary shall not make a grant to any State under
this subsection unless the State agrees to provide State,
local, or private funds for the program in an amount that is
equal to not less than 30 percent of the [total] administrative
cost of the program, which may be satisfied from State
contributions that are made for similar programs. The Secretary
may negotiate with an Indian State agency a lower percentage of
matching funds than is required under the preceding sentence,
but not lower than 10 percent of the [total] administrative
cost of the program, if the Indian State agency demonstrates to
the Secretary financial hardship for the affected Indian tribe,
band, group, or council.

* * * * * * *

(6)(A) * * *

* * * * * * *

[(F) In approving and ranking State plans submitted under
this paragraph, the Secretary shall--
[(i) favorably consider a State's prior experiences
with this or similar programs;
[(ii) favorably consider a State's operation of a
similar program with State or local funds that can
present data concerning the value of the program;
[(iii) require that if a State receiving a grant
under this section applies the Federal grant to a
similar program operated in the previous fiscal year
with State or local funds, the State shall not reduce
in any fiscal year the amount of State and local funds
available to the program in the preceding fiscal year
after receiving funds for the program under this
subsection;
[(iv) give preference to State plans that would serve
areas in the State that have--
[(I) the highest concentration of eligible
persons;
[(II) the greatest access to farmers'
markets;
[(III) broad geographical area;
[(IV) the greatest number of recipients in
the broadest geographical area within the
State; and
[(V) any other characteristics, as determined
appropriate by the Secretary, that maximize the
availability of benefits to eligible persons;
and
[(v) take into consideration the amount of funds
available and the minimum amount needed by each
applicant State to successfully operate the program.]
[(G)] (F)(i) An amount equal to 75 percent of the funds
available after satisfying the requirements of subparagraph (B)
shall be made available to States participating in the program
that wish to serve additional recipients, and whose State plan
to do so is approved by the Secretary. If this amount is
greater than that necessary to satisfy the approved State plans
for additional recipients, the unallocated amount shall be
applied toward satisfying any unmet need of States that have
not participated in the program in the prior fiscal year, and
whose State plans have been approved.

* * * * * * *

(9)(A) There are authorized to be appropriated to carry out
this subsection $8,000,000 for fiscal year 1994, $10,500,000
for fiscalyear 1995, and such sums as may be necessary for each
of fiscal years [1996 through 1998] 1999 through 2003.

* * * * * * *

(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.
(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).
(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.
(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.
(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.

* * * * * * *

NUTRITION EDUCATION AND TRAINING

Sec. 19. (a) * * *

* * * * * * *

APPROPRIATIONS AUTHORIZED

(i)[(1) For the fiscal years beginning October 1, 1977, and
October 1, 1978, grants to the States for the conduct of
nutrition education and information programs shall be based on
a rate of 50 cents for each child enrolled in schools or in
institutions within the State, except that no State shall
receive an amount less than $75,000 per year.
[(2)(A) Out of any moneys in the Treasury not otherwise
appropriated, and in addition to any amounts otherwise made
available for fiscal year 1995, the Secretary of the Treasury
shall provide to the Secretary $1,000 for fiscal year 1995 and
$10,000,000 for fiscal year 1996 for making grants under this
section to each State for the conduct of nutrition education
and training programs. The Secretary shall be entitled to
receive the funds and shall accept the funds.
[(B)(i)(I) Subject to clause (ii), grants to each State from
the amounts appropriated under subparagraph (A) shall be based
on a rate of 50 cents for each child enrolled in schools or
institutions within such State.
[(II) If the amount appropriated for any fiscal year is
insufficient to pay the amount to which each State is entitled
under subclause (I), the amount of each grant shall be ratably
reduced. If additional funds become available for making such
payments, such amounts shall be increased on the same basis as
they were reduced.
[(ii) No State shall receive an amount that is less than--
[(I) $50,000, in any fiscal year in which the amount
appropriated for purposes of this section is less than
$10,000,000;
[(II) $62,500, in any fiscal year in which the amount
appropriated for purposes of this section is
$10,000,000 or more but is less than $15,000,000;
[(III) $68,750, in any fiscal year in which the
amount appropriated for purposes of this section is
$15,000,000 or more but is less than $20,000,000; and
[(IV) $75,000 in any fiscal year in which the amount
appropriated for purposes of this section is
$20,000,000 or more.]
[(3)] (1) Fiscal years [1997 through 2002] 1999
through 2003.--
[(A) In general.--There are authorized to be
appropriated to carry out this section
$10,000,000 for each of fiscal years 1997
through 2002.]
(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.

* * * * * * *

[(4)] (2) Funds made available to any State under this
section shall remain available to the State for obligation in
the fiscal year succeeding the fiscal year in which the funds
were received by the State.
[(5)] (3) Enrollment data used for purposes of this
subsection shall be the latest available as certified by the
Department of Education.

* * * * * * *

ADDITIONAL VIEWS

I am compelled to respond to concerns with my amendment to
allow the federal U.S. Department of Agriculture to purchase
the lower priced non-quota peanuts for the school lunch and
other food assistance programs raised during full Committee
consideration of H.R. 3874. Allegations made during discussion
of the amendment reflected the fear that the purchasing of non-
quota peanuts would result in the infiltration of foreign foods
into the school lunch program. However, Federal nutrition law
has longstanding ``Buy American'' provisions that require the
government to purchase U.S.-produced commodities. U.S. grown
non-quota peanuts are no different than U.S. quota peanuts,
except that they are grown without a license and they are
available at approximately $350 per ton as compared to quota
peanuts at about $650 per ton. The proposed amendment to the
National School Lunch Act had absolutely nothing to do with the
importation of foreign peanuts, nor food safety.
Contrary to the rhetoric of peanut quota program
proponents, the Depression era peanut quota system was not
phased out in the Federal Agriculture Improvement and Reform
(``FAIR'') Act, Some food commodities were transitioned to the
free market under the provisions of the Farm Bill of 1996.
However, the peanut quota system was left untouched by the new
law. Therefore, U.S. peanuts continue to be subject to severe
restrictions on production with artificial price supports that
are almost twice the world market price.
The proposed amendment to the National School Lunch Act to
allow USDA to buy non-quota peanuts for the school lunch
program would not ``kill the American peanut farmer'' as
suggested during consideration of the amendment. The amount of
non-quota peanuts purchased for USDA food assistance programs
is less than 2% of the national peanut quota production. In
1997, the Secretary of Agriculture set the national peanut
quota at 1,133,000 tons, while the USDA purchases of peanuts
totaled 19,200 tons. Thus, to have the USDA buy non-quota
peanuts would hardly kill the American peanut farmer. In fact,
it may help U.S. farmers that grow peanuts who are just as
``American'' as farmers and quota holders that have an
exclusive federal license to grow peanuts at a support price
that is almost twice the world price.
The amendment I proposed to the National School Lunch Act
simply provided a mechanism for the U.S. government to buy non-
quota peanuts at the same price that we sell American peanuts
to foreign countries. While current law requires U.S. peanut
growth without a quota to be exported or crushed into oil or
meal, my amendment would have made these peanuts available at
the same lower price for consumption by American school
children. If we were to allow the Federal government to
purchase peanuts for American school children for the same
price we sell American peanuts to consumers in other countries,
we could have saved at least $5 million to purchase a greater
amount of nutritious food through government feeding programs.
It is now particularly clear that peanut quota holders want the
federal government to support their pocketbooks, even if its at
the expense of enhanced nutrition for American school children.

Donald M. Payne.

DISSENTING VIEWS

i. introduction

Congress should reject HR 3874, a bill reauthorizing the
Women's, Infant, and Children's (WIC) program and other
childhood nutrition programs, and the flawed redistributionist,
welfare state model that lies behind this bill. Although the
goals of this legislation are noble, the means toward achieving
the goals embodied therein are unconstitution and ineffective.
Providing for the care of the poor is a moral
responsibility of every citizen, however, it is not a proper
function of the federal government to plunders one group of
citizens and redistribute those funds to another group of
citizens. Nowhere in the United States Constitution is the
federal government authorized to provide welfare services. If
any government must provide welfare services, it should be
state and local governments. However, the most humane and
efficient way to provide charitable services are through
private efforts. Among their other virtues, private charities
are much more likely to provide short-term assistance rather
than fostering long-term dependency upon government programs.
Private charities are also much better able to target
assistance to the truly needy than government programs, which
are burdened with bureaucratic rules of eligibility, as well as
procedures designed to protect the ``due process'' rights of
recipients, which cannot be adequately changed to meet unique
individual circumstances. Thus many people who are genuinely
needy do not receive needed help. In fact, more than 40% of all
families living below the poverty level receive no government
assistance. Private charities can also be more effective
because they do not have to fulfill administrative
requirements, such as the WIC's programs rebate system, which
actually divert resources from the needy.

ii. government welfare programs violate the privacy and other rights of
the recipients

Private charities are also able to place an emphasis upon
reformation of personal behavior while not imposing the
controls on personal life that government programs, such as
WIC, impose on the program recipients. When a pregnant woman
signs up to receive WIC vouchers, she is trading away a large
amount of her personal freedom. Her choices of where to shop
will be restricted to WIC-approved vendors and her choice of
what foods to buy will be restricted to those foods which match
the WIC nutrition specifications. WIC recipients are also
required to participate in WIC parenting and nutrition classes.
As an OB/GYN I certainly recognize the importance of proper
nutrition for pregnant women and young children. However, as a
constitutionalist, I strenuously object to the federal
government coercing pregnant women into accepting such services
and restricting their choices of food products. The founders of
this country would be flabbergasted if they knew that the
federal government had monopolized the provisions of charitable
services to low-income women, but they would be horrified if
they knew the federal government was forbidding poor women from
purchasing Post Raisin Bran for their children because some
federal bureaucrats had determined that it contains too much
sugar!

iii. the programs in hr 2646 are corporate welfare masquerading as
compassion

The fact that the manufacture of foods such as Raisin Bran
battle to get their products included in this program reveals
the extent to which WIC is actually corporate welfare. Many
corporations have made a tidy profit from helping to feed the
poor and excluding their competitors in the process. For
example, thanks to the WIC program, the federal government is
the largest purchaser of infant formula in the nation.
According to the Congressional Research Service, food
vendors participating in WIC received $9.86 billion in Fiscal
Year 1997--75% of the total funds spent on the WIC program!
This fiscal year, producers of food products approved by the
federal government for purchase by WIC participants are
expected to receive $10 billion in taxpayer dollars! Small
wonder the lobbyists who came to my office to discuss WIC were
not advocates for the poor, but rather well-healed
spokespersons for corporate interests!
Anyone who doubts that these programs serve the interests
of large corporations should consider that one of the most
contentious issue debated at Committee mark-up was opposition
to an attempt to allow USDA to purchase non-quota peanuts
(currently the only peanuts available for sale are farmers who
have a USDA quota all other farmers are forbidden to sell
peanuts in the US) for school nutrition programs. Although this
program would have saved the American taxpayers $5 million this
year, the amendment was rejected at the behest of supporters of
the peanut lobby. A member of my staff, who appropriately asked
why this amendment could not pass with overwhelming support,
was informed by a staffer for another member, who
enthusiastically supports the welfare state, that the true
purpose of this program is to benefit producers of food
products, not feed children.

iii. federal welfare programs crowd out more compassionate and
efficient private efforts

The main reason supporters of a free and moral society must
oppose this bill is because federal welfare programs crowd out
the more efficient private charities for two reasons. First,
the taxes imposed on the American people in order to finance
these programs leave taxpayers with fewer resources to devote
to private charity. Secondly, the welfare state erodes the
ethic of charitable responsibility as citizens view aiding the
poor as the government's role, rather than a moral obligation
of the individual.
The best way to help the poor is to dramatically cut taxes
thus allowing individuals to devote more of their own resources
to those charitable causes which better address genuine need. I
am a cosponsor of H.R. 1338, which raises the charitable
deduction and I believe Congress should make awakening the
charitable impulses of the American people by reducing their
tax burden one of its top priorities. In fact, Congress should
seriously consider enacting a dollar-per-dollar tax credit for
donations to the needy. This would do more to truly help the
disadvantaged than a tenfold increase in spending on the
programs in H.R. 3874.

iv. conclusion

Congress should reject H.R. 3874 because the programs
contained therein lack constitutional foundation, allow the
federal government to control the lives of program recipients,
and serve as a means of transferring monies from the taxpayers
to big corporations. Instead of funding programs, Congress
should return responsibility for helping those in need to those
best able to effectively provide assistance, the American
people acting voluntarily.

Ron Paul.}}}