    [House Report 114-852]
    [From the U.S. Government Publishing Office]

    114th Congress   }                                  {    Rept. 114-852
                            HOUSE OF REPRESENTATIVES
     2d Session      }                                  {           Part 1

    ======================================================================

              IMPROVING CHILD NUTRITION AND EDUCATION ACT OF 2016

                                    _______

    December 8, 2016.--Committed to the Committee of the Whole House on the
                  State of the Union and ordered to be printed

                                    _______

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

                                  R E P O R T

                                 together with

                                 MINORITY VIEWS

                            [To accompany H.R. 5003]

          [Including cost estimate of the Congressional Budget Office]

        The Committee on Education and the Workforce, to whom was
    referred the bill (H.R. 5003) to reauthorize child nutrition
    programs, and for other purposes, having considered the same,
    report favorably thereon with an amendment and recommend that
    the bill as amended do pass.
        The amendment is as follows:
      Strike all after the enacting clause and insert the
    following:

    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

      (a) Short Title.--This Act may be cited as the ``Improving Child
    Nutrition and Education Act of 2016''.
      (b) Table of Contents.--The table of contents for this Act is as
    follows:

    Sec. 1. Short title; table of contents.
    Sec. 2. Definition of Secretary.

                       TITLE I--NATIONAL SCHOOL LUNCH ACT

    Sec. 100. State agency.
    Sec. 101. Apportionments to States.
    Sec. 102. Repeal of nutrition promotion.
    Sec. 103. Direct Federal expenditures.
    Sec. 104. Nutritional and other program requirements.
    Sec. 105. Miscellaneous provisions.
    Sec. 106. Summer food service program for children.
    Sec. 107. Commodity distribution program.
    Sec. 108. Child and adult care food program.
    Sec. 109. Demonstration projects.
    Sec. 110. Fruit and vegetable program.
    Sec. 111. Compliance and accountability.
    Sec. 112. Repeal of State childhood hunger challenge grants.
    Sec. 113. Duties of the Secretary relating to nonprocurement debarment.
    Sec. 114. Improvements to school lunch facilities.
    Sec. 115. Prohibitions.

                         TITLE II--CHILD NUTRITION ACT

    Sec. 201. Special milk program authorization.
    Sec. 202. School breakfast program.
    Sec. 203. State administrative expenses.
    Sec. 204. Regulations.
    Sec. 205. Definition of State agency.
    Sec. 206. Special supplemental nutrition program for women, infants,
    and children.
    Sec. 207. Team nutrition network.

                            TITLE III--MISCELLANEOUS

    Sec. 301. Reviews.
    Sec. 302. Program delivery.
    Sec. 303. Product availability.
    Sec. 304. Procurement.
    Sec. 305. School Nutrition Advisory Committee.
    Sec. 306. Paperwork reduction.
    Sec. 307. Technology.
    Sec. 308. Improving health and safety oversight and monitoring for the
    child and adult care food program.
    Sec. 309. Technical corrections.
    Sec. 310. Budgetary effects.
    Sec. 311. Effective date.

    SEC. 2. DEFINITION OF SECRETARY.

      In this Act, the term ``Secretary'' means the Secretary of
    Agriculture.

                       TITLE I--NATIONAL SCHOOL LUNCH ACT

    SEC. 100. STATE AGENCY.

      In each of the following Acts, by striking ``State educational
    agency'' and ``State educational agencies'' each place such term
    appears (including any headings) and inserting ``State agency'' and
    ``State agencies'', respectively:
              (1) The Richard B. Russell National School Lunch Act (42
            U.S.C. 1751 et seq.).
              (2) The Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).

    SEC. 101. APPORTIONMENTS TO STATES.

      Section 4(b) of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1753(b)) is amended--
              (1) in paragraph (3)--
                      (A) in subparagraph (B), by striking ``Beginning on''
                    and all that follows through ``the Secretary'' and
                    inserting ``The Secretary'';
                      (B) in subparagraph (E), by striking ``Beginning on''
                    and all that follows through ``school food
                    authorities'' and inserting ``School food
                    authorities''; and
                      (C) in subparagraph (F)(iii)--
                              (i) in subclause (I), by inserting ``(as in
                            effect on the day before the date of the
                            enactment of the Improving Child Nutrition and
                            Education Act of 2016)'' after ``subparagraph
                            (A)(ii)''; and
                              (ii) by adding at the end the following:
                                      ``(III) Sunset.--The Secretary shall
                                    return to the general fund of the
                                    Treasury any funds that were made
                                    available under this subparagraph but
                                    not obligated by a State agency as of
                                    September 30, 2016.''; and
              (2) by adding at the end the following:
              ``(4) Announcements.--With respect to reimbursement rates
            described in this subsection, the Secretary shall announce the
            rates and, to the maximum extent practicable, any associated
            guidance by February 15 of the school year prior to the school
            year for which the rates and guidance will become effective.''.

    SEC. 102. REPEAL OF NUTRITION PROMOTION.

      Section 5 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1754) is repealed.

    SEC. 103. DIRECT FEDERAL EXPENDITURES.

      Section 6 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1755) is amended--
              (1) in subsection (c)--
                      (A) by striking ``(c)(1)(A) The national average''
                    and all that follows through ``(D) Among those
                    commodities'' and inserting the following:
      ``(c) Calculation of Total Assistance.--
              ``(1) National average value.--
                      ``(A) In general.--Subject to subparagraphs (B) and
                    (C), the national average value of donated foods, or
                    cash payments in lieu thereof, shall be equal to the
                    quotient obtained by dividing, not later than February
                    15 of each year for the upcoming school year--
                              ``(i) the total funds available in the
                            preceding school year under section 4, this
                            section, and section 11; by
                              ``(ii) the number of lunches served in the
                            preceding school year in all schools
                            participating in the school lunch program under
                            this Act.
                      ``(B) Adjustment.--
                              ``(i) In general.--The value determined under
                            subparagraph (A) shall be adjusted by the
                            annual percentage change in a 3-month average
                            value of the Producer Price Index for Foods
                            Used in Schools and Institutions of the Bureau
                            of Labor Statistics (in this subparagraph
                            referred to as the `Index') for the preceding
                            September, October, and November.
                              ``(ii) Requirement.--An adjustment under
                            clause (i) shall be computed to the nearest \1/
                            4\ cent.
                              ``(iii) Index.--
                                      ``(I) In general.--The Index shall be
                                    computed using 5 major food components
                                    in the Index (cereal and bakery
                                    products, meats, poultry and fish,
                                    dairy products, processed fruits and
                                    vegetables, and fats and oils).
                                      ``(II) Components.--Each component
                                    described in subclause (I) shall be
                                    weighted using the same relative weight
                                    as determined by the Bureau of Labor
                                    Statistics.
                              ``(iv) Minimum amount of commodity
                            assistance.--Not less than 12 percent of the
                            value adjusted in accordance with this
                            subparagraph shall be provided in the form of
                            commodity assistance.
                      ``(C) Insufficient amounts.--If amounts available to
                    carry out section 4, this section, and section 11 are
                    insufficient to meet the requirements of such sections
                    for a school year, the Secretary shall, to the extent
                    necessary, use the authority provided under section
                    14(a) to meet the requirements for the school year.
                      ``(D) Amount for each state.--For each school year,
                    the total commodity assistance or cash in lieu thereof
                    available to a State for the school lunch program shall
                    be equal to the product obtained by multiplying--
                              ``(i) the number of lunches served in such
                            State in the most recent school year for which
                            data are available; by
                              ``(ii) the rate determined under
                            subparagraphs (A) and (B).
                      ``(E) Special emphasis.--Among those commodities'';
                    and
                      (B) in paragraph (1), by striking ``(E)
                    Notwithstanding'' and inserting the following:
                      ``(F) Minimum quantity of donated foods.--
                    Notwithstanding'';
              (2) by striking subsection (e); and
              (3) by redesignating subsection (f) as subsection (e).

    SEC. 104. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

      Section 9 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1758) is amended--
              (1) by striking the section heading and designation and all
            that follows through the end of paragraph (1) in subsection (a)
            and inserting the following:

    ``SEC. 9. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

      ``(a) Requirements.--
              ``(1) Technical assistance and training.--The Secretary shall
            provide--
                      ``(A) technical assistance and training to schools
                    participating in the school lunch program to assist the
                    schools in complying with the nutritional requirements
                    prescribed by the Secretary pursuant to subsection (f)
                    and in providing appropriate meals to children with
                    medically certified special dietary needs, including
                    food allergies or other special dietary needs of
                    individual children, including religious dietary
                    restrictions; and
                      ``(B) additional technical assistance to schools that
                    are having difficulty maintaining compliance with the
                    requirements.'';
              (2) in subsection (a)--
                      (A) in paragraph (2), by adding at the end the
                    following:
                      ``(D) Fluid milk considerations.--In determining
                    varieties of fluid milk that shall be available with
                    school meals programs under this Act and section 4 of
                    the Child Nutrition Act of 1966 (42 U.S.C. 1773) and
                    outside of the school meal programs, the Secretary, not
                    later than 90 days after the date of enactment of the
                    Improving Child Nutrition and Education Act of 2016,
                    shall carry out the following:
                              ``(i) Consider the critical nutrient needs of
                            children who may be at risk for inadequate
                            intake of the recommended daily servings of
                            milk and dairy products under the most recent
                            Dietary Guidelines described in subparagraph
                            (A)(i) and conform the applicable regulations
                            to such guidelines.
                              ``(ii) Analyze milk consumption data and
                            trends for school-aged children, and to the
                            extent practicable, increase actual milk
                            consumption in schools in a manner consistent
                            with the number of servings recommended under
                            such Dietary Guidelines, and ensure that
                            schools may offer any type of milk with fat
                            levels that are in compliance with such Dietary
                            Guidelines.
                      ``(E) Milk variety considerations.--In determining
                    milk varieties eligible for schools to offer with
                    school meal programs under this Act and section 4 of
                    the Child Nutrition Act of 1966 (42 U.S.C. 1773) and
                    outside of the school meal programs, the Secretary
                    shall consider the most commonly available types,
                    sizes, containers, and varieties of milk in local,
                    regional, and national commercial markets from which
                    local educational agencies procure milk, to promote
                    competition and reduce milk waste.'';
                      (B) by striking ``(4) Provision of information'' and
                    all that follows through ``(C) Procurement and
                    processing of food service products and commodities.--
                    The Secretary'' and inserting the following:
              ``(4) Procurement and processing of food service products and
            commodities.--The Secretary'';
                      (C) in paragraph (4) (as so designated)--
                              (i) by redesignating clauses (i) through
                            (iii) as subparagraphs (A) through (C),
                            respectively, and indenting appropriately; and
                              (ii) by redesignating subclauses (I) and (II)
                            as clauses (i) and (ii), respectively, and
                            indenting appropriately; and
                      (D) by adding at the end the following:
              ``(6) Emergency access to potable water.--
                      ``(A) In general.--To ensure that children have
                    access to potable water during meal service, the
                    Secretary may award funds to State agencies to assist
                    such agencies in providing bottled water for a period
                    of not more than 90 days (except as otherwise provided
                    under subparagraph (C)) when--
                              ``(i) a major disaster or emergency has been
                            declared by the President under the Robert T.
                            Stafford Disaster Relief and Emergency
                            Assistance Act (42 U.S.C. 5121 et seq.); and
                              ``(ii) the Secretary determines that there is
                            a significant risk to the health of school
                            children posed by the public water system (as
                            defined under section 1401(4) of the Safe
                            Drinking Water Act (42 U.S.C. 300f)).
                      ``(B) Matching requirement.--To receive funds under
                    this paragraph, a State agency shall assure the
                    Secretary that the State will utilize donated water
                    supplies and State funding to supplement the funds that
                    the State receives under this paragraph to provide
                    bottled water as necessary for students.
                      ``(C) Extension of authority.--If the risk described
                    in subparagraph (A)(ii) persists in a State after the
                    first 90-day period for which funds under this
                    paragraph are provided to such State, funds may be
                    provided under this paragraph to such State for an
                    additional 90-day period.
                      ``(D) Funding.--Not more than $475,000 may be
                    provided under this paragraph for a fiscal year.'';
              (3) in subsection (b)--
                      (A) in paragraph (2)(B)--
                              (i) in clause (i), by striking ``, and shall
                            contain only the family size income levels for
                            reduced price meal eligibility with the
                            explanation that households with incomes less
                            than or equal to these values would be eligible
                            for free or reduced price lunches'';
                              (ii) in clause (ii), by inserting ``or
                            reduced price'' after ``free'';
                              (iii) in clause (iii)(I)--
                                      (I) in item (aa), by striking ``and''
                                    at the end;
                                      (II) in item (bb), by striking the
                                    period at the end and inserting ``;
                                    and''; and
                                      (III) by adding at the end the
                                    following:
                                              ``(cc) individuals may report
                                            alleged fraud to the Office of
                                            the Inspector General of the
                                            Department of Agriculture.'';
                                            and
                              (iv) by adding at the end the following:
                              ``(iv) Reporting of fraud.--The Secretary
                            shall ensure that the Internet website of the
                            Department of Agriculture prominently displays
                            a link to the Internet website of the Office of
                            the Inspector General of the Department and the
                            phone number of the Office of the Inspector
                            General through which an individual may report
                            any alleged fraud.
                              ``(v) Application forms.--Not later than 120
                            days after the date of the enactment of the
                            Improving Child Nutrition and Education Act of
                            2016, the Secretary shall--
                                      ``(I) review a sample of application
                                    forms, including paper and digital
                                    forms, used to apply for participation
                                    in the school lunch program authorized
                                    under this Act and the school breakfast
                                    program established by section 4 of the
                                    Child Nutrition Act of 1966 (42 U.S.C.
                                    1773);
                                      ``(II) provide to States guidance
                                    relating to best practices, including a
                                    standard application form local
                                    educational agencies or schools may
                                    use;
                                      ``(III) provide to States guidance
                                    relating to how to improve the
                                    application to ensure families
                                    understand and can enroll in the school
                                    lunch program and the school breakfast
                                    program; and
                                      ``(IV) provide to States such
                                    information as is necessary to ensure
                                    that States understand school food
                                    authorities may not--
                                              ``(aa) require or mandate
                                            families apply for either
                                            program;
                                              ``(bb) request that a family
                                            apply for the program after the
                                            parent or guardian has informed
                                            the school that the family does
                                            not want to participate in the
                                            program or receive additional
                                            information about the program
                                            in that school year; or
                                              ``(cc) in the case of a
                                            family that has not informed
                                            the school about their choice,
                                            request more than twice in that
                                            school year that such family
                                            apply for the program if such
                                            family has not submitted an
                                            application, except that
                                            providing information about the
                                            application (including how and
                                            when the application will be
                                            sent to parents and how to fill
                                            out the application) shall not
                                            count as a request to apply.'';
                      (B) in paragraph (3)--
                              (i) by striking subparagraph (D) and
                            inserting the following:
                      ``(D) Verification.--
                              ``(i) Standard verification of
                            applications.--
                                      ``(I) In general.--Beginning with the
                                    second school year that begins after
                                    the date of the enactment of the
                                    Improving Child Nutrition and Education
                                    Act of 2016, each school year, each
                                    local educational agency shall verify
                                    the eligibility of the children in a
                                    portion of the household applications
                                    approved for the school year by the
                                    local educational agency, as of
                                    November 1 of the school year, as
                                    determined by the Secretary in
                                    accordance with this subsection.
                                      ``(II) Sample size.--
                                              ``(aa) In general.--The
                                            portion for a local educational
                                            agency for a school year shall
                                            equal the lesser of--
                                                      ``(AA) 10,000; or
                                                      ``(BB) 10 percent of
                                                    approved household
                                                    applications.
                                              ``(bb) Calculation.--Not
                                            later than July 1 of each year,
                                            the Secretary shall calculate
                                            the sample size under this
                                            subparagraph for each local
                                            educational agency based on
                                            data from the 2 most recent
                                            school years available.
                                      ``(III) Sample selection.--
                                    Applications shall be selected for
                                    verification by the local educational
                                    agency based on indications that
                                    information relevant to eligibility is
                                    inconsistent with the information
                                    provided on the application, including
                                    at a minimum the following:
                                              ``(aa) The household has
                                            submitted information in
                                            writing to the local
                                            educational agency that is
                                            inconsistent with the
                                            information on the application.
                                              ``(bb) The information
                                            provided on the application is
                                            consistent with a pattern of
                                            error or fraud detected by the
                                            local educational agency, the
                                            State agency, or the Secretary.
                                              ``(cc) For not more than \1/
                                            4\ of the sample, students who
                                            are directly certified or the
                                            application provides a case
                                            number (in lieu of income
                                            information) showing
                                            participation in--
                                                      ``(AA) the
                                                    supplemental nutrition
                                                    assistance program
                                                    established under the
                                                    Food and Nutrition Act
                                                    of 2008 (7 U.S.C. 2011
                                                    et seq.); or
                                                      ``(BB) a State
                                                    program funded under
                                                    the program of block
                                                    grants to States for
                                                    temporary assistance
                                                    for needy families
                                                    established under part
                                                    A of title IV of the
                                                    Social Security Act (42
                                                    U.S.C. 601 et seq.)
                                                    that the Secretary
                                                    determines complies
                                                    with standards
                                                    established by the
                                                    Secretary that ensure
                                                    that the eligibility
                                                    requirements under the
                                                    State program are
                                                    comparable to the
                                                    requirements for
                                                    participation in
                                                    accordance with this
                                                    Act and the Child
                                                    Nutrition Act of 1966
                                                    (42 U.S.C. 1771 et
                                                    seq.).
                                              ``(dd) For not more than \1/
                                            4\ of the sample, the income
                                            information provided on the
                                            application is close to the
                                            income limit for free or
                                            reduced price meals, as
                                            determined by the local
                                            educational agency each year.
                                              ``(ee) Such other criteria as
                                            is determined by the State.
                                      ``(IV) Additional verification of
                                    applications.--If the number of
                                    applications that match the criteria
                                    described in subclause (III) is
                                    insufficient to meet the number of
                                    applications determined under subclause
                                    (II), the local educational agency
                                    shall select additional applications at
                                    random.
                              ``(ii) Verification for cause.--In addition
                            to conducting verification of a sample of
                            applications as described in clause (i), a
                            local educational agency may verify any
                            household application at any point in the
                            school year if the household application meets
                            the criteria described in item (aa), (bb), or
                            (cc) of clause (i)(III) or such other criteria
                            as is determined by the Secretary.
                              ``(iii) Compliance.--In conducting
                            verification under this subparagraph, a State
                            agency or local educational agency shall not
                            select applications in a manner that violates
                            section 12(l)(4)(M).'';
                              (ii) in subparagraph (F)--
                                      (I) in clause (i), in the matter
                                    preceding subclause (I), by striking
                                    ``may'' and inserting ``shall''; and
                                      (II) by striking clauses (iv) and (v)
                                    and inserting the following:
                              ``(iv) Direct certification.--If eligibility
                            for a household application is confirmed using
                            direct verification, each child in the
                            household shall be considered directly
                            certified.'';
                              (iii) in subparagraph (G)--
                                      (I) in clause (iii), by striking ``1
                                    attempt'' and inserting ``2 attempts'';
                                    and
                                      (II) by adding at the end the
                                    following:
                              ``(v) Validity of verification results.--
                                      ``(I) Definitions.--In this clause:
                                              ``(aa) Approved
                                            application.--The term
                                            `approved application' includes
                                            each student on a paper or
                                            electronic application approved
                                            by the local educational agency
                                            for free or reduced price
                                            lunches for the school year.
                                              ``(bb) Response rate.--The
                                            term `response rate' means the
                                            percentage of the approved
                                            household applications of the
                                            local educational agency for
                                            which verification information
                                            was obtained after attempted
                                            verification under this
                                            section.
                                              ``(cc) Nonresponse rate.--The
                                            term `nonresponse rate' means
                                            the percentage of the approved
                                            household applications of the
                                            local educational agency for
                                            which verification information
                                            was not obtained after
                                            attempted verification under
                                            this section.
                                              ``(dd) Confirmation rate.--
                                            The term `confirmation rate'
                                            means the percentage of
                                            approved household applications
                                            and directly certified students
                                            selected by the local
                                            educational agency for
                                            verification under this
                                            subparagraph that had the level
                                            of benefits confirmed as a
                                            result of information obtained
                                            during the verification
                                            process.
                                      ``(II) Reductions.--
                                              ``(aa) In general.--The
                                            sample under subparagraph
                                            (D)(i)(II) may be reduced by
                                            not more than the lesser of
                                            2,500 applications or 2.5
                                            percentage points for each of
                                            the criteria described in
                                            subclause (III) that are met by
                                            the local educational agency.
                                              ``(bb) Limitation.--
                                            Reductions under item (aa) may
                                            result in a sample of not less
                                            than 2.5 percent of approved
                                            applications.
                                      ``(III) Criteria.--The criteria
                                    referred to in subclause (II)(aa) are
                                    as follows:
                                              ``(aa) Response rate.--For
                                            the preceding school year the
                                            response rate was more than 85
                                            percent.
                                              ``(bb) Nonresponse rate
                                            reduction.--The nonresponse
                                            rate was at least 15 percent
                                            below the nonresponse rate for
                                            the second preceding school
                                            year.
                                              ``(cc) Confirmation rate.--
                                            The confirmation rate is 100
                                            percent or has increased by at
                                            least 5 percent over the two
                                            most recent school years for
                                            which data is available.
                                              ``(dd) Administrative burden
                                            reduction.--
                                                      ``(AA) In general.--
                                                    The local educational
                                                    agency receives a
                                                    determination from the
                                                    Secretary that
                                                    compliance with
                                                    subparagraph (D)(i)(II)
                                                    would render the local
                                                    educational agency
                                                    unable to administer
                                                    the program.
                                                      ``(BB) Requirement.--
                                                    The Secretary shall
                                                    develop a system by
                                                    which to measure cost
                                                    and administrative
                                                    burden associated with
                                                    compliance with
                                                    subparagraph (D)(i)(II)
                                                    and shall consider
                                                    requests from local
                                                    educational agencies
                                                    based on that
                                                    system.'';
                              (iv) in subparagraph (H)(i)--
                                      (I) in subclause (I), by striking
                                    ``November'' and inserting
                                    ``December''; and
                                      (II) in subclause (II), by striking
                                    ``December'' and inserting ``January'';
                              (v) in subparagraph (K)(i), in the matter
                            preceding subclause (I), by striking ``data
                            mining'' and inserting ``analyses of data'';
                              (vi) by amending subparagraph (K)(ii) to read
                            as follows:
                              ``(ii) Report.--Not later than two years
                            after the date of the enactment of the
                            Improving Child Nutrition and Education Act of
                            2016, the Secretary shall submit to the
                            Committee on Education and the Workforce of the
                            House of Representatives and Committee on
                            Agriculture, Nutrition, and Forestry of the
                            Senate a report describing--
                                      ``(I) the results of the feasibility
                                    study conducted under this subsection;
                                      ``(II) how a computer system--
                                              ``(aa) used to reduce
                                            verification and certification
                                            errors can be adapted to
                                            further reduce errors; and
                                              ``(bb) using technology
                                            described in clause (i) could
                                            be implemented; and
                                      ``(III) a plan to adapt or implement
                                    such system.'';
                              (vii) by adding at the end the following:
                      ``(L) Enhanced verification methods.--
                              ``(i) Requirements.--
                                      ``(I) In general.--The Secretary
                                    shall help local educational agencies
                                    engage in alternative and enhanced
                                    methods of certification and
                                    verification to increase the
                                    effectiveness of the process, reduce
                                    certification errors, and produce more
                                    meaningful management information to
                                    facilitate local educational agency,
                                    State, and Federal oversight with
                                    respect to program integrity in the
                                    school meal programs.
                                      ``(II) Best practices.--The Secretary
                                    shall encourage local educational
                                    agencies to adopt proven best practices
                                    with regard to verification.
                                      ``(III) Selection for
                                    implementation.--To the extent
                                    necessary to refine alternative
                                    verification methods or assess the
                                    feasibility, impact, or efficacy of the
                                    methods prior to recommending the
                                    methods, the Secretary shall select
                                    States and local educational agencies
                                    that have requested to participate in
                                    the development of best practices to
                                    implement methods subject to clause
                                    (iii).
                              ``(ii) Requirements.--The certification and
                            verification methods shall--
                                      ``(I) meet such terms and conditions
                                    as the Secretary considers appropriate;
                                    and
                                      ``(II) except as otherwise provided
                                    in this subparagraph, be conducted in
                                    accordance with this subsection.
                              ``(iii) Selection criteria.--In selecting
                            methods, including methods for implementation
                            under clause (i)(III), the Secretary shall--
                                      ``(I) consider the degree to which
                                    the method would improve certification
                                    accuracy and program integrity within
                                    the school meal programs;
                                      ``(II) consider whether there is
                                    evidence that the method could be
                                    replicated easily by other local
                                    educational agencies or political
                                    subdivisions;
                                      ``(III) consider whether the method
                                    would increase the efficiency and
                                    effectiveness of the verification
                                    process;
                                      ``(IV) consider whether the local
                                    educational agency or State agency has
                                    a demonstrated capacity to undertake
                                    the method and to produce the data
                                    necessary to support the evaluation;
                                    and
                                      ``(V) ensure the methods implemented
                                    under clause (i)(III) are implemented
                                    across a range of geographic areas and
                                    States, including rural and urban
                                    areas, and, when considered as a group,
                                    allow for an assessment of a range of
                                    strategies regarding verification
                                    sample selection, obtaining eligibility
                                    documentation, and the entity
                                    conducting verification, including
                                    strategies that--
                                              ``(aa) use analyses of data,
                                            particularly in large local
                                            educational agencies to develop
                                            algorithms to select error-
                                            prone applications for
                                            verification;
                                              ``(bb) use third-party data
                                            sources to confirm eligibility
                                            prior to conducting household
                                            verification under subparagraph
                                            (G);
                                              ``(cc) rely on alternative
                                            methods, including message
                                            testing, of communicating with
                                            households to assess which
                                            methods most effectively result
                                            in household responses;
                                              ``(dd) rely on agencies or
                                            organizations other than the
                                            local educational agency to
                                            conduct verification, including
                                            at a minimum the State agency;
                                            and
                                              ``(ee) could reduce the
                                            administrative burden of
                                            conducting verification for a
                                            consortia of local educational
                                            agencies, including shared
                                            online applications and shared
                                            verification procedures.
                              ``(iv) Reduction.--Notwithstanding the
                            limitation in subparagraph (D)(v)(II)(bb), a
                            local educational agency that uses the
                            strategies described in clause (iii)(V) may
                            qualify for a reduction of additional 0.25
                            percentage points under such subparagraph,
                            creating a floor of 2.25 percent for the
                            verification sample size.'';
                      (C) in paragraph (4)--
                              (i) in subparagraph (B), by inserting ``,
                            including a child enrolled in a nonpublic
                            school,'' after ``under which a child'';
                              (ii) by striking subparagraph (E);
                              (iii) by redesignating subparagraphs (F) and
                            (G) as subparagraphs (E) and (F), respectively;
                            and
                              (iv) in subparagraph (E) (as so
                            redesignated)--
                                      (I) in clause (i), by striking
                                    ``means--'' and all that follows
                                    through ``each school year thereafter''
                                    in subclause (III) and inserting
                                    ``means, for the school year'';
                                      (II) in clause (ii)--
                                              (aa) in subclause (II), by
                                            striking ``and'' at the end;
                                              (bb) in subclause (III), by
                                            striking the period at the end
                                            and inserting a semicolon; and
                                              (cc) by adding at the end the
                                            following:
                                      ``(IV) include in the report required
                                    under section 4301 of the Food,
                                    Conservation, and Energy Act of 2008
                                    (42 U.S.C. 1758a), a description of
                                    technical assistance provided to and
                                    progress of States identified under
                                    subclause (I) toward implementing the
                                    measures and meeting the goals
                                    established by the State as required
                                    under clause (iii)(II); and
                                      ``(V) provide guidance to schools on
                                    providing meals and collecting payment
                                    for any student who is no longer able
                                    to receive meals because the student
                                    did not provide a response to the
                                    verification request for the student's
                                    school meal application.''; and
                                      (III) in clause (iii)(II)(bb), by
                                    inserting ``within 3 school years''
                                    after ``those measures'';
                      (D) in paragraph (15)--
                              (i) in subparagraph (B)(i), by striking
                            ``section 9(b)(1)(A) of this Act'' and
                            inserting ``paragraph (1)(A)''; and
                              (ii) in subparagraphs (C)(ii) and (D), by
                            striking ``paragraph (4)(G)'' both places it
                            appears and inserting ``paragraph (4)(F)'';
              (4) in subsection (f)--
                      (A) in paragraph (1)--
                              (i) in subparagraph (A), by striking ``and''
                            at the end;
                              (ii) in subparagraph (B), by striking the
                            period at the end and inserting ``; and''; and
                              (iii) by adding at the end the following:
                      ``(C) meet minimum nutritional requirements
                    prescribed by the Secretary on the basis of tested
                    nutritional research specifically conducted to
                    understand the impact for children, except that the
                    minimum nutritional requirements--
                              ``(i) may not prohibit the substitution of
                            foods to accommodate the medical, including
                            allergies, or other special dietary needs of
                            individual students, including religious
                            dietary restrictions; and
                              ``(ii) shall, as possible in accommodating
                            the medical or other special dietary needs of
                            such students, be based on the weekly average
                            of the nutrient content of school lunches.'';
                      (B) in paragraph (3)(A)(ii), by striking ``paragraph
                    (3)'' and inserting ``paragraph (2)'';
                      (C) by striking paragraph (4) and inserting the
                    following:
              ``(4) Regulations, review, and relief.--
                      ``(A) Review regulations.--The Secretary shall, at
                    least every 3 years--
                              ``(i) review the regulations promulgated in
                            accordance with this Act for the school meal
                            programs described in paragraph (1) (in this
                            paragraph referred to as the `school meal
                            programs');
                              ``(ii) with consultation from a parent, a
                            pediatrician, a dietician who conducts child
                            nutrition research, and stakeholders in schools
                            (including school leaders, school boards, local
                            educational agency administrators, and school
                            food nutrition directors), certify that the
                            regulations are--
                                      ``(I) appropriate for the age of
                                    children participating in the school
                                    meal programs, including for the health
                                    of children;
                                      ``(II) in compliance with the
                                    preponderance of the latest high-
                                    quality research based on school-aged
                                    children conducted to examine the
                                    health and safety of children
                                    participating in the school meal
                                    programs;
                                      ``(III) not increasing the cost to
                                    implement the requirements of the
                                    school meal programs (which costs shall
                                    be considered the total costs to
                                    implement the regulations and not
                                    limited to the cost of any changes to
                                    the regulations); and
                                      ``(IV) not discouraging students from
                                    participating in the school meal
                                    programs;
                              ``(iii) if necessary to meet the requirements
                            of clause (ii), revise the regulations to meet
                            such requirements;
                              ``(iv) not later than 30 days prior to
                            publication under clause (v)(II) of the revised
                            regulations--
                                      ``(I) submit the revised regulations
                                    for comment to the Committee on
                                    Education and the Workforce of the
                                    House of Representatives and the
                                    Committee on Agriculture, Nutrition,
                                    and Forestry of the Senate;
                                      ``(II) review any comments provided
                                    under subclause (I), and further revise
                                    the regulations, if necessary to ensure
                                    the revised regulations are in
                                    compliance with clause (i); and
                                      ``(III) provide a public notice and
                                    comment period of not less than 60
                                    days, review the public comments, and
                                    further revise the regulations, if
                                    necessary to ensure the revised
                                    regulations are in compliance with
                                    clause (i); and
                              ``(v) publish in the Federal Register, and
                            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--
                                      ``(I) a notice that no changes to the
                                    regulations are required and the
                                    certification described in clause (ii);
                                    or
                                      ``(II) the regulations, as revised
                                    under clause (iv), and the
                                    certification described in clause (ii).
                      ``(B) First review.--The first review required under
                    subparagraph (A) after the date of enactment of the
                    Improving Child Nutrition and Education Act of 2016
                    shall--
                              ``(i) be concluded not later than December
                            31, 2016;
                              ``(ii) include a review of the sodium and
                            whole grain requirements under the regulations
                            for the school meal programs; and
                              ``(iii) ensure that such requirements--
                                      ``(I) maintain the sodium target
                                    requirements established for the school
                                    lunch program and school breakfast
                                    program under sections 210.10(f) and
                                    220.8(f) of title 7, Code of Federal
                                    Regulations, respectively (as such
                                    regulations are in effect on the day
                                    before the date of the enactment of the
                                    Improving Child Nutrition and Education
                                    Act of 2016) until such requirements
                                    are revised in accordance with
                                    subclause (II); and
                                      ``(II) in a case in which the sodium
                                    target requirements are revised as a
                                    result of the review described in this
                                    subparagraph, ensure that such a
                                    revision--
                                              ``(aa) is based on health
                                            requirements for children;
                                              ``(bb) is supported by a
                                            majority of research focused on
                                            school-aged children that
                                            directly establishes, through
                                            well-controlled randomized
                                            trials or well-designed, long-
                                            term observational studies,
                                            that sodium reductions are both
                                            safe and produce beneficial
                                            health outcomes for such
                                            children;
                                              ``(cc) is able to support
                                            food safety and be produced in
                                            a manner that does not
                                            significantly increase the cost
                                            of food; and
                                              ``(dd) does not take effect
                                            until 3 years after the
                                            revision has been published in
                                            the Federal Register.
                      ``(C) Special rule for regulation relief for family
                    meal days.--
                              ``(i) In general.--Subject to clause (ii),
                            the Secretary shall issue guidance, or
                            promulgate new rules as necessary, to ensure
                            each State agency provides guidance to school
                            food authorities with respect to the allowance
                            of up to 4 family meal days, as designated by a
                            school, which shall be exempt from the meal
                            pattern rules specified under the regulations
                            for the school meal programs, during which the
                            school may--
                                      ``(I) invite parents to participate
                                    in special meals, such as a
                                    Thanksgiving meal or a parents' day
                                    meal; and
                                      ``(II) provide additional nutrition
                                    education, such as recipe building or
                                    healthy cooking classes to parents and
                                    families on making healthy meal options
                                    at home, which may be provided by an
                                    entity or individual other than a
                                    school food service director or food
                                    service personnel.
                              ``(ii) Clarification.--In issuing guidance or
                            promulgating rules under clause (i), the
                            Secretary shall not establish any requirements
                            or limitations for family meal days, except to
                            ensure that schools have the authority to hold
                            up to 4 family meal days per school year.
                      ``(D) Regulation flexibility.--The Secretary shall
                    provide guidance, when there is difficulty in procuring
                    food to comply with the regulations, to allow a school
                    food authority to substitute food items across food
                    groups and subgroups, including in-season, locally-
                    produced fruits and vegetables, notwithstanding the
                    food-based meal patterns and menu planning requirements
                    of this subsection, provided that the school food
                    authority continues to meet applicable daily and weekly
                    nutrient and dietary requirements under this
                    subsection.''; and
                      (D) by adding at the end the following:
              ``(5) Accommodations.--The accommodation requirements
            described in paragraph (1)(C)(i) shall apply to all programs
            under this Act and all programs under the Child Nutrition Act
            of 1966 (42 U.S.C. 1771 et seq.), except for section 17 of such
            Act (42 U.S.C. 1786).''.
              (5) by striking subsections (g) and (k);
              (6) by redesignating subsections (h), (i), (j), and (l) as
            subsections (g), (h), (i), and (j), respectively; and
              (7) in subsection (g) (as so redesignated), by striking
            ``2011 through 2015'' each place it appears in paragraphs (3)
            and (4) and inserting ``2017 through 2021''.

    SEC. 105. MISCELLANEOUS PROVISIONS.

      (a) Universal Meal Service in High Poverty Areas Threshold.--Section
    11(a)(1)(F) of the Richard B. Russell National School Lunch Act (42
    U.S.C. 17659a(a)(1)(F)) is amended--
              (1) in clause (ii)(I), in the matter preceding item (aa), by
            inserting ``(including a subset of schools within the local
            educational agency if the result obtained by dividing the total
            number of the identified students enrolled in such schools by
            the total number of all students enrolled in such schools, is
            above the threshold in clause (viii))'' after ``on behalf of
            certain schools''; and
              (2) by striking clause (viii) and inserting the following:
              ``(viii) Threshold.--
                      ``(I) In general.--For each school year beginning on
                    or after July 1, 2017, the Secretary shall use a
                    threshold that is not less than 60 percent.
                      ``(II) Community eligibility selection transition.--
                    In the case of a school that received special
                    assistance payments under this subparagraph during the
                    school year immediately prior to the school year in
                    which the Improving Child Nutrition and Education Act
                    of 2016 was enacted, such school shall, not later than
                    June 30, 2018--
                              ``(aa) meet the threshold described in
                            subclause (I); or
                              ``(bb) transition from receiving payments
                            under this subparagraph in accordance with
                            subclause (III).
                      ``(III) Technical assistance.--In the case of schools
                    described in subclause (II)(bb), the Secretary shall
                    provide technical assistance to ensure that such
                    schools are able to effectively and efficiently
                    transition from receiving payments under this
                    subparagraph to receiving special assistance payments
                    otherwise made available under this paragraph,
                    including communicating the application process to
                    families in a timely manner to ensure continuity of
                    services for eligible families.''; and
              (3) in clause (xi)--
                      (A) in subclause (II), by striking ``Not later than
                    December 31, 2013'' and inserting ``Not later than one
                    year after the date of enactment of the Improving Child
                    Nutrition and Education Act of 2016''; and
                      (B) in subclause (III), by striking ``If the
                    Secretary uses the authority provided in clause
                    (vii)(II)(bb) to use a different multiplier for
                    different schools or local educational agencies, for
                    each school year beginning on or after July 1, 2014,
                    not later than April 1, 2014'' and inserting ``If the
                    Secretary uses the authority provided in clause (vii),
                    for each school year beginning on or after July 1,
                    2017, not less than one year prior to the Secretary
                    electing to use such authority''.
      (b) Reimbursement Rate.--Section 11(a)(3)(A) of the Richard B.
    Russell National School Lunch Act (42 U.S.C. 17659a(a)(3)(A)) is
    amended by striking ``July 1'' and inserting ``February 15''.
      (c) Definition of State Agency.--Paragraph (9) of section 12(d) of
    the Richard B. Russell National School Lunch Act (42 U.S.C. 1760(d)(9))
    is amended to read as follows:
              ``(9) State agency.--The term `State agency' means--
                      ``(A) the chief State school officer (such as the
                    State superintendent of public instruction,
                    commissioner of education, or similar officer);
                      ``(B) a board of education controlling the State
                    department of education;
                      ``(C) the State Commissioner or individual who
                    administers agricultural programs in the State; or
                      ``(D) a State official the State legislature
                    designates to administer the programs under this
                    Act.''.
      (d) Procurement Training.--Section 12(m)(4) of the Richard B. Russell
    National School Lunch Act (42 U.S.C. 1760) is amended by striking
    ``2015'' and inserting ``2021''.
      (e) Price for a Paid Lunch.--Section 12 of the Richard B. Russell
    National School Lunch Act (42 U.S.C. 1760) is further amended by
    striking subsection (p) and redesignating subsections (q) and (r) as
    subsections (p) and (q), respectively.

    SEC. 106. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

      Section 13 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1761) is amended--
              (1) in subsection (a)--
                      (A) in paragraph (4), by adding at the end the
                    following:
                      ``(C) Educational and enrichment activities.--In
                    determining participation under subparagraph (A), the
                    State shall prioritize applications that include an
                    educational or enrichment activity, or demonstrate a
                    partnership with an entity providing such activity.'';
                      (B) by amending paragraph (8) to read as follows:
              ``(8) Streamlining.--
                      ``(A) Seamless summer.--Except as otherwise
                    determined by the Secretary, a service institution that
                    is a public or private nonprofit school food authority
                    may provide summer or school vacation food service in
                    accordance with applicable provisions of law governing
                    the school lunch program established under this Act or
                    the school breakfast program established under the
                    Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).
                      ``(B) Summer and cacfp at-risk streamlining.--
                              ``(i) In general.--Notwithstanding
                            subsections (b)(2) and (c)(1), in order for
                            States and service institutions to operate more
                            effectively through the year, a State may elect
                            to streamline and simplify program operations
                            and requirements by reducing paperwork and
                            other administrative burdens, and consolidating
                            training, monitoring, and other requirements,
                            while retaining appropriate measures of program
                            integrity. Such State election may include the
                            utilization of technical assistance provided to
                            the State under clause (iv) and shall apply to
                            service institutions that--
                                      ``(I) are described in paragraphs (6)
                                    or (7);
                                      ``(II) provide care to at-risk school
                                    children (as defined in section
                                    17(r)(2)), and may be eligible child
                                    care centers or homes (as defined under
                                    section 17(a)(2)); and
                                      ``(III) are not public schools.
                              ``(ii) Streamlined reimbursement.--States
                            that demonstrate streamlined and simplified
                            program operations under clause (i) for service
                            institutions, and that are selected by the
                            Secretary under clause (v), shall streamline
                            reimbursements for such service institutions by
                            providing reimbursements for--
                                      ``(I) lunch and either breakfast or a
                                    supplement served to at-risk school
                                    children--
                                              ``(aa) during each day of
                                            operation during the months of
                                            May through September; and
                                              ``(bb) in the case of a
                                            service institution that
                                            provides meal service to such
                                            children who are not in school
                                            for a period during the school
                                            year due to a natural disaster,
                                            building repair, court order,
                                            or similar cause, at any time
                                            during such period in that
                                            school year; and
                                      ``(II) up to 1 meal and 1 supplement
                                    served to at-risk school children
                                    during each day of operation outside of
                                    school hours during the regular or
                                    continuous school calendar, including
                                    after school, weekends, and school
                                    holidays.
                              ``(iii) Rate of reimbursement.--The State
                            shall reimburse service institutions seeking
                            reimbursement under this subparagraph at a rate
                            that is consistent with section 17(r)(4)(B).
                              ``(iv) Technical assistance.--
                                      ``(I) In general.--Not later than
                                    December 31, 2016, the Secretary shall
                                    develop guidance and provide technical
                                    assistance for States and service
                                    institutions to assist in the
                                    implementation of this subparagraph,
                                    including by identifying areas of
                                    programmatic overlap in the program
                                    under this section and the child and
                                    adult care food program under section
                                    17 in order for States to simplify the
                                    administration and oversight of each
                                    such program.
                                      ``(II) Guidance.--Such guidance shall
                                    include information on possible ways
                                    States may ensure participation under
                                    this subparagraph will lead to reduced
                                    paperwork and other administrative
                                    burdens, including recommendations for
                                    streamlined program applications,
                                    reporting requirements, inspections,
                                    and other areas of potential
                                    duplication, while retaining
                                    appropriate measures of program
                                    integrity.
                                      ``(III) Other states.--Information
                                    provided under this clause shall be
                                    provided in such a manner that any
                                    State may identify areas of
                                    programmatic overlap, and reduce
                                    paperwork and other burdens, even if
                                    such State has not yet been selected to
                                    provide reimbursements to service
                                    institutions in accordance with this
                                    subparagraph.
                              ``(v) Successful implementation.--
                                      ``(I) In general.--A State seeking to
                                    provide reimbursements in accordance
                                    this subparagraph shall demonstrate to
                                    the Secretary the ways in which the
                                    State has used the election under
                                    clause (i) to reduce paperwork and
                                    other administrative burdens while
                                    retaining appropriate measures of
                                    program integrity, which may include
                                    the utilization of technical assistance
                                    provided to the State under clause
                                    (iv).
                                      ``(II) Initial selection of states.--
                                              ``(aa) In general.--The
                                            Secretary shall select not more
                                            than 5 States to provide
                                            reimbursements in accordance
                                            with this subparagraph,
                                            beginning in May 2017, if such
                                            States have the capacity to
                                            effectively implement this
                                            subparagraph, as demonstrated
                                            by streamlining and simplifying
                                            program operations in
                                            accordance with subclause (I).
                                              ``(bb) Update.--When
                                            appropriate, but not later than
                                            May 31, 2018, and consistent
                                            with subclause (V)(bb), the
                                            Secretary shall update the
                                            information under clause (iv).
                                      ``(III) Next selection of states.--
                                              ``(aa) In general.--If the
                                            Secretary determines that
                                            additional States have the
                                            capacity described in subclause
                                            (I) and additional best
                                            practices could be provided by
                                            further implementation of this
                                            subparagraph, the Secretary may
                                            select not more than 5 such
                                            States to provide
                                            reimbursements in accordance
                                            with this subparagraph
                                            beginning in October 2018.
                                              ``(bb) Update.--Not later
                                            than September 30, 2019, and
                                            consistent with subclause
                                            (V)(bb), the Secretary shall
                                            update the information under
                                            clause (iv) to reflect the
                                            further implementation of this
                                            subparagraph.
                                      ``(IV) Additional selection of
                                    states.--The Secretary may select
                                    additional States to provide
                                    reimbursements in accordance with this
                                    subparagraph beginning in May 2020, and
                                    each year thereafter, if such States
                                    have the capacity described in
                                    subclause (I).
                                      ``(V) Best practices.--
                                              ``(aa) In general.--As a
                                            condition of being selected
                                            under this clause, a State
                                            shall provide, in such time and
                                            in such manner as the Secretary
                                            may reasonably require,
                                            information to the Secretary
                                            regarding best practices of
                                            successful implementation of
                                            this subparagraph.
                                              ``(bb) Update.--The Secretary
                                            shall continue to periodically
                                            update the information under
                                            clause (iv) to include the best
                                            practices provided under item
                                            (aa) for continued successful
                                            implementation of this
                                            subparagraph.'';
                      (C) by striking paragraphs (9), (10), and (12); and
                      (D) by redesignating paragraph (11) as paragraph (9);
                    and
                      (E) by adding at the end the following:
              ``(10) Temporary allowance for off-site consumption.--
                      ``(A) In general.--Beginning in May 2017, the
                    Secretary shall grant requests made by a State to allow
                    children who are participating in the program but for
                    whom an operation under paragraph (12) is not
                    available, to consume meals away from a congregate
                    feeding site when the program is available to such
                    children at the site, but--
                              ``(i) the site is closed due to extreme
                            weather conditions;
                              ``(ii) violence or other public safety
                            concerns in the area temporarily prevent
                            children from traveling safely to the site; or
                              ``(iii) other emergency circumstances, as
                            defined by the State, prevent access to the
                            site.
                      ``(B) Limitations.--In granting a request under
                    subparagraph (A), the Secretary shall ensure that--
                              ``(i) allowances are issued by a State only
                            between the months of May through September;
                              ``(ii) allowances are granted in the most
                            efficient and effective manner to ensure
                            programs and States can quickly respond and
                            adapt to the circumstances described in clauses
                            (i) through (iii) of subparagraph (A); and
                              ``(iii) once an allowance is issued, any meal
                            in which a component is offered but not served
                            is not reimbursed under subsection (b).
                      ``(C) State plan.--As part of the management and
                    administration plan described in subsection (n), a
                    State shall describe--
                              ``(i) the approval process, including the
                            timeline, the State would undertake to issue an
                            allowance;
                              ``(ii) standards for what circumstances merit
                            an allowance, how long an allowance will last,
                            and when an allowance may be extended; and
                              ``(iii) how the program would operate once an
                            allowance is issued.
              ``(11) Off-site consumption.--
                      ``(A) In general.--Beginning in May 2017, a State may
                    elect for service institutions to carry out an off-site
                    consumption operation in the State to provide summer
                    food service program meals to children eligible to
                    participate in the program that such children may
                    consume away from a congregate feeding site.
                      ``(B) Availability.--The operation described in
                    subparagraph (A) shall be available to a child
                    described in subparagraph (A) only if the child lives
                    in an area that is eligible to participate in the
                    summer food service program, but that is not currently
                    being served, and such area--
                              ``(i) is rural, as defined by the State; or
                              ``(ii) is not rural, and is an area in which
                            more than 80 percent of students are certified
                            as eligible for free or reduced price meals.
                      ``(C) Administration.--
                              ``(i) In general.--The following shall apply
                            to an operation described in subparagraph (A):
                                      ``(I) The number of meals served to
                                    each child in a single meal service is
                                    limited to 2 meals, and the number of
                                    meals in a seven-day period shall be
                                    limited to 10 meals.
                                      ``(II) Any meal served shall meet the
                                    same standards for nutrition, safety,
                                    and quality as a meal served at a
                                    congregate feeding site.
                                      ``(III) Any meal in which a component
                                    is offered but not served shall not be
                                    reimbursed under subsection (b).
                                      ``(IV) Each State shall give priority
                                    to children who are living where
                                    congregate feeding sites are not
                                    accessible.
                                      ``(V) Nothing in this section shall
                                    be construed to allow congregate
                                    feeding sites to cease from operating
                                    in order to be replaced by off-site
                                    consumption operations under this
                                    paragraph.
                                      ``(VI) A State shall not--
                                              ``(aa) operate an off-site
                                            consumption operation
                                            simultaneously in the same
                                            service area with a congregate
                                            feeding site;
                                              ``(bb) use more than 10
                                            percent of funds received for
                                            administrative expenses to
                                            carry out this paragraph; or
                                              ``(cc) implement an off-site
                                            consumption operation in all
                                            service areas in the State.
                              ``(ii) State plan.--Each State choosing to
                            provide summer food service program meals
                            through an off-site consumption operation under
                            this paragraph shall describe how the State
                            plans to implement the operation in the
                            management and administration plan in
                            subsection (n), which shall include information
                            on how the State will--
                                      ``(I) document operation, including
                                    implementation;
                                      ``(II) determine the method for
                                    selecting eligible areas and eligible
                                    service institutions to most
                                    effectively deliver summer food service
                                    program meals in the manner described
                                    in this paragraph;
                                      ``(III) design mechanisms by which
                                    households with children eligible to
                                    participate in the program could
                                    indicate a need for meal service
                                    through such an operation;
                                      ``(IV) develop an appropriate
                                    maintenance of effort requirement for
                                    service institutions currently
                                    operating congregate feeding sites;
                                      ``(V) develop requirements for
                                    implementing safety and security
                                    measures to ensure that safety and
                                    security through such an operation is
                                    equivalent to such measures at a
                                    congregate feeding site; and
                                      ``(VI) periodically reevaluate the
                                    potential for children to be served at
                                    a congregate feeding site.'';
              (2) in subsection (k)(3)--
                      (A) by striking ``(3) To provide'' and inserting the
                    following:
              ``(3) Nutritional and food quality monitoring.--
                      ``(A) In general.--To provide''; and
                      (B) by adding at the end the following:
                      ``(B) Insufficient funds.--
                              ``(i) In general.--If funds provided under
                            subparagraph (A) are insufficient to pay for
                            State or local health department inspections,
                            and to reinspect facilities and deliveries to
                            test meal quality, as required under this Act
                            or the Child Nutrition Act of 1966 (42 U.S.C.
                            1771 et seq.), State agencies may elect to use
                            funds described in paragraph (1) for those
                            activities.
                              ``(ii) Limitation.--Funds described in clause
                            (i) shall not exceed the lesser of--
                                      ``(I) actual costs; or
                                      ``(II) 1 percent of program funds.'';
              (3) by amending subsection (n) to read as follows:
      ``(n) State Plan.--Each State desiring to participate in the program
    shall notify the Secretary by January 1 of each year of its intent to
    administer the program and shall submit, by February 15, a management
    and administration plan for the program for the fiscal year, which
    shall include, at a minimum--
              ``(1) the State's administrative budget for the fiscal year;
            and
              ``(2) the State's plans for--
                      ``(A) use of program funds and additional State or
                    private funds to reach children with the greatest need,
                    to the maximum extent practicable;
                      ``(B) strengthening the congregate feeding model for
                    program delivery, including a process for identifying
                    gaps in service and barriers to access;
                      ``(C) administrative and fiscal plans for using the
                    allowance described in subsection (a)(10) and, if
                    applicable, the option described in subsection (a)(11)
                    to assist service institutions in reaching children
                    with the greatest need;
                      ``(D) providing technical assistance and training for
                    eligible service institutions;
                      ``(E) monitoring and inspecting service institutions,
                    feeding sites, and food service management companies
                    and ensuring that such companies do not enter into
                    contracts for more meals than they can provide
                    effectively and efficiently, and in compliance with the
                    program;
                      ``(F) timely and effective action against program
                    violators; and
                      ``(G) ensuring fiscal integrity by auditing service
                    institutions not subject to auditing requirements
                    prescribed by the Secretary.''; and
              (4) in subsection (r), by striking ``2015'' and inserting
            ``2021''.

    SEC. 107. COMMODITY DISTRIBUTION PROGRAM.

      Section 14 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1762a) is amended--
              (1) in subsection (f), in the third sentence--
                      (A) by striking ``section 9(a) of this Act'' and
                    inserting ``section 9(f)''; and
                      (B) by striking ``represent the four basic food
                    groups, including'' and inserting ``include''; and
              (2) by striking subsection (h).

    SEC. 108. CHILD AND ADULT CARE FOOD PROGRAM.

      (a) In General.--Section 17 of the Richard B. Russell National School
    Lunch Act (42 U.S.C. 1766) is amended--
              (1) in subsection (a)--
                      (A) in paragraph (2)--
                              (i) in subparagraph (B), in the matter
                            preceding clause (i), by striking ``if'' and
                            inserting ``if, during the month preceding the
                            date of submission of the applicable initial
                            application or reapplication'';
                              (ii) in subparagraph (E), by striking ``and''
                            at the end;
                              (iii) in subparagraph (F), by striking the
                            period at the end and inserting a semicolon;
                            and
                              (iv) by adding at the end the following:
                      ``(G) any public or licensed nonprofit private
                    residential child care institution (as defined in
                    subsection (v)(1)) that is not concurrently receiving
                    reimbursement under the school lunch program under this
                    Act or the school breakfast program under the Child
                    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.); and
                      ``(H) any boarding school funded by the Bureau of
                    Indian Education that is not concurrently receiving
                    reimbursements under such school lunch program or
                    school breakfast program.''; and
                      (B) in paragraph (3), by striking ``subsection (r)''
                    and inserting ``subsections (r) and (v)''; and
                      (C) by adding at the end the following:
              ``(7) Duration of determination.--With respect to an
            institution described in paragraph (2)(B), an eligibility
            determination under this subsection shall remain in effect for
            a period of 4 months after the date such institution is
            approved by the State under subsection (d).'';
              (2) in subsection (b), by striking ``For the fiscal year
            ending September 30, 1979, and for each subsequent fiscal year,
            the'' and inserting ``The'';
              (3) in subsection (d)--
                      (A) in paragraph (4)--
                              (i) by striking ``In consultation'' and
                            inserting the following:
                      ``(A) In general.--In consultation''; and
                              (ii) by adding at the end the following:
                      ``(B) Reports.--Each sponsoring organization shall,
                    on an annual basis, submit to the applicable State
                    agency a report that describes, with respect to the
                    preceding fiscal year--
                              ``(i) the expenditures of program funds by
                            the sponsoring organization; and
                              ``(ii) the amount of meal reimbursements
                            retained by the sponsoring organization for
                            administrative costs, if applicable.''; and
                      (B) in paragraph (5), by adding at the end the
                    following:
                      ``(F) Serious deficiency process.--
                              ``(i) In general.--Not later than 1 year
                            after the date of the enactment of the
                            Improving Child Nutrition and Education Act of
                            2016, the Secretary shall review the serious
                            deficiency process for the program under this
                            section.
                              ``(ii) Review.--In carrying out clause (i),
                            the Secretary shall review the processes for,
                            and those involved in--
                                      ``(I) a finding of serious
                                    deficiency, including--
                                              ``(aa) what measures
                                            automatically result in a
                                            finding of serious deficiency;
                                            and
                                              ``(bb) how differentiation is
                                            being made between--
                                                      ``(AA) a reasonable
                                                    margin of human error
                                                    and systematic or
                                                    intentional
                                                    noncompliance; and
                                                      ``(BB) State-specific
                                                    requirements and
                                                    Federal law and
                                                    regulations, if
                                                    applicable;
                                      ``(II) appeals and mediation in any
                                    case in which there is a finding of
                                    serious deficiency;
                                      ``(III) determining the circumstances
                                    under which a corrective action plan is
                                    acceptable;
                                      ``(IV) information sharing between
                                    Departments of Agriculture and Health
                                    and Human Services; and
                                      ``(V) termination and
                                    disqualification, including maintenance
                                    of the list under subparagraph (E).
                              ``(iii) Guidance and regulations.--
                                      ``(I) In general.--After conducting
                                    the review under this subparagraph, the
                                    Secretary shall use findings from such
                                    review to assist sponsoring
                                    organizations, State agencies, and the
                                    Food and Nutrition Service in ensuring
                                    a fair, uniform, and effective
                                    administration of the serious
                                    deficiency process, while retaining
                                    program integrity, by issuing guidance,
                                    and, as appropriate, regulations, on
                                    the following:
                                              ``(aa) Clarity on the
                                            different measures for
                                            noncompliance.
                                              ``(bb) Parameters for an
                                            appeals process to review a
                                            finding of serious deficiency
                                            or a determination that a
                                            corrective action plan is
                                            inadequate.
                                              ``(cc) Adequate timeframes
                                            under a corrective action plan
                                            for compliance that are
                                            consistent for all types of
                                            institutions participating in
                                            the program, including family
                                            or group day care homes.
                                      ``(II) Information sharing.--Within
                                    such guidance or regulation, and as
                                    soon as practicable, the Secretary
                                    shall ensure information about findings
                                    are shared with the Secretary of Health
                                    and Human Services as to allow for
                                    maximum health, safety, oversight, and
                                    monitoring of participating child care
                                    and Head Start facilities.'';
              (4) in subsection (f)--
                      (A) in paragraph (2)(C), by adding at the end the
                    following:
                              ``(iii) Carryover funds.--Not more than 10
                            percent of the amount reserved by sponsoring
                            organizations under clause (i) for
                            administrative expenses for a fiscal year may
                            remain available for obligation or expenditure
                            in the succeeding fiscal year for
                            administrative purposes.''; and
                      (B) in paragraph (3)--
                              (i) by striking subparagraph (C); and
                              (ii) by redesignating subparagraphs (D) and
                            (E) as subparagraphs (C) and (D), respectively;
              (5) in subsection (g), by striking paragraph (6) and
            inserting the following:
              ``(6) Use of donated foods.--To the maximum extent
            practicable, each institution shall use in its food service
            foods that are donated by the Secretary.'';
              (6) in subsection (h)(1), by adding at the end the following:
                      ``(E) Engagement with state and local agencies.--
                              ``(i) In general.--Subject to clause (ii),
                            institutions participating in the program under
                            this section may engage with State agencies and
                            local educational agencies to use existing
                            infrastructure to enhance the use of, and
                            increase access to, donated commodities.
                              ``(ii) Effect of subparagraph.--Nothing in
                            this subparagraph shall compel a local
                            educational agency unwillingly to serve any
                            institution participating in the program under
                            this section.'';
              (7) in subsection (i)(2)(B)(i), by striking ``if the State
            agency demonstrates'' and all that follows through the period
            at the end and inserting ``if the State agency demonstrates
            that the State agency can use funds to improve program
            management, oversight, and integrity, including by working with
            other State agencies involved with the monitoring of
            institutions under this section in order to streamline and
            coordinate the efforts of such State agencies.'';
              (8) in subsection (r), by striking paragraphs (5) and (6);
              (9) in subsection (s)(2)(C), by striking ``parents of
            enrolled children at enrollment'' and inserting ``parents or
            legal guardians of enrolled children in an easily accessible
            manner'';
              (10) in subsection (u)(3)--
                      (A) in subparagraph (C)(i), by inserting ``for
                    distribution to participants and families of
                    participants'' after ``nutrition education''; and
                      (B) in subparagraph (H), by adding at the end the
                    following:
                              ``(iii) Sunset.--The Secretary shall return
                            to the general fund of the Treasury any funds
                            that were--
                                      ``(I) made available under this
                                    subparagraph; and
                                      ``(II) not obligated as of the date
                                    of the enactment of the Improving Child
                                    Nutrition and Education Act of 2016.'';
                                    and
              (11) by adding at the end the following:
      ``(v) Participation by Residential Child Care Institutions.--
              ``(1) Definition of residential child care institution.--In
            this subsection, the term `residential child care institution'
            means any public or nonprofit private residential child care
            institution, or distinct part of such an institution, that--
                      ``(A) operates principally for the care of children;
                    and
                      ``(B) if private, is licensed to provide residential
                    child care services under the appropriate licensing
                    code by the State or local agency.
              ``(2) Administration.--Except as otherwise provided in this
            subsection, a residential child care institution shall be
            considered eligible for reimbursement for meals and supplements
            served to eligible children residing at the residential child
            care institution, so long as the institution does not
            simultaneously participate in the school lunch program under
            this Act or the school breakfast program under the Child
            Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).
              ``(3) Meal or supplement reimbursement.--
                      ``(A) Limitations.--A residential child care
                    institution may claim reimbursement under this
                    section--
                              ``(i) only for a meal or supplement served to
                            children residing at the residential child care
                            institution, who are--
                                      ``(I) not more than 18 years of age;
                                    or
                                      ``(II) children with disabilities;
                                    and
                              ``(ii) for not more than--
                                      ``(I) 1 breakfast, 1 lunch, and 1
                                    supplement per child per day; or
                                      ``(II) 1 breakfast, 1 supper, and 1
                                    supplement per child per day.
                      ``(B) Rate.--A meal or supplement eligible for
                    reimbursement under this subsection shall be reimbursed
                    at the rate at which free, reduced price, and paid
                    meals and supplements, respectively, are reimbursed
                    under subsection (c).''.
      (b) Advisory Committee.--
              (1) In general.--Not later than 180 days after the date of
            the enactment of this Act, the Secretary shall establish and
            convene an advisory committee--
                      (A) to examine the feasibility of reducing
                    unnecessary or duplicative paperwork resulting from
                    regulations and recordkeeping requirements, including
                    paperwork resulting from additional State requirements,
                    for individuals and entities participating or seeking
                    to participate in the child and adult care food program
                    under section 17 of the Richard B. Russell National
                    School Lunch Act (42 U.S.C. 1766) (as amended by
                    subsection (a)), including (within the meaning of that
                    Act (42 U.S.C. 1751 et seq.))--
                              (i) State agencies;
                              (ii) family child care homes;
                              (iii) child care centers;
                              (iv) sponsoring organizations; and
                              (v) families.
                      (B) to provide recommendations to reduce unnecessary
                    or duplicative paperwork for those program participants
                    while ensuring that proper accountability and program
                    integrity are maintained.
              (2) Representation.--The advisory committee under this
            subsection shall include representation from each of the
            following (within the meaning of the Richard B. Russell
            National School Lunch Act (42 U.S.C. 1751 et seq.), as
            applicable):
                      (A) Public and private nonprofit organizations.
                      (B) Home-based day care providers.
                      (C) Head Start centers.
                      (D) For-profit proprietary organizations.
                      (E) Shelters for homeless families.
                      (F) Adult day care centers.
                      (G) State agencies.
                      (H) Sponsor organizations that provide administrative
                    support to multiple providers.
              (3) Considerations.--In developing the recommendations under
            this subsection, the advisory committee shall take into
            consideration, as appropriate--
                      (A) any existing information, recommendations, and
                    reports from the paperwork reduction work group
                    convened by the Food and Nutrition Service in response
                    to section 119(i) of the Child Nutrition and WIC
                    Reauthorization Act of 2004 (42 U.S.C. 1766 note; 118
                    Stat. 755);
                      (B) the use of technology for electronic
                    recordkeeping to reduce paperwork burdens on program
                    participants and providers; and
                      (C) input from additional advocates and stakeholders
                    for a broader knowledge base, if the advisory committee
                    determines necessary.
              (4) Secretarial action.--
                      (A) Guidance or regulations.--
                              (i) Issuance.--Not later than 1 year after
                            the date of the enactment of this Act, the
                            Secretary shall issue guidance or regulations,
                            as appropriate, based on the recommendations of
                            the advisory committee under paragraph (1)
                            regarding streamlined and consolidated
                            paperwork and recordkeeping requirements,
                            including applications, monitoring and auditing
                            requirements, and any other areas recommended
                            by the advisory committee intended to reduce
                            administrative burden.
                              (ii) Implementation.--Not later than 18
                            months after the date of the enactment of this
                            Act, the Secretary shall implement any changes
                            resulting from the guidance or regulations
                            described in clause (i).
                      (B) Report.--After issuing any guidance or
                    regulations under subparagraph (A), the Secretary shall
                    submit to the Committee on Agriculture, Nutrition, and
                    Forestry of the Senate and the Committee on Education
                    and the Workforce of the House of Representatives a
                    report describing any recommendations for legislative
                    changes to further strengthen and streamline the
                    application and monitoring process and reduce
                    administrative burden on grantees, participants, local
                    and State governments, and the Federal Government.

    SEC. 109. DEMONSTRATION PROJECTS.

      Section 18 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1769) is amended--
              (1) by striking subsections (g), (h), (j), and (k);
              (2) by redesignating subsection (i) as subsection (g);
              (3) in subsection (g)(5), as so redesignated, by striking
            ``2011 through 2015'' and inserting ``2017 through 2021'';
              (4) by inserting after subsection (c) the following:
      ``(d) Access to Local Foods: Farm to School Program.--
              ``(1) Program.--The Secretary shall carry out a program to
            assist eligible schools, State and local agencies, Indian
            tribal organizations, agricultural producers or groups of
            agricultural producers, and nonprofit entities through grants,
            technical assistance, and research to implement farm to school
            programs that improve access to local foods and improve
            nutrition education in eligible schools.
              ``(2) Definitions.--In this subsection:
                      ``(A) Agricultural producer.--The term `agricultural
                    producer' means a farmer, rancher, or fisher (including
                    of farm-raised fish).
                      ``(B) Eligible school.--The term `eligible school'
                    means a school or institution that participates in--
                              ``(i) a program under this Act, including the
                            summer food service program for children under
                            section 13 and the early care and afterschool
                            portions of the child and adult care food
                            program under section 17; or
                              ``(ii) the school breakfast program
                            established under section 4 of the Child
                            Nutrition Act of 1966 (42 U.S.C. 1773).
              ``(3) Grants.--
                      ``(A) In general.--The Secretary shall award
                    competitive grants under this subsection to be used for
                    implementing farm to school programs for the purposes
                    of improving access to local foods and improving
                    nutrition education, through--
                              ``(i) research, training, and technical
                            assistance;
                              ``(ii) supporting operations;
                              ``(iii) planning;
                              ``(iv) purchasing equipment;
                              ``(v) developing school gardens; and
                              ``(vi) developing partnerships to facilitate
                            nutrition education and healthy eating.
                      ``(B) Regional balance.--In making awards under this
                    subsection, the Secretary shall, to the maximum extent
                    practicable, ensure--
                              ``(i) geographical diversity; and
                              ``(ii) equitable treatment of urban, rural,
                            and tribal communities.
                      ``(C) Improved procurement and distribution.--Funds
                    provided under this subsection may be used to improve
                    local food procurement and distribution options between
                    agricultural producers and eligible schools, including
                    innovative approaches to aggregation, processing,
                    transportation, and distribution.
                      ``(D) Awards.--
                              ``(i) Maximum amount.--The total amount
                            provided to a grant recipient under this
                            subsection shall not exceed $150,000.
                              ``(ii) Term.--The term of an award shall not
                            exceed 3 years.
                              ``(iii) Limitation.--The Secretary shall not
                            award any entity more than 1 grant at any given
                            time.
                              ``(iv) Purpose and scope.--In carrying out
                            this subsection, the Secretary shall make
                            awards of diverse amounts and duration so as to
                            best match a variety of purposes, scopes, and
                            needs of the project proposals.
                      ``(E) Limitation.--The Secretary shall not award a
                    grant under this subsection if the majority of grant
                    funds would be used solely for the purpose of carrying
                    out a conference.
              ``(4) Federal share.--
                      ``(A) In general.--The Federal share of costs for a
                    project funded through a grant awarded under this
                    subsection shall not exceed 75 percent of the total
                    cost of the project.
                      ``(B) Federal matching.--As a condition of receiving
                    a grant under this subsection, a grant recipient shall
                    provide matching support in the form of cash or in-kind
                    contributions, including facilities, equipment, or
                    services provided by State and local governments,
                    nonprofit organizations, and private sources.
              ``(5) Criteria for selection.--
                      ``(A) In general.--To the maximum extent practicable,
                    in providing assistance under this subsection, the
                    Secretary shall give priority to proposals to--
                              ``(i) serve a high proportion of children who
                            are eligible for free or reduced price meals;
                              ``(ii) incorporate nutrition education
                            activities that encourage the participation of
                            school children in farm and garden-based
                            agricultural education activities;
                              ``(iii) provide families the opportunity to
                            participate in educational programming,
                            including through materials and engagement
                            activities, to improve nutrition outside the
                            school environment;
                              ``(iv) demonstrate collaboration between
                            eligible schools, nongovernmental and
                            community-based organizations, agricultural
                            producer groups, and other community partners;
                              ``(v) make local food products available on
                            the menu of reimbursable meals under this Act
                            at the eligible school;
                              ``(vi) demonstrate the potential for long-
                            term program sustainability with non-Federal
                            funds; and
                              ``(vii) expand the selection of local
                            commodities available for eligible schools.
                      ``(B) Tribal community projects.--In the case of
                    projects serving tribal communities, the Secretary
                    shall, to the maximum extent practicable, give highest
                    priority to projects that propose to use products from
                    tribal agricultural producers, in addition to the
                    priorities under subparagraph (A).
              ``(6) Evaluation.--As a condition of receiving a grant under
            this subsection, each grant recipient shall agree to cooperate
            in an evaluation of the program by the Secretary.
              ``(7) Technical assistance and research.--
                      ``(A) In general.--The Secretary shall provide
                    technical assistance, research, and information through
                    amounts reserved under this subsection for such
                    purposes, to assist schools, State and local agencies,
                    Indian tribal organizations, agricultural producers,
                    and nonprofit entities--
                              ``(i) to facilitate the coordination and
                            sharing of information and resources that may
                            be applicable to the farm to school program;
                              ``(ii) to collect and share information on
                            best practices;
                              ``(iii) to disseminate research and data on
                            existing farm to school programs and the
                            potential for programs to begin in underserved
                            areas; and
                              ``(iv) to increase awareness of, and
                            participation in, farm to school programs among
                            agricultural and aquiculture producers or
                            agricultural producer groups, including
                            beginning, veteran, and socially disadvantaged
                            farmers and ranchers.
                      ``(B) Review.--Not later than 1 year after the date
                    of the enactment of the Improving Child Nutrition and
                    Education Act of 2016 and every 3 years thereafter, the
                    Secretary shall review and submit to the Committee on
                    Agriculture and 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 that describes the regulatory and
                    other barriers related to including locally or
                    regionally produced food products in school food
                    programs, including any progress that has been made in
                    identifying and eliminating such barriers through
                    examining--
                              ``(i) barriers to the development and
                            implementation of successful farm to school
                            programs;
                              ``(ii) the direct and indirect costs
                            affecting the production and marketing of
                            locally or regionally produced agricultural
                            food products for school food programs;
                              ``(iii) the costs local school food programs
                            incur by acquiring such local foods for school
                            meal programs in comparison to the costs for
                            other foods in such school meal programs; and
                              ``(iv) local and regional market access for
                            such food products, partnerships, small-scale
                            production, and any barriers to and long-term
                            feasibility of such access.
              ``(8) Funding.--
                      ``(A) In general.--On October 1, 2016, and each
                    October 1 thereafter, out of any funds in the Treasury
                    not otherwise appropriated, the Secretary of the
                    Treasury shall transfer to the Secretary to carry out
                    this subsection $10,000,000, to remain available until
                    expended.
                      ``(B) Receipt and acceptance.--The Secretary shall be
                    entitled to receive, shall accept, and shall use to
                    carry out this subsection the funds transferred under
                    subparagraph (A), without further appropriation.
                      ``(C) Administration.--Of the funds made available to
                    the Secretary under subparagraph (A), not more than 5
                    percent may be used to pay administrative costs
                    incurred by the Secretary in carrying out this
                    subsection and evaluating the program in accordance
                    with paragraph (6).
      ``(e) Summer Meal Service Through Business Partnership.--
              ``(1) In general.--From the funds made available under the
            summer food service program under section 13, the Secretary
            shall award grants on a competitive basis to not more than 4
            State agencies to improve delivery of such summer food service
            program for low-income children in underserved areas during the
            summer through sustainable, scalable, business-driven
            solutions.
                      ``(A) Duration.--A grant awarded under this
                    subsection shall be for a period of not more than 3
                    years.
                      ``(B) Priority.--In awarding grants under this
                    subsection, the Secretary shall give priority to State
                    agencies that have met the application requirements
                    under this subsection and which demonstrate a severe
                    unmet need for serving children in additional eligible
                    areas in the State through the summer food service
                    program under section 13.
                      ``(C) Limitation.--Funds under this subsection will--
                              ``(i) be awarded for the purpose of reducing
                            childhood hunger and allowing parents to better
                            participate in the labor force or an education
                            or workforce development program; and
                              ``(ii) not preempt or prevent operation of
                            the summer food service program under section
                            13.
              ``(2) State application.--A State seeking to improve delivery
            of the summer food service program in such State in accordance
            with this subsection shall submit an application at such time
            and in such manner as the Secretary may reasonably require. The
            application shall contain--
                      ``(A) State plans to implement and manage the program
                    in accordance with other applicable Federal
                    requirements under this Act;
                      ``(B) a determination of the eligible areas in the
                    State in which poor economic conditions exist in
                    accordance with the program, but where an eligible
                    service institution is not currently in operation,
                    where the State may reimburse a vendor;
                      ``(C) identified eligible vendors which the State has
                    determined to be qualified to provide meals in
                    accordance with this subsection;
                      ``(D) a proposed timeline for entering into contracts
                    with eligible vendors and strategies for effective
                    communication; and
                      ``(E) an assurance that funds will be used to provide
                    meals to the most vulnerable, underserved, and rural
                    populations, as determined by the State.
              ``(3) Eligible vendor.--For purposes of this subsection, an
            eligible vendor is a food vendor which the State determines has
            the administrative capacity and proven operating performance to
            provide eligible meals to children in underserved areas in
            accordance with this subsection and the summer food service
            program requirements on management responsibilities of sponsors
            and self-preparation sites, including requirements that the
            vendor--
                      ``(A) accepts final administrative and financial
                    responsibility for management of an effective food
                    service, including auditing and reporting
                    responsibilities, but will not receive administrative
                    funding from the State to do so;
                      ``(B) has not been determined ineligible to
                    participate in any other program under this Act or the
                    Child Nutrition Act of 1966 by reason of violation of
                    the requirements of that program;
                      ``(C) will provide adequate supervisory and
                    operational personnel for monitoring and management of
                    a self-preparation site;
                      ``(D) contracts directly with the State as a sponsor;
                      ``(E) ensures that meals are inspected periodically
                    as required under existing program regulations;
                      ``(F) participates in applicable State and Federal
                    reporting and auditing requirements under this Act as
                    appropriate, including to provide other information
                    determined relevant by the Secretary in accordance with
                    paragraph (5);
                      ``(G) has State or local health certification for the
                    facilities in which meals will be prepared and
                    distributed for use in the program, and ensures that
                    State and local health and sanitation requirements are
                    met at all times; and
                      ``(H) has the organizational capacity to offer meals
                    in underserved communities, including preparation and
                    delivery logistics.
              ``(4) State disbursement.--A State shall use the grant
            awarded to the State under this subsection to reimburse an
            eligible vendor for meals served to eligible children in
            accordance with the summer food service program under section
            13 and with this subsection, as follows:
                      ``(A) Reimbursements shall be available for an
                    eligible vendor operating in an eligible area in which
                    poor economic conditions exist where no sponsor is
                    currently operating the program under section 13.
                      ``(B) To the extent practicable, a State shall give
                    priority to eligible vendors that--
                              ``(i) demonstrate partnerships with entities
                            providing summer enrichment activities such as
                            schools, local government agencies, and
                            nonprofit agencies; and
                              ``(ii) provide meals at a congregate site.
                      ``(C) A State shall follow established procedures in
                    entering into contracts with a vendor, such as through
                    a Request for Proposal, Invitation for Sealed Bid,
                    Small Purchase Procedure, or other common method.
              ``(5) Auditing.--
                      ``(A) State reporting.--Not later than 1 year after
                    the end of the grant period for a grant awarded to a
                    State under this subsection, the State shall submit to
                    the Secretary a report on--
                              ``(i) the activities carried out with such
                            grant; and
                              ``(ii) the impacts of such activities on
                            children, families, and eligible service
                            institutions during the summer.
                      ``(B) Report from secretary.--No later than 4 years
                    after the first grant is awarded under this subsection,
                    the Secretary shall provide to the Committee on
                    Education and the Workforce of the House of
                    Representatives and the Committee on Agriculture,
                    Nutrition, and Forestry of the Senate a report on the
                    grant program under this subsection, which shall
                    include--
                              ``(i) a review of information submitted by
                            States under subparagraph (A); and
                              ``(ii) best practices on reducing childhood
                            hunger in the summer months.
              ``(6) Limitations.--The following rules shall apply with
            respect to this subsection:
                      ``(A) No commodities shall be provided to businesses
                    or vendors under this subsection.
                      ``(B) Vendors shall assume all administrative costs
                    under this subsection.
                      ``(C) Meals shall be provided to children eligible
                    for the summer food service program under section 13.
                      ``(D) A vendor receiving reimbursements shall not
                    profit directly from such reimbursements under this
                    subsection.
                      ``(E) The Secretary shall include payments to States
                    under this subsection in its calculations for
                    administrative costs incurred by States under
                    subsection (k)(1) of section 13.
      ``(f) Summer Electronic Benefit Transfer for Children.--
              ``(1) Purpose.--The purposes of the provision of electronic
            benefits provided through this subsection are to assess the use
            of alternate methods of providing access to food for children
            during the summer months when school is not in regular session
            that are intended to--
                      ``(A) increase summer food service program
                    effectiveness and efficiency;
                      ``(B) reduce or eliminate the food insecurity and
                    hunger of children; and
                      ``(C) improve the nutritional status of children.
              ``(2) Demonstration.--
                      ``(A) Election.--A State that, as of the date of
                    enactment of the Improving Child Nutrition and
                    Education Act of 2016, is operating, or has operated, a
                    summer electronic benefit transfer for children
                    demonstration may elect to continue operating such
                    demonstration in accordance with the requirements of
                    this subsection as an alternative to other delivery
                    models of providing meals to children during the summer
                    months when school is not in regular session.
                      ``(B) State requirements.--As a condition of
                    participating in the demonstration under this
                    subsection, a State shall--
                              ``(i) comply with the requirements under this
                            subsection; and
                              ``(ii) agree to provide such information the
                            Secretary may require for the evaluation of the
                            demonstration as required under this
                            subsection.
              ``(3) Definitions.--In this subsection:
                      ``(A) Eligible household.--The term `eligible
                    household' means a household that includes 1 or more
                    school-aged child determined as eligible to receive
                    free or reduced price school meals during the prior
                    school year, but such child is not participating in a
                    program that provides food during the summer through
                    the summer food service program under section 13.
                      ``(B) State.--The term `State' includes a tribal
                    entity.
                      ``(C) Summer electronic benefit transfer for children
                    demonstration.--The term `summer electronic benefit
                    transfer for children demonstration' means an
                    electronic benefit transfer demonstration project under
                    section 748(g)(1) of the Agriculture, Rural
                    Development, Food and Drug Administration, and Related
                    Appropriations Act, 2010 (Public Law 111-80; 123 Stat.
                    2132).
              ``(4) Benefit levels.--
                      ``(A) In general.--The Secretary shall approve States
                    seeking to make an election under paragraph (2)(A) that
                    will evaluate the impact of providing a variety of
                    differentiated benefit levels to eligible children as a
                    way to reach such children to the greatest extent
                    practicable. The values of such benefits shall be
                    determined by the State, but shall be between $15 and
                    $30 per month for each school-aged child in an eligible
                    household.
                      ``(B) Rate determination.--In determining the values
                    under subparagraph (A), a State may consider
                    differentiating rates based on the need for such
                    benefits, which may be determined through factors such
                    as--
                              ``(i) the proportion of applicants that are
                            eligible for free price meals;
                              ``(ii) total number of households and
                            children seeking to participate;
                              ``(iii) food security in children across
                            communities in such State;
                              ``(iv) average redemption rates of benefits;
                              ``(v) impact of such values at improving food
                            security in children;
                              ``(vi) availability of other community
                            programs that provide meals to children during
                            the summer months when school is not in regular
                            session where children might otherwise receive
                            nutrition assistance; and
                              ``(vii) any other information a State
                            determines is useful for determining such
                            rates.
                      ``(C) Limitations.--
                              ``(i) Time.--No child may receive more than 3
                            months of benefits under this paragraph in any
                            12-month period.
                              ``(ii) Amount.--No child may receive more
                            than $30 of benefits under this paragraph per
                            month.
                      ``(D) Cost sharing.--Nothing in this paragraph shall
                    be construed to prohibit States or local entities from
                    providing additional non-Federal resources for the
                    purposes of this subsection.
              ``(5) Effective implementation.--
                      ``(A) In general.--In administering this subsection
                    and providing benefits to children in accordance with
                    this subsection, a State shall consider previous State
                    experiences and best practices in implementing the
                    summer electronic benefit transfer for children
                    demonstration carried out before the date of enactment
                    of the Improving Child Nutrition and Education Act of
                    2016, including information evaluating findings of the
                    demonstration (including the 2013 final report
                    published by the Department of Agriculture).
                      ``(B) Technical assistance.--The Secretary shall
                    provide, and periodically update, technical assistance
                    to States for purposes of this paragraph.
              ``(6) Use of benefits.--
                      ``(A) In general.--Benefits issued to families
                    through the election under paragraph (2)(A) may be used
                    only for the purchase of food for consumption by
                    school-aged children in such family.
                      ``(B) Timing.--Benefits issued through the election
                    described in this subparagraph may be redeemed only
                    when school is out of session for the summer period.
              ``(7) Administration.--In administering this subsection, the
            State shall--
                      ``(A) ensure that benefits are issued only to
                    eligible households that live--
                              ``(i) in areas with high rates of poverty or
                            long-term poverty that are rural and have no
                            congregate feeding sites or access to meals
                            otherwise provided through the summer food
                            service program authorized under section 13; or
                              ``(ii) outside an area in which poor economic
                            conditions exist but in an area with no access
                            to meals otherwise provided through the summer
                            food service program authorized under section
                            13;
                      ``(B) issue benefits to eligible households only
                    after such household has made an oral or written
                    request to receive electronic benefit transfer benefits
                    under this subsection; and
                      ``(C) document how the election will be administered
                    in the management and administration plan described in
                    subsection (n), including the process for identifying
                    areas in which benefits will be issued.
              ``(8) Evaluation.--The Secretary shall provide for an
            ongoing, independent evaluation of the demonstration carried
            out under this subsection, including quasi-experimental or
            other methods that are capable of producing scientifically
            valid information to determine effectiveness in achieving the
            purposes described in paragraph (1), including examining or
            assessing--
                      ``(A) feasibility of, or barriers to, successful
                    implementation of this subsection;
                      ``(B) varied approaches in State implementation of
                    this subsection, including different approaches,
                    challenges, and lessons learned;
                      ``(C) specific levels of use and receipt of benefits;
                      ``(D) impact on children's food security and
                    nutritional impacts, including by the different impacts
                    on children in a variety of geographical areas such as
                    rural, urban, and suburban areas, localities, and
                    States;
                      ``(E) total cost (including administrative cost) of
                    implementing and operating this subsection, including
                    in comparison to other methods of providing summer meal
                    service to school-aged children;
                      ``(F) impacts and results of such evaluation in
                    comparison to evaluations of the summer electronic
                    benefits transfer for children demonstration published
                    by the Secretary of Agriculture; and
                      ``(G) the potential for benefits provided under this
                    subsection to improve effectiveness and efficiency of
                    the summer food service program in comparison to other
                    methods of providing summer meal service to school-aged
                    children.
              ``(9) Report.--Not later than one year after amounts are
            first appropriated under paragraph (10), and each year
            thereafter, the Secretary shall submit to Congress a report
            that--
                      ``(A) includes the information resulting from the
                    most recent evaluation under paragraph (8); and
                      ``(B) takes into consideration evaluations of the
                    summer electronic benefits transfer for children
                    demonstration published by the Secretary of
                    Agriculture.
              ``(10) Authorization of appropriations.--
                      ``(A) In general.--There is authorized to be
                    appropriated to carry out this subsection not more than
                    $10,000,000 for each of fiscal years 2018 through 2020,
                    to remain available until expended.
                      ``(B) Limitations.--Of such appropriations, for each
                    fiscal year--
                              ``(i) each State shall utilize a portion for
                            administrative funds that shall be equal to the
                            levels necessary to effectively and efficiently
                            administer the State's demonstration under this
                            subsection, as determined by the State;
                              ``(ii) not more than 1 percent may be spent
                            on administrative funds by the Secretary; and
                              ``(iii) not more than $499,999 shall be
                            available for the Secretary to comply with
                            paragraph (8).
              ``(11) Guidance.--Not later than December 31, 2016, the
            Secretary shall provide guidance to States to implement this
            subsection, including recommendations for States to
            successfully continue to implement the summer electronic
            benefit transfer for children demonstration while complying
            with the new or additional requirements of this subsection.'';
            and
              (5) by adding at the end the following:
      ``(h) State Administration of Child Nutrition Programs.--
              ``(1) Purposes.--The purposes of this subsection are to
            provide States flexibility to develop programs and policies to
            best meet the nutritional needs of school-aged children in the
            State by providing flexibility over school meal programs under
            this Act and section 4 of the Child Nutrition Act of 1966 (42
            U.S.C. 1773) and other programs to address such needs more
            effectively and efficiently with less Federal involvement,
            including by--
                      ``(A) removing duplication, redundancies, regulatory
                    burden, and unnecessary requirements resulting from the
                    Federal administration of the school meal programs;
                      ``(B) more efficiently using Federal, State, local,
                    and nongovernmental resources to strengthen delivery of
                    the school meal programs and other programs; and
                      ``(C) supporting healthy meals through involvement by
                    parents, family members, and the community, including
                    nonprofit organizations, health organizations, and
                    school officials from large and small urban, suburban,
                    and rural areas in the State.
              ``(2) Grants authorized.--
                      ``(A) In general.--The Secretary shall award grants,
                    on a competitive basis, to up to 3 States to enable the
                    States to carry out the activities described in this
                    subsection.
                      ``(B) Considerations.--In awarding grants under this
                    subsection, the Secretary shall--
                              ``(i) in a case in which more than 3 States
                            apply for a grant under this subsection, give
                            priority to States by taking into consideration
                            regional diversity; and
                              ``(ii) ensure each State awarded a grant
                            under this subsection meets the required
                            assurances under paragraph (3)(D), except that
                            the Secretary shall not approve or disapprove
                            an application on the basis of a State's plan
                            or proposed program.
                      ``(C) Duration of grants.--A grant to a State under
                    this subsection--
                              ``(i) shall be awarded to the State for a 3-
                            year period; and
                              ``(ii) may be renewed by the Secretary for an
                            additional 3-year period if the State can
                            demonstrate success in meeting the nutritional
                            needs of the school-aged children in the State.
                      ``(D) Amount of grants.--The amount of a grant
                    awarded to a State under this subsection for each year
                    of the grant period shall be equal to the amount
                    described in paragraph (3)(C).
                      ``(E) Matching requirement.--Each State that receives
                    a grant under this subsection shall provide funds from
                    non-Federal sources (which may be provided in cash,
                    commodities, or in kind) to support the activities
                    under this subsection.
                      ``(F) Limitations.--A State that receives a grant
                    under this subsection may not, during any period during
                    which the State receives such grant, receive funds
                    under any of the following:
                              ``(i) The school lunch program under this
                            Act.
                              ``(ii) The school breakfast program under
                            section 4 of the Child Nutrition Act of 1966
                            (42 U.S.C. 1773).
                              ``(iii) The special milk program under
                            section 3 of the Child Nutrition Act of 1966
                            (42 U.S.C. 1772).
                              ``(iv) The State administrative expenses
                            funding under section 7 of the Child Nutrition
                            Act of 1966 (42 U.S.C. 1776).
                              ``(v) The team nutrition network under
                            section 19 of the Child Nutrition Act of 1966
                            (42 U.S.C. 1788).
              ``(3) Application.--To receive a grant under this subsection,
            a State shall submit an application at such time and in such
            manner as the Secretary may reasonably require. The application
            shall contain--
                      ``(A) an assurance that each school-aged child in the
                    State will have access to at least one affordable meal
                    service option during the school day at the school in
                    which the child is enrolled, and a plan for how the
                    State will carry out such assurance, including--
                              ``(i) the income thresholds or other needs-
                            based determinations to be used for
                            determining--
                                      ``(I) which students are eligible for
                                    free meals;
                                      ``(II) which students are eligible
                                    for reduced price meals; and
                                      ``(III) which students are required
                                    to pay the full price for meals;
                              ``(ii) the estimated number of students in
                            the State eligible for the thresholds for each
                            meal category described in clause (i);
                              ``(iii) the price to be charged to students
                            eligible for reduced price meals and the price
                            to be charged to students required to pay the
                            full price for meals;
                              ``(iv) how the State will identify and verify
                            eligibility of such students, such as through
                            census data, application processes, or any
                            other State-determined method;
                              ``(v) an identification of any non-Federal
                            sources, including State funds, the State will
                            utilize to meet the needs of school-aged
                            children in the State if the grant received
                            under this subsection is not sufficient to
                            cover the cost of the meals to be served during
                            the period in which the State receives such
                            grant;
                              ``(vi) any other factors the State will use
                            to determine distribution of funds received
                            under the grant to each elementary school and
                            secondary school in the State to reimburse the
                            schools for the cost of the meals served,
                            including how the State will ensure a fair
                            distribution of such funds to address the need
                            for such meals at each such school; and
                              ``(vii) the monitoring plan the State will
                            use to ensure the funding described in clause
                            (v) will be used in accordance with this
                            subsection;
                      ``(B) a description of the requirements for meals
                    provided under this subsection that the State will
                    require, including requirements for meal standards and
                    pricing;
                      ``(C) a request for an amount of grant funds for each
                    year that the State will receive a grant under this
                    subsection, which may not, for each such year exceed
                    the amount the State received for fiscal year 2016--
                              ``(i) for free and reduced price meal
                            reimbursements under the programs described in
                            clauses (i) and (ii) of paragraph (2)(F),
                            excluding any additional reimbursements
                            received under section 4(b)(3) of this Act; and
                              ``(ii) under the programs described in
                            paragraphs (iii) through (v) of paragraph
                            (2)(F); and
                      ``(D) assurances that the State will--
                              ``(i) provide healthy meals to school-aged
                            children in the State to ensure maximum
                            participation of students in the State;
                              ``(ii) provide technical assistance to local
                            educational agencies and schools to ensure
                            maximum participation of students in the State;
                              ``(iii) provide an annual report to the
                            Secretary that outlines the activities and
                            progress made in providing healthy meals to
                            students in a more cost efficient manner than
                            such meals were provided prior to the State
                            receiving such grant; and
                              ``(iv) work with school leaders, school
                            nutrition providers, and health professionals
                            to develop and implement the plan under
                            subparagraph (A) and to ensure that meals
                            provided in schools in the State using the
                            grant will be healthy and provided in an
                            efficient and cost effective manner.
              ``(4) Use of funds.--
                      ``(A) In general.--A State that receives a grant
                    under this subsection shall use the grant funds to--
                              ``(i) provide meals to school-aged children
                            in accordance with paragraph (3);
                              ``(ii) carry out the activities described in
                            subparagraph (B) of this paragraph; and
                              ``(iii) carry out any other activities the
                            State determines will support the goals of this
                            subsection.
                      ``(B) Additional state activities.--Each State that
                    receives a grant under this subsection shall, in
                    addition to the activities described in clauses (i) and
                    (ii) of subparagraph (A), provide nutritional
                    assistance to low-income and vulnerable children, as
                    determined by the State, by--
                              ``(i) addressing specific State and community
                            nutritional needs;
                              ``(ii) engaging partners to deliver the meal
                            programs to spur innovation in such delivery,
                            including local governments and school
                            officials, businesses, non-profit and faith-
                            based organizations, and other community
                            partners;
                              ``(iii) developing or strengthening private
                            sector partnerships to support the community
                            and nutritional needs of school-aged children;
                            and
                              ``(iv) achieving administrative and other
                            programmatic cost savings.
                      ``(C) Limitation.--A State may use not more than 10
                    percent of the grant received under this subsection for
                    administrative and outreach expenses.
              ``(5) State reporting.--Not later than 2 years after
            receiving a grant under this subsection, a State shall submit
            to the Secretary a report on how the State was better able to
            operate school meals and other programs to address needs more
            effectively compared to how the State addressed such needs
            before the grant was awarded to the State. The report shall
            include--
                      ``(A) a description of how the State used the grant
                    funds, the State costs of carrying out the activities
                    under this subsection (including food, administrative,
                    labor, oversight, and any other costs), and any revenue
                    the State received by carrying out such activities
                    (including Federal, non-Federal, and family
                    contributions);
                      ``(B) the strategies and activities undertaken at the
                    State and, if applicable, local level to meet the goals
                    of this subsection;
                      ``(C) financial efficiencies the State has identified
                    through the grant, including the extent to which
                    activities under the grant have led to the addition,
                    blending, or braiding of other Federal or private
                    funding, and the specific or estimated amount of cost-
                    savings, reduced burdens, and other efficiencies;
                      ``(D) the impacts the State has made in meeting the
                    goals of this subsection;
                      ``(E) any barriers the State has identified in
                    providing school meals, and ways in which to overcome
                    such barriers; and
                      ``(F) other State-determined and voluntarily provided
                    information intended to share best practices for future
                    implementation of this subsection.
              ``(6) Limitations on federal interference.--Nothing in this
            subsection shall be construed to authorize the Secretary to
            establish, as a condition to receive a grant under this
            subsection or as requirement to operate such a grant, any
            criterion that specifies, defines, or prescribes--
                      ``(A) nutritional guidelines, standards, or meal
                    requirements, including the methods that a State uses
                    to develop, implement, or improve such nutritional
                    guidelines, standards, or meal requirements;
                      ``(B) specific aspects, parameters, or measures of
                    programmatic quality, including measures of compliance
                    or evaluation;
                      ``(C) nutritional curriculum, programs of
                    instruction, or instructional content;
                      ``(D) any aspect of meal provision criteria,
                    including nutritional requirements, timing, duration,
                    type, price, amount, or any other aspect of meals or
                    meal program operation;
                      ``(E) any term under this subsection as such term
                    applies to activities carried out by a State, including
                    the terms healthy, affordable meal, school day, and
                    nutritional needs;
                      ``(F) the ways in which a State identifies and
                    verifies eligibility for benefits, including child,
                    family, and provider eligibility;
                      ``(G) differentiated payment rates a State may use;
                      ``(H) the amount or sources of non-Federal funds that
                    a State must provide;
                      ``(I) the percentages or amounts of grant funds to be
                    used for specific activities within or among programs;
                      ``(J) the scope or structure of programs, including
                    number of meals served, timing within the day, and
                    length or time of year a program operates; and
                      ``(K) any aspect or parameter of programmatic
                    evaluation.
              ``(7) Federal reporting.--Not later than 4 years after the
            first grant is awarded under this subsection, the Secretary
            shall provide to the Committee on Education and the Workforce
            of the House of Representatives and the Committee on
            Agriculture, Nutrition, and Forestry of the Senate, and to
            States, a report on the feasibility of scaling the
            implementation of this subsection, including the efficiencies,
            cost savings, and other benefits identified by State
            implementation of the programs described in paragraph (2)(F)
            under this subsection. Such determination of feasibility shall
            be based on information including--
                      ``(A) State reports submitted under paragraph (5);
                      ``(B) a determination of the level of Federal cost-
                    savings achieved and the amount of future cost-saving
                    implications;
                      ``(C) programmatic simplifications the Federal
                    Government could pursue; and
                      ``(D) other information provided by States or private
                    entities that would be useful in recommendations to the
                    public, States, and to Congress.''.

    SEC. 110. FRUIT AND VEGETABLE PROGRAM.

      Section 19 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1769a) is amended--
              (1) in the heading, by striking ``fresh'';
              (2) by striking ``fresh'' each place it appears in
            subsections (a), (b), and (e); and
              (3) in subsection (i)--
                      (A) by striking paragraphs (5) and (7);
                      (B) by redesignating paragraph (6) as paragraph (5);
                    and
                      (C) by adding at the end the following:
              ``(6) Clarification.--
                      ``(A) Guidance.--The Secretary shall issue guidance
                    with respect to how funds under the program may be
                    used, which--
                              ``(i) clarifies to States that such funds may
                            be used on all forms of fruits and vegetables,
                            provided the fruit or vegetable product meets
                            the requirements of section 210.11 of title 7,
                            Code of Federal Regulations (as in effect on
                            the date of enactment of the Improving Child
                            Nutrition and Education Act of 2016);
                              ``(ii) provides the appropriate exemptions
                            described in such section 210.11 of the Code of
                            Federal Regulations; and
                              ``(iii) encourages schools to introduce
                            fruits and vegetables to children in new
                            contexts, including by allowing schools to
                            offer combinations of fruits and vegetables
                            with tree nuts, which provide a good source of
                            protein per serving and meet the nutrition
                            standards of such section 210.11 of the Code of
                            Federal Regulations, except that the Secretary
                            shall provide exemptions from the total fat
                            requirements under such section 210.11 for tree
                            nut products.
                      ``(B) Local decision.--Nothing in this section shall
                    be construed to require a school participating in the
                    program to select forms of fruit or vegetables other
                    than fresh.''.

    SEC. 111. COMPLIANCE AND ACCOUNTABILITY.

      Section 22 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1769c) is amended--
              (1) in subsection (a)--
                      (A) by striking ``(1) In general.--There shall be''
                    and inserting ``There shall be''; and
                      (B) by redesignating subparagraphs (A) and (B) as
                    paragraphs (1) and (2), respectively, and indenting
                    appropriately;
              (2) in subsection (b)--
                      (A) in paragraph (1)(C)(i), by striking ``3-year
                    cycle'' and inserting ``5-year cycle'';
                      (B) by redesignating paragraphs (4) through (6) as
                    paragraphs (5) through (7), respectively;
                      (C) by striking paragraph (3) and inserting the
                    following:
              ``(3) Error reduction plans.--
                      ``(A) In general.--Each State agency shall work with
                    the local educational agencies that have the highest
                    rates of certification errors according to the
                    verification process under section 9(a)(D) to develop
                    an error reduction plan and monitor implementation of
                    the plan over the remainder of the review cycle.
                      ``(B) Plan components.--Each error reduction plan
                    shall include--
                              ``(i) specific measures that the local
                            educational agency shall take to reduce
                            certification errors, including at a minimum--
                                      ``(I) increasing the standard
                                    verification sample size, except such
                                    increase shall not result in a
                                    verification sample size of more than
                                    15 percent;
                                      ``(II) improvements in the
                                    application;
                                      ``(III) the use of technology to
                                    minimize opportunities for error; and
                                      ``(IV) enhanced training and
                                    oversight of staff involved in the
                                    certification and verification process;
                              ``(ii) a timeline for the local educational
                            agency to implement those measures within the
                            review cycle;
                              ``(iii) annual goals for reductions in
                            certification errors;
                              ``(iv) technical assistance to be provided by
                            the State agency; and
                              ``(v) working with an educational service
                            agency to help conduct the verification process
                            and other aspects of the program as necessary
                            to help reduce errors in the administration of
                            the program.
                      ``(C) State agency responsibilities.--Each State
                    agency shall--
                              ``(i) assist the local educational agencies
                            identified under subparagraph (D) with
                            developing an error reduction plan that
                            complies with subparagraph (B);
                              ``(ii) provide technical assistance as
                            described in the error reduction plan under
                            subparagraph (B)(iv);
                              ``(iii) conduct annual reviews focused on the
                            direct certification, application,
                            certification, verification, meal counting, and
                            meal claiming processes; and
                              ``(iv) report annually to the Secretary on
                            the progress of the State in reducing errors.
                      ``(D) Selection of local educational agencies.--
                              ``(i) In general.--Each State agency shall
                            select up to 10 percent of the local
                            educational agencies in the State to develop an
                            error reduction plan.
                              ``(ii) Limitation.--The percentage of local
                            educational agencies selected under clause (i)
                            shall not be comprised of more than 50 percent
                            of small local educational agencies, as
                            determined by the Secretary.
                              ``(iii) Assessment of certification error.--
                            In selecting local educational agencies under
                            this paragraph, certification error shall be
                            assessed based on a measure determined by the
                            Secretary that considers--
                                      ``(I) the results of the reviews
                                    conducted under paragraph (1) and
                                      ``(II) the percentage of household
                                    applications verified under section
                                    9(b)(3)(D)(i) that had the level of
                                    benefits changed as a result of
                                    information obtained during the
                                    verification process, excluding benefit
                                    terminations resulting from not
                                    obtaining information during household
                                    verification conducted under section
                                    9(b)(3)(G).
              ``(4) High performance.--
                      ``(A) In general.--If a local educational agency is
                    determined to be in the top 20 percent of local
                    educational agencies in the State, as determined by the
                    State under subparagraph (B), the sample size under
                    section 9(b)(3)(D)(i)(II) shall be a verification
                    sample size of 2.5 percent.
                      ``(B) Considerations.--The State shall determine
                    whether a local educational agency is in the top 20
                    percent of local educational agencies in the State by
                    considering error rates, confirmation rates, non-
                    response rates, response rates, and other factors as
                    necessary to make such determination.''; and
                      (D) in paragraph (6) (as redesignated by subparagraph
                    (B)), in subparagraph (A), by striking ``paragraph
                    (4)'' each place it appears and inserting ``paragraph
                    (5)''; and
              (3) in subsection (d), by striking ``2011 through 2015'' and
            inserting ``2017 through 2021''.

    SEC. 112. REPEAL OF STATE CHILDHOOD HUNGER CHALLENGE GRANTS.

      Section 24 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1769e) is repealed.

    SEC. 113. DUTIES OF THE SECRETARY RELATING TO NONPROCUREMENT DEBARMENT.

      Section 25 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1769f) is amended--
              (1) by redesignating subsection (g) as subsection (h); and
              (2) by inserting after subsection (f) the following:
      ``(g) Fines.--
              ``(1) In general.--In a situation in which a contractor is
            found guilty in any criminal proceeding or found liable in any
            civil or administrative proceeding, of the activities listed in
            paragraph (2), in connection with the supplying, providing, or
            selling of goods or services to any local agency in connection
            with a child nutrition program, the Secretary shall impose a
            civil penalty of not more than $100,000,000, as determined by
            the Secretary, to provide restitution to the program for harm
            done to the program.
              ``(2) Included activities.--Activities include, at a
            minimum--
                      ``(A) an anticompetitive activity, including bid-
                    rigging, price-fixing, the allocation of customers
                    between competitors, or other violation of Federal or
                    State antitrust laws;
                      ``(B) fraud, bribery, theft, forgery, or
                    embezzlement;
                      ``(C) knowingly receiving stolen property;
                      ``(D) making a false claim or statement; or
                      ``(E) any other obstruction of justice.
              ``(3) Use of funds.--Any funds collected under this
            subsection shall be credited to the child nutrition programs
            appropriations account.''.

    SEC. 114. IMPROVEMENTS TO SCHOOL LUNCH FACILITIES.

      The Richard B. Russell National School Lunch Act is amended by
    inserting after section 26 (42 U.S.C. 1769g) the following:

    ``SEC. 27. IMPROVEMENTS TO SCHOOL LUNCH FACILITIES.

      ``(a) Definitions.--In this section:
              ``(1) Durable equipment.--The term `durable equipment' means
            durable food preparation, handling, cooking, serving, and
            storage equipment greater than $500 in value.
              ``(2) Eligible entity.--The term `eligible entity' means--
                      ``(A) a local educational agency or a school food
                    authority administering or operating a school lunch
                    program under this Act;
                      ``(B) a tribal organization; or
                      ``(C) a consortium that includes a local educational
                    agency or school food authority described in
                    subparagraph (A), a tribal organization, or both.
              ``(3) Infrastructure.--The term `infrastructure' means a food
            storage facility, kitchen, food service facility, cafeteria,
            dining room, or food preparation facility.
              ``(4) Local educational agency.--The term `local educational
            agency' has the meaning given the term in section 8101 of the
            Elementary and Secondary Education Act of 1965 (20 U.S.C.
            7801).
              ``(5) School food authority.--The term `school food
            authority' has the meaning given the term in section 210.2 of
            title 7, Code of Federal Regulations (or a successor
            regulation).
              ``(6) Tribal organization.--The term `tribal organization'
            has the meaning given the term in section 4 of the Indian Self-
            Determination and Education Assistance Act (25 U.S.C. 450b).
      ``(b) Loan Guarantees.--
              ``(1) Authority.--The Secretary shall issue a loan guarantee
            to an eligible lender for purposes of financing the
            construction, remodeling, or expansion of infrastructure or the
            purchase of durable equipment that will assist the eligible
            entity in providing healthy meals through the school lunch
            program authorized under this Act.
              ``(2) Preference.--In issuing a loan guarantee under this
            subsection, the Secretary shall give a preference to an
            eligible entity that, as compared with other eligible entities
            seeking a loan guarantee under this subsection, demonstrates
            substantial or disproportionate--
                      ``(A) need for infrastructure improvement or durable
                    equipment; or
                      ``(B) impairment in durable equipment.
              ``(3) Oversight.--The Secretary, acting through the Under
            Secretary for Rural Development, shall establish procedures to
            oversee any project or purchase for which a loan guarantee is
            issued under this subsection.
              ``(4) Guarantee amount.--A loan guarantee issued under this
            subsection may not guarantee more than 80 percent of the
            principal amount of the loan.
              ``(5) Fees and costs.--
                      ``(A) In general.--The Secretary shall establish fees
                    for loan guarantees under this subsection that are, to
                    the maximum extent practicable, equal to all costs of
                    the loan guarantees as determined under the Federal
                    Credit Reform Act of 1990 (2 U.S.C. 661 et. seq.), as
                    determined by the Secretary.
                      ``(B) Fee shortfall.--To the extent that the
                    Secretary determines that fees described in
                    subparagraph (A) are not sufficient to pay for all of
                    the costs for the loan guarantees pursuant to the
                    Federal Credit Reform Act of 1990 (2 U.S.C. 661 et.
                    seq.), the Secretary may use funds described in
                    paragraph (6) to pay for the costs of loan guarantees
                    not paid for by the fees.
              ``(6) Funding.--Subject to the availability of appropriations
            provided in advance in an appropriations Act specifically for
            the purpose of carrying out this subsection, there is
            authorized to be appropriated $5,000,000 for fiscal year 2017
            and each fiscal year thereafter.
      ``(c) Grants.--
              ``(1) Authority.--Beginning in fiscal year 2017 and subject
            to the availability of appropriations provided in advance in an
            appropriations Act specifically for the purpose of carrying out
            this subsection, the Secretary shall make grants, on a
            competitive basis, to eligible entities for the purchase of
            durable equipment and infrastructure needed to serve healthier
            meals and improve food safety.
              ``(2) Priority.--In awarding grants under this subsection,
            the Secretary shall give priority to eligible entities that--
                      ``(A) are located in States that have enacted
                    comparable statutory grant funding mechanisms or that
                    have otherwise appropriated funds for the purpose
                    described in paragraph (1); and
                      ``(B) have identified and are reasonably expected to
                    meet an unmet local or community need--
                              ``(i) through a public-private partnership or
                            partnership with a food pantry or other low-
                            income assistance agency; or
                              ``(ii) by allowing related community
                            organizations to use kitchen or cafeteria
                            space.
              ``(3) Federal share.--
                      ``(A) In general.--The Federal share of costs for
                    assistance funded through a grant awarded under this
                    subsection shall not exceed 80 percent of the total
                    cost of the durable equipment or infrastructure.
                      ``(B) Matching.--To receive a grant under this
                    subsection, an eligible entity shall provide matching
                    support in the form of cash or in-kind contributions.
                      ``(C) Waiver.--The Secretary may waive or vary the
                    requirements of subparagraphs (A) and (B) if the
                    Secretary determines that undue hardship or effective
                    exclusion from participation would otherwise result.
              ``(4) Authorization of appropriations.--
                      ``(A) In general.--There is authorized to be
                    appropriated $25,000,000 to carry out this subsection
                    for fiscal year 2017 through fiscal year 2019.
                      ``(B) Limit.--The Secretary may use not more than 5
                    percent of the funds made available under subparagraph
                    (A) to provide technical assistance.
      ``(d) Salad Bars.--Not later than 180 days after the date of the
    enactment of the Improving Child Nutrition and Education Act of 2016,
    the Secretary shall review or revise any guidance in existence on that
    date of enactment so as to ensure that school food authorities have
    flexibility in the establishment and implementation of salad bars.''.

    SEC. 115. PROHIBITIONS.

      The Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et
    seq.) is further amended by adding at the end the following:

    ``SEC. 30. PROHIBITIONS.

      ``Nothing in this Act, the Child Nutrition Act of 1966 (42 U.S.C.
    1771 et seq.), the Healthy, Hunger-Free Kids Act of 2010, or the
    Improving Child Nutrition and Education Act of 2016 shall--
              ``(1) authorize the Secretary to issue or establish any
            regulations or requirements not explicitly authorized under any
            such Act; or
              ``(2) authorize the Secretary to require, as a condition of
            participation in any program under any such Act--
                      ``(A) any curriculum or education requirements for
                    participating schools or child care providers; or
                      ``(B) the adoption of any specific education
                    standards for nutrition education.''.

                         TITLE II--CHILD NUTRITION ACT

    SEC. 201. SPECIAL MILK PROGRAM AUTHORIZATION.

      Section 3(a)(7) of the Child Nutrition Act of 1966 (42 U.S.C.
    1772(a)(7)) is amended by striking ``on an annual basis each'' and
    inserting ``annually by February 15 for the upcoming''.

    SEC. 202. SCHOOL BREAKFAST PROGRAM.

      Section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) is
    amended--
              (1) in subsection (b)(1), by adding at the end the following:
                      ``(F) Increased reimbursement.--(i) For school year
                    2018-2019, the Secretary shall increase by 2 cents the
                    annually adjusted payment for each breakfast (free,
                    reduced price, and paid) described in subparagraph (B).
                      ``(ii) For school year 2019-2020, the national
                    average payment for each breakfast referred to in
                    clause (i) of this subparagraph shall equal the result
                    obtained under such clause (i) applicable to such
                    breakfast, as annually adjusted for the school year in
                    accordance with subparagraph (B).
                      ``(iii) For school year 2020-2021, the national
                    average payment for each breakfast referred to in
                    clause (i) of this subparagraph shall equal the
                    annually adjusted payment for such breakfast, as
                    determined under clause (ii) of this subparagraph, plus
                    1 cent.
                      ``(iv) For school year 2021-2022, and each succeeding
                    school year, the national average payment for each
                    breakfast referred to in clause (i) of this
                    subparagraph shall equal the result obtained under
                    clause (iii) of this subparagraph applicable to such
                    breakfast, as annually adjusted for the school year in
                    accordance with subparagraph (B).''.
              (2) in subsection (e)(1)(B), by striking ``, including
            technical'' and all that follows through ``established under
            this section,''.

    SEC. 203. STATE ADMINISTRATIVE EXPENSES.

      Section 7 of the Child Nutrition Act of 1966 (42 U.S.C. 1776) is
    amended--
              (1) in subsection (a)--
                      (A) in paragraph (3), in the second sentence, by
                    striking ``, except as provided in paragraph (5)'';
                      (B) by striking paragraph (5); and
                      (C) by redesignating paragraphs (6) through (9) as
                    paragraphs (5) through (8), respectively;
              (2) in subsection (b)--
                      (A) by striking ``expenses, for administrative'' and
                    inserting the following: ``expenses for--''
              ``(1) administrative''; and
                      (B) by striking ``for support'' and all that follows
                    through ``for staff'' and inserting the following:
              ``(2) support services;
              ``(3) office equipment;
              ``(4) State-operated purchasing programs; and
              ``(5) staff'';
              (3) in subsection (g)(2)(B), by amending clause (iii) to read
            as follows:
                              ``(iii) Minimizing disruptions.--The
                            Secretary shall encourage school food
                            authorities to consider--
                                      ``(I) providing the training required
                                    under this subparagraph to local food
                                    service personnel during paid, regular
                                    hours; and
                                      ``(II) that to the extent that
                                    training must occur during nonwork
                                    hours, it is minimally disruptive to
                                    employees' other work obligations if
                                    employees are provided with sufficient
                                    notice of training.'';
              (4) in subsection (i)--
                      (A) in paragraph (3)--
                              (i) in subparagraph (A), by inserting before
                            the period at the end the following: ``and for
                            the purposes described in section 749(h) of the
                            Agriculture, Rural Development, Food and Drug
                            Administration, and Related Agencies
                            Appropriations Act, 2010 (Public Law 111-80;
                            123 Stat. 2133)''; and
                              (ii) by adding at the end the following:
                      ``(C) Priority.--In awarding funds to States under
                    this paragraph, the Secretary shall give priority to
                    States in which local educational agencies, school food
                    authorities, or schools submit a plan under
                    subparagraph (B) that includes the use of technology or
                    information management systems to provide assistance to
                    tribal organizations administering the food
                    distribution program on Indian reservations established
                    under section 4(b) of the Food and Nutrition Act of
                    2008 (7 U.S.C. 2013(b)) for purposes of improving the
                    rate of direct certification of children in households
                    participating in that program.''; and
                      (B) in paragraph (4), by striking ``2015'' and
                    inserting ``2021'';
              (5) in subsection (j), by striking ``2015'' and inserting
            ``2021'';
              (6) by redesignating subsection (j) as subsection (k); and
              (7) by inserting after subsection (i) the following:
      ``(j) Centralized Exchange Network.--
              ``(1) Establishment.--The Secretary shall establish a
            centralized exchange network to facilitate State exchange of
            information and best practices, for programs authorized under
            this Act or the Richard B. Russell National School Lunch Act
            (42 U.S.C. 1751 et seq.).
              ``(2) Network topics.--State exchanges of information and
            best practices described in paragraph (1) may include, at a
            minimum, research methods and data related to--
                      ``(A) improved efficiency in the delivery of
                    benefits;
                      ``(B) improved compliance in the programs; and
                      ``(C) reduction of fraud, waste, and abuse in the
                    programs.
              ``(3) Administrative funds.--The Secretary shall not use more
            than $450,000 for such network.''.

    SEC. 204. REGULATIONS.

      Section 10(b)(1)(C) of the Child Nutrition Act of 1966 (42 U.S.C.
    1779(b)(1)(C)) is amended--
              (1) in clause (i), by striking ``and'' at the end;
              (2) by striking the period at the end of clause (ii) and
            inserting a semicolon; and
              (3) by adding at the end the following:
                              ``(iii) ensure that the nutrition standards
                            under this paragraph do not apply to
                            fundraisers held by student groups or
                            organizations, and that the school and
                            applicable State agency are not prohibited from
                            determining which such fundraisers may be held;
                            and
                              ``(iv) ensure that the nutrition standards
                            under this paragraph allow any foods that may
                            be served as part of a reimbursable meal served
                            under the school meal programs to be sold in
                            schools as described in subparagraph (B).''.

    SEC. 205. DEFINITION OF STATE AGENCY.

      Section 15 of the Child Nutrition Act of 1966 (42 U.S.C. 1784) is
    amended by striking paragraph (2) and inserting the following:
              ``(2) State agency.--The term `State agency' means--
                      ``(A) the chief State school officer (such as the
                    State superintendent of public instruction,
                    commissioner of education, or similar officer);
                      ``(B) a board of education controlling the State
                    department of education;
                      ``(C) the State Commissioner or individual who
                    administers agricultural programs in the State; or
                      ``(D) a State official the State legislature
                    designates to administer the programs under this
                    Act.''.

    SEC. 206. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS,
                        AND CHILDREN.

      (a) In General.--Section 17 of the Child Nutrition Act of 1966 (42
    U.S.C. 1786) is amended--
              (1) in subsection (a), in the second sentence, by striking
            ``promotion'' and inserting ``counseling, promotion,'';
              (2) in subsection (b)(14), by striking the paragraph
            designation and all that follows through ``means those foods''
            and inserting the following:
              ``(14) Supplemental food.--The term `supplemental food' means
            any food'';
              (3) in subsection (d)--
                      (A) in paragraph (2)--
                              (i) in subparagraph (B)--
                                      (I) in the matter preceding clause
                                    (i), by striking ``may choose to'' and
                                    inserting ``shall'';
                                      (II) in clause (i)(II), by striking
                                    ``and'' at the end;
                                      (III) in clause (ii), by striking the
                                    period at the end and inserting ``;
                                    and''; and
                                      (IV) by adding at the end the
                                    following:
              ``(iii) any basic allowance for subsistence provided under
            section 402 of title 37, United States Code, to a member of a
            uniformed service.''; and
                              (ii) by adding at the end the following:
                      ``(E) Child support payments.--For the purpose of
                    determining income eligibility under this section, a
                    State agency shall exclude from income any child
                    support payment for an applicant who is legally
                    obligated to pay child support for any noncustodial
                    child.''; and
                      (B) in paragraph (3), by adding at the end the
                    following:
                      ``(G) Data exchange standards for improved
                    interoperability.--
                              ``(i) Designation.--The Secretary, in
                            consultation with an interagency work group
                            established by the Office of Management and
                            Budget, and taking into consideration State
                            government perspectives, shall designate data
                            exchange standards to govern, under this
                            section--
                                      ``(I) necessary categories of
                                    information that State agencies
                                    operating related programs are required
                                    under applicable law to electronically
                                    exchange with another State agency; and
                                      ``(II) Federal reporting and data
                                    exchange required under applicable law.
                              ``(ii) Requirements.--The data exchange
                            standards required by clause (i) shall, to the
                            maximum extent practicable--
                                      ``(I) incorporate a widely accepted,
                                    nonproprietary, searchable, computer-
                                    readable format;
                                      ``(II) contain interoperable
                                    standards developed and maintained by
                                    intergovernmental partnerships, such as
                                    the National Information Exchange
                                    Model;
                                      ``(III) incorporate interoperable
                                    standards developed and maintained by
                                    Federal entities with authority
                                    regarding contracting and financial
                                    assistance;
                                      ``(IV) be consistent with, and
                                    implement, applicable accounting
                                    principles;
                                      ``(V) be implemented in a manner
                                    that--
                                              ``(aa) is cost effective; and
                                              ``(bb) improves program
                                            efficiency and effectiveness;
                                      ``(VI) be capable of being upgraded
                                    as necessary; and
                                      ``(VII) protects the privacy of any
                                    personally identifiable information
                                    from being accessed by individuals who
                                    do not need access to such information.
                              ``(iii) Effect of subparagraph.--Nothing in
                            this subparagraph requires any change to an
                            existing data exchange standard for Federal
                            reporting that is determined to be effective
                            and efficient.
                              ``(iv) Implementation.--
                                      ``(I) In general.--Not later than 2
                                    years after the date of the enactment
                                    of the Improving Child Nutrition and
                                    Education Act of 2016, the Secretary
                                    shall issue a proposed rule to
                                    implement this subparagraph.
                                      ``(II) Requirements.--The proposed
                                    rule under this clause shall--
                                              ``(aa) identify all federally
                                            required data exchanges;
                                              ``(bb) include specification
                                            and timing for the exchanges to
                                            be standardized;
                                              ``(cc) address the factors
                                            used in determining whether and
                                            when to standardize data
                                            exchanges;
                                              ``(dd) specify State
                                            implementation options; and
                                              ``(ee) describe future
                                            milestones.'';
              (4) in subsection (e)--
                      (A) by striking the subsection designation and all
                    that follows through ``The State agency shall'' in the
                    first sentence of paragraph (1) and inserting the
                    following:
      ``(e) Nutrition and Drug Abuse Education.--
              ``(1) Education.--
                      ``(A) In general.--A State agency shall'';
                      (B) in paragraph (1) (as amended by subparagraph
                    (A)), by adding at the end the following:
                      ``(B) Disposal of certain infant formula.--
                              ``(i) In general.--The State agency shall
                            ensure that all pregnant, postpartum, and
                            breastfeeding participants in the program, and
                            parents or caretakers of infant and child
                            participants in the program, are provided
                            education regarding proper disposal of unused
                            or excess infant formula obtained with food
                            instruments issued under the program under this
                            section.
                              ``(ii) Inclusions.--The education under this
                            subparagraph shall include information
                            regarding--
                                      ``(I) the safety hazards of
                                    purchasing infant formula from an
                                    unauthorized vendor; and
                                      ``(II) the penalties associated with
                                    the gifting, trading, sale, or resale
                                    of infant formula or other supplemental
                                    foods obtained with food instruments
                                    issued under the program under this
                                    section, in accordance with subsection
                                    (o).''; and
                      (C) by striking paragraph (3) and inserting the
                    following:
              ``(3) Nutrition education materials.--
                      ``(A) In general.--The Secretary, after submitting
                    proposed nutrition education materials to the Secretary
                    of Health and Human Services for comment, shall issue
                    the materials for use in the program under this
                    section.
                      ``(B) Sharing of materials with child and adult care
                    food program.--A State agency may allow the local
                    agencies or clinics operating under the State agency to
                    share nutrition educational materials with institutions
                    participating in the Child and Adult Care Food Program
                    established under section 17 of the Richard B. Russell
                    National School Lunch Act (42 U.S.C. 1766) at no cost
                    to that program, if a written materials-sharing
                    agreement exists between the relevant agencies.'';
              (5) in subsection (f)--
                      (A) by striking ``(f)(1)(A) Each State agency'' and
                    all that follows through ``change in the plan.'' and
                    inserting the following:
      ``(f) Plan of Operation and Administration by State Agency.--
              ``(1) Requirements.--
                      ``(A) Submission.--
                              ``(i) In general.--Each State agency shall
                            submit to the Secretary a plan of operation and
                            administration of the program authorized under
                            this section.
                              ``(ii) Deadlines.--Each State agency shall
                            submit--
                                      ``(I) an initial plan not later than
                                    such date as is specified by the
                                    Secretary; and
                                      ``(II) an update to the plan every 3
                                    years thereafter or, if the
                                    requirements of this section continue
                                    to be met by current plan, an assurance
                                    that the current plan continues to meet
                                    such requirements.'';
                      (B) in paragraph (1)(B), by striking ``submitted
                    for'' and inserting ``submitted covering'';
                      (C) in paragraph (1)(C)--
                              (i) in clause (x), by striking ``and'' at the
                            end;
                              (ii) by redesignating clause (xi) as clause
                            (xiii); and
                              (iii) by inserting after clause (x) the
                            following:
              ``(xi) a plan to allow, during an emergency or disaster
            period, for different foods to be obtained with program
            benefits in lieu of, or in addition to, the supplemental foods
            available to be obtained with such benefits;
              ``(xii) a plan detailing the methods to be used by all local
            agencies to ensure compliance with subsection (d)(2); and'';
                      (D) in paragraph (5)--
                              (i) by striking ``(5) State and local'' and
                            inserting the following:
              ``(5) Accounts, records, and review.--
                      ``(A) In general.--State and local''; and
                              (ii) by adding at the end the following:
                      ``(B) Review.--The Secretary shall periodically
                    review State and local agency compliance with the
                    approved plan of operation and administration of the
                    applicable State.'';
                      (E) in paragraph (10)--
                              (i) by striking ``(10) The Secretary'' and
                            inserting the following:
              ``(10) Standards for administration.--
                      ``(A) In general.--The Secretary''; and
                              (ii) by adding at the end the following:
                      ``(B) Notification to state authority.--If, on
                    reviewing the administration by a State of the program,
                    the Secretary determines there is a need to temporarily
                    halt the State from approving new vendors to address
                    deficiencies in proper administration, the Secretary
                    may issue a moratorium on the authority of the State to
                    approve new vendors, subject to the condition that the
                    Secretary shall provide the State with reasoning behind
                    such determination and shall establish--
                              ``(i) a timeframe under which the moratorium
                            will be issued, including any renewal or
                            lifting of the moratorium;
                              ``(ii) a process to approve vendors for the
                            State in a manner that does not impede--
                                      ``(I) the sale of a business; or
                                      ``(II) the establishment of any new
                                    business; and
                              ``(iii) a review process to be conducted by
                            the Secretary to ensure that participants,
                            nonparticipants, and vendors are not adversely
                            impacted by the implementation of the
                            moratorium.'';
                      (F) in paragraph (11)--
                              (i) in subparagraph (C)--
                                      (I) in clause (i)--
                                              (aa) by inserting before the
                                            semicolon at the end the
                                            following: ``which, beginning
                                            not later than 60 days after
                                            the date of enactment of the
                                            Improving Child Nutrition and
                                            Education Act of 2016, shall
                                            include an examination of
                                            criteria relating to fluid milk
                                            (in consideration of the most
                                            recent Dietary Guidelines for
                                            Americans published under
                                            section 301 of the National
                                            Nutrition Monitoring and
                                            Related Research Act of 1990 (7
                                            U.S.C. 5341)), and an
                                            examination of the consumption
                                            and redemption rates of milk
                                            beginning on May 5, 2014''; and
                                              (bb) by striking ``and'' at
                                            the end;
                                      (II) in clause (ii)--
                                              (aa) by striking ``and
                                            cultural eating patterns'' and
                                            inserting ``cultural eating
                                            patterns, commercial
                                            availability, and participant
                                            demand, except that any changes
                                            made under this clause shall
                                            not limit the overall fruit
                                            intake of children''; and
                                              (bb) by striking the period
                                            at the end and inserting ``;
                                            and''; and
                                      (III) by adding at the end the
                                    following:
                              ``(iii) consider accommodations for medical,
                            including food allergies, or other special
                            dietary needs of individuals, including
                            religious dietary restrictions.'';
                              (ii) by adding at the end the following:
                      ``(D) Product package sizes.--In promulgating or
                    revising regulations under this paragraph, the
                    Secretary shall allow a range of product package sizes
                    to be selected by participants.
                      ``(E) Cash value vouchers.--In adjusting annually for
                    food cost inflation in the food package under this
                    paragraph, the Secretary shall round to the nearest
                    dollar increment.
                      ``(F) Participant choice options.--The Secretary
                    shall maximize opportunities for State agency
                    flexibility to ensure adequate and appropriate
                    participant choice to meet participant needs and
                    cultural preferences in supplemental foods made
                    available under this section.'';
              (6) in subsection (g), by striking paragraph (1)(A) and
            inserting the following:
                      ``(A) Authorization.--There are authorized to be
                    appropriated to carry out this section $6,350,000,000
                    for each of fiscal years 2017 through 2021.''; and
              (7) in subsection (h)--
                      (A) in paragraph (8)(A)--
                              (i) in clause (vi)--
                                      (I) by striking ``Effective
                                    beginning'' and inserting the
                                    following:
                                      ``(I) In general.--Effective
                                    beginning''; and
                                      (II) by adding at the end the
                                    following:
                                      ``(II) Infant formula.--Effective
                                    beginning on the date of the enactment
                                    of the Improving Child Nutrition and
                                    Education Act of 2016, a State agency
                                    that has fully implemented electronic
                                    benefits transfer systems throughout
                                    the State shall have in effect a system
                                    to ensure that infant formula rebate
                                    invoices, under competitive bidding,
                                    provide an actual count of the number
                                    of units sold to participants in the
                                    program under this section.''; and
                              (ii) by adding at the end the following:
                              ``(xi) Contract duration.--The contracts
                            awarded under clause (iii) shall specify that--
                                      ``(I) if the income eligibility limit
                                    under title XIX of the Social Security
                                    Act (42 U.S.C. 1396 et seq.) for
                                    pregnant women or infants is
                                    substantially increased, the contractor
                                    may terminate the existing contract
                                    effective on the later of--
                                              ``(aa) the date that is 1
                                            year after the date on which
                                            the State decision to increase
                                            the eligibility limit by
                                            amending the State plan is made
                                            by--
                                                      ``(AA) adopting State
                                                    legislation;
                                                      ``(BB) issuing a
                                                    State executive order
                                                    or administrative rule;
                                                    or
                                                      ``(CC) any other
                                                    applicable State
                                                    process, as determined
                                                    by the Secretary; and
                                              ``(bb) the first day of the
                                            month during which the increase
                                            takes effect; and
                                      ``(II) if a contractor elects to
                                    terminate a contract pursuant to
                                    subclause (I), the contractor shall
                                    notify the State agency by not later
                                    than the date that is 1 year before the
                                    proposed date of termination.'';
                      (B) in paragraph (9)--
                              (i) in subparagraph (B)--
                                      (I) in clause (i)--
                                              (aa) in subclause (I), by
                                            striking ``and'' at the end;
                                            and
                                              (bb) by adding at the end the
                                            following:
                                      ``(III) limit the term of any
                                    contract (including any extension or
                                    renewal period) to a maximum of 5
                                    years, subject to the condition that
                                    any such extension or renewal shall be
                                    approved only on mutual consent of the
                                    contractor and the State agency;
                                      ``(IV) agree to provide, by not later
                                    than 180 days before exercising any
                                    termination for convenience clause, a
                                    written notice to each affected
                                    contractor;
                                      ``(V) agree--
                                              ``(aa) to receive an annual
                                            audit of infant formula rebate
                                            invoices by a contractor; and
                                              ``(bb) to provide to each
                                            contractor accurate monthly
                                            redemption files; and
                                      ``(VI) agree not to provide any State
                                    preference to any bidder in evaluating
                                    bids;'';
                                      (II) in clause (iii), by striking
                                    ``and'' at the end;
                                      (III) in clause (iv)--
                                              (aa) by striking ``30'' and
                                            inserting ``45''; and
                                              (bb) by striking the period
                                            at the end and inserting a
                                            semicolon;
                                      (IV) by redesignating clauses (iii)
                                    and (iv) as clauses (iv) and (v),
                                    respectively;
                                      (V) by inserting after clause (ii)
                                    the following:
                              ``(iii) for any State agency that has fully
                            implemented electronic benefits transfer
                            systems throughout the State, have a system to
                            ensure that rebate invoices under competitive
                            bidding provide an actual count of the number
                            of units lawfully sold to participants in the
                            program under this section;''; and
                                      (VI) by adding at the end the
                                    following:
                              ``(vi) provide a process to negotiate the
                            amount of funds to be returned to the bidder by
                            the State agency, and the method of return, on
                            determining and verifying that rebates were
                            paid on any food, including infant formula,
                            sold under fraudulent means;
                              ``(vii) open bids and enter into a contract
                            under paragraph (8)(A)(iii) only after making a
                            reasonable effort to confirm in writing, via
                            email or other means, that the manufacturers on
                            the list the State agency maintains under
                            paragraph (8)(A)(ix) received the initial
                            request for proposals or other bid solicitation
                            document by not later than the date that is 45
                            days before the date on which the bids are due;
                              ``(viii) agree to provide to contractors
                            supporting documentation for monthly invoices,
                            subject to the participant and vendor
                            confidentiality protections under program
                            rules; and
                              ``(ix) not later than the date that is 90
                            days after the date for opening bids, submit to
                            the Secretary a copy of the bid solicitation
                            and any other contract documents.''; and
                              (ii) by adding at the end the following:
                      ``(D) Certain food for infants.--Before any State
                    agency solicits bids for a contract for infant fruits,
                    vegetables, cereal, or meat under a competitive bidding
                    system, the State agency shall--
                              ``(i) consider--
                                      ``(I) the impact of the contract on--
                                              ``(aa) participation or
                                            redemption rates;
                                              ``(bb) costs to the State
                                            agency for infant fruits,
                                            vegetables, cereal, or meat,
                                            including product,
                                            administrative, and procurement
                                            costs; and
                                              ``(cc) the ability of the
                                            State agency--
                                                      ``(AA) to achieve the
                                                    purpose described in
                                                    subsection (a);
                                                      ``(BB) to provide
                                                    infants with a variety
                                                    of developmentally
                                                    appropriate infant
                                                    fruits, vegetables,
                                                    cereal, or meat; and
                                                      ``(CC) to serve the
                                                    nutritional needs of
                                                    program participants;
                                                    and
                                              ``(dd) consumers who are not
                                            participants, including the
                                            availability of alternate
                                            brands and potential effects on
                                            retail pricing of infant
                                            fruits, vegetables, cereal, or
                                            meat; and
                                      ``(II) whether the contract is
                                    compatible with--
                                              ``(aa) the management
                                            information and food instrument
                                            system of the State agency;
                                              ``(bb) eligible vendors; and
                                              ``(cc) the capacity of the
                                            manufacturer to meet technical
                                            specifications; and
                              ``(ii) provide to the Secretary--
                                      ``(I) a written explanation of how
                                    the considerations described in clause
                                    (i) affected the decision of the State
                                    agency to solicit bids for a contract;
                                    and
                                      ``(II) not later than 15 months after
                                    the start of such contract, a report
                                    that shall include--
                                              ``(aa) the net savings to
                                            date from the contract;
                                              ``(bb) an assessment of the
                                            impact on eligible stores, non-
                                            participants, and retail prices
                                            for infant fruits, vegetables,
                                            cereal, and meat; and
                                              ``(cc) an analysis of the
                                            costs and benefits of the
                                            contract, including an
                                            examination of retail prices of
                                            infant fruits, vegetables,
                                            cereal, and meat.'';
                      (C) in paragraph (11)(E)--
                              (i) by striking ``If a State'' and inserting
                            the following:
                              ``(i) In general.--If a State''; and
                              (ii) by adding at the end the following:
                              ``(ii) Requirement.--Effective not later than
                            120 days after the date of the enactment the
                            Improving Child Nutrition and Education Act of
                            2016, in calculating average payments per
                            voucher under clause (i), a State agency shall
                            exclude food instruments not fully redeemed,
                            based on an actual count or a reasonable
                            estimate.'';
                      (D) in paragraph (12)--
                              (i) in subparagraph (A)(i), by striking
                            ``food delivery system that provides'' and
                            inserting ``method to deliver''; and
                              (ii) by adding at the end the following:
                      ``(H) Regulations.--As State agencies transition to
                    electronic benefit transfer for the program, the
                    Secretary shall update regulations to account for the
                    fact that State agencies--
                              ``(i) are receiving transaction pricing more
                            frequently than twice a year from vendors; and
                              ``(ii) should adjust vendor reimbursement
                            levels more frequently to reflect program food
                            price changes in the marketplace.
                      ``(I) Authorization of appropriations.--
                              ``(i) In general.--There is authorized to be
                            appropriated to carry out this paragraph
                            $25,000,000 for each of fiscal years 2017
                            through 2019.
                              ``(ii) Use.--The Secretary shall allocate the
                            funds made available under this subparagraph to
                            States for purposes of enhancing and
                            accelerating the implementation of electronic
                            benefit transfer systems.
                      ``(J) Penalty for noncompliance.--For any State
                    agency that fails to comply with subparagraph (B),
                    including a State agency receiving an exemption under
                    subparagraph (C), the Secretary shall--
                              ``(i) withhold such amounts otherwise
                            required to be allocated to the State agency
                            for nutrition services and administration as
                            the Secretary determines to be appropriate; and
                              ``(ii) direct the amounts withheld for use by
                            the State agency solely for achieving
                            compliance with subparagraph (B).''; and
                      (E) in paragraph (13), by adding at the end the
                    following:
                      ``(C) Access.--The Secretary shall make available
                    upon request the national universal product code
                    database to vendors approved for participation in the
                    special supplemental food program established under
                    this section.'';
              (8) by striking subsection (k);
              (9) by redesignating subsections (l) through (q) as
            subsections (k) through (p), respectively;
              (10) in subsection (o) (as so redesignated)--
                      (A) in paragraphs (1) and (2)(B), by striking
                    ``subsection (o)(1)(A)'' each place it appears and
                    inserting ``subsection (n)(1)(A)'';
                      (B) in paragraph (5)--
                              (i) in subparagraph (C), by striking ``and''
                            at the end;
                              (ii) in subparagraph (D), by striking the
                            period at the end and inserting ``; and''; and
                              (iii) by adding at the end the following:
                      ``(E) fifth, to reimburse any WIC infant formula
                    manufacturer for any rebate provided to the State
                    agency on WIC infant formula unlawfully trafficked
                    under a provision of law described in paragraph (2).'';
                    and
                      (C) by adding at the end the following:
              ``(6) Notice of investigation.--
                      ``(A) In general.--For any investigation into the
                    trafficking of WIC infant formula pursuant to this
                    subsection, the Secretary shall provide notice of
                    resolution of the disposition of an unlawful action
                    resulting from the investigation to all contracted
                    manufacturers of the trafficked infant formula.
                      ``(B) Estimates.--Not later than 60 days after the
                    date on which notice is provided under subparagraph
                    (A), the State shall submit to the contracted
                    manufacturer an estimate of--
                              ``(i) the number of units, if any, for which
                            rebates may have been issued as a result of the
                            violation; and
                              ``(ii) the total dollar amount of the
                            rebates.''; and
              (11) by adding at the end the following:
      ``(q) Fraud and Safety Review.--
              ``(1) In general.--Not later than 180 days after the date of
            the enactment of the Improving Child Nutrition and Education
            Act of 2016, the Secretary shall review current guidance,
            regulations, and practices regarding fraud and safety for
            purposes of this section.
              ``(2) Inclusions.--The review under paragraph (1) shall
            include a review of issues relating to--
                      ``(A) excess and unused infant formula;
                      ``(B) invoices pertaining to products subject to
                    rebate;
                      ``(C) the sale of infant formula by unauthorized
                    entities; and
                      ``(D) the purchase of infant formula from
                    unauthorized entities.
              ``(3) Updates.--Based on the findings of the review under
            paragraph (1), the Secretary shall update current regulations
            and guidance and issue additional regulations and guidance, as
            necessary--
                      ``(A) to minimize fraud; and
                      ``(B) to ensure the safety of participants.
      ``(r) Cooperation With Law Enforcement Agencies.--Notwithstanding any
    other provision of law, State agencies and law enforcement agencies
    shall share WIC vendor information relating to investigations or
    prosecutions under the program under this section, as determined by the
    Secretary.
      ``(s) Pilot Projects.--
              ``(1) In general.--Subject to paragraph (2), the Secretary
            may conduct pilot projects to test alternative certification
            and food delivery procedures under this section.
              ``(2) Prohibition.--In conducting pilot projects under
            paragraph (1), the Secretary may not waive or modify the
            application of program eligibility, supplemental foods, or cost
            containment requirements.
              ``(3) Evaluation.--The Secretary shall evaluate each pilot
            project carried out under this subsection after the pilot
            project has been in operation for 3 years.''.
      (b) WIC Farmer's Market.--Section 17(l)(9)(A) of the Child Nutrition
    Act of 1966 (42 U.S.C. 1786(m)(9)(A)), as redesignated by section
    206(a)(9), is amended to read as follows:
                      ``(A) Authorization of appropriations.--There are
                    authorized to be appropriated to carry out this
                    subsection $18,548,000 for each of fiscal years 2017
                    through 2021.''.
      (c) Review of Adjunctive Eligibility for WIC.--
              (1) Definitions.--In this subsection:
                      (A) Adjunctively eligible.--The term ``adjunctively
                    eligible'' with respect to an individual, means an
                    individual who is eligible for WIC under section
                    17(d)(2)(A)(iii) of the Child Nutrition Act of 1966 (42
                    U.S.C. 1786(d)(2)(A)(iii)).
                      (B) Comptroller general.--The term ``Comptroller
                    General'' means the Comptroller General of the United
                    States.
                      (C) Medicaid.--The term ``Medicaid'' means the
                    Medicaid program under title XIX of the Social Security
                    Act (42 U.S.C. 1396 et seq.).
                      (D) Poverty line.--The term ``poverty line'' means
                    the most recent annual Federal Poverty Income
                    Guidelines published by the Department of Health and
                    Human Services.
                      (E) WIC.--The term ``WIC'' means the special
                    supplemental nutrition program for women, infants, and
                    children established by section 17 of the Child
                    Nutrition Act of 1966 (42 U.S.C. 1786).
              (2) Study.--The Comptroller General shall conduct a study to
            examine the impact of adjunctive eligibility on WIC
            participation, including the administrative burden, number of
            participants in WIC, and other impacts on the participants.
              (3) Adjunctive eligibility and income of wic participants.--
                      (A) In general.--In conducting the study described in
                    paragraph (2), the Comptroller General shall examine
                    the extent to which individuals certified as
                    adjunctively eligible to receive supplemental foods and
                    services through WIC have income above 185 percent of
                    the poverty line.
                      (B) Data.--
                              (i) Data collection.--The Comptroller General
                            shall collect data to determine--
                                      (I) the total number of pregnant
                                    women, postpartum women, breastfeeding
                                    women, infants, and children
                                    participating in WIC;
                                      (II) an estimate of the share of
                                    individuals described in subclause (I)
                                    who are certified as adjunctively
                                    eligible under section 17(d)(2)(A)(iii)
                                    of the Child Nutrition Act of 1966 (42
                                    U.S.C. 1786(d)(2)(A)(iii)); and
                                      (III) an estimate of the share of
                                    individuals described in subclause (II)
                                    for whom income (for purposes of
                                    Medicaid eligibility) is above 185
                                    percent of the poverty line, above 250
                                    percent of the poverty line, above 300
                                    percent of the poverty line, and above
                                    any other demarcation thresholds as
                                    determined by the Comptroller General.
                              (ii) Sources.--The Comptroller General shall
                            collect the information described in clause (i)
                            from--
                                      (I) WIC program data for subclauses
                                    (I) and (II) of that clause; and
                                      (II) a review of the income of a
                                    representative sample of WIC
                                    participants (for purposes of Medicaid
                                    eligibility) at the time of WIC
                                    certification (for subclause (III) of
                                    that clause).
                              (iii) Other.--The estimate developed under
                            clause (i)(III) shall be based on data
                            collected in selected States in which the
                            income eligibility limit for infants under 1
                            year of age for Medicaid is at or above 185
                            percent of the poverty line.
              (4) Use of income data to inform medicaid adjunctive
            eligibility determinations.--
                      (A) In general.--Following collection of the data
                    described in paragraph (3), the Comptroller General
                    shall assess the feasibility, benefits, and costs of
                    requiring that WIC use an automated process to document
                    that only applicants with income below a specified
                    threshold may be certified as adjunctively eligible
                    based solely on Medicaid receipt.
                      (B) Scope.--The assessment described in subparagraph
                    (A) shall include an evaluation of the capacity of the
                    management information systems for both WIC and
                    Medicaid, including the ability of the systems to
                    exchange data.
                      (C) WIC management information systems.--The
                    Comptroller General shall assess--
                              (i) which State agencies and tribal
                            organizations operating WIC use management
                            information systems with the capacity, via an
                            automated process, for local WIC clinics to
                            document--
                                      (I) income as a share of the poverty
                                    level for purposes of Medicaid
                                    eligibility; or
                                      (II) Medicaid enrollment and income
                                    below a specified level;
                              (ii) the steps necessary to prepare all local
                            WIC clinics to obtain and to access that income
                            information as a part of the WIC application
                            process as well as part of the associated costs
                            of modifying WIC automated systems and training
                            staff; and
                              (iii) other information determined relevant
                            by the Comptroller General, such as the impact
                            of the identified steps on administrative
                            costs, clinical services, and waiting times for
                            appointments.
                      (D) Medicaid management information systems.--The
                    Comptroller General shall assess--
                              (i) whether State's mechanized claims
                            processing and information retrieval systems
                            under section 1903(a)(3)(A)(i) of the Social
                            Security Act (42 U.S.C. 1396b(a)(3)(A)(i)) have
                            the capacity to provide, at the time of WIC
                            certification and via an automated process,
                            data to an agency or tribal organization
                            operating WIC regarding--
                                      (I) income as a share of the poverty
                                    level for purposes of Medicaid
                                    eligibility; or
                                      (II) whether a Medicaid recipient has
                                    income below a specified level;
                              (ii) the steps necessary to ensure that
                            mechanized claims processing and information
                            retrieval systems in States for which the
                            income eligibility limit for infants under 1
                            year of age under Medicaid is above 185 percent
                            of the poverty line have the capacity to
                            provide the information described in clause (i)
                            to local WIC clinics for the purpose of
                            documenting adjunctive eligibility under an
                            option that would limit that eligibility to
                            individuals with income below a specific
                            threshold; and
                              (iii) other information determined relevant
                            by the Comptroller General and the Secretary of
                            Health and Human Services, including the impact
                            of the identified steps on administrative
                            costs.
              (5) Report.--Not later than 18 months after the date of the
            enactment of this Act, the Comptroller General 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 describing--
                      (A) the data collected under paragraph (3);
                      (B) the assessments made under paragraph (4); and
                      (C) the feasibility, costs, and benefits of a new
                    requirement that would only permit adjunctive
                    eligibility for individuals with household income below
                    a specified level.

    SEC. 207. TEAM NUTRITION NETWORK.

      Section 19 of the Child Nutrition Act of 1966 (42 U.S.C. 1788) is
    amended--
              (1) in subsection (a)--
                      (A) in paragraph (1)--
                              (i) by inserting ``evidence-based'' before
                            ``team nutrition messages''; and
                              (ii) by striking ``developed by the
                            Secretary'';
                      (B) in paragraph (2), by inserting ``under this Act
                    and the Richard B. Russell National School Lunch Act
                    (42 U.S.C. 1751 et seq.)'' before the semicolon at the
                    end;
                      (C) in paragraph (4), by striking ``purposes; and''
                    and inserting the following: ``purposes, including if
                    appropriate--
                      ``(A) State and local nutrition education programs,
                    health and wellness policies, nutrition and health
                    education resources, and other State resources; and
                      ``(B) Federal nutrition education efforts, including
                    those programs under this Act and the Richard B.
                    Russell National School Lunch Act (42 U.S.C. 1751 et
                    seq.);''; and
                      (D) in paragraph (5)--
                              (i) by striking ``helping children to
                            maintain a healthy weight by''; and
                              (ii) by inserting ``in and out of school''
                            before the period at the end;
              (2) in subsection (b), by striking ``(b)'' and all that
            follows through ``In this section, the term'' and inserting the
            following:
      ``(b) Definitions.--In this section:
              ``(1) Nutrition education.--The term `nutrition education'
            means the provision of individual or group learning
            opportunities and materials for children and families that--
                      ``(A) emphasize the relationship between nutrition,
                    physical activity, and health with a goal of improving
                    long-term dietary and physical health and increasing
                    food security; and
                      ``(B) include learning about food preparation.
              ``(2) Team nutrition network.--The term'';
              (3) in subsection (c)--
                      (A) by striking the subsection heading and inserting
                    ``State Network Grants.--''; and
                      (B) by adding at the end the following:
              ``(4) Allocation.--Subject to the availability of funds for
            use in carrying out this subsection, the total amount of funds
            made available for a fiscal year for grants under this
            subsection shall equal not more than the sum of--
                      ``(A) the product obtained by multiplying \1/2\ cent
                    by the number of lunches reimbursed through food
                    service programs under the Richard B. Russell National
                    School Lunch Act (42 U.S.C. 1751 et seq.) during the
                    second preceding fiscal year in schools, institutions,
                    and service institutions that participate in the food
                    service programs; and
                      ``(B) the total value of funds received by the
                    Secretary in support of this subsection from
                    nongovernmental sources.
              ``(5) Requirements for state participation.--To be eligible
            to receive a grant under this subsection, a State agency shall
            submit to the Secretary a plan, at such time and in such manner
            as the Secretary may require, including--
                      ``(A) a description of the goals and proposed State
                    plan for addressing the nutrition of children;
                      ``(B) a description of the means by which the State
                    agency will use and disseminate the team nutrition
                    messages and material to children and, if appropriate,
                    families of such children;
                      ``(C) an explanation of the ways in which the State
                    agency will use the funds from the grant to work toward
                    the goals required under clause (i), and to promote
                    healthy eating in schools throughout the State;
                      ``(D) a description of the ways in which the State
                    team nutrition network messages and activities will be
                    coordinated at the State and local level with other
                    community health promotion and education activities;
                      ``(E) an annual summary of the team nutrition network
                    activities and their effectiveness;
                      ``(F) a description of the ways in which school
                    environments might support healthy eating and physical
                    activity; and
                      ``(G) a description of how all communications to
                    parents and legal guardians of students who are members
                    of a household receiving information under the program
                    shall be in an understandable and uniform format and,
                    to the maximum extent practicable, in a language that
                    parents and legal guardians can understand.
              ``(6) State coordinator.--Each State that receives a grant
            under this subsection may appoint a team nutrition network
            coordinator. Such coordinator shall implement comprehensive,
            coordinated nutrition education programming through the team
            nutrition network, including to assist schools, school food
            authorities, and other child nutrition program providers in the
            State to administer and coordinate the team nutrition network
            activities.
              ``(7) Authorized activities.--A State agency that receives a
            grant under this section may use funds from the grant to--
                      ``(A) identify the programs and services available to
                    meet the health and nutritional needs of children and
                    families in the State;
                      ``(B) disseminate team nutrition network messages and
                    material that provide comprehensive, coordinated
                    nutrition and physical fitness awareness and obesity
                    prevention education;
                      ``(C) implement demonstration projects in schools to
                    promote physical activity and to enhance the nutrition
                    education provided to students;
                      ``(D) improve access to local foods through
                    coordinating with farm-to-school grant activities that
                    include the provision of nutrition education;
                      ``(E) encourage schools to develop healthy eating and
                    lifestyle policies;
                      ``(F) provide training and technical assistance to
                    teachers and school food service professionals
                    consistent with the purposes of this subsection; and
                      ``(G) collaborate with public and private and faith-
                    based organizations, including community-based
                    organizations, State medical associations, and public
                    health groups, to provide nutrition and physical
                    education targeting lower income children, ethnic
                    minorities, and youth at a greater risk for obesity or
                    malnourishment.'';
              (4) by striking subsections (d) through (g) and (k);
              (5) by redesignating subsections (h) through (j) as
            subsections (d) through (f), respectively;
              (6) by redesignating subsection (l) as subsection (g);
              (7) in subsection (d) (as so redesignated)--
                      (A) in the subsection heading, by inserting
                    ``Education'' after ``Nutrition'';
                      (B) in paragraph (5)--
                              (i) in subparagraph (A)--
                                      (I) in clause (i), by striking
                                    ``and'' at the end; and
                                      (II) by adding at the end the
                                    following:
                              ``(iii) incorporate nutrition education into
                            physical and health education, and, if
                            appropriate, afterschool programs, including
                            athletics; and''; and
                              (ii) in subparagraph (B)--
                                      (I) by striking clause (iv);
                                      (II) in clause (vii), by striking ``a
                                    variety of healthy foods'' and all that
                                    follows through ``fruit bars'' and
                                    inserting ``a variety of healthy foods,
                                    including through initiatives to
                                    creatively market such foods'';
                                      (III) in clause (viii), by striking
                                    ``low-fat and nutrient dense'' and
                                    inserting ``healthy''; and
                                      (IV) by redesignating clauses (v)
                                    through (ix) as clauses (iv) through
                                    (viii), respectively;
              (8) in subsection (e) (as so redesignated), by striking ``may
            provide for technical assistance and grants'' and inserting
            ``shall provide for technical assistance''; and
              (9) in subsection (g) (as so redesignated) by striking ``such
            sums'' and all that follows through the period at the end and
            inserting ``to carry out this section $17,000,000 for each
            fiscal year.''.

                            TITLE III--MISCELLANEOUS

    SEC. 301. REVIEWS.

      (a) Tribal Foods.--
              (1) In general.--Not later than 1 year after the date of the
            enactment of this Act, the Secretary shall review--
                      (A) the barriers to including tribally produced,
                    traditional, and culturally appropriate foods in child
                    nutrition programs (as defined in section 25(b) of the
                    Richard B. Russell National School Lunch Act (42 U.S.C.
                    1769f (b)) within tribal schools; and
                      (B) the means of encouraging and assisting enhanced
                    inclusion of foods described in subparagraph (A) in
                    child nutrition programs.
              (2) Scope.--In carrying out the review described in paragraph
            (1), the Secretary shall--
                      (A) survey and compile resources of the Department of
                    Agriculture on the issue described in paragraph (1)(A);
                      (B) if necessary, clarify relevant Federal
                    regulations governing schools and tribal producers,
                    including regulations relating to procurement,
                    reimbursement, and food safety;
                      (C) involve all relevant agencies, including the Food
                    and Nutrition Service and Office of Tribal Relations of
                    the Department of Agriculture; and
                      (D) submit to Congress a report describing the
                    results of the review.
      (b) Use of Program Data.--
              (1) In general.--The Secretary, jointly with the Secretary of
            Education, shall--
                      (A) review information regarding available
                    alternative data sets for use in programs that are
                    using free and reduced price meals data; and
                      (B) determine the appropriateness of using such
                    alternative data sets in place of free and reduced
                    price meal program data by other programs to reduce the
                    burden on local school food authorities.
              (2) Report to congress.--Not later than 1 year after the date
            of the enactment of this Act, the Secretaries 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 that describes the results
            of the review and any recommendations of the Secretaries.
      (c) Crediting and Labeling Program.--
              (1) In general.--The Secretary shall review and update the
            system of crediting and the voluntary child nutrition labeling
            program used in administering--
                      (A) the school lunch program established under the
                    Richard B. Russell National School Lunch Act (42 U.S.C.
                    1751 et seq.); and
                      (B) the school breakfast program established by
                    section 4 of the Child Nutrition Act of 1966 (42 U.S.C.
                    1773).
              (2) Scope.--The review described in paragraph (1) shall
            include, at a minimum--
                      (A) the treatment of food products within previously
                    established food categories and new products that have
                    entered the commercial marketplace since the system of
                    crediting and the voluntary child nutrition labeling
                    program were developed; and
                      (B) the timeliness in which applications for labels
                    under the voluntary child nutrition labeling program
                    are reviewed and are granted or denied.
              (3) Report to congress.--Not later than 1 year after the date
            of the enactment of this Act, 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 that describes the results
            of the review and any recommendations of the Secretary.
      (d) Nutritional Analysis.--The Secretary shall--
              (1) review the practicability and feasibility of--
                      (A) conducting a nutritional analysis, using publicly
                    and commercially available nutritional information, of
                    food products that are voluntarily submitted for use in
                    child nutrition programs, outside of the reimbursable
                    school meal; and
                      (B) aggregating and making the information obtained
                    through that nutritional analysis publicly available
                    for use by school food authorities, food manufacturers,
                    and other interested parties; and
              (2) if found practicable and feasible, proceed with the
            analysis, aggregation, and public availability.
      (e) Other.--
              (1) In general.--The Secretary shall review--
                      (A) the cost differences between--
                              (i) providing meals and supplements under the
                            Richard B. Russell National School Act (42
                            U.S.C. 1751 et seq.) and section 4 of the Child
                            Nutrition Act of 1966 (42 U.S.C. 1773) in
                            Palau, Guam, American Samoa, the Commonwealth
                            of Puerto Rico, the United States Virgin
                            Islands, and the Commonwealth of the Northern
                            Mariana Islands, respectively; and
                              (ii) the average cost of providing meals and
                            supplements under those provisions of law in
                            the 50 States and the District of Columbia; and
                      (B) the relation of the cost differences determined
                    under subparagraph (A) to the national average payment
                    rates for meals and supplements prescribed under
                    sections 4, 11, 13, and 17 of the Richard B. Russell
                    National School Lunch Act (42 U.S.C. 1753, 1759a, 1761,
                    1766) and section 4(b) of the Child Nutrition Act of
                    1966 (42 U.S.C. 1773(b)).
              (2) Report to congress.--Not later than 1 year after the date
            of the enactment of this Act, 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 that describes the results
            of the review and any recommendations of the Secretary.
      (f) Unlawful Activity.--
              (1) In general.--Not later than 1 year after the date of the
            enactment of this Act, the Secretary shall review--
                      (A) the number of instances and types of unlawful
                    activity that occurred in the preceding 3 years,
                    including, at a minimum, instances of fraud, bid-
                    rigging, and any other anticompetitive activities
                    carried out in connection with supplying, providing, or
                    selling goods or services for a program under the
                    Richard B. Russell National School Lunch Act (42 U.S.C.
                    1751 et seq.) or the Child Nutrition Act of 1966 (42
                    U.S.C. 1771 et seq.); and
                      (B) the practices and procedures currently used by
                    the Department of Agriculture to prevent unlawful
                    activity described in subparagraph (A).
              (2) Secretarial response.--Following completion of the review
            described in paragraph (1), the Secretary shall respond, if
            appropriate, by taking action to reduce such unlawful activity,
            including, at a minimum--
                      (A) revising any relevant guidance and regulations;
                      (B) issuing fines authorized under subsection (g) of
                    section 25 of the Richard B. Russell National School
                    Lunch Act (42 U.S.C. 1769f) (as amended by section
                    115); and
                      (C) submitting to the appropriate committees of
                    Congress recommendations for any legislative changes
                    needed to enhance program oversight.
              (3) Scope.--The actions described in paragraph (2) shall be
            designed to reduce--
                      (A) anticompetitive activities, including bid-
                    rigging, price-fixing, the allocation of customers
                    between competitors, or other violation of Federal or
                    State antitrust laws;
                      (B) fraud, bribery, theft, forgery, or embezzlement;
                      (C) knowingly receiving stolen property;
                      (D) making a false claim or statement; or
                      (E) any other obstruction of justice.
      (g) Infant Formula.--Not later than 180 days after the date of
    enactment of this Act, the Secretary shall--
              (1) review the current regulations regarding caloric density
            standards for infant formula made available in the special
            supplemental nutrition program for women, infants, and children
            established by section 17 of the Child Nutrition Act of 1966
            (42 U.S.C. 1786); and
              (2) as appropriate, update the regulations based on the most
            recent scientific knowledge available.

    SEC. 302. PROGRAM DELIVERY.

      (a) Streamlining.--The Secretary shall work with States participating
    in programs authorized under the Richard B. Russell National School
    Lunch Act (42 U.S.C. 1751 et seq.) and the Child Nutrition Act of 1966
    (42 U.S.C. 1771 et seq.) to encourage--
              (1) streamlining of program administration, including data
            collection and reporting requirements, at the State level;
              (2) communication among State agencies administering the
            programs;
              (3) coordination of administration of Federal benefits at the
            State level to ensure efficiency of program delivery and
            improved access to participants, including efficiencies for
            operation between the special supplemental nutrition program
            for women, infants, and children under section 17 of the Child
            Nutrition Act of 1966 (42 U.S.C. 1786) and the program under
            subsection (m) of such section (42 U.S.C. 1786); and
              (4) consolidation and elimination of duplicative or
            unnecessary Federal and State reporting requirements.
      (b) Study.--The Secretary, through an independent researcher with
    expertise in economics or government efficiency, shall conduct a study
    on the school meal programs under the Richard B. Russell National
    School Lunch (42 U.S.C. 1751 et seq.) and section 4 of the Child
    Nutrition Act of 1966 (42 U.S.C. 1773) to examine alternative funding
    mechanisms and delivery to improve program effectiveness and efficiency
    while reducing program costs, by--
              (1) analyzing how businesses currently partner with schools
            or institutions to operate the school meal programs, and
            examining better ways to work with private sector businesses in
            the programs;
              (2) providing analysis and recommendations on improvements to
            the programs by lowering administrative and program costs to
            schools, local educational agencies, States, and the Federal
            government, including analysis and recommendations with respect
            to--
                      (A) financial impacts, including estimating potential
                    cost-savings of business participation for families,
                    schools, local educational agencies, States, and the
                    Federal government;
                      (B) regulatory and other barriers preventing business
                    participation, and how to remove such barriers to
                    encourage such business participation; and
                      (C) regulatory and other barriers to better utilize
                    donations, including donations of food products, while
                    still complying with food safety requirements; and
              (3) considering the factors the Secretary is working on with
            States under subsection (a), while carrying out the analysis
            under paragraphs (1) and (2) of this subsection.
      (c) Further Actions.--Not later than 1 year after the date of
    enactment of this Act, the Secretary shall--
              (1) make the regulatory and guidance changes recommended
            under subsections (a) and (b); and
              (2) 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) the findings of the study conducted under
                    subsection (b);
                      (B) a plan for legislative and regulatory action,
                    including--
                              (i) a timetable of action for regulatory
                            relief; and
                              (ii) recommendations for legislative action
                            required to improve program efficiency and
                            lower administrative costs for the school meal
                            programs.
      (d) Spending Limitation.--Not more than a total of $475,000 shall be
    used to carry out subsections (b) and (c).

    SEC. 303. PRODUCT AVAILABILITY.

      (a) In General.--The Secretary shall, to the extent practicable, make
    available lactose-free milk with an extended shelf life for use in the
    commodity distribution program authorized under section 14 of the
    Richard B. Russell National School Lunch Act (42 U.S.C. 1762a).
      (b) Size and Form.--The milk described in subsection (a) shall, to
    the extent practicable, be made available in a size and form acceptable
    for and conducive to consumption by school-aged children.

    SEC. 304. PROCUREMENT.

      In administering the summer food service program for children
    established under section 13 of the Richard B. Russell National School
    Lunch Act (42 U.S.C. 1761) and the child and adult care food program
    established under section 17 of such Act (42 U.S.C. 1766), the
    Secretary shall ensure that--
              (1) service institutions participating in the programs have
            flexibility in determining the frequency of procurement and
            food items included in each solicitation; and
              (2) any procurement procedure implemented by a State agency
            is cost effective and efficient in meeting the relevant meal
            pattern requirements.

    SEC. 305. SCHOOL NUTRITION ADVISORY COMMITTEE.

      (a) Establishment.--Not later than 120 days after the date of the
    enactment of this Act, the Secretary shall establish a School Nutrition
    Advisory Committee (referred to in this section as the ``Committee'')
    to provide input in the administration of the school lunch program
    authorized under the Richard B. Russell National School Lunch Act (42
    U.S.C. 1751 et seq.) and the school breakfast program established by
    section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) (referred
    to in this section as ``child nutrition programs'').
      (b) Membership.--
              (1) Composition.--Members of the Committee shall be appointed
            by the Secretary from recommendations made by the chair and
            ranking member of the Committee on Education and the Workforce
            of the House of Representatives and the Committee on
            Agriculture, Nutrition, and Forestry of the Senate. Membership
            on the Committee shall represent the following stakeholders:
                      (A) An organization that conducts research and
                    advocates on issues relating to child nutrition.
                      (B) An organization that advocates for cardiac
                    health.
                      (C) A professional organization representing
                    dietitians.
                      (D) A trade association representing fruit and
                    vegetable growers.
                      (E) A coalition of large urban school food
                    authorities.
                      (F) 2 representatives from State agencies that
                    administer the child nutrition programs.
                      (G) A professional organization representing school
                    food employees.
                      (H) A professional organization representing school
                    board members.
                      (I) A council representing large school districts.
                      (J) A professional association representing school
                    administrators.
                      (K) An entity that processes and manufactures meat
                    products.
                      (L) An entity that processes and manufactures dairy
                    products.
                      (M) An entity that processes and manufactures grain
                    products.
                      (N) An entity that assists suppliers and school food
                    authorities in selling and obtaining food products.
                      (O) A school food authority located in each of the 7
                    regions established for activities of the Food and
                    Nutrition Service, including--
                              (i) 3 representatives from districts located
                            in rural areas;
                              (ii) 2 representatives from districts located
                            in urban areas; and
                              (iii) 2 representatives from districts
                            located in urban cluster areas as defined by
                            census tract data.
                      (P) A council that represents public officials who
                    head departments of elementary and secondary education.
                      (Q) A professional organization representing
                    pediatricians.
              (2) Terms.--The members will serve on the Committee for a 3-
            year term. The chairmen of each congressional committee, under
            paragraph (1) shall alternate in appointing a chair and vice
            chair of the committee.
      (c) Function.--The Committee shall--
              (1) provide a venue for communication between stakeholders
            and the Department of Agriculture regarding child nutrition
            programs;
              (2) give insight into child nutrition program implementation;
              (3) review and make recommendations to the Secretary on
            policy development involving child nutrition programs; and
              (4) evaluate methods for programmatic and administrative
            improvement of child nutrition programs.
      (d) Meetings.--The Committee shall meet quarterly.
      (e) Staffing.--The Secretary shall provide such staff personnel as
    may be required to assist the Committee in carrying out the duties of
    the Committee, but such staff shall not interfere in the discussions or
    conclusions reached by the Committee.
      (f) Termination.--The authority of the Committee shall terminate on
    September 30, 2025.

    SEC. 306. PAPERWORK REDUCTION.

      (a) In General.--For any program authorized under the Richard B.
    Russell National School Lunch Act (42 U.S.C. 1751 et seq.) or the Child
    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), the Secretary shall--
              (1) periodically review regulations, guidance, and other
            requirements to evaluate the volume of information required to
            be reported to the Department of Agriculture by program
            participants; and
              (2) if appropriate, streamline or otherwise reduce any
            unnecessary or duplicative paperwork, reporting requirements,
            and other administrative burdens while maintaining program
            integrity.
      (b) Report.--Not later than 2 years after the date of the enactment
    of this Act and every 3 years thereafter, and upon any publishing of
    guidance or updated Federal requirements 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 that describes any action the Secretary
    has taken under subsection (a) during the preceding 3 calendar years,
    or in the case of a report submitted based on publishing updated
    guidance or requirements, a report on such action, including a
    determination of appropriateness under subsection (a)(2).

    SEC. 307. TECHNOLOGY.

      (a) Use of Technology.--Not later than 180 days after the date of the
    enactment of this Act, the Secretary shall--
              (1) review the current use of technology in the school lunch
            program established under the Richard B. Russell National
            School Lunch Act (42 U.S.C. 1751 et seq.) and the school
            breakfast program established by section 4 of the Child
            Nutrition Act of 1966 (42 U.S.C. 1773);
              (2) identify opportunities in which enhanced use of
            technology would reduce the rate of errors in administration of
            the programs by State agencies and local educational agencies;
            and
              (3) encourage State agencies and local educational agencies
            to use technology in the areas identified under paragraph (2).
      (b) Identification.--Not later than 180 days after the date of the
    enactment of this Act, the Secretary shall--
              (1) review the feasibility and evaluate the benefits of using
            a unique student identifier in the school lunch program
            established under the Richard B. Russell National School Lunch
            Act (42 U.S.C. 1751 et seq.) and the school breakfast program
            established by section 4 of the Child Nutrition Act of 1966 (42
            U.S.C. 1773);
              (2) 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 describing the
            results of the review under paragraph (1); and
              (3) initiate implementation of a system for using a unique
            student identifier, unless implementation is not in the best
            interest of the programs described in paragraph (1), or does
            not adequately protect student privacy.

    SEC. 308. IMPROVING HEALTH AND SAFETY OVERSIGHT AND MONITORING FOR THE
                        CHILD AND ADULT CARE FOOD PROGRAM.

      Not later than 1 year after the date of enactment of this Act, the
    Secretary of Agriculture shall work with the Secretary of Health and
    Human Services to improve health and safety oversight and monitoring
    practices required under the child and adult care food program under
    section 17 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1766) by issuing guidance to States to--
              (1) reduce duplicative monitoring or oversight practices
            among such child and adult care food program, the programs
            under the Child Care and Development Block Grant Act of 1990
            (42 U.S.C. 9858 et seq.) and the Head Start Act (42 U.S.C. 9831
            et seq.), and other applicable programs; and
              (2) provide recommendations in cases in which separate State
            agencies administer such programs, including practices for
            streamlining the monitoring of Federal requirements (including
            compliance, operations, and financial requirements as a result
            of multiple Federal programmatic regulations), in order to
            reduce the burden on participants and States while enhancing
            levels of health, safety, and program integrity.

    SEC. 309. TECHNICAL CORRECTIONS.

      (a) Richard B. Russell National School Lunch Act.--
              (1) The Richard B. Russell National School Lunch Act is
            amended in each of sections 4, 9, 9A, 12, 19, 23, and 25 (42
            U.S.C. 1753, 1758,1758b, 1760, 1796a, 1769d, and 1769f) by
            striking ``Committee on Education and Labor'' each place it
            appears and inserting ``Committee on Education and the
            Workforce''.
              (2) Section 9 of the Richard B. Russell National School Lunch
            Act (42 U.S.C. 1758) is amended--
                      (A) by striking ``foster child'' each place it
                    appears and inserting ``foster youth''; and
                      (B) in subsection (b)(5)(B), by striking ``(42 U.S.C.
                    11434a(2))'' and inserting ``(42 U.S.C. 11434a(2)))''.
              (3) Section 12 of the Richard B. Russell National School
            Lunch Act (42 U.S.C. 1760) is amended in subsection (d)(3), by
            striking ``U.S.C'' and inserting ``U.S.C.''.
              (4) Section 14(c) of the Richard B. Russell National School
            Lunch Act (42 U.S.C. 1762a(c)) is amended--
                      (A) by striking ``section 311(a)(4) of the Older
                    Americans Act of 1965 (42 U.S.C. 3030(a)(4))'' and
                    inserting ``section 311(c)(4) of the Older Americans
                    Act of 1965 (42 U.S.C. 3030a(c)(4))''; and
                      (B) by striking ``(42 U.S.C. 3030(b)(1))'' and
                    inserting ``(42 U.S.C. 3030a(b)(1))''.
      (b) Child Nutrition Act of 1966.--
              (1) The Child Nutrition Act of 1966 is amended in each of
            sections 10 and 17 (42 U.S.C. 1779, 1786) by striking
            ``Committee on Education and Labor'' each place it appears and
            inserting ``Committee on Education and the Workforce''.
              (2) Section 7(a)(2)(B)(i) of the Child Nutrition Act of 1966
            (42 U.S.C. 1776(a)(2)(B)(i)) is amended by striking ``clause
            (ii)'' and inserting ``clause (ii))''.
              (3) Section 17 of the Child Nutrition Act of 1966 (42 U.S.C.
            1786) is amended--
                      (A) in subsection (h)(4)--
                              (i) in subparagraph (A)(vi), by striking
                            ``and'' at the end; and
                              (ii) in subparagraph (C)(iv), by striking ``;
                            and'' at the end and inserting a period;
                      (B) in subsection (l)(6)(C)(iv), as redesignated by
                    section 206(a)(9) of this Act, by striking ``(G)(i)''
                    each place it appears and inserting ``(F)(i)''.

    SEC. 310. BUDGETARY EFFECTS.

      The budgetary effects of this Act, for the purpose of complying with
    the Statutory Pay-As-You-Go Act of 2010, shall be determined by
    reference to the latest statement titled ``Budgetary Effects of PAYGO
    Legislation'' for this Act, submitted for printing in the Congressional
    Record by the chair of the Committee on the Budget of the House of
    Representatives, provided that such statement has been submitted prior
    to the vote on passage.

    SEC. 311. EFFECTIVE DATE.

      Except as otherwise specifically provided in this Act or any of the
    amendments made by this Act, this Act and the amendments made by this
    Act take effect on October 1, 2016.

                                    Purpose

        H.R. 5003, the Improving Child Nutrition and Education Act
    of 2016 (bill), amends the Richard B. Russell National School
    Lunch Act (NSLA) and the Child Nutrition Act of 1966 (CNA) to
    support state and local efforts in providing nutritious food to
    students; to increase accountability and transparency; to
    better target assistance to those most in need; to provide
    flexibility to states and service providers; to strengthen the
    integrity and efficiency of the Special Supplemental Nutrition
    Program for Women, Infants, and Children (WIC); to improve
    service delivery in the Child and Adult Care Food Program
    (CACFP); and to support nutrition education and family
    engagement. The bill provides state and local leaders the
    flexibility and additional support they need to ensure all
    vulnerable children have access to healthy meals.

                                Committee Action

        H.R. 5003 reflects work by the Committee on Education and
    the Workforce (Committee) to reauthorize the NSLA and CNA. The
    bill builds upon the Committee's ongoing efforts to improve
    child nutrition programs by examining federal investments,
    reducing burdensome requirements, and strengthening programs.

                                 112TH CONGRESS

    Full Committee Hearing on Examining the Costs of Federal Overreach into
            School Meals

        On May 13, 2011, the Committee held a hearing in
    Washington, D.C., on ``Examining the Costs of Federal Overreach
    into School Meals.'' The purpose of the hearing was to discuss
    the impact of implementing recent changes to the child
    nutrition laws and the challenges new regulations impose on the
    school meal program, including greater costs and fewer options
    for students. Testifying before the Committee were Ms. Sally
    Spero, Food Planning Supervisor, San Diego Unified School
    District, San Diego, California; Mr. Barry Sackin, Owner, B.
    Sackin and Associates, Murrieta, California; Ms. Karen
    Castaneda, Director for Food Services, Pennridge School
    District, Perkasie, Pennsylvania; and Mr. Kenneth Hecht,
    Executive Director, California Food Policy Advocates, Oakland,
    California.

                                 113TH CONGRESS

    Full Committee Hearing on School Meal Regulations: Discussing the Costs
            and Consequences for Schools and Students

        On June 27, 2013, the Committee held a hearing in
    Washington, D.C., on ``School Meal Regulations: Discussing the
    Costs and Consequences for Schools and Students.'' The purpose
    of the hearing was to evaluate the consequences of school meal
    regulations issued by the U.S. Department of Agriculture (USDA)
    under the Healthy, Hunger-Free Kids Act of 2010 (HHFKA).
    Testifying before the Committee were Ms. Kay E. Brown, Director
    of Education, Workforce, and Income Security Issues, U.S.
    Government Accountability Office (GAO), Washington, D.C.; Ms.
    Megan Schaper, Director of Food and Nutrition Services, State
    College Area School District, State College, Pennsylvania; Ms.
    Sandra Ford, Director of Food and Nutrition Services, Manatee
    County School District, Bradenton, Florida; and Dr. Margo
    Wootan, Director of Nutrition Policy, Center for Science in the
    Public Interest, Washington, D.C.

                                 114TH CONGRESS

    First Session--hearings

    Full Committee Hearing on Serving Students and Families through Child
            Nutrition Programs

        On April 15, 2015, the Committee held a hearing in
    Washington, D.C., on ``Serving Students and Families through
    Child Nutrition Programs.'' The purpose of the hearing was to
    examine the importance of the federal governments child
    nutrition programs and highlight how these programs are linked
    to better educational outcomes. Testifying before the Committee
    were Ms. Julia Bauscher, President, School Nutrition
    Association/ Director, School and Community Nutrition Services,
    Jefferson County Public Schools, Louisville, Kentucky; Mr. Duke
    Storen, Senior Director, Research, Advocacy, and Partner
    Development, Share Our Strength, Washington, D.C.; Dr. Kathy
    Krey, Director of Research and Assistant Research Professor,
    Texas Hunger Initiative, Baylor University, Waco, Texas; and
    Ms. Dorothy S. McAuliffe, First Lady of Virginia, Office of the
    Governor, Commonwealth of Virginia, Richmond, Virginia.

    Subcommittee Hearing on Addressing Waste, Fraud, and Abuse in Federal
            Child Nutrition Programs

        On May 19, 2015, the Subcommittee on Early Childhood,
    Elementary, and Secondary Education (Subcommittee) held a
    hearing in Washington, D.C., on ``Addressing Waste, Fraud, and
    Abuse in Federal Child Nutrition Programs.'' The purpose of the
    hearing was to examine concerns with waste, fraud, and abuse in
    federal child nutrition programs and look at ways to prevent
    future fraud in the programs. Testifying before the
    Subcommittee were Mr. Gil Harden, Assistant Inspector General
    for Audit, Office of Inspector General, USDA, Washington, D.C.;
    Ms. Kay E. Brown, Director, Education, Workforce, and Income
    Security, GAO, Washington, D.C.; Ms. Jessica Lucas-Judy, Acting
    Director, Forensic Audits and Investigative Service, GAO,
    Washington, D.C.; and Ms. Zoe Neuberger, Senior Policy Analyst,
    Center on Budget and Policy Priorities, Washington, D.C.

    Full Committee Hearing on Child Nutrition Assistance: Are Federal Rules
            and Regulations Serving the Best Interests of Schools and
            Families?

        On June 16, 2015, the Committee held a hearing in
    Washington, D.C., on ``Child Nutrition Assistance: Are Federal
    Rules and Regulations Serving the Best Interests of Schools and
    Families?'' The purpose of the hearing was to examine rules and
    regulations governing child nutrition policies and discuss
    possible reforms to improve federal child nutrition programs.
    Testifying before the Committee was the Honorable Tom Vilsack,
    Secretary, USDA, Washington, D.C.

    Subcommittee Hearing on Child Nutrition Assistance: Looking at the Cost
            of Compliance For States and Schools

        On June 24, 2015, the Subcommittee held a hearing in
    Washington, D.C., on ``Child Nutrition Assistance: Looking at
    the Cost of Compliance for States and Schools.'' The purpose of
    the hearing was to examine the challenges states and schools
    have faced in implementing the requirements of HHFKA and its
    regulations. Testifying before the Subcommittee were Dr. Lynn
    Harvey, Chief, School Nutrition Services, Safe and Healthy
    Schools Support Division, North Carolina Department of Public
    Instruction, Raleigh, North Carolina; Mr. John Payne,
    President, Blackford School Board of Trustees, Hartford City,
    Indiana; Dr. Melody Schopp, Secretary of Education, South
    Dakota Department of Education, Pierre, South Dakota; and Ms.
    Donna Martin, Director, School Nutrition Program, Burke County
    Public Schools, Waynesboro, Georgia.

    Second Session--Legislative action

        On April 20, 2016, Rep. Todd Rokita (R-IN), Chairman of the
    Subcommittee, introduced H.R. 5003, the Improving Child
    Nutrition and Education Act of 2016. The bill reforms federal
    child nutrition programs to reduce waste, fraud, and abuse, as
    well as ensure states and schools have the flexibility they
    need to provide children access to healthy meals.
        On May 18, 2016, the Committee considered the bill in
    legislative session and reported the bill favorably, as
    amended, to the House of Representatives by a vote of 20-14.
    There were 32 amendments offered:
               Amendment in the Nature of a Substitute:
            Subcommittee Chairman Rokita offered an amendment in
            the nature of a substitute. The amendment (1) clarified
            requirements in the fruit and vegetable program; (2)
            permitted the Secretary of Agriculture (Secretary) to
            provide bottled water during a state of emergency that
            impacts the public water system; (3) authorized a new
            demonstration project that would provide states greater
            flexibility in offering healthy meals; (4) clarified
            the cost for the regulations review; (5) required the
            Secretary to provide a minimum of a 60-day comment
            period for revised regulations on meal standards; (6)
            clarified the Secretary should look at program
            efficiencies within the WIC program when examining ways
            to remove duplication and increase program efficiency;
            and (7) included other technical and clarifying
            changes. The amendment was agreed to by voice vote.
               Amendment 2: Ranking Member Robert C.
            ``Bobby'' Scott (D-VA) offered an amendment to change
            the title of the bill. The amendment was defeated by
            voice vote.
               Amendment 3: Ranking Member Scott offered an
            amendment to provide a study on universal free meals.
            The amendment was defeated by voice vote.
               Amendment 4: Rep. Rick Allen (R-GA) offered
            an amendment to study how utilizing private-sector
            partnerships can improve child nutrition programs. The
            amendment was agreed to by voice vote.
               Amendment 5: Rep. Marcia L. Fudge (D-OH)
            offered an amendment to strike language that set the
            Community Eligibility Provision (CEP) threshold at 60
            percent. The amendment was defeated by a vote of 13-22.
               Amendment 6: Rep. Mark DeSaulnier (D-CA)
            offered an amendment to require USDA to establish a
            process to ensure state compliance with potable water
            requirements. The amendment was defeated by a vote of
            13-22.
               Amendment 7: Ranking Member Scott offered an
            amendment to provide nationwide funding for water
            testing in schools and child care settings. The
            amendment was defeated by a vote of 13-22.
               Amendment 8: Rep. Glenn Grothman (R-WI)
            offered an amendment to set the CEP threshold at 80
            percent. The amendment was defeated by a vote of 8-27.
               Amendment 9: Ranking Member Scott offered an
            amendment to strike the three-year Secretarial review
            and certification process. The amendment was defeated
            by a vote of 13-22.
               Amendment 10: Rep. Suzanne Bonamici (D-OR)
            offered an amendment to strike the exemption to the
            smart snacks rule. The amendment was defeated by a vote
            of 13-22.
               Amendment 11: Ranking Member Scott offered
            an amendment to strike the cultural foods exemption.
            The amendment was agreed to by voice vote.
               Amendment 12: Rep. Mark Takano (D-CA)
            offered an amendment to expand the salad bar promotion
            and technical assistance provision. The amendment was
            withdrawn.
               Amendment 13: Rep. Mark Pocan (D-WI) offered
            an amendment to require food service worker training.
            The amendment was defeated by a vote of 16-19.
               Amendment 14: Rep. Takano offered an
            amendment to strike the increased verification
            requirements. The amendment was defeated by a vote of
            13-22.
               Amendment 15: Rep. Elise Stefanik (R-NY)
            offered an amendment to help states better monitor
            CACFP in order to improve oversight and ease
            administrative burdens. The amendment was agreed to by
            voice vote.
               Amendment 16: Rep. Susan A. Davis (D-CA)
            offered an amendment to strike a provision limiting the
            number of times families may be contacted during the
            school meal application process. The amendment was
            defeated by a vote of 16-19.
               Amendment 17: Rep. Jared Polis (D-CO)
            offered an amendment to require the school meal
            applications to be in a language recipients understand
            and to preserve free or reduced price eligibility if
            the requirement was not met. The amendment was defeated
            by a vote of 13-21.
               Amendment 18: Rep. Polis offered an
            amendment to clarify the Secretary can consult with
            pediatricians, dieticians, and parents during the
            nutrition standards review. The amendment was agreed to
            by voice vote.
               Amendment 19: Rep. Dave Brat (R-VA) offered
            an amendment to provide flexible funding for child
            nutrition programs. The amendment was withdrawn.
               Amendment 20: Ranking Member Scott offered
            an amendment to strike the demonstration project that
            would provide flexible spending to three states in
            administering child nutrition programs. The amendment
            was defeated by a vote of 14-20.
               Amendment 21: Rep. Joe Courtney (D-CT)
            offered an amendment to provide schools with
            flexibility in purchasing milk for students. The
            amendment was agreed to by voice vote.
               Amendment 22: Ranking Member Scott offered
            an amendment to provide free and reduced price meals to
            low-income students in higher education. The amendment
            was withdrawn.
               Amendment 23: Ranking Member Scott offered
            an amendment to prohibit stigma-related functions
            within school meal programs. The amendment was
            withdrawn.
               Amendment 24: Rep. Katherine M. Clark (D-MA)
            offered an amendment to expand eligibility under the
            WIC program. The amendment was defeated by a vote of
            13-21.
               Amendment 25: Rep. Bonamici offered an
            amendment to expand the CACFP to include a third meal.
            The amendment was defeated by a vote of 15-19.
               Amendment 26: Ranking Member Scott offered
            an amendment to expand the Summer Food Service Program
            (SFSP) to include a third meal. The amendment was
            defeated by a vote of 15-19.
               Amendment 27: Rep. Grothman offered an
            amendment to provide states flexibility in
            administering the school meal and snack programs. The
            amendment was defeated by a vote of 9-25.
               Amendment 28: Reps. Davis and Bonamici
            offered an amendment to amend the SFSP electronic
            benefits transfer (EBT) program and increase
            authorization levels. The amendment was defeated by a
            vote of 13-21.
               Amendment 29: Rep. Davis offered an
            amendment to allow other forms of EBT, such as those in
            WIC and the Supplemental Nutrition Assistance Program
            (SNAP), within the SFSP EBT provision. The amendment
            was agreed to by voice vote.
               Amendment 30: Rep. Alma S. Adams (D-NC)
            offered an amendment to change the area eligibility to
            40 percent for summer programs. The amendment was
            defeated by a vote of 13-21.
               Amendment 31: Ranking Member Scott offered
            an amendment to strike the prohibitions placed on the
            Secretary. The amendment was defeated by a vote of 13-
            21.
               Amendment 32: Rep. Fudge offered an
            amendment to prohibit the Act from taking effect until
            certain conditions were met. The amendment was defeated
            by a vote of 13-21.
        Rep. Joe Wilson (R-SC) offered a motion to report the bill
    as amended. The motion was adopted by a vote of 20-14.

                                    Summary

        NSLA and CNA authorize several nutrition programs with
    mandatory spending implications, notably the school lunch and
    breakfast programs and CACFP. Most recently reauthorized
    through HHFKA, the authorization of many of the programs
    expired on September 30, 2015.
        Congress vastly expanded the federal government's role in
    child nutrition through HHFKA and provided USDA broad authority
    to create regulations regarding nutrition standards and meal
    patterns, including specific requirements regarding whole-
    grains, sodium, calories, and fruit and vegetable servings.
    Since the regulations were implemented, schools, students, and
    families have experienced a number of harmful consequences. For
    example, participation in the school lunch program has
    decreased by 1.2 million meals per day.\1\ Additionally, a
    study by the National School Boards Association in 2014 found
    84 percent of districts have seen an increase in plate waste;
    77 percent have seen a decrease in participation; and 82
    percent have experienced an increase in cost, largely due to
    the implementation of these new federal meal standards.\2\
    School districts have found the requirements to be burdensome,
    costly, and difficult to implement, leading to greater strain
    on school budgets and fewer students being served.
    ---------------------------------------------------------------------------
        \1\USDA school lunch participation data. http://www.fns.usda.gov/
    sites/default/files/pd/slsummar.pdf.
        \2\National School Boards Association. Pulse Poll on School Meal
    Requirements. Page 1. October 2014. http://www.nsba.org/sites/default/
    files/reports/NSBA_School_Nutrition_Poll.pdf.
    ---------------------------------------------------------------------------
        Without responsible reform, schools will continue to face
    these burdens and additional challenges as federal requirements
    become even more stringent. For example, the current mandated
    sodium levels make it difficult for schools to purchase low-
    sodium food kids will eat. As sodium restrictions increase, it
    will become more difficult to produce food that appeals to
    kids, which will result in more food being wasted and more kids
    dropping out of the school lunch program. Additionally, food
    safety will be affected as certain foods expire more quickly,
    further increasing costs for schools.
        In order to address these issues and provide viable
    solutions, Subcommittee Chairman Rokita introduced H.R. 5003.
    The legislation helps address these issues by giving states,
    schools, and providers the flexibility they need to ensure
    children have access to healthy meals without additional or
    prohibitive costs. Specifically, the legislation offers a
    better way forward in the following areas:
               Reviewing Nutrition Standards. The
            legislation requires USDA to review and update federal
            meal patterns and nutrition standards every three years
            and then update the standards as necessary. The first
            review is to be completed within 90 days of enactment
            of the bill. In conducting these reviews, USDA is to
            consult with school leaders. The Department must ensure
            federal standards do not limit student participation,
            are appropriate for school-age children, and do not
            increase costs for schools.
               Reining in the Secretarys Authority. The
            legislation limits the Secretarys authority by
            prohibiting the Secretary from imposing additional
            requirements not included in the law or dictating
            educational content around nutrition.
               Reducing Administrative Burdens. Under
            current law, overly prescriptive federal rules dictate
            when schools may serve certain foods, and different
            rules apply depending on how the meal is served. These
            federal requirements have created confusion and
            administrative challenges for school lunch officials.
            The bill allows all foods that qualify to be served as
            part of a reimbursed meal to also be served in a la
            carte lines, enabling school officials to more easily
            plan school meals.
               Strengthening Verification. Current law
            requires schools to verify the accuracy of student
            participation by reviewing a
             small percentage of applications, focusing on those
            applications that are prone to error. To decrease fraud
            and abuse, the bill raises the standard verification
            sample to 10 percent of all applications. Schools that
            perform well based on school district-specific metrics
            will be able to reduce their verification sample by
            certain amounts. Schools that perform in the top 20
            percent in the state will be able to drop their sample
            size to the bottom threshold, 2.5 percent, immediately.
            Schools performing in the bottom 10 percent will be
            required to take additional verification steps to
            address their error rate.
               Improving Community Eligibility. CEP allows
            schools to provide free breakfasts and lunches to all
            students if the school or school district is in an area
            of high poverty. This option is allowed when 40 percent
            or more of the student population are (among other
            factors) homeless, in foster care, or in a family
            eligible for other means-tested benefit programs. The
            legislation would raise the CEP percentage to 60
            percent in order to better target resources to those
            students in need, while also ensuring all students who
            are eligible for assistance continue to receive
            assistance.
               Repealing the Middle-Class ``Tax'' Increase.
            The 2010 reauthorization of child nutrition assistance
            forces schools to increase prices for students and
            families who do not rely on federal assistance when
            purchasing school meals (also known as ``full-paid''
            students). The bill repeals this mandated increase in
            the price of full-paid meals.
               Repealing the Ban on Student Bake Sales.
            Current law requires the Secretary to issue regulations
            covering all foods sold in school, including food sold
            in student-led activities such as bake sales and
            fundraisers. This has undermined the ability of
            students to raise funds to support academic and
            extracurricular activities. The bill exempts student
            group fundraisers from federal nutrition standards.
               Streamlining State Audits. The bill requires
            states to audit school programs once every five years,
            rather than once every three years as mandated by
            current law. This change will ensure states have more
            time to help schools in need of assistance instead of
            focusing solely on complying with burdensome paperwork
            requirements imposed by the federal government.
               Increasing Breakfast Reimbursement. The bill
            provides the first increase for breakfast reimbursement
            in over 25 years by providing schools an additional
            $0.02 for breakfast without adding any additional cost
            to taxpayers. For the school year beginning in 2020,
            the added reimbursement amount will increase to $0.03.
               Providing Flexibility in SFSP Distribution.
            SFSP helps provide low-income children with access to
            healthy meals when they are not in school. Food is
            served at designated sites (also known as ``congregate
            sites''), which can be difficult for children who live
            in rural areas or lack transportation. The bill allows
            states to provide summer meals away from a congregate
            site in rural or low-income areas without access to
            summer service. It also streamlines the process for
            states to allow congregate sites to provide meals for
            off-site consumption in the case of extreme or
            emergency circumstances.
               Reducing Burdens and Improving Access to
            CACFP. CACFP supports meals and snacks served to
            children and adults in home-based and center-based
            daycare. To reduce administrative burdens and
            paperwork, the bill lengthens eligibility
            determinations from one to four months after approval.
            The bill requires USDA to improve its program integrity
            measures to ensure a fair, accurate, and consistent
            review process. It requires the Secretary to convene
            and implement recommendations from an advisory
            committee that will propose ways to reduce unnecessary
            or duplicative paperwork. Additionally, it allows
            public or licensed nonprofit private residential child
            care institutions, as well as any boarding school
            funded by the Bureau of Indian Education, to
            participate in the program if they are not
            participating in the school lunch or breakfast
            programs.
               Streamlining Service Provider Applications.
            Children currently may receive meals through both SFSP
            and the at-risk afterschool meals component of the
            CACFP. It is common for service providers to
            participate in both programs, but under current law,
            they must apply for and comply with the various
            requirements in each of the individual programs. The
            bill empowers states to streamline the programs by
            simplifying administration and operations and by
            reimbursing providers for year-round service at CACFP
            levels.
               Strengthening the Integrity of the WIC
            Program. The bill authorizes the WIC program at the
            current appropriation for the next five years. The bill
            strengthens the integrity of the program by encouraging
            states to move to EBT more quickly. Additionally, the
            bill improves the process for state moratoriums on the
            addition of new vendors to ensure there are clear
            guidelines in place to help states control costs and
            improve program integrity. The bill includes changes to
            the rebate process for infant formula to provide
            greater fairness and accountability. Additionally, GAO
            is required to review how adjunctive eligibility
            through Medicaid impacts WIC participation and costs.

    Supporting innovation

               Current law authorizes certain demonstration
            projects to determine more effective ways to eliminate
            hunger and deliver healthy food to children in and out
            of school. To help spur local innovation, the bill
            includes a number of reforms around demonstration
            projects: Summer Electronic Benefit Transfer for
            Children. Ten states are currently able to provide
            benefits through the Summer Electronic Benefit Transfer
            for Children (SEBTC) program.\3\ Those states can use
            either SNAP or WIC EBT technology to allow families to
            purchase food in the summer rather than eat at a
            congregate site. The bill continues the project for
            states that are currently operating with WIC or SNAP
            technology but changes requirements and adds new
            limitations. The bill requires a robust evaluation to
            determine the effects of EBT as an alternate delivery
            method during the summer months.
    ---------------------------------------------------------------------------
        \3\Connecticut, Delaware, Michigan, Missouri, Nevada, Oregon,
    Texas, Washington, Cherokee Nation and Chickasaw Nation.
    ---------------------------------------------------------------------------
               Farm to School. The bill requires a greater
            focus on nutrition education for children and families
            and increases support for the program to help address
            high demand.
               Local Business Participation. The bill
            authorizes a competitive grant program allowing local
            businesses in four states to act as sponsors in SFSP in
            low-income or rural areas where there currently are no
            meal services in order to evaluate the benefit of
            partnering with local employers to address hunger
            issues.

    Other notable provisions

               Family Meal Days. Under the legislation,
            federal nutrition standards can be waived up to four
            days in a year so schools can provide Family Meal Days.
            This would be a voluntary option for schools. Fruits
            and Vegetables Mandates. The bill removes a federal
            mandate in the fruits and vegetables snack program that
            dictates the types of produce school nutrition
            officials can serve. Improvements to School Lunch
            Facilities. The legislation continues to provide
            assistance to improve school kitchens and cafeterias,
            which requires matching funds by recipients who receive
            assistance. Sharing Best Practices. The bill requires
            the Secretary to establish a centralized exchange
            network to facilitate the sharing of information and
            best practices between the states to enhance
            efficiency, improve compliance, and reduce waste,
            fraud, and abuse. Paperwork Reduction and Use of
            Technology. The bill requires the Secretary to review
            regulations, guidance, and other federal requirements
            to identify ways to streamline and reduce the paperwork
            burden on states and schools and to review the current
            use of technology in the school lunch program.

                                Committee Views

    Introduction

        Helping children access healthy meals has long been a
    national priority. With the goal of improving access while
    ensuring accountability, the Committee worked with numerous
    organizations--including those representing school leaders and
    school nutrition professionals--to develop a legislative
    proposal that will improve child nutrition programs.\4\ The
    bill includes commonsense reforms to give schools the
    flexibility and assistance they need to better serve their
    students healthy meals. As Ms. Megan Schaper, director of Food
    Service and Nutrition for the State College Area School
    District in State College, Pennsylvania, said in her testimony
    before the Subcommittee, ``a program that cannot remain
    fiscally solvent due to decreased participation, decreased
    opportunities to generate revenue, and mandated increases in
    program costs is not positioned to provide high-quality,
    healthful meals to students.''\5\ H.R. 5003 provides the relief
    schools need, maintains healthy standards for students' meals,
    and provides greater investments in other important programs
    that help fight hunger while reducing waste, fraud, and abuse.
    ---------------------------------------------------------------------------
        \4\H.R. 5003, the Improving Child Nutrition and Education Act of
    2016. http://edworkforce.house.gov/uploadedfiles/
    improving_child_nutrition_and_education_act_of_2016.pdf.
        \5\Subcommittee hearing entitled, ``School Meal Regulations:
    Discussing the Costs and Consequences for Schools and Students'' on
    June 27, 2013. Testimony of Ms. Megan Schaper, Director of Food Service
    and Nutrition, State College Area School District, Pennsylvania. U.S.
    House of Representatives, Subcommittee on Early Childhood, Elementary,
    and Secondary Education, Committee on Education and the Workforce,
    Washington, DC.
    ---------------------------------------------------------------------------

             Title I--Richard B. Russell National School Lunch Act

        Title I of the bill amends NSLA. First, the definition of
    ``state agency'' is broadened to reflect how states have chosen
    to operate these programs. While many state departments of
    education run these programs, others utilize the state
    departments of agriculture or other agencies and offices to run
    child nutrition programs. The Committee believes states should
    decide which state agency is best able to run these programs
    without adding additional paperwork.

    Addressing waste, fraud, and abuse

        Child nutrition programs struggle with waste, fraud, and
    abuse. The Office of Management and Budget (OMB) has
    ``designated the National School Lunch Program as 1 of 13
    federal `high-error' programs due to its large estimated
    improper payments--approximately $1.7 billion in fiscal year
    2014.''\6\
    ---------------------------------------------------------------------------
        \6\``School-Meals Programs: Additional Verification Could Help USDA
    Ensure Legitimate Access.'' GAO-15-594T. May 7, 2015. http://
    www.gao.gov/assets/680/670077.pdf.
    ---------------------------------------------------------------------------
        Ms. Jessica Lucas-Judy, Acting Director, Forensic Audits
    and Investigative Services at GAO, noted in her testimony
    before the Subcommittee:

              ``USDA estimates that approximately $959 million of
            its fiscal year 2014 improper payments represents
            certification errors and approximately $789 million
            represents school-district counting and claiming
            errors. USDA estimates that the School Breakfast
            Program had approximately $923 million in improper
            payments in fiscal year 2014.''\7\
    ---------------------------------------------------------------------------
        \7\``School Meals: USDA Could Improve Verification Process for
    Program Access.'' GAO-15-634T, Statement of Jessica Lucas-Judy, Acting
    Director, Forensic Audits and Investigative Service. May 19, 2015.
    http://gao.gov/assets/680/670272.pdf.

        Several instances of fraud were discovered by GAO through
    an audit. GAO discovered several of its employees received
    federal assistance, even though they exceeded the income
    limit.\8\ That audit led to five individuals being indicted,
    one of whom was also a school board member.\9\
    ---------------------------------------------------------------------------
        \8\``School-Meals Programs: USDA Has Enhanced Controls, but
    Additional Verification Could Help Ensure Legitimate Program Access.''
    GAO-14-262. May 15, 2014. http://www.gao.gov/assets/670/663258.pdf.
        \9\``5 GAO workers charged with fraud in obtaining school lunch
    subsidies.'' Lynh Bui. The Washington Post. August 11, 2015. https://
    www.washingtonpost.com/local/crime/pr-georges-school-board-member-five-
    others-accused-of-fraud/2015/08/11/4b9aaffc-405a-11e5-bfe3-
    ff1d8549bfd2_story.html.
    ---------------------------------------------------------------------------
        Verification is an area Secretary Vilsack pinpointed could
    be reformed to increase accountability. Testifying before the
    Committee, he stated it would be ``more helpful if we could get
    up to 10 percent [of free and reduced price lunch applications
    in each school district] reviewed.'' The Secretary further
    stated that increasing the percentage would certainly send a
    message and would begin to focus on the importance of making
    sure we are accurate on all of this.''\10\ The Committee agrees
    with the Secretary and included language in the legislation for
    a new verification process. This process will require school
    districts to review more applications and focus on those
    schools with persistent problems. By requiring greater
    interventions for poorly performing school districts, states
    will be able to focus technical assistance and support on the
    districts in need of the most help in improving the
    verification process to ensure students are receiving the
    correct level of assistance for school meals. Higher performing
    school districts will be allowed to automatically drop their
    verification from 10 percent of all applications to the lowest
    required verification percentage of 2.5 percent. To further
    ease any administrative burdens accompanying the new
    verification requirements, H.R. 5003 incentivizes school
    districts to adopt best practices to modernize the process.
    These changes ensure the issues raised by GAO and the Secretary
    are addressed, while minimizing additional burdens on school
    districts.
    ---------------------------------------------------------------------------
        \10\Full Committee hearing entitled, ``Child Nutrition Assistance:
    Are Federal Rules and Regulations Serving the Best Interests of Schools
    and Families?'' on June 16, 2015. Testimony of Secretary Vilsack, U.S.
    Department of Agriculture, Washington, D.C. U.S. House of
    Representatives, Committee on Education and the Workforce, Washington,
    D.C.
    ---------------------------------------------------------------------------

    Nutrition standards

        As soon as the new regulations governing meal patterns and
    nutrition standards were published, those responsible for
    implementing the meal programs raised concerns about timetables
    and costs. The School Nutrition Association (SNA) commented, We
    are concerned that the timeframes within the rule are ambitious
    given the significant changes which will have to be made to
    school menus that will, at the same time, meet the rule's
    requirements, while also retaining student participation.''\11\
    AASA, The School Superintendents Association, also expressed
    concerns about the cost of the new rule and the rules yet to be
    offered, stating, Beyond the anticipated unfunded costs of
    adopting the higher nutrition standards, we anticipate local
    education agencies (LEAs) will face similar burdens with the
    regulations relating to the training and certification
    requirements, the indirect cost component, and setting a
    national paid-lunch price.''\12\
    ---------------------------------------------------------------------------
        \11\School Nutrition Association. Comment letter on the Food and
    Nutrition Service Proposed Rule: Nutrition Standards in the National
    School Lunch and School Breakfast Programs. March 29, 2011. https://
    www.regulations.gov/contentStreamer?documentId=FNS-2007-0038-
    8987&attachmentNumber=1&disposition=attachment&contentType=pdf.
        \12\AASA: The School Superintendents Association. Comment letter on
    the Food and Nutrition Service Proposed Rule: Nutrition Standards in
    the National School Lunch and School Breakfast Programs. April 5, 2011.
    https://www.regulations.gov/contentStreamer?documentId=FNS-2007-0038-
    9609&attachmentNumber=1&disposition=attachment&contentType=pdf.
    ---------------------------------------------------------------------------
        At a hearing held by the Subcommittee to examine the impact
    of the new rules, witnesses described concerns about costs and
    participation in the programs. Ms. Megan Schaper said:

              ``My school district was well on the way to meeting
            the new nutrition standards when we ended the 2011/12
            school year. We served an abundance of fruits and
            vegetables every day, our breads were whole-grain rich,
            and we knew that our meals were well within the fat and
            calorie ranges as required. That said, we still had
            extremely negative reactions from students and families
            with the meals planned to be in compliance with the
            meat and grain caps. Sandwiches and entree salads could
            not be offered five days a week at our elementary
            schools without respectively exceeding or not reaching
            the grain limits. At secondary schools, popular entrees
            had to be eliminated or substantially reduced in size
            and in our customers' opinions, the larger fruits and
            vegetables did not make up for this.''\13\
    ---------------------------------------------------------------------------
        \13\Subcommittee hearing entitled, ``School Meal Regulations:
    Discussing the Costs and Consequences for Schools and Students'' on
    June 27, 2013. Testimony of Ms. Megan Schaper, Director of Food Service
    and Nutrition, State College Area School District, Pennsylvania. U.S.
    House of Representatives, Subcommittee on Early Childhood, Elementary,
    and Secondary Education, Committee on Education and the Workforce,
    Washington, DC.

        She continued to discuss the decline in participation in
    ---------------------------------------------------------------------------
    her district and the state overall, saying:

              ``Participation dropped in my schools by 34,000 meals
            or 3 percent. Anticipating negative reactions to the
            new standards, my district opted to utilize nonfederal
            funding to justify not raising our lunch prices this
            year as would have been required under Section 205, and
            therefore I believe we avoided larger decreases in
            participation. The lunch price equity rule required
            many other districts to raise meal prices. Higher meal
            prices combined with less satisfaction with the meals
            in general dealt the proverbial one-two punch to the
            participation levels in many districts. Statewide in
            Pennsylvania participation has dropped by 5.6 percent
            through March with the majority of that loss in the
            paid-meal category.''\14\
    ---------------------------------------------------------------------------
        \14\Ibid.

        At the same hearing, GAO noted new rules required some
    schools to replace popular items with less popular
    alternatives, which led to greater food waste and students
    remaining hungry because the food provided was not enough to
    sustain them throughout the day.\15\
    ---------------------------------------------------------------------------
        \15\Subcommittee hearing entitled, ``School Meal Regulations:
    Discussing the Costs and Consequences for Schools and Students'' on
    June 27, 2013. Testimony of Ms. Kay E. Brown, Director for Education,
    Workforce, and Income Security Issues, Government Accountability
    Office, Washington, D.C. U.S. House of Representatives, Subcommittee on
    Early Childhood, Elementary, and Secondary Education, Committee on
    Education and the Workforce, Washington, DC.
    ---------------------------------------------------------------------------
        Providing all students access to healthy meals in a cost-
    effective manner is a priority shared by Republicans and
    Democrats. Unfortunately, the status quo has made it harder for
    states and schools to serve the needs of their students and
    families. The bill provides a different approach, one that
    ensures federal policies (1) reflect the input of school
    leaders, (2) do not increase costs for schools, (3) meet the
    needs of all students, (4) are based on sound science, and (5)
    lead to better participation. Further, the legislation sets up
    a permanent process to ensure standards are reviewed over time
    to make certain the needs of students and schools are still
    being met and, when necessary, changes are considered in a
    responsible way.
        Key aspects of the new process for establishing nutrition
    standards are increasing transparency and providing the public
    adequate time to consider the policy changes. H.R. 5003
    requires and supports transparency throughout the process,
    including through consultation with local stakeholders when the
    new rules are being developed, mandated notice to Congress on
    the new requirements, and the creation of the School Nutrition
    Advisory Committee, a committee created to advise the Secretary
    on child nutrition programs.

    Sodium targets

        Schools are in dire need of additional flexibility so they
    can provide food that kids will eat. Under the current
    regulations, the next sodium target will take effect in the
    2017-18 school year. H.R. 5003 requires the first review of the
    regulations to be completed by December 31, 2016. During this
    review, the Secretary will consult with local officials,
    dieticians, parents, and physicians to determine what changes
    should be made to the regulations, specifically addressing the
    whole-grain requirements and the sodium targets to ensure
    schools can provide food that kids will eat. Because of the
    impending deadline, the bill requires the sodium target to be
    frozen at the current level while the Secretary reviews
    evidenced-based studies to determine the appropriate sodium
    targets. The new target will go into effect three years from
    when it is finalized. The three-year implementation is
    necessary to ensure food producers have time to adapt their
    food to the new targets, schools have time to purchase the
    food, and students have time to adapt to changes in the food
    being served.
        Highlighting the need for additional flexibility, Ms.
    Schaper stated, To be most effective at ending hunger and
    curbing childhood obesity, schools need the flexibility to
    provide healthful lunches that students actually want to
    purchase and eat.''\16\
    ---------------------------------------------------------------------------
        \16\Subcommittee hearing entitled, ``School Meal Regulations:
    Discussing the Costs and Consequences for Schools and Students'' on
    June 27, 2013. Testimony of Ms. Megan Schaper, Director of Food Service
    and Nutrition, State College Area School District, Pennsylvania. U.S.
    House of Representatives, Subcommittee on Early Childhood, Elementary,
    and Secondary Education, Committee on Education and the Workforce,
    Washington, DC.
    ---------------------------------------------------------------------------

    Milk varieties

        Nutrients in milk are important to children's growth and
    development. H.R. 5003 provides schools with flexibility to
    offer additional varieties of milk to encourage students to
    drink milk. The Committee notes H.R. 5003 continues the
    longstanding statutory requirement to offer milk with each
    school lunch. The Committee expects USDA to reaffirm this
    requirement through the updated manuals and guidance.

    Potable water

        Current law includes a requirement for schools to make
    potable water available to students during meal service. In the
    case of an emergency, access to clean water might not be
    possible, so the bill authorizes the Secretary to provide
    access to bottled water to schools that have been affected by a
    nationally-declared emergency.

    Special dietary needs

        The legislation requires the Secretary to issue guidance to
    schools on addressing food-related medical issues, including
    food allergies and other special dietary needs (such as
    religious accommodations) when providing school meals or food
    in other programs. Guidance is needed to ensure kids are not
    excluded due to special dietary needs.

    Family Meal Days

        H.R. 5003 requires the Secretary to allow schools or LEAs
    to waive meal standards up to four days per year to facilitate
    Family Meal Days.'' During the Family Meal Days, schools invite
    families to share school meals, such as a Thanksgiving meal,
    with their children. In implementing this provision, the
    Secretary is prohibited from adding any mandates or
    requirements to the provision. Schools are provided flexibility
    to determine when and how best to host these days to maximize
    family participation.
                Community eligibility
        HHFKA added the community eligibility provision'' (CEP)
    that provides free meals to all students at a school when a
    certain percentage of the student population is identified as
    categorically or automatically eligible for free meals. This
    provision of current law allows taxpayer dollars to subsidize
    meals for students who are not otherwise eligible to receive
    free school meals. H.R. 5003 maintains the provision but
    increases the threshold to 60 percent, making this provision of
    the law consistent with other policies affecting the school
    lunch program. It is important to note this change will not
    affect eligibility for one single student; every child who is
    eligible to receive assistance today will still be eligible for
    assistance under the reauthorized law. The change in the
    provision, however, allows for more effective use of taxpayer
    dollars and more help for those students who need it most.
                Summer food service program for children
        The Committee agrees with the intent of the SFSP in
    addressing the needs of vulnerable children who might be at a
    higher risk of hunger during the summer when they are not
    receiving meals at school. Dr. Kathy Krey, director of research
    at the Texas Hunger Initiative at Baylor University, testified
    before the Committee on the importance of the program, stating:

              ``Regular access to healthy meals in the summer
            months is important, not just for health but for
            students' academic well-being. We know that inadequate
            nutrition can intensify the learning loss that can
            occur over the summer. This particularly affects low-
            income students who can lose up to twice the ground of
            other students during the summer months.''\17\
    ---------------------------------------------------------------------------
        \17\Full Committee hearing entitled, ``Serving Students and
    Families through Child Nutrition Programs'' on April 15, 2015.
    Testimony of Dr. Kathy Krey, Director of Research and Assistant
    Research Professor, Texas Hunger Initiative, Baylor University, Texas.
    U.S. House of Representatives, Committee on Education and the
    Workforce, Washington, D.C.

        While some low-income children receive meals at home or
    through another care arrangement during the summer months,
    others do not, and meeting the needs of these children can be
    particularly challenging. H.R. 5003 continues SFSP with
    fundamental improvements to give states and providers more
    flexibility to provide meals, especially in rural and low-
    income areas where children may be more vulnerable, and
    strengthens existing programs by requiring states to prioritize
    applications with an educational or enrichment activity.
                Streamlining and improving efficiencies
        H.R. 5003 continues the Seamless Summer Option (SSO), which
    allows schools to provide summer meals in a capacity similar to
    their school-year operations, while providing educational
    enrichment. H.R. 5003 establishes opportunities to streamline
    and improve operations of out-of-school meal programs
    throughout the year. SFSP and CACFP programs work together to
    provide meals to children beyond the typical school day,
    whether during the summer or in afterschool programs. Some
    providers operate both programs to serve children throughout
    the year but in doing so must navigate through burdensome red
    tape and expensive and time-consuming hurdles.
        USDA has provided guidance to help states simplify and
    streamline requirements between the two programs so providers
    can better serve at-risk children.\18\ These are steps in the
    right direction; however, the Committee has heard from numerous
    providers of both SFSP and CACFP regarding the need to simplify
    operations and encourage states to improve operations of these
    programs. H.R. 5003 encourages states to remove expensive and
    time-consuming hurdles to help community groups serve meals in
    a more cost-efficient manner. The bill requires the Secretary
    to provide guidance to help states reduce paperwork and
    streamline applications, reporting requirements, inspections,
    and other potential duplications.
    ---------------------------------------------------------------------------
        \18\``Available Flexibilities for CACFP At-risk Sponsors and
    Centers Transitioning to Summer Food Service Program (SFSP).'' U.S.
    Department of Agriculture. November 12, 2013. http://www.fns.usda.gov/
    sites/default/files/SP%2006_CACFP%2003_SFSP%2006-2014os.pdf. See also
    ``Transitioning from the Summer Food Service Program to Child and Adult
    Care Food Program At-risk Afterschool Meals.'' U.S. Department of
    Agriculture. May 31, 2013. http://www.fns.usda.gov/sites/default/files/
    CACFP12_SFSP14-2013.pdf.
    ---------------------------------------------------------------------------
                Non-congregate site flexibility
        Currently, SFSP assists organizations serving meals to
    children in supervised congregate settings such as summer camps
    and recreational programs (referred to as the ``congregate
    feeding requirement''). The program works well in many places,
    helping children access healthy meals in safe, interactive
    environments. However, this model can be a barrier for families
    who lack transportation, live in rural areas, or do not have a
    safe place for children to access help. Mr. Duke Storen, senior
    director of Research, Advocacy, and Partner Development at
    Share Our Strength, testified on this point, noting, ``States
    and communities need more options in terms of the way that
    summer benefits are delivered. Now, there is a single, sort of
    uniform congregate feeding model, and that works great for some
    but it doesn't work at all for most.''\19\ H.R. 5003 allows
    states and providers flexibility from the congregate feeding
    requirement in rural and low-income areas, or when the existing
    congregate site is closed due to extreme weather conditions,
    violence or other safety concerns, or other emergency
    circumstances, as determined by the state.
    ---------------------------------------------------------------------------
        \19\Full Committee hearing entitled, ``Serving Students and
    Families through Child Nutrition Programs'' on April 15, 2015.
    Testimony of Mr. Duke Storen, Senior Director, Research, Advocacy, and
    Partner Development, Share Our Strength, Washington, D.C. U.S. House of
    Representatives, Committee on Education and the Workforce, Washington,
    D.C.
    ---------------------------------------------------------------------------
        This flexibility should be complementary to the existing
    site-based model--not a complete shift away from an approach
    that is working for many students. H.R. 5003 limits this
    allowance to the areas where there are barriers to successful
    operation of the current program. Further, the limit of two
    meals per service and 10 meals per week ensures food and
    resources are not wasted. States should periodically reevaluate
    the potential for children to be served at a congregate site as
    a way to determine whether children might have new
    opportunities at supervised locations. The approach in H.R.
    5003 offers responsible flexibility to states and programs so
    they may better reach children while protecting the intent of
    the program.
                Child and adult care food program
        CACFP supports working parents by ensuring children
    enrolled in participating child care centers, family child care
    homes, Head Start facilities, or afterschool programs have
    access to nutritious meals and important nutrition education.
    The program helps improve the wellness, healthy growth, and
    development of young children, older adults, and chronically
    impaired or disabled persons.
        H.R. 5003 extends the definition of ``institution'' to
    include any (1) public residential child care institution; (2)
    private residential child care institution that is licensed and
    nonprofit; and (3) boarding school funded by the Bureau of
    Indian Education that is not participating in the school lunch
    or breakfast programs. This provides flexibility for such
    institutions to participate in the program that best fits the
    needs of the children in their care.
        While there are many successful aspects of CACFP,
    substantial hurdles prevent some providers from administering
    the program effectively, including administrative burdens
    caused by extensive paperwork requirements, duplicative
    monitoring, and other requirements. USDA has failed to enact or
    change policies to reduce the paperwork burden. A 2015 USDA
    report to Congress found:

        Despite broad agreement by USDA and CACFP stakeholders with
    the 2007 report's priorities, the current feedback to the Work
    Group suggests that concrete action to address many of the
    recommendations has not been effective or fully utilized.
    Although implementation of provisions of the Healthy, Hunger-
    Free Kids Act offered further streamlining of application and
    oversight requirements, it became increasingly clear to members
    of the Work Group that additional actions would be needed.\20\

        \20\``Report to Congress. Reducing Paperwork in the Child and Adult
    Care Food Program.'' U.S. Department of Agriculture. Page 5. August
    2015. http://www.fns.usda.gov/sites/default/files/cacfp/
    CACFP_Paperwork_Report.pdf.
    ---------------------------------------------------------------------------
        H.R. 5003 includes reforms to reduce paperwork by
    lengthening eligibility for private centers from one month to
    four months. The bill also improves financial operations by
    allowing sponsors to carry-over 10 percent of their
    administrative funds for administrative purposes, while
    ensuring proper oversight through accurate reporting. The
    legislation further reduces administrative burdens by re-
    convening a paperwork reduction task force.
        Another area of improvement is the review and issuance of
    guidance or regulations regarding the serious deficiency
    process. This provision will help offer clarity for providers
    and state agencies, and ensure oversight is fair, uniform, and
    effective, while retaining program integrity. Improving
    accountability and integrity will protect federal funds and
    equip providers to operate more effectively. Information should
    be shared with the Department of Health and Human Services
    (HHS), as many facilities operating CACFP are administered by
    HHS, to ensure proper oversight.
        H.R. 5003 further improves oversight and monitoring for
    child care providers participating in the CACFP who are, more
    often than not, participating in a variety of other federal
    programs with their own sets of monitoring, oversight, and
    other programmatic requirements. Duplicative paperwork wastes
    the time and resources of providers and state agencies. H.R.
    5003 encourages reviews to be coordinated, streamlined, and
    consolidated. Lastly, current law allows the Secretary to
    provide additional state audit funds. H.R. 5003 ensures these
    funds are used to improve program management and oversight,
    including by improving practices across state agencies.
                Demonstration projects
        Current law authorizes demonstration projects to identify
    more effective ways to eliminate hunger, deliver healthy food
    to children in and out of school, and help spur local
    innovation. H.R. 5003 builds on effective demonstrations and
    includes promising new methods for funding and delivering child
    nutrition programs. Before investing wholesale in new ideas or
    widely expanding current practices, alternate delivery methods
    must be tested and measured for effectiveness.

    Access to local foods: Farm to school program

        The existing Farm to School Program has led to more
    agricultural producers being involved in child nutrition
    programs, better nutrition education, and more local foods
    being served in schools. The grants from this program act as
    one-time capital infusions to schools so they can invest in the
    infrastructure and operations needed to promote long-lasting
    nutrition education and procure regional foods. Ensuring these
    grants are awarded to a variety of grantees across the country
    is important; therefore, H.R. 5003 limits entities to one grant
    at a time. In addition, the legislation provides a grant period
    of up to three years, which streamlines the process to combine
    the current ``planning'' and ``implementation'' periods into
    one award cycle.

    Summer meal service through business partnership

        Many children and families benefit from the healthy meals
    supported by SFSP during the summer when school meals are not
    available. The Committee includes commonsense reforms in H.R.
    5003 to strengthen this program. These reforms ensure local
    governments, camps, and nonprofit organizations can better
    serve children in the summer. In addition, businesses are
    taking initiatives to address hunger in their communities. Mr.
    Storen testified:

              ``For decades, public-private partnerships have been
            at the core of this solution, allowing community
            organizations, schools, faith-based groups, and private
            companies to come together to address the issue.
            Through our work to end childhood hunger in all 50
            states, we see the power that comes from all sectors
            working together to solve this problem.''\21\
    ---------------------------------------------------------------------------
        \21\Full Committee hearing entitled, ``Serving Students and
    Families through Child Nutrition Programs'' on April 15, 2015.
    Testimony of Mr. Duke Storen, Senior Director, Research, Advocacy, and
    Partner Development, Share Our Strength, Washington, D.C. U.S. House of
    Representatives, Committee on Education and the Workforce, Washington,
    D.C.

        When local communities and businesses leverage resources to
    develop innovative approaches, they create solutions to address
    hunger in ways the government cannot. That is why H.R. 5003
    authorizes a demonstration project that would allow four states
    to approve businesses as sponsors to provide summer meals in
    low-income or rural areas without current meal service.
        The Committee views this demonstration project as a
    promising approach that builds upon the work businesses are
    already doing to help increase access to summer meals for
    eligible children. H.R. 5003 limits the project to four states
    as a way to assess the impacts these businesses can have on
    addressing childhood hunger with less federal involvement while
    also examining taxpayer funds are used more efficiently and
    effectively than other methods.

    Summer electronic benefit transfer for children

        The Agriculture, Rural Development, Food and Drug
    Administration, and Related Agencies Appropriations Act, 2010
    (P.L. 111-80) authorized and provided funding for the USDA to
    implement and evaluate demonstrations to reduce summer hunger
    for children. USDA developed the SEBTC demonstration to study
    the use of SNAP and WIC electronic benefits transfer technology
    to provide food assistance to low-income children during the
    summer.
        The existing project demonstrated some promise in
    addressing food insecurity in the summer, but questions remain
    whether this method produces the best results in the most cost-
    effective manner. Participation rates, consumption rates, and
    the cost of the program compared to the benefits need to be
    understood before the program is expanded. For this reason,
    H.R. 5003 allows states that are currently participating in
    SEBTC to continue operating and evaluating this project. It is
    the Committee's intent that states participating in the
    demonstration, as amended through H.R. 5003, will study
    additional parameters to improve the program and determine
    whether it is an effective delivery method for providing access
    to meals in the summer.
        The Committee is concerned that ``administrative costs for
    SEBTC in its early demonstration years were higher than for
    most ongoing nutrition assistance programs.''\22\ States should
    seek to minimize such administrative costs, so H.R. 5003 limits
    these funds for participating states.
    ---------------------------------------------------------------------------
        \22\``Summer Electronic Benefit Transfer for Children (SEBTC)
    Demonstration: Summary Report.'' Abt Associates Inc. May 2016. http://
    www.fns.usda.gov/sites/default/files/ops/sebtcfinalreport.pdf (noting
    that in 2012, when the demonstration reached the largest number of
    children and families compared to other years, the total cost was $13.2
    million, including $4 million in administrative costs and $9.3 million
    in benefits).
    ---------------------------------------------------------------------------

    State administration of child nutrition programs

        This demonstration project would provide up to three states
    with the opportunity to develop programs and policies to best
    meet the nutritional needs of the school-aged children in their
    states, free from specific federal requirements and
    regulations. States will be awarded a grant to administer this
    provision for a three-year period, which will be equal to the
    funds provided to the state in FY 2016 for free and reduced
    price meals through the school lunch, school breakfast, special
    milk, state administrative expenses, and team nutrition network
    programs. Participating states will provide additional non-
    federal resources to meet the needs of children in the state.
    To participate, states will have to (1) provide healthy meals
    to children; (2) ensure each child has access to at least one
    affordable meal during the school day; (3) determine income
    thresholds for such meals; (4) provide technical assistance to
    ensure maximum participation; and (5) ensure all funds received
    by the state are used to provide meals and carry out the
    activities provided in this demonstration. It is important to
    explore new ways to fund and operate existing programs to
    ensure taxpayer funds are being used efficiently and
    effectively. This project will help states and Congress
    identify better ways to provide healthy meals to students.
                Fruit and vegetable program
        To help provide students access to fruits and vegetables,
    H.R. 5003 opens the Fruit and Vegetable Program to all forms of
    fruits and vegetables. When providing guidance on this expanded
    option, the Secretary shall ensure all forms of fruits and
    vegetables--fresh, frozen, canned, and dried--are treated
    equally and schools will be able select the form best for their
    students and schools.
                Compliance and accountability
        While accountability is critical for federal programs,
    federal nutrition policies currently include compliance
    requirements that have increased paperwork and costs for
    participants with little benefit for taxpayers. Some of these
    provisions have left states without time to focus on schools
    and school districts that need extra support to improve
    verification and prevent waste, fraud, and abuse. H.R. 5003
    includes provisions that focuses on poorly performing
    districts, removes unnecessary requirements that increase
    costs, and reverts back to the five-year audit cycle to ensure
    states have time to assist school districts in need rather than
    simply check boxes on paperwork. The legislation also strikes
    the requirement for a minimum price to be charged for paid
    meals, because this is a decision that should be left to local
    leaders.
                Improvements to school lunch facilities
        According to the Pew Charitable Trusts, 88 percent of
    school districts are in need of at least one piece of kitchen
    equipment, and 55 percent of school districts need to make
    changes to their kitchen infrastructure.\23\ H.R. 5003
    continues funding and guaranteed loans for schools to improve
    kitchen facilities.
    ---------------------------------------------------------------------------
        \23\``Give Schools the Tools to Prepare Healthy, Delicious Meals:
    The School Food Modernization Act.'' Pew Charitable Trusts. February
    20, 2015. http://www.pewtrusts.org/en/research-and-analysis/fact-
    sheets/2015/02/give-schools-the-tools-to-prepare-healthy-delicious-
    meals.
    ---------------------------------------------------------------------------
                Prohibitions
        Recent federal regulations governing child nutrition are
    often far overreaching and too burdensome for schools. H.R.
    5003 includes a new section that prohibits the Secretary from
    placing additional burdens on schools as the reforms in the
    legislation are enacted. In implementing the provisions of this
    bill, the Committee expects the Secretary to follow the letter
    and spirit of the law.

                         Title II--Child Nutrition Act

        Title II of the bill amends the CNA and addresses several
    major issues.

    School Breakfast Program

        According to the SNA, one in five children live in food
    insecure households. The School Breakfast Program is critical
    to helping these students receive the nutrition they need to
    succeed at school.\24\ Unfortunately, the federal meal pattern
    requirements updated after HHFKA added an estimated $0.27 per
    breakfast served but provided no additional funding to help
    schools cover those costs.\25\ As previously noted, the changes
    to the meal standards will significantly curtail the additional
    costs for providing school meals, yet providing a healthy
    breakfast is still a cost every participating school faces.
    H.R. 5003 provides the first increase in the breakfast
    reimbursement rate for schools in more than 25 years. This will
    mean an additional $0.03 by the end of the authorization for
    schools for each breakfast served. This critical assistance to
    schools is made possible through other reforms in the
    legislation and at no additional cost to taxpayers.
    ---------------------------------------------------------------------------
        \24\``2016 Position Paper: 10 cents per breakfast in USDA Foods.''
    School Nutrition Association. https://schoolnutrition.org/
    uploadedFiles/Legislation_and_Policy/SNA_Policy_Resources/
    2016PP10CentsOnePage.pdf.
        \25\Federal Register. Vol. 78, No. 125. Department o fAgriculture:
    Food and Nutrition Service, ``National School Lunch Program and School
    Breakfast Program: Nutrition Standards for All Foods Sold in School as
    Required by the Healthy, Hunger-Free Kids Act of 2010.'' June 28, 2015.
    https://www.gpo.gov/fdsys/pkg/FR-2013-06-28/pdf/2013-15249.pdf.
    ---------------------------------------------------------------------------

    State administrative expenses

        Some local school systems have explored alternative food
    delivery models through the use of private contracts. The bill
    encourages this practice by providing greater flexibility with
    respect to the use of federal funds, which will help ensure
    states coordinate with and reimburse entities for utilizing
    cost saving strategies. The Committee recognizes the training
    requirements for school food service personnel and supports
    efforts to offer this training at times that are most
    convenient for the staff, therefore minimally disrupting other
    duties or jobs and requirements.

    Smart snack rule

        HHFKA required the Secretary to issue new rules covering
    the sale of foods not reimbursed by the federal government,
    referred to as ``competitive foods.'' The rule introduced new
    requirements covering when certain foods could be served
    outside of the paid meal lines. USDA did not establish the cost
    of these new regulatory requirements, stating, ``The magnitude
    of these effects is subject to considerable uncertainty; the
    ultimate impact of the rule will be determined by the manner in
    which schools implement the new standards and how students
    respond.''\26\ School officials raised serious concerns about
    the impact of these rules. For example, testifying before the
    Subcommittee, Ms. Sandra Ford, director of Food and Nutrition
    Services with Manatee County School District in Bradenton,
    Florida, stated the new rule was estimated to cost the district
    roughly $1 million in annual revenue.\27\ This rule was issued
    as schools struggled to implement new nutrition standards,
    which resulted in disrupting many school fundraisers. To
    protect the ability of students to fund class trips, run career
    and technical education programs involving food programs and
    workforce education, and other school-based activities, the
    bill requires the Secretary to improve current rules. The
    Committee expects that new regulatory policies will make it
    easier for schools to plan their menus and provide food kids
    will eat, limit the financial impact of the rule for schools,
    and ensure student-led fundraisers are allowed to operate.
    ---------------------------------------------------------------------------
        \26\Federal Register. Vol. 78, No. 125. Department of Agriculture:
    Food and Nutrition Service, ``National School Lunch Program and School
    Breakfast Program: Nutrition Standards for All Foods Sold in School as
    Required by the Healthy, Hunger-Free Kids Act of 2010.'' June 28, 2015.
    Page 39070. https://www.gpo.gov/fdsys/pkg/FR-2013-06-28/pdf/2013-
    15249.pdf.
        \27\Subcommittee hearing entitled, ``School meal Regulations:
    Discussing the Costs and Consequences for Schools and Students'' on
    June 27, 2013. Testimony of Ms. Sandra Ford, Director of Food and
    Nutrition Services, Manatee County School District, Florida. U.S. House
    of Representatives, Subcommittee on Early Childhood, Elementary, and
    Secondary Education, Committee on Education and the Workforce,
    Washington, DC.
    ---------------------------------------------------------------------------

    Special Supplemental Nutrition Program for Women, Infants, and Children

        WIC provides supplemental nutritious foods, nutrition
    education, and counseling at WIC clinics--as well as screening
    and referrals to other health, welfare, and social services--
    for income-eligible women who are pregnant or post-partum,
    infants, and children up to five years of age. The bill
    strengthens the program for taxpayers and vulnerable mothers
    and children by improving the contracting, sole source bidding,
    and anti-waste, fraud, and abuse provisions. The changes to the
    moratorium process will properly balance the need to prevent
    fraudulent and wasteful activity with the need to ensure local
    businesses, WIC participants, and non-participants are not
    unduly harmed.
        As the Secretary reviews allowable foods under WIC, it is
    important they do not limit access to fruits and vegetables.
    H.R. 5003 includes language to ensure the Secretary does not
    arbitrarily limit children's access to fruit.
        H.R. 5003 includes a provision regarding certain food for
    infants. This provision is intended to ensure states consider
    the full range of costs and benefits associated with single-
    supplier rebate contracts for infant foods. Administrative
    costs and potentially higher retail prices for products offered
    through single-supplier agreements reduce the ``savings''
    achieved through these agreements. Higher retail prices also
    negatively affect non-WIC consumers. Single-supplier contracts
    reduce variety and choice for WIC participants and may
    contribute to lower redemptions in this product category. Lower
    redemption rates diminish the goals of increasing consumption
    of fruits and vegetables. In November 2015, the Institute of
    Medicine released its ``Review of WIC Food Packages: Proposed
    Framework for Revisions: Interim Report,'' and stated:

              ``On the one hand, containing costs is essential for
            maximizing program funds to serve as many WIC-eligible
            individuals as possible. Yet strategies that limit cost
            are often synonymous with strategies that limit choice.
            Cost-containment practices that restrict participant
            choice in such a way that some foods become undesirable
            for purchase undermine WIC's goal to provide healthy
            and nutritious foods to low-income individuals. As a
            result, states attempt to balance containing cost with
            promoting enough variety and choice among healthy WIC
            foods that families will want to purchase those
            foods.''\28\

        \28\``Review of WIC Food Packages: Proposed Framework for
    Revisions: Interim Report.'' Committee to Review WIC Food Packages:
    Food and Nutrition Board: Institute of Medicine. The National Academies
    of Sciences, Engineering, Medicine. http://www.nap.edu/read/21832/
    chapter/1.

        Improving the contracting provisions is a critical reform
    to the WIC program in H.R. 5003. Providers of infant formula
    fund just over 20 percent of the WIC program through the infant
    formula rebate program. Infant formula rebates totaled
    approximately $1.8 billion in FY 2015. The proposed reforms
    seek to achieve a better balance in the rights and obligations
    of the contracting parties when entering into WIC rebate
    contracts. These reforms are necessary to ensure a fair process
    during the bid solicitation and contract review process.
        In addition, the bill requires GAO to study the impact of
    adjunctive eligibility on the WIC program and participants.
    Data used to evaluate this provision must be fair, accurate,
    and examine how many states have eligibility requirements above
    the WIC statutory eligibility requirement of 185 percent of
    poverty. The Committee included a timeframe of 18 months for
    completion of the report.

    Team nutrition network

        Team Nutrition is an initiative run by USDA's Food and
    Nutrition Service to provide training and technical assistance
    to food service workers, nutrition education to children and
    their caregivers, and school and community support for healthy
    eating and physical activity.\29\ The bill makes improvements
    to better support nutrition education and improve coordination
    of activities in this area. This will include guidance from the
    Secretary for schools to coordinate work with their ``farm to
    school'' grants and plans for the newly allowed Family Meal
    Days. The prohibitions included in Title I of the bill are
    critical to ensuring the Secretary does not overreach and does
    not dictate curriculum, standards, or other activities that are
    best left to state and local officials to determine and
    develop.
    ---------------------------------------------------------------------------
        \29\``Team Nutrition.'' U.S. Department of Agriculture. http://
    www.fns.usda.gov/tn/team-nutrition.
    ---------------------------------------------------------------------------

                            Title III--Miscellaneous

        Title III of the bill addresses miscellaneous provisions.

    Reviews

        H.R. 5003 includes many areas the Secretary shall review to
    improve child nutrition programs. Of particular note is a
    requirement to determine if there are more appropriate data
    sources to use other than the school meal eligibility data for
    other federal programs that are means tested.
        Additionally, the requirement to look at crediting in
    school meals is important to ensure the process is neutral in
    its application and does not arbitrarily leave foods ineligible
    for the program or a part of the program. The Food and
    Nutrition Service should properly apply the exemptions in its
    2013 regulations to nut, seed, or nut/seed butter (separate or
    combined with other ingredients) on competitive foods sold in
    U.S. schools. Additionally, USDA should review the allowance of
    jerky products that provide significant protein in a form kids
    will consume. It is important that USDA not exclude foods that
    provide a good source of nutrition in a cost effective manner
    that are enjoyed by students, therefore limiting food waste.
        Another important review the Secretary shall conduct is an
    evaluation of the number of incidences and types of unlawful
    activity that have occurred over the last three years,
    including a review of the agencies responses, and to take
    action preventing further fraud. Finally, it is important the
    Secretary review the regulations regarding infant formula and
    update them appropriately to reflect the current scientific
    knowledge.

    Program delivery

        It is important for the Secretary to continually review
    federal policies and the impact they have on states, school
    districts, and schools. The Secretary should also recognize
    that federal rules are often in addition to rules state leaders
    place on school districts and schools. The Secretary must work
    with states to coordinate and streamline requirements and
    reduce duplication.

    School nutrition advisory committee

        The Secretary must engage all stakeholders in the
    implementation of child nutrition programs. As part of this
    engagement, the Secretary should pay particular attention to
    those who pay for and run these programs. The advisory
    committee will make recommendations to the Secretary on
    important issues and provide local stakeholders a role in the
    decision-making process. By requiring the appropriate
    congressional committees to provide recommendations for
    membership, the bill will ensure that a diverse range of
    thought and opinion is adequately reflected. The Secretary and
    USDA staff must not inappropriately interfere in the work of
    the committee. The committee's role is to provide thoughtful
    and deliberative feedback and recommendations on policies, free
    from influence of the Secretary and administration.

    Conclusion

        Helping children succeed in the classroom is a priority of
    both Republicans and Democrats, and children cannot learn in
    the classroom if they are hungry. That is why federal policies
    have long supported states, schools, and other institutions as
    they work to meet the nutritional needs of low-income children
    and families in their communities. Unfortunately, federal rules
    and mandates issued in recent years make serving vulnerable
    children harder for state and local leaders. The current one-
    size-fits-all approach has resulted in higher costs for schools
    and fewer students being served. This bill provides a better
    way for children and families who rely on nutrition assistance.
    Through a number of positive reforms, this bill will deliver
    the flexibility, accountability, and additional support
    students, families, schools, and taxpayers need. The bill
    reflects the Committee's ongoing effort to ensure the federal
    government spends taxpayer resources responsibly and all
    children have equal opportunities to achieve a lifetime
    success.

                               Section-by-Section

    Section 1--Short title; Table of contents

        States the short title as ``Improving Child Nutrition and
    Education Act of 2016'' and contains the table of contents for
    the Act.

    Section 2--Definition of Secretary

        Defines the term ``Secretary'' to mean the Secretary of
    Agriculture.

             Title I--Richard B. Russell National School Lunch Act

    Section 100--Authorized State agency

        Changes ``State educational agency'' to ``State agency.''

    Section 101--Apportionment to states

        Returns to the Treasury any administrative funds provided
    to states to implement the new school meal rules unspent by
    September 30, 2016, and requires the Secretary to announce the
    reimbursement rate for the upcoming school year and any
    necessary guidance by February 15, 2017.

    Section 102--Repeal of nutrition promotion

        Repeals the nutrition promotion program.

    Section 103--Direct federal expenditures

        Changes the formula for commodity assistance and moves the
    date forward to inform states of their share.

    Section 104--Nutritional and other requirements

        Requires the Secretary to provide technical assistance and
    training to participating schools and to revise the milk
    requirements.
        Authorizes the Secretary to award funds to state agencies
    to assist in providing bottled water to schools in a state of
    emergency.
        Strikes a provision to inform families of what the income
    threshold is to qualify for reduced priced meals and requires
    the inclusion of a provision on the notice to families to
    clarify individuals may report alleged fraud to the USDA
    Inspector General (IG) and requires the USDA to have a
    prominent link to the USDA IG website and a phone number which
    can be used to report alleged fraud. Also requires the
    Secretary to review school meal applications and provide states
    best practices and guidance to improve the application process
    and clarifies school food authorities' interactions with
    families regarding applications.
        Makes changes to the meal application verification process
    to help reduce the error rate for approved applications. Phases
    in these changes after one year.
        Amends the nutrition standards requirements to require a
    triennial review of the standards, with the first review
    occurring by December 31, 2016.
        Includes an allowance for Family Meal Days. Also includes a
    requirement for guidance to schools allowing school food
    authorities to substitute food items, including in-season,
    locally-produced fruits and vegetables when there is difficulty
    in procuring food to comply with the regulations, provided the
    school food authority continues to meet the nutrition
    standards.

    Section 105--Miscellaneous provisions

        Amends the CEP, updates the procurement training
    requirements from 2015 to 2021, and repeals paid meal equity
    requirements.

    Section 106--Summer food service program for children

        Prioritizes applications with an educational or enrichment
    activity and requires states to include in their administration
    and management plan how they will strengthen the congregate
    feeding model.
        Encourages all states to streamline and simplify operations
    for institutions eligible to participate in the At-Risk
    Afterschool component of CACFP and allows states that have
    demonstrated such streamlining to be reimbursed for meals both
    in summer and throughout the school year as a way to further
    streamline meal delivery and reduce burden on providers and
    states. The funding in this provision is phased in by allowing
    five states in May 2017, an additional five states in October
    2018, and to any state in May 2020. These meals will be
    reimbursed consistent with rates in CACFP.
        Requires the Secretary to grant state requests to allow
    children already participating in the program to consume meals
    off-site when the existing congregate site is closed due to
    extreme weather conditions, violence or other safety concerns,
    or other emergency circumstances as determined by the state.
        Permits a state to elect for service organizations to
    provide summer meals to children that may be consumed away from
    the congregate site. The child being served such meals must
    live in a rural area or an area where more than 80 percent of
    students are certified as eligible to receive free- or reduced-
    price lunch.

    Section 107--Commodity Distribution process

        Makes technical corrections to the Commodity Distribution
    program and strikes a mandate for a notice of irradiated food
    products.

    Section 108--Child and adult care food program

        Extends the definition of ``institution'' to include any
    (1) public residential child care institution; (2) private
    residential child care institution that is licensed and
    nonprofit; and (3) boarding school funded by the Bureau of
    Indian Education, so long as the institution does not
    participate in the school lunch or breakfast programs.
    Lengthens eligibility for private centers from one month to
    four months. Allows sponsoring organizations to carry over 10
    percent of their administrative funds for any succeeding fiscal
    year for administrative purposes and requires reporting on the
    amount retained for administrative costs.
        Requires the Secretary to review, and issue guidance or
    regulations regarding, the serious deficiency process. Requires
    relevant information to be shared with the HHS during the
    review of the serious deficiency process as well as when
    reviewing program participants. Requires the Secretary to
    convene an advisory committee to examine the feasibility of
    reducing unnecessary or duplicative paperwork and implement
    changes resulting from recommendations. Ensures states use any
    additional audit funds provided by the Secretary to improve
    program management and oversight, including across state
    agencies.

    Section 109--Demonstration projects

        Strikes outdated projects and authorizes the following four
    projects:
               Access to Local Foods: Farm to School
            Program;
               Summer Meal Service through Business
            Partnership;
               Summer Electronic Benefit Transfer for
            Children; and
               State Administration of Child Nutrition
            Programs.

    Section 110--Fruit and vegetable program

        Removes the limitation to provide fresh fruit and
    vegetables thereby opening the program to all forms, but
    includes clarification that states have the option to elect
    offering all forms. Encourages schools to introduce fruits and
    vegetables to children in new contexts, including allowing
    schools to offer combinations of fruits and vegetables with
    tree nuts.

    Section 111--Compliance and accountability

        Reverts the required audit cycle back to five years (rather
    than three years) and requires states to work with LEAs on
    ``Error Reduction Plans.''

    Section 112--Repeal of State Childhood Hunger Challenge Grants

        Repeals the State Childhood Hunger Challenge Grants.

    Section 113--Duties of the Secretary relating to non-procurement
            debarment

        Increases fines for contractors found guilty in any
    criminal proceeding or found liable in any civil or
    administrative proceeding of specific activities.

    Section 114--Improvements to school lunch facilities

        Authorizes kitchen equipment grants and loans.

    Section 115--Prohibitions

        Prohibits the Secretary from overreaching or adding new
    requirements not authorized under the law.

                         Title II--Child Nutrition Act

    Section 201--Special Milk Program Authorization

        Requires the date for notification of the reimbursement
    rate for milk to be February 15 of the preceding school year
    instead of simply on an annual basis.

    Section 202--School Breakfast Program

        Increases the reimbursement rate for breakfast.

    Section 203--State Administrative Expenses

        Clarifies the use of state administrative expenses.

    Section 204--Regulations

        Ensures any foods sold in the reimbursed meal program may
    also be served in an a la carte line and ensures fundraisers
    held by student organizations may occur at any time other than
    during meal times.

    Section 205--Definition of State agency

        Defines a ``state agency'' as the chief state school
    officer, a board of education controlling the state department
    of education, the state commissioner or individual who
    administers agricultural programs in the state, or a state
    official the state legislature designates to administer
    programs authorized in this provision.

    Section 206--Special Supplemental Nutrition Program for Women, Infants,
            and Children

        Makes changes to the WIC program, including the bidding
    process; sole source contracting; and prevention of waste,
    fraud, and abuse.

    Section 207--Team nutrition network

        Improves Team Nutrition by requiring the program to improve
    nutrition education, which includes physical activity, long-
    term dietary health, food security, and food preparation.

                            Title III--Miscellaneous

    Section 301--Reviews

        Requires the Secretary to review the following:
               Barriers to including tribally-produced and
            cultural foods in the school meal programs;
               Along with the Secretary of Education, how
            free and reduced price lunch data is used and whether
            there is a viable alternative to such data;
               An update of the system of crediting and the
            voluntary child nutrition labeling program used in
            administering the programs under these laws;
               The practicability and feasibility of
            conducting nutritional analysis of food products
            voluntarily submitted for use in the child nutrition
            programs;
               The cost difference between providing meals
            in the outlying areas and the 50 states and Washington,
            D.C.;
               Unlawful activity under the program over the
            past three years and to address such issues to help
            prevent any unlawful activity in the future; and
               The infant formula available under WIC.

    Section 302--Program delivery

        Requires the Secretary to work with states to improve
    program administration through the use of technology, better
    coordination, better communication among states, and
    consolidation and elimination of duplicative or unnecessary
    federal and state reporting requirements.

    Section 303--Product availability

        Requires the Secretary to make available, in a size and
    form for school-age children, lactose-free milk with an
    extended shelf life for use in the commodity distribution
    program.

    Section 304--Procurement

        Requires the Secretary to ensure service institutions
    participating in the programs have flexibility in determining
    when and what food to purchase and that procurement processes
    implemented in states are cost effective and efficient.

    Section 305--School nutrition advisory committee

        Establishes an advisory committee to provide input from
    stakeholders to the Secretary on the administration of the
    programs under these laws.

    Section 306--Paperwork reduction

        Requires the Secretary to review regulations, guidance and
    other requirements in order to identify ways to streamline and
    reduce paperwork requirements, and if appropriate, act on such
    review to streamline or otherwise reduce the paperwork burden
    on states and schools. Requires a report on the paperwork
    burden to Congress after two years, and every three years
    thereafter (or upon any guidance or updated federal
    requirements).

    Section 307--Technology

        Requires the Secretary to review the current use of
    technology in the school lunch program and identify
    opportunities to make improvements and encourage greater use.

    Section 308--Improving health and safety oversight and monitoring for
            the Child and Adult Care Food Program

        Requires the Secretary and the Secretary of HHS to work
    together to improve health and safety oversight and monitoring
    practices required under CACFP by issuing guidance to states to
    reduce duplicative monitoring or oversight activities that are
    a result of multiple federal regulations, including through
    CACFP, the Head Start Act, and the Child Care and Development
    Fund.

    Section 309--Technical corrections

        Makes technical and conforming corrections.

    Section 310--Budgetary effects

        Establishes PAYGO compliance.

    Section 311--Effective date

        Establishes the effective date as October 1, 2016, unless
    otherwise specifically stated.

                           Explanation of Amendments

        The amendments, including the amendment in the nature of a
    substitute, are 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. H.R. 5003 builds upon the Committee's ongoing efforts
    to improve child nutrition programs by examining federal
    investments, reducing burdensome requirements, and
    strengthening programs.

                           Unfunded Mandate Statement

        Section 423 of the Congressional Budget and Impoundment
    Control Act (as amended by Section 101(a)(2) of the Unfunded
    Mandates Reform Act, P.L. 104-4) requires a statement of
    whether the provisions of the reported bill include unfunded
    mandates. This issue is addressed in the CBO letter.

                               Earmark Statement

        H.R. 5003 does not contain any congressional earmarks,
    limited tax benefits, or limited tariff benefits as defined in
    clause 9 of House Rule XXI.

                                Roll Call Votes

        Clause 3(b) of rule XIII of the Rules of the House of
    Representatives requires the Committee Report to include for
    each record vote on a motion to report the measure or matter
    and on any amendments offered to the measure or matter the
    total number of votes for and against and the names of the
    Members voting for and against.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

             Statement of General Performance Goals and Objectives

        In accordance with clause (3)(c) of House Rule XIII, the
    goal of H.R. 5003 is to improve child nutrition programs by
    examining federal investments, reducing burdensome
    requirements, and strengthening programs.

                        Duplication of Federal Programs

        No provision of H.R. 5003 establishes or reauthorizes a
    program of the Federal Government known to be duplicative of
    another Federal program, a program that was included in any
    report from the Government Accountability Office to Congress
    pursuant to section 21 of Public Law 111-139, or a program
    related to a program identified in the most recent Catalog of
    Federal Domestic Assistance.

                      Disclosure of Directed Rule Makings

        The committee estimates that enacting H.R. 5003 does not
    specifically direct the completion of any specific rule makings
    within the meaning of 5 U.S.C. 551.

      Statement of Oversight Findings and Recommendations of the Committee

        In compliance with clause 3(c)(1) of rule XIII 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.

                   New Budget Authority and CBO Cost Estimate

        With respect to the requirements of clause 3(c)(2) of rule
    XIII of the Rules of the House of Representatives and section
    308(a) of the Congressional Budget Act of 1974 and with respect
    to requirements of clause 3(c)(3) of rule XIII of the Rules of
    the House of Representatives and section 402 of the
    Congressional Budget Act of 1974, the committee has received
    the following estimate for H.R. 5003 from the Director of the
    Congressional Budget Office:

                                         U.S. Congress,
                                   Congressional Budget Office,
                                         Washington, DC, June 30, 2016.
    Hon. John Kline,
    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. 5003, the
    Improving Child Nutrition and Education Act of 2016.
        If you wish further details on this estimate, we will be
    pleased to provide them. The CBO staff contact is Jennifer
    Gray.
                Sincerely,
                                                            Keith Hall.
        Enclosure.

    H.R. 5003--Improving Child Nutrition and Education Act of 2016

        Summary: H.R. 5003 would amend and reauthorize child
    nutrition programs and the Special Supplemental Nutrition
    Program for Women, Infants, and Children (WIC). Those
    authorizations would extend through 2021.
        CBO estimates that enacting this legislation would decrease
    direct spending by $128 million over the 2017-2021 period and
    by $59 million over the 2017-2026 period for the child
    nutrition programs. Enacting the bill would increase revenues
    by $8 million over the same period.
        Additionally, CBO estimates that implementing H.R. 5003
    would increase discretionary costs by $29.8 billion over the
    2017-2021 period, assuming appropriation of the necessary
    amounts. Most of those costs would be for the reauthorization
    of WIC.
        Pay-as-you-go procedures apply because enacting the
    legislation would affect direct spending and revenues. CBO
    estimates that enacting the legislation would not increase net
    direct spending or on-budget deficits by more than $5 billion
    in any of the four consecutive 10-year periods beginning in
    2027.
        The bill would impose new requirements on states and on
    school districts that implement child nutrition programs. Those
    requirements would be intergovernmental mandates as defined in
    the Unfunded Mandates Reform Act (UMRA). In aggregate, CBO
    estimates that the costs of intergovernmental mandates in the
    bill would fall below the threshold established in UMRA ($77
    million in 2016, adjusted annually for inflation). The bill
    contains no private-sector mandates as defined in UMRA.
        Estimated cost to the Federal Government: The estimated
    budgetary effect of H.R. 5003 is shown in the following table.
    The costs of this legislation fall within budget function 600
    (income security).

                                  TABLE 1.--BUDGETARY EFFECTS OF H.R. 5003, IMPROVING CHILD NUTRITION AND EDUCATION ACT OF 2016
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      By fiscal year, in millions of dollars--
                                                       -----------------------------------------------------------------------------------------------------
                                                         2017    2018    2019    2020    2021    2022    2023    2024    2025    2026   2017-2021  2017-2026
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          INCREASES OR DECREASES (-) IN DIRECT SPENDING

    Estimated Budget Authority........................      20      22     -74     -58     -42     -19       1      17      32      42      -130        -54
    Estimated Outlays.................................      17      15     -62     -62     -38     -16      -2      15      28      41      -128        -59

                                                                      INCREASES IN REVENUES

    Estimated Revenues................................       *       *       1       1       1       1       1       1       1       1         3          8

                                        INCREASE OR DECREASE (-) IN DEFICITS FROM CHANGES IN DIRECT SPENDING AND REVENUES

    Effect on Deficit.................................      17      15     -63     -63     -39     -17      -3      14      27      40      -131        -67

                                                         INCREASES IN SPENDING SUBJECT TO APPROPRIATION

    Estimated Authorization Level.....................   6,448   6,422   6,422   6,397   6,397       5       5       5       5       5    32,084     32,109
    Estimated Outlays.................................   5,126   6,062   6,167   6,212   6,208   1,108     197      69       5       5    29,775     31,159
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Notes: Components may not sum to totals because of rounding; * = between zero and $500,000.

        Basis of estimate: For purposes of this estimate, CBO
    assumes H.R. 5003 will be enacted late in 2016.

    Background

        The child nutrition programs include several programs that
    benefit mainly school-age children. Schools can provide meals
    to students through the National School Lunch Program (NSLP)
    and the School Breakfast Program (SBP). The federal government
    reimburses participating schools for at least part of the cost
    of each meal served through those programs. Schools receive a
    relatively small subsidy for meals served to students from
    households with incomes above 185 percent of the federal
    poverty level (referred to as paid meals) and larger subsidies
    for meals served to students from lower income households.
        Students from households with incomes below 185 percent of
    the federal poverty level can apply to receive free or reduced-
    price meals, depending on their level of household income.
    Those students also can qualify for free meals based on
    household participation in other assistance programs (the
    Supplemental Nutrition Assistance Program, Temporary Assistance
    to Needy Families, Food Distribution Program on Indian
    Reservations, or in some cases, Medicaid) or their status as a
    homeless, runaway, migrant, or foster child. State or local
    agencies can directly certify that students meet those criteria
    based on documentation from the appropriate agencies or
    authorized individuals.
        The Child and Adult Care Food Program (CACFP) provides
    reimbursement for meals and snacks served to children and
    adults in participating child and adult care centers, day care
    homes, Head Start programs, afterschool programs in low-income
    areas, and emergency shelters. Organizations participating in
    the At-Risk Afterschool Meals component of CACFP can receive
    reimbursement for meals and snacks served to children 18 years
    of age or younger after school, on weekends and holidays, and
    during school vacations during the regular school year. The
    Summer Food Service Program (SFSP) provides reimbursement for
    meals and snacks served to children at qualifying sites during
    the summer when school is not in session.

    Direct Spending

        CBO estimates that enacting H.R. 5003 would, on net, reduce
    direct spending by $59 million over the 2017-2026 period (see
    Table 2).
        Community Eligibility Provision (CEP). Under the Community
    Eligibility Provision, participating schools must serve all
    breakfasts and lunches free of charge. They do not collect
    applications from students and reimbursements for meals are
    based on a formula specified in law. Under CEP, school
    districts, groups of schools within a district, or individual
    schools can opt to participate in the program if the percentage
    of enrolled students that are directly certified for free meals
    without an application--known as the identified student
    percentage (ISP)--is at least 40 percent.
        The bill would increase the minimum ISP for schools or
    groups of schools participating in CEP to 60 percent beginning
    July 1, 2017. Schools already participating in CEP when the
    provision becomes effective would have until the beginning of
    school year 2018-2019 to comply with the new ISP threshold.

                                              TABLE 2.--ESTIMATED DIRECT SPENDING UNDER H.R. 5003, THE IMPROVING CHILD NUTRITION AND EDUCATION ACT OF 2016
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              By fiscal year, in millions of dollars--
                                                               -------------------------------------------------------------------------------------------------------------------------------------
                                                                   2017       2018       2019       2020       2021       2022       2023       2024       2025       2026    2017-2021   2017-2026
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              INCREASES OR DECREASES (-) IN DIRECT SPENDING

    Community Eligibility Provision:
        Estimated Budget Authority............................         -1        -33       -171       -179       -185       -192       -198       -205       -212       -219       -569       -1,595
        Estimated Outlays.....................................         -1        -28       -148       -178       -184       -190       -197       -204       -211       -218       -539       -1,559
    Summer and CACFP At-Risk Streamlining:
        Estimated Budget Authority............................          2         14         24         34         65         92        113        131        148        162        139          785
        Estimated Outlays.....................................          2         12         23         32         60         87        109        128        145        160        129          758
    Off-Site Consumption Option:
        Estimated Budget Authority............................          6          8         10         14         14         15         15         16         16         17         52          131
        Estimated Outlays.....................................          6          8         10         14         14         15         15         16         16         17         52          131
    Health Inspections:
        Estimated Budget Authority............................          *          *          *          *          *          *          *          *          *          *          *            *
        Estimated Outlays.....................................          *          *          *          *          *          *          *          *          *          *          *            *
    Breakfast Reimbursement Rates:
        Estimated Budget Authority............................          0         10         60         69        100        105        111        118        124        130        239          827
        Estimated Outlays.....................................          0          8         51         67         94        104        110        116        122        129        220          801
    Income Verification Procedures:
        Estimated Budget Authority............................          0          0        -18        -17        -35        -37        -38        -40        -41        -43        -70         -269
        Estimated Outlays.....................................          0          0        -15        -17        -32        -36        -38        -39        -41        -43        -64         -261
    Farm to School Program:
        Estimated Budget Authority............................          5          5          5          5          5          5          5          5          5          5         25           50
        Estimated Outlays.....................................          4          5          5          5          5          5          5          5          5          5         24           49
    Equipment Grants:
        Estimated Budget Authority............................          *          3          4          5          5          5          5          5          5          5         17           42
        Estimated Outlays.....................................          *          3          4          5          5          5          5          5          5          5         17           42
    Summer EBT Demonstration Project:
        Estimated Budget Authority............................          0         10         10         10          0          0          0          0          0          0         30           30
        Estimated Outlays.....................................          0          1          5          9          9          5          1          0          0          0         24           30
    Business Partnership Demonstration Project:
        Estimated Budget Authority............................          0          2          4          4          0          0          0          0          0          0         10           10
        Estimated Outlays.....................................          0          2          4          4          0          0          0          0          0          0         10           10
    New Institutions In CACFP:
        Estimated Budget Authority............................          *         -3         -5         -5         -5         -5         -5         -5         -5         -5        -18          -43
        Estimated Outlays.....................................          *         -2         -5         -5         -5         -5         -5         -5         -5         -5        -17          -42
    Eligibility For For-Profit Institutions:
        Estimated Budget Authority............................          1          1          1          1          1          1          1          1          1          1          5           10
        Estimated Outlays.....................................          *          1          1          1          1          1          1          1          1          1          4            9
    Team Nutrition:
        Estimated Budget Authority............................          *         -1         -1         -2         -2         -3         -3         -4         -4         -5         -6          -25
        Estimated Outlays.....................................          *         -1         -1         -2         -2         -2         -3         -3         -4         -4         -6          -22
    Commodity Reimbursement Calculation:
        Estimated Budget Authority............................          6          6          6          6          0          0          0          0          0          0         24           24
        Estimated Outlays.....................................          5          6          6          6          1          0          0          0          0          0         24           24
    Other Provisions:
        Estimated Budget Authority............................          1          *          *          *          *          *          *          *          *          *          3            6
        Estimated Outlays.....................................          1          *          *          *          *          *          *          *          *          *          3            6
    Interaction Effects:
        Estimated Budget Authority............................          *          *         -3         -3         -5         -5         -5         -5         -5         -6        -11          -37
        Estimated Outlays.....................................          *          *         -2         -3         -4         -5         -5         -5         -5         -6         -9          -35
    Total Changes In Direct Spending:
        Estimated Budget Authority............................         20         22        -74        -58        -42        -19          1         17         32         42       -130          -54
        Estimated Outlays.....................................         17         15        -62        -62        -38        -16         -2         15         28         41       -128          -59
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Notes: Components may not sum to totals because of rounding; * = between -$500,000 and $500,000. CACFP = Child and Adult Care Food Program; EBT = Electronic Benefit Transfer.

        Based on the characteristics of schools currently
    participating in CEP, CBO estimates that this provision would
    affect more than 8,500 schools. CBO estimates that about 2,000
    of those schools would continue participating in CEP by forming
    new groups with an ISP that would meet the 60-percent
    threshold. The other 6,500 schools would no longer participate
    in CEP. Those schools would revert to the system of collecting
    applications for free and reduced-price meals and receiving
    reimbursements based on the number of free, reduced-price, and
    paid meals that the schools served. Additionally, CBO expects
    that participation in the school meals programs would decline
    in those schools as students eligible for reduced-price and
    paid meals would no longer receive meals free of charge. CBO
    estimates that enacting this provision would reduce direct
    spending by about $1.6 billion over the 2017-2026 period.
        Summer Food Service Program. H.R. 5003 contains several
    provisions related to SFSP. In total, CBO estimates that
    enacting those provisions would increase direct spending by
    $889 million over the 2017-2026 period.
        Summer and CACFP At-Risk Streamlining. Section 106 would
    allow sites that are not schools to provide meals and snacks to
    at-risk students year-round under a single program. Eligible
    sites could serve lunch and either breakfast or a snack during
    the summer months and up to one meal and one snack during the
    school year after school, on weekends, and on school holidays.
    All meals served during the year would be reimbursed at the
    rates provided through the CACFP At-Risk Afterschool Program.
    The year-round option would be available for up to five states
    beginning in May 2017, up to five additional states beginning
    in October 2018, and all states beginning in May 2020.
        California currently operates a similar program that allows
    nonschool SFSP sites to serve snacks after school, on weekends,
    and on school holidays. Based on data from the California
    program and consultation with states and policy experts, CBO
    expects that ultimately one-quarter of eligible SFSP sites
    would participate in the year-round program. Some of those
    sites currently operate programs through both SFSP and the
    CACFP at-risk afterschool program. Additionally, CBO expects
    that some sites that only operate through the CACFP at-risk
    afterschool program would add a SFSP site. By 2026, CBO
    estimates that nearly 9,000 sites would operate a year-round
    program through this option. In total, CBO estimates that by
    2026, about 29 million snacks and 57 million suppers would be
    served during the school year and 31 million meals and snacks
    would be served during the summer months through this program.
    CBO estimates that enacting this provision would increase
    direct spending by $758 million over the 2017-2026 period.
        Off-Site Consumption Option. Under current law, all SFSP
    meals must be served in a congregate setting, where all meals
    are consumed where they are served. Section 106 would allow
    SFSP sites to provide off-site meals to children in rural or
    high-poverty areas if the area is not served by a congregate
    site. For example, a demonstration project allowed
    participating sponsors to provide off-site meals through a
    delivery service in selected rural areas. The bill would limit
    the number of meals served to each child to two meals per
    service and 10 meals per week.
        Based on consultation with states and policy experts, CBO
    estimates that SFSP sponsors would serve a little less than 10
    percent of eligible children living in eligible areas under
    this option. CBO estimates that enacting this provision would
    increase direct spending by $131 million over the 2017-2026
    period.
        Health Inspections. Section 106 also would allow states to
    use SFSP state administrative funds for health inspections.
    Because states have historically obligated most of their
    administrative funds, CBO expects that increased expenditures
    from administrative funds would total less than $500,000 in
    each year and over the 2017-2026 period.
        Breakfast Reimbursement Rates. Section 202 would increase
    federal reimbursements for all breakfasts served through the
    SBP by 2 cents in the 2018-2019 school year and by an
    additional 1 cent in the 2020-2021 school year. Those increases
    would incorporate inflation each year. Breakfasts served in
    child and adult care centers through the CACFP are reimbursed
    at the SBP rates, so those breakfasts also would receive higher
    reimbursements. CBO estimates enacting that this provision
    would increase direct spending by $801 million over the 2017-
    2026 period.
        Income Verification Procedures. Under current law, local
    educational agencies (LEAs) are required every school year to
    verify the eligibility of individuals from a sample of
    household applications for free and reduced-price meals that
    have been approved. For most LEAs, the sample they must verify
    is the lesser of 3,000 applications or 3 percent of all
    approved applications. The applications are selected from among
    error-prone applications, which are applications with a monthly
    income that is within $100 of the income threshold to be
    eligible for free or reduced-price meals. If there are not
    enough error-prone applications to complete the sample, LEAs
    can select applications at random.
        The bill would increase the sample size to the lesser of
    10,000 applications or 10 percent of approved household
    applications. The bill also would expand the types of
    applications and students that LEAs select for verification,
    including, for example, applications with information that is
    inconsistent with other information provided by the household
    and directly certified students. The bill also would provide
    several mechanisms to reduce the sample size to less than 10
    percent. Finally, the bill would make other changes to the
    verification process, such as extending the deadline for
    completing verification activities from November 15 to December
    15 of each year.
        CBO expects that more applications would be selected for
    verification under the bill than under current law. Because the
    verification process uncovers more instances of households
    reporting too little income than too much income, verifying
    more applications would, on average, reduce the number of
    students who are eligible for free and reduced-price meals. In
    addition, some eligible students would lose meal benefits
    because they failed to provide the necessary documents for
    verification. Under the bill, CBO estimates that 12 million
    fewer free lunches and breakfasts and 5 million more paid
    lunches and breakfasts would be served in 2026; there would be
    little change in the number of reduced-price meals served.
    Those estimates are based on data from FNS on the results and
    response rates from the verification process and on the number
    of students in LEAs that meet the criteria for reducing the
    sample size. CBO estimates that implementing the new
    verification procedures would reduce direct spending by $261
    million over the 2017-2026 period.
        Farm to School Program. Section 109 would increase from $5
    million to $10 million the annual funding for the program,
    which aims to improve access to local foods in certain schools.
    Thus, CBO estimates that enacting this provision would increase
    direct spending by $49 million over the 2017-2026 period.
        Equipment Grants. Section 114 would authorize
    appropriations totaling $25 million over the 2017-2019 period
    for grants to schools to build infrastructure and purchase
    equipment to serve healthier meals and improve food safety. CBO
    expects that some grant recipients would use those funds to
    purchase equipment that would allow them to begin or expand
    breakfast operations through initiatives such as grab-and-go
    breakfast or breakfast in the classroom. Based on information
    on the operation of similar programs, CBO estimates that a
    little more than 700 schools would use grant funding for SBP
    and would thus serve more breakfasts. CBO estimates that
    appropriating the authorized amounts would increase direct
    spending for school breakfasts by $42 million over the 2017-
    2026 period.
        Demonstration Projects. Section 109 would create several
    new demonstration projects. In total, CBO estimates that
    enacting those provisions would cost $40 million over the 2017-
    2026 period.
        Summer Electronic Benefit Transfer (EBT) Demonstration
    Project. Under the bill, states that have operated a summer EBT
    demonstration project under a previous authority could continue
    operating that project. Such states would be able to provide a
    summer EBT card to children in certain areas who are in
    households where at least one school-aged child is eligible for
    free or reduced-price meals. The bill also would require the
    Secretary of Agriculture to complete an evaluation of the
    demonstration project. Finally, the bill would provide $10
    million per year for each of fiscal years 2018 through 2020 for
    that project. CBO estimates that enacting this provision would
    increase direct spending by $30 million over the 2017-2026
    period.
        Business Partnership Demonstration Project. Under the bill,
    a maximum of four states could receive grants to reimburse for-
    profit food vendors for meals they serve through the SFSP in
    areas with unmet needs. The grants would be available to the
    participating states for three years. Based on information from
    policy experts and food vendors that currently sell meals to
    SFSP sponsors, CBO estimates that this provision would increase
    direct spending by $10 million.
        State Administration of Child Nutrition Programs
    Demonstration Project. Under the bill, up to three states could
    receive a block grant with a fixed level of funding for several
    child nutrition programs. The grant period would be three
    years, with the possibility of an additional three-year
    extension. The annual funding level for each participating
    state would equal the amount the state received in fiscal year
    2016 for free and reduced-price meals served through NSLP and
    SBP (excluding the amounts received through the six-cent
    reimbursement for schools in compliance with nutrition
    standards) and the amounts the state received through the
    Special Milk Program, state administrative expenses, and Team
    Nutrition. The participating states would not be able to
    receive additional federal funds for those programs. Under the
    block grant program states would have broad flexibility in
    administering those programs.
        Based on consultation with state officials and policy
    experts, CBO does not expect that any state would take up this
    option. As a result, enacting this program would not affect
    direct spending.
        Child and Adult Care Food Program. H.R. 5003 contains
    provisions that change the types of institutions that may
    participate and the terms of participation for CACFP. In total,
    CBO estimates that enacting those provisions would save $33
    million over the 2017-2026 period.
        New Institutions in CACFP. Section 108 would allow
    residential child care institutions (RCCIs) and boarding
    schools funded by the Bureau of Indian Education (BIE) to serve
    meals through CACFP. Those institutions can currently serve
    meals through NSLP and SBP. The bill would prohibit RCCIs and
    such boarding schools from receiving reimbursements through
    those programs while concurrently receiving reimbursements
    through CACFP. The bill would allow RCCIs to serve meals to
    children 18 years of age and younger through CACFP. Boarding
    schools funded by BIE would be permitted to serve meals to
    children 12 years of age and younger, except meals served
    through the At-Risk Afterschool program, which has a higher age
    limitation.
        Institutions serving meals through CACFP comply with
    different administrative and nutrition requirements than those
    under NSLP and SBP. Based on information from policy experts,
    CBO estimates that ultimately half of the meals and snacks
    RCCIs serve through the school lunch and breakfast programs
    would switch to CACFP. CBO does not expect that boarding
    schools would switch to CACFP because they would not receive
    reimbursement for meals served to children 13 years of age or
    older.
        Institutions meeting the nutrition standards in NSLP
    receive an additional per-meal reimbursement for lunches
    served, and institutions in high-poverty areas receive
    additional per-meal reimbursements for meals served through
    NSLP and SBP. Meals served through CACFP are not eligible for
    these additional reimbursements. As a result, RCCIs switching
    from the school lunch and breakfast programs to CACFP would
    receive lower reimbursements for each meal they serve. However,
    the increase in CACFP meals served would result in increased
    funding for states to audit CACFP institutions. On net, CBO
    estimates that this provision would decrease direct spending by
    $42 million over the 2017-2026 period.
        Eligibility for For-Profit Institutions. Under current law,
    child care centers that operate on a for-profit basis are
    eligible to receive reimbursements for meals served through
    CACFP if they meet certain requirements related to the income
    or program participation of children they serve. For-profit
    centers must certify that they meet those eligibility
    requirements each month in order to receive meal
    reimbursements. Section 108 would increase the period of
    eligibility to four months for those institutions. During that
    four-month period, for-profit centers would be eligible to
    receive reimbursements for meals served to children even if
    they did not meet certain program requirements during the
    certification period.
        Based on data on participation patterns in the program and
    information from policy experts, CBO estimates that, by 2026,
    about 225 child care centers would maintain eligibility for at
    least one additional month. CBO estimates that this provision
    would increase direct spending by $9 million over the 2017-2026
    period.
        Team Nutrition. Section 207 would provide $17 million for
    Team Nutrition each year. Current law authorizes such sums as
    maybe necessary for the program. CBO projects the funding for
    Team Nutrition by adjusting the most recent funding level for
    inflation. In 2016, $17 million was provided for Team Nutrition
    and CBO projects that funding will increase to $22 million by
    2026. CBO estimates that the bill would lower the projected
    funding level each year relative to CBO's baseline and would
    reduce direct spending by $22 million over the 2017-2026
    period.
        Commodity Reimbursement Calculation. Under current law, the
    Food and Nutrition Service (FNS) is required to spend at least
    12 percent of the total cash assistance in NSLP on commodities.
    Through fiscal year 2020, the value of bonus commodities can
    count toward the requirement. (Bonus commodities are purchases
    made by the Department of Agriculture and donated to NSLP.)
    Including the value of those commodities reduces the amount of
    additional commodity purchases that FNS must make to reach the
    required level. Based on recent levels of donations, CBO
    estimates that under current law, the program will receive $6
    million per year in bonus commodities through 2020.
        H.R. 5003 would change the current formula for commodity
    reimbursement, but CBO estimates that the amount of commodity
    spending would remain essentially the same under the new
    formula. However, the value of bonus commodities would no
    longer count toward total commodity spending (although schools
    would still be able to receive bonus commodities). Therefore,
    CBO estimates that enacting this provision would increase
    direct spending for commodity purchases by $24 million over the
    2017-2026 period.
        Other Provisions. The bill includes several other
    provisions that would increase direct spending by less than
    $500,000 in any year.
               Section 104 would provide $475,000 per year
            to purchase bottled water during emergencies and when
            public water poses a risk to the health of school
            children. CBO estimates that enacting this provision
            would increase direct spending by about $5 million over
            the 2017-2026 period.
               Section 105 would remove requirements
            related to the price that schools charge for full-price
            lunches. Under current law, schools charging less than
            the difference between the federal reimbursement for a
            free lunch and the federal reimbursement for a paid
            lunch are required to increase the price they charge
            for a lunch, unless the state ensures that there are
            sufficient nonfederal funds to cover the gap. The bill
            would remove those requirements. CBO expects that some
            schools would reduce the amount they charge for a full-
            price lunch, leading to an increase in participation in
            NSLP. CBO estimates that this provision would increase
            costs by less than $500,000 in each year and over the
            2017-2026 period.
               Section 203 would require the Secretary to
            establish a centralized exchange network that would
            allow states to exchange information about the child
            nutrition programs. The bill would limit spending on
            the network to $450,000.
               Section 302 would require the Secretary to
            conduct a study on business involvement by the private
            sector in the school meal programs. The bill also would
            require the Secretary to submit a report to the
            Congress on the findings from that study and
            recommendations for legislative action that would
            improve efficiency and lower administrative costs for
            the school meal programs. The bill would limit spending
            on the study and report to $475,000.
        Interaction Effects. The bill includes several provisions
    that would interact with each other. For example, the provision
    in section 105 that would increase the threshold for
    participation in CEP would interact with the provision in
    section 202 that would increase breakfast reimbursement rates.
    CBO expects that the CEP change would decrease the number of
    breakfasts served; that decrease in reimbursable breakfasts
    would thus reduce the costs of increasing breakfast
    reimbursement rates. In total, CBO estimates that interactions
    would reduce costs by $35 million over the 2017-2026 period.

    Revenues

        Section 113 would require the Secretary to levy civil
    monetary penalties against contractors of a child nutrition
    program who are found guilty of certain criminal activities
    that have harmed the program. Those activities include
    undertaking anticompetitive behavior, such as price-fixing;
    making false statements; committing fraud, bribery, or
    embezzlement; and knowingly receiving stolen property. CBO
    estimates that enacting H.R. 5003 would increase revenues by $8
    million over the 2017-2026 period.

    Spending subject to appropriation

        The bill would make changes to discretionary programs
    previously authorized by the Richard B. Russell National School
    Lunch Act and the Child Nutrition Act of 1966, as amended, and
    would authorize new and existing discretionary programs through
    2021. CBO estimates that implementing H.R. 5003 would cost
    $29.8 billion--primarily for the WIC program--over the 2017-
    2021 period, assuming the appropriation of the necessary
    amounts.
        WIC. The WIC program is administered by the states and
    provides supplemental foods, health care referrals, and
    nutrition education to pregnant and post-partum women with low
    income, and infants and children up to age five. The bill would
    make several changes to the program, such as excluding certain
    household payments when calculating income, rounding the value
    of the WIC benefit to the nearest whole dollar, changing state
    contracts with infant formula providers, and authorizing a
    pilot project to test alternative methods for certifying the
    eligibility of participants and delivering food.
        The bill would:
               Authorize the appropriation of $6.35 billion
            per year for WIC for fiscal years 2017 through 2021.The
            program was authorized through 2015 at such sums as may
            be necessary; the Congress provided $6.35 billion for
            WIC in 2016.
               Authorize the appropriation of $18.5 million
            per year for the WIC Farmers' Market Nutrition Program
            for fiscal years 2017 through 2021. The program was
            authorized through 2015 at such sums as may be
            necessary; the Congress provided $18.5 million for that
            program in 2016.
               Authorize $25 million per year in grants for
            three years to assist states with the transition from
            paper coupons for WIC benefits to electronic benefit
            transfer systems.
               Require the Government Accountability Office
            (GAO) to study the effects of allowing Medicaid
            participants to be automatically eligible for WIC.
            Based on the cost of similar studies conducted by the
            GAO, CBO estimates that study would cost $1 million
            over the 2017-2021 period.
        In total, CBO estimates that enacting those WIC provisions
    would increase discretionary outlays by $29.6 billion over the
    2017-2021 period.

                                       TABLE 3.--SPENDING SUBJECT TO APPROPRIATION
    ----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------
                                                                2017     2018     2019     2020     2021   2017-2021
    ----------------------------------------------------------------------------------------------------------------
                                     INCREASES IN SPENDING SUBJECT TO APPROPRIATION

    Reauthorize WIC:
        Authorization Level.................................    6,395    6,394    6,394    6,369    6,369     31,919
        Estimated Outlays...................................    5,116    6,012    6,139    6,184    6,180     29,630
    Grants and Other Activities:
        Estimated Authorization Level.......................       53       28       28       28       28        165
        Estimated Outlays...................................       11       51       28       28       28        145
        Total Changes:
            Estimated Authorization Level...................    6,448    6,422    6,422    6,397    6,397     32,084
            Estimated Outlays...............................    5,126    6,062    6,167    6,212    6,208     29,775
    ----------------------------------------------------------------------------------------------------------------
    Notes: Components may not sum to totals because of rounding; WIC = Special Supplemental Nutrition Program for
      Women, Infants, and Children.

        Grants and Other Activities. The bill would reauthorize two
    existing grant programs; authorize a new grant program, a new
    loan guarantee program, and two new advisory committees; and
    eliminate a number of grant programs that have not received
    funding in recent years. Specifically, the bill would:
               Reauthorize grants to states to make
            technological improvements in the administration of
            most child nutrition programs, and allow states to use
            those funds to improve direct certification rates. The
            grants were authorized through 2015 at such sums as may
            be necessary; the Congress did not provide any funds
            for those grants in 2016. Based on the cost of a
            similar grant program, CBO estimates that such grants
            would require appropriations of $22 million annually.
               Authorize a new grant program for schools to
            purchase equipment to serve healthier meals and improve
            food safety. The bill would authorize appropriations of
            $25 million in total over three fiscal years, 2017
            through 2019, for those grants. As discussed above
            under the heading Direct Spending, CBO expects some of
            the grants would be used for purchases that would
            increase participation in SBP and thus increase direct
            spending.
               Permanently authorize $5 million per year
            for loan guarantees for local school food authorities
            to make infrastructure improvements and durable
            equipment purchases.
               Repeal the authorization of appropriations
            for a number of grant programs, none of which received
            appropriations in fiscal year 2016. Because the
            authorization for most of those grant programs has
            already expired, CBO estimates that repealing their
            authorizations would not affect the federal budget.
            (Two of the programs whose discretionary authorizations
            would be repealed under the bill, the Farm to School
            grant program and the Fresh Fruit and Vegetable
            Program, also receive mandatory funding. Those programs
            would continue to receive mandatory funding under the
            bill.)
               Reauthorize the appropriation of $1 million
            per year through 2021 for training and technical
            assistance on procurement procedures.
               Authorize two new advisory committees. CBO
            estimates that implementing those committees would not
            have a significant effect on the federal budget.
        CBO estimates that enacting those provisions would result
    in discretionary outlays of $145 million over the 2017-2021
    period.
        Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
    Act of 2010 establishes budget-reporting and enforcement
    procedures for legislation affecting direct spending or
    revenues. The net changes in outlays and revenues that are
    subject to those pay-as-you-go procedures are shown in the
    following table.

                        TABLE 4.--CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 5003, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON EDUCATION AND THE WORKFORCE ON MAY 18, 2016
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          By fiscal year, in millions of dollars--
                                                      ----------------------------------------------------------------------------------------------------------------------------------------------
                                                          2016       2017       2018       2019       2020       2021       2022       2023       2024       2025       2026    2016-2021  2016-2026
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               NET INCREASE OR DECREASE (-) IN THE DEFICIT

    Statutory Pay-As-You-Go Impact...................          0         17         15         63        -63        -39        -17         -3         14         27         40       -131        -67
    Memorandum:
        Changes in Outlays...........................          0         17         15        -62        -62        -38        -16         -2         15         28         41       -128        -59
        Changes in Revenues..........................          0          0          0          1          1          1          1          1          1          1          1          3          8
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Note: Components may not sum to totals because of rounding.

        Increase in long-term direct spending and deficits: CBO
    estimates that enacting the legislation would not increase net
    direct spending or on-budget deficits by more than $5 billion
    in any of the four consecutive 10-year periods beginning in
    2027.
        Estimated impact on state, local, and tribal governments:
    For large entitlement programs that provide $500 million or
    more annually to state, local, and tribal governments, UMRA
    defines an increase in the stringency of conditions as an
    intergovernmental mandate if the affected entity lacks the
    flexibility to offset the costs of the new conditions. The bill
    would impose new requirements on states and on schools that
    implement the child nutrition program. Because states and
    schools have limited flexibility to amend their programmatic or
    financial responsibilities in the program, the new
    requirements, which are mostly administrative, would be
    intergovernmental mandates. In aggregate, CBO estimates that
    the costs to governmental entities would fall below the annual
    threshold established in UMRA.
        Unique Student Identification System. Section 307 would
    require the Secretary of Agriculture to review the feasibility
    of implementing a unique student identification system in the
    school lunch and breakfast programs and would require the
    Secretary to submit the results of the review to the Congress.
    The Secretary could implement such a system unless it is
    determined not to be in the best interest of the programs or
    does not adequately protect student privacy.
        Many states use unique student identifiers in their student
    information systems to track attendance and other educational
    information. Local educational agencies (LEAs) also may use
    identifiers to indicate a student's qualification status for
    meals in school lunch programs and for other purposes, but
    those identifiers may not necessarily be linked. Simply
    requiring states and LEAs to establish that they have unique
    identifiers in place would yield much smaller costs than a
    requirement to adopt a unified system of unique identifiers
    where local identifiers are completely replaced. The broader
    option would result in millions of dollars of upfront costs to
    upgrade technology, change point of sale systems, and provide
    additional administrative support.
        The costs of the mandate would largely depend on how
    broadly FNS chooses to implement a new identification system
    under the new requirements, but assuming the agency does not
    require major systemic changes, CBO estimates that the costs
    would fall below $50 million. Most of those costs would occur
    in the first or second year after implementation.
        New Verification Requirements. The bill would impose
    additional duties on states and LEAs when they review
    applications and verify eligibility in school meal programs.
    While some state agencies and LEAs may be able to offset the
    costs of the additional requirements using administrative funds
    or funds from school food service accounts, some smaller
    districts may not be able to absorb such costs. Those districts
    would likely face pressure to hire additional staff. Using
    information from FNS on past LEA verification activities and
    the National Center for Education Statistics on the number of
    children eligible for free and reduced lunch, CBO estimates
    that the incremental increase in costs for this mandate could
    total less than $10 million annually.
        Raising the Threshold under the Community Eligibility
    Provision (CEP). Under current law school districts, groups of
    schools within a district, or individual schools may serve free
    meals to all students if at least 40 percent of students are
    directly certified in school meals programs, and participating
    schools are reimbursed for those meals based on a formula
    specified in law. Schools and school districts that qualify for
    such assistance also realize administrative savings because
    they do not have to verify the eligibility of as many students.
    The bill would increase the threshold for participation to 60
    percent beginning on July 1, 2017. Schools, school districts,
    and groups of schools with fewer than 60 percent of their
    students directly certified would no longer be eligible for
    federal reimbursements under this program, and they would face
    higher administrative costs to verify more students. Using
    information from FNS and industry sources, CBO estimates that
    the costs for conducting verification and other activities for
    the population of students that are not directly certified but
    still qualify under the school meals programs would result in
    costs of roughly $10 million annually; those costs would begin
    after 2017.
        Other Requirements. The bill would extend a number of other
    requirements through 2021, including reports about food safety
    inspections by state agencies and other administrative
    requirements. CBO estimates that the costs of extending these
    requirements would be covered with authorized funding.
        Other Impacts. States and schools would benefit from other
    provisions in the bill that authorize grant funds for the WIC
    program. New requirements on state WIC programs would not
    constitute intergovernmental mandates because they would result
    from participation in a voluntary federal program.
        Estimated impact on the private sector. This bill contains
    no private-sector mandates as defined in UMRA.
        Previous CBO estimate. On March 11, 2016, CBO transmitted a
    cost estimate for the Improving Child Nutrition Integrity and
    Access Act of 2016, as ordered reported by the Senate Committee
    on Agriculture, Nutrition, and Forestry on January 20, 2016 and
    posted on the committee's website. That bill contains
    provisions similar to those in H.R. 5003. The Senate bill was
    estimated relative to CBO's March 2015 baseline; H.R. 5003 was
    estimated relative to CBO's March 2016 baseline. Any
    differences in the estimates reflect differences in both the
    language of the legislation and in the baselines used for the
    estimates.
        Estimate prepared by: Federal Costs: Jennifer Gray,
    Kathleen FitzGerald, Elizabeth Cove Delisle; Federal Revenues:
    Peter Huether; Impact on State, Local, and Tribal Governments:
    J'nell Blanco Suchy; Impact on the Private Sector: Logan Smith.
        Estimate approved by: H. Samuel Papenfuss; Deputy Assistant
    Director for Budget Analysis.

                            Committee Cost Estimate

        Clause 3(d)(1) of rule XIII of the Rules of the House of
    Representatives requires an estimate and a comparison of the
    costs that would be incurred in carrying out H.R. 5003.
    However, clause 3(d)(2)(B) 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 402 of the Congressional Budget Act.

             Changes in Existing Law Made by the Bill, as Reported

        In compliance with clause 3(e) 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 (new matter is
    printed in italic and existing law in which no change is
    proposed is shown in roman):

             Changes in Existing Law Made by the Bill, as Reported

      In compliance with clause 3(e) 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, and existing law in which no
    change is proposed is shown in roman):

                  RICHARD B. RUSSELL NATIONAL SCHOOL LUNCH ACT

               *       *       *       *       *       *       *
                            APPORTIONMENTS TO STATES

      Sec. 4. (a) The sums appropriated for any fiscal year
    pursuant to the authorizations contained in section 3 of this
    Act shall be available to the Secretary for supplying
    agricultural commodities and other food for the program in
    accordance with the provisions of this Act.
      (b)(1) The Secretary shall make food assistance payments to
    each [State educational agency] State agency each fiscal year,
    at such times as the Secretary may determine, from the sums
    appropriated for such purpose, in a total amount equal to the
    product obtained by multiplying--
              (A) the number of lunches (consisting of a
            combination of foods which meet the minimum nutritional
            requirements prescribed by the Secretary under section
            9(a) of this Act) served during such fiscal year in
            schools in such State which participate in the school
            lunch program under this Act under agreements with such
            [State educational agency] State agency; by
              (B) the national average lunch payment prescribed in
            paragraph (2) of this subsection.
      (2) The national average lunch payment for each lunch served
    shall be 10.5 cents (as adjusted pursuant to section 11(a) of
    this Act) except that for each lunch served in school food
    authorities in which 60 percent or more of the lunches served
    in the school lunch program during the second preceding school
    year were served free or at a reduced price, the national
    average lunch payment shall be 2 cents more.
              (3) Additional reimbursement.--
                      (A) Regulations.--
                              (i) Proposed regulations.--
                            Notwithstanding section 9(f), not later
                            than 18 months after the date of
                            enactment of this paragraph, the
                            Secretary shall promulgate proposed
                            regulations to update the meal patterns
                            and nutrition standards for the school
                            lunch program authorized under this Act
                            and the school breakfast program
                            established by section 4 of the Child
                            Nutrition Act of 1966 (42 U.S.C. 1773)
                            based on recommendations made by the
                            Food and Nutrition Board of the
                            National Research Council of the
                            National Academy of Sciences.
                              (ii) Interim or final regulations.--
                                      (I) In general.--Not later
                                    than 18 months after
                                    promulgation of the proposed
                                    regulations under clause (i),
                                    the Secretary shall promulgate
                                    interim or final regulations.
                                      (II) Date of required
                                    compliance.--The Secretary
                                    shall establish in the interim
                                    or final regulations a date by
                                    which all school food
                                    authorities participating in
                                    the school lunch program
                                    authorized under this Act and
                                    the school breakfast program
                                    established by section 4 of the
                                    Child Nutrition Act of 1966 (42
                                    U.S.C. 1773) are required to
                                    comply with the meal pattern
                                    and nutrition standards
                                    established in the interim or
                                    final regulations.
                              (iii) Report to congress.--Not later
                            than 90 days after the date of
                            enactment of this paragraph, and each
                            90 days thereafter until the Secretary
                            has promulgated interim or final
                            regulations under clause (ii), the
                            Secretary shall submit to the
                            [Committee on Education and Labor]
                            Committee on Education and the
                            Workforce of the House of
                            Representatives and the Committee on
                            Agriculture, Nutrition, and Forestry of
                            the Senate a quarterly report on
                            progress made toward promulgation of
                            the regulations described in this
                            subparagraph.
                      (B) Performance-based reimbursement rate
                    increase.--[Beginning on the later of the date
                    of promulgation of the implementing regulations
                    described in subparagraph (A)(ii), the date of
                    enactment of this paragraph, or October 1,
                    2012, the Secretary] The Secretary shall
                    provide additional reimbursement for each lunch
                    served in school food authorities determined to
                    be eligible under subparagraph (D).
                      (C) Additional reimbursement.--
                              (i) In general.--Each lunch served in
                            school food authorities determined to
                            be eligible under subparagraph (D)
                            shall receive an additional 6 cents,
                            adjusted in accordance with section
                            11(a)(3), to the national lunch average
                            payment for each lunch served.
                              (ii) Disbursement.--The State agency
                            shall disburse funds made available
                            under this paragraph to school food
                            authorities eligible to receive
                            additional reimbursement.
                      (D) Eligible school food authority.--To be
                    eligible to receive an additional reimbursement
                    described in this paragraph, a school food
                    authority shall be certified by the State to be
                    in compliance with the interim or final
                    regulations described in subparagraph (A)(ii).
                      (E) Failure to comply.--[Beginning on the
                    later of the date described in subparagraph
                    (A)(ii)(II), the date of enactment of this
                    paragraph, or October 1, 2012, school food
                    authorities] School food authorities found to
                    be out of compliance with the meal patterns or
                    nutrition standards established by the
                    implementing regulations shall not receive the
                    additional reimbursement for each lunch served
                    described in this paragraph.
                      (F) Administrative costs.--
                              (i) In general.--Subject to clauses
                            (ii) and (iii), the Secretary shall
                            make funds available to States for
                            State activities related to training,
                            technical assistance, certification,
                            and oversight activities of this
                            paragraph.
                              (ii) Provision of funds.--The
                            Secretary shall provide funds described
                            in clause (i) to States administering a
                            school lunch program in a manner
                            proportional to the administrative
                            expense allocation of each State during
                            the preceding fiscal year.
                              (iii) Funding.--
                                      (I) In general.--In the later
                                    of the fiscal year in which the
                                    implementing regulations
                                    described in subparagraph
                                    (A)(ii) (as in effect on the
                                    day before the date of the
                                    enactment of the ``Improving
                                    Child Nutrition and Education
                                    Act of 2016'')  are promulgated
                                    or the fiscal year in which
                                    this paragraph is enacted, and
                                    in the subsequent fiscal year,
                                    the Secretary shall use not
                                    more than $50,000,000 of funds
                                    made available under section 3
                                    to make payments to States
                                    described in clause (i).
                                      (II) Reservation.--In
                                    providing funds to States under
                                    clause (i), the Secretary may
                                    reserve not more than
                                    $3,000,000 per fiscal year to
                                    support Federal administrative
                                    activities to carry out this
                                    paragraph.
                                      (III) Sunset.--The Secretary
                                    shall return to the general
                                    fund of the Treasury any funds
                                    that were made available under
                                    this subparagraph but not
                                    obligated by a State agency as
                                    of September 30, 2016.
              (4) Announcements.--With respect to reimbursement
            rates described in this subsection, the Secretary shall
            announce the rates and, to the maximum extent
            practicable, any associated guidance by February 15 of
            the school year prior to the school year for which the
            rates and guidance will become effective.

    [SEC. 5. NUTRITION PROMOTION.

      [(a) In General.--Subject to the availability of funds made
    available under subsection (g), the Secretary shall make
    payments to State agencies for each fiscal year, in accordance
    with this section, to promote nutrition in food service
    programs under this Act and the school breakfast program
    established under the Child Nutrition Act of 1966 (42 U.S.C.
    1771 et seq.).
      [(b) Total Amount for Each Fiscal Year.--The total amount of
    funds available for a fiscal year for payments under this
    section shall equal not more than the product obtained by
    multiplying--
              [(1) \1/2\ cent; by
              [(2) the number of lunches reimbursed through food
            service programs under this Act during the second
            preceding fiscal year in schools, institutions, and
            service institutions that participate in the food
            service programs.
      [(c) Payments to States.--
              [(1) Allocation.--Subject to paragraph (2), from the
            amount of funds available under subsection (g) for a
            fiscal year, the Secretary shall allocate to each State
            agency an amount equal to the greater of--
                      [(A) a uniform base amount established by the
                    Secretary; or
                      [(B) an amount determined by the Secretary,
                    based on the ratio that--
                              [(i) the number of lunches reimbursed
                            through food service programs under
                            this Act in schools, institutions, and
                            service institutions in the State that
                            participate in the food service
                            programs; bears to
                              [(ii) the number of lunches
                            reimbursed through the food service
                            programs in schools, institutions, and
                            service institutions in all States that
                            participate in the food service
                            programs.
              [(2) Reductions.--The Secretary shall reduce
            allocations to State agencies qualifying for an
            allocation under paragraph (1)(B), in a manner
            determined by the Secretary, to the extent necessary to
            ensure that the total amount of funds allocated under
            paragraph (1) is not greater than the amount
            appropriated under subsection (g).
      [(d) Use of Payments.--
              [(1) Use by state agencies.--A State agency may
            reserve, to support dissemination and use of nutrition
            messages and material developed by the Secretary, up
            to--
                      [(A) 5 percent of the payment received by the
                    State for a fiscal year under subsection (c);
                    or
                      [(B) in the case of a small State (as
                    determined by the Secretary), a higher
                    percentage (as determined by the Secretary) of
                    the payment.
              [(2) Disbursement to schools and institutions.--
            Subject to paragraph (3), the State agency shall
            disburse any remaining amount of the payment to school
            food authorities and institutions participating in food
            service programs described in subsection (a) to
            disseminate and use nutrition messages and material
            developed by the Secretary.
              [(3) Summer food service program for children.--In
            addition to any amounts reserved under paragraph (1),
            in the case of the summer food service program for
            children established under section 13, the State agency
            may--
                      [(A) retain a portion of the funds made
                    available under subsection (c) (as determined
                    by the Secretary); and
                      [(B) use the funds, in connection with the
                    program, to disseminate and use nutrition
                    messages and material developed by the
                    Secretary.
      [(e) Documentation.--A State agency, school food authority,
    and institution receiving funds under this section shall
    maintain documentation of nutrition promotion activities
    conducted under this section.
      [(f) Reallocation.--The Secretary may reallocate, to carry
    out this section, any amounts made available to carry out this
    section that are not obligated or expended, as determined by
    the Secretary.
      [(g) Authorization of Appropriations.--There are authorized
    to be appropriated such sums as are necessary to carry out this
    section, to remain available until expended.]

                          DIRECT FEDERAL EXPENDITURES

      Sec. 6. (a) The funds provided by appropriation or transfer
    from other accounts for any fiscal year for carrying out the
    provisions of this Act, and for carrying out the provisions of
    the Child Nutrition Act of 1966, other than section 3 thereof,
    less
              (1) not to exceed 3\1/2\ per centum thereof which per
            centum is hereby made available to the Secretary for
            the Secretary's administrative expenses under this Act
            and under the Child Nutrition Act of 1966;
              (2) the amount apportioned by the Secretary pursuant
            to section 4 of this Act and the amount appropriated
            pursuant to sections 11 and 13 of this Act and sections
            4 and 7 of the Child Nutrition Act of 1966; and
              (3) not to exceed 1 per centum of the funds provided
            for carrying out the programs under this Act and the
            programs under the Child Nutrition Act of 1966, other
            than section 3, which per centum is hereby made
            available to the Secretary to supplement the
            nutritional benefits of these programs through grants
            to States and other means for nutritional training and
            education for workers, cooperators, and participants in
            these programs, for pilot projects and the cash-in-lieu
            of commodities study required to be carried out under
            section 18 of this Act, and for necessary surveys and
            studies of requirements for food service programs in
            furtherance of the purposes expressed in section 2 of
            this Act and section 2 of the Child Nutrition Act of
            1966,
    shall be available to the Secretary during such year for direct
    expenditure by the Secretary for agricultural commodities and
    other foods to be distributed among the States and schools and
    service institutions participating in the food service programs
    under this Act and under the Child Nutrition Act of 1966 in
    accordance with the needs as determined by the local school and
    service institution authorities. Except as provided in the next
    2 sentences, any school participating in food service programs
    under this Act may refuse to accept delivery of not more than
    20 percent of the total value of agricultural commodities and
    other foods tendered to it in any school year; and if a school
    so refuses, that school may receive, in lieu of the refused
    commodities, other commodities to the extent that other
    commodities are available to the State during that year. Any
    school food authority may refuse some or all of the fresh
    fruits and vegetables offered to the school food authority in
    any school year and shall receive, in lieu of the offered
    fruits and vegetables, other more desirable fresh fruits and
    vegetables that are at least equal in value to the fresh fruits
    and vegetables refused by the school food authority. The value
    of any fresh fruits and vegetables refused by a school under
    the preceding sentence for a school year shall not be used to
    determine the 20 percent of the total value of agricultural
    commodities and other foods tendered to the school food
    authority in the school year under the second sentence. The
    provisions of law contained in the proviso of the Act of June
    28, 1937, facilitating operations with respect to the purchase
    and disposition of surplus agricultural commodities under
    section 32 of the Act approved August 24, 1935, shall, to the
    extent not inconsistent with the provisions of this Act, also
    be applicable to expenditures of funds by the Secretary under
    this Act. In making purchases of such agricultural commodities
    and other foods, the Secretary shall not issue specifications
    which restrict participation of local producers unless such
    specifications will result in significant advantages to the
    food service programs authorized by this Act and the Child
    Nutrition Act of 1966.
      (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) for each school year for the school lunch program in the
    State, not later than September 30 of the following school
    year.
      [(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.
      [(B) The value of food assistance for each meal shall be
    adjusted each July 1 by the annual percentage change in a 3-
    month average value of the Price Index for Foods Used in
    Schools and Institutions for March, April, and May each year.
    Such adjustment shall be computed to the nearest \1/4\ cent.
      [(C) For each school year, the total commodity assistance or
    cash in lieu thereof available to a State for the school lunch
    program shall be calculated by multiplying the number of
    lunches served in the preceding school year by the rate
    established by subparagraph (B). After the end of each school
    year, the Secretary shall reconcile the number of lunches
    served by schools in each State with the number of lunches
    served by schools in each State during the preceding school
    year and increase or reduce subsequent commodity assistance or
    cash in lieu thereof provided to each State based on such
    reconciliation.
      [(D) Among those commodities]
      (c) Calculation of Total Assistance.--
              (1) National average value.--
                      (A) In general Subject to subparagraphs (B)
                    and (C), the national average value of donated
                    foods, or cash payments in lieu thereof, shall
                    be equal to the quotient obtained by dividing,
                    not later than February 15 of each year for the
                    upcoming school year--
                              (i) the total funds available in the
                            preceding school year under section 4,
                            this section, and section 11; by
                              (ii) the number of lunches served in
                            the preceding school year in all
                            schools participating in the school
                            lunch program under this Act.
                      (B) Adjustment.--
                              (i) In general.--The value determined
                            under subparagraph (A) shall be
                            adjusted by the annual percentage
                            change in a 3-month average value of
                            the Producer Price Index for Foods Used
                            in Schools and Institutions of the
                            Bureau of Labor Statistics (in this
                            subparagraph referred to as the
                            ``Index'') for the preceding September,
                            October, and November.
                              (ii) Requirement.--An adjustment
                            under clause (i) shall be computed to
                            the nearest \1/4\ cent.
                              (iii) Index.--
                                      (I) In general.--The Index
                                    shall be computed using 5 major
                                    food components in the Index
                                    (cereal and bakery products,
                                    meats, poultry and fish, dairy
                                    products, processed fruits and
                                    vegetables, and fats and oils).
                                      (II) Components.--Each
                                    component described in
                                    subclause (I) shall be weighted
                                    using the same relative weight
                                    as determined by the Bureau of
                                    Labor Statistics.
                              (iv) Minimum amount of commodity
                            assistance.--Not less than 12 percent
                            of the value adjusted in accordance
                            with this subparagraph shall be
                            provided in the form of commodity
                            assistance.
                      (C) Insufficient amounts.--If amounts
                    available to carry out section 4, this section,
                    and section 11 are insufficient to meet the
                    requirements of such sections for a school
                    year, the Secretary shall, to the extent
                    necessary, use the authority provided under
                    section 14(a) to meet the requirements for the
                    school year.
                      (D) Amount for each state.--For each school
                    year, the total commodity assistance or cash in
                    lieu thereof available to a State for the
                    school lunch program shall be equal to the
                    product obtained by multiplying--
                              (i) the number of lunches served in
                            such State in the most recent school
                            year for which data are available; by
                              (ii) the rate determined under
                            subparagraphs (A) and (B).
                      (E) Special emphasis.--Among those
                    commodities delivered under this section, the
                    Secretary shall give special emphasis to high
                    protein foods, meat, and meat alternates (which
                    may include domestic seafood commodities and
                    their products).
      [(E) Notwithstanding]
              (F) Minimum quantity of donated foods._
            Notwithstanding any other provision of this section,
            not less than 75 percent of the assistance provided
            under this subsection shall be in the form of donated
            foods for the school lunch program.
      (2) To the maximum extent feasible, each State agency shall
    offer to each school food authority under its jurisdiction that
    participates in the school lunch program and receives
    commodities, agricultural commodities and their products, the
    per meal value of which is not less than the national average
    value of donated foods established under paragraph (1). Each
    such offer shall include the full range of such commodities and
    products that are available from the Secretary to the extent
    that quantities requested are sufficient to allow efficient
    delivery to and within the State.
      (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.
      [(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--
              [(A) commodity assistance provided under this
            section, including cash in lieu of commodities and
            administrative costs for procurement of commodities
            under this section; or
              [(B) during the period beginning October 1, 2003, and
            ending September 30, 2020, commodities provided by the
            Secretary under any provision of law.
      [(2) If amounts available to carry out the requirements of
    the sections described in paragraph (1) are insufficient to
    meet the requirement contained in paragraph (1) for a school
    year, the Secretary shall, to the extent necessary, use the
    authority provided under section 14(a) to meet the requirement
    for the school year.]
      [(f)] (e) Pilot Project for Procurement of Unprocessed Fruits
    and Vegetables.--
              (1) In general.--The Secretary shall conduct a pilot
            project under which the Secretary shall facilitate the
            procurement of unprocessed fruits and vegetables in not
            more than 8 States receiving funds under this Act.
              (2) Purpose.--The purpose of the pilot project
            required by this subsection is to provide selected
            States flexibility for the procurement of unprocessed
            fruits and vegetables by permitting each State--
                      (A) to utilize multiple suppliers and
                    products established and qualified by the
                    Secretary; and
                      (B) to allow geographic preference, if
                    desired, in the procurement of the products
                    under the pilot project.
              (3) Selection and participation.--
                      (A) In general.--The Secretary shall select
                    States for participation in the pilot project
                    in accordance with criteria established by the
                    Secretary and terms and conditions established
                    for participation.
                      (B) Requirement.--The Secretary shall ensure
                    that at least 1 project is located in a State
                    in each of--
                              (i) the Pacific Northwest Region;
                              (ii) the Northeast Region;
                              (iii) the Western Region;
                              (iv) the Midwest Region; and
                              (v) the Southern Region.
              (4) Priority.--In selecting States for participation
            in the pilot project, the Secretary shall prioritize
            applications based on--
                      (A) the quantity and variety of growers of
                    local fruits and vegetables in the States on a
                    per capita basis;
                      (B) the demonstrated commitment of the States
                    to farm-to-school efforts, as evidenced by
                    prior efforts to increase and promote farm-to-
                    school programs in the States; and
                      (C) whether the States contain a sufficient
                    quantity of local educational agencies, various
                    population sizes, and geographical locations.
              (5) Recordkeeping and reporting requirements.--
                      (A) Recordkeeping requirement.--States
                    selected to participate in the pilot project,
                    and participating school food authorities
                    within those States, shall keep records of the
                    fruits and vegetables received under the pilot
                    project in such manner and form as requested by
                    the Secretary.
                      (B) Reporting requirement.--Each
                    participating State shall submit to the
                    Secretary a report on the success of the pilot
                    project in the State, including information
                    on--
                              (i) the quantity and cost of each
                            type of fruit and vegetable received by
                            the State under the pilot project; and
                              (ii) the benefit provided by those
                            procurements in conducting school food
                            service in the State, including meeting
                            school meal requirements.

                               PAYMENTS TO STATES

      Sec. 7. (a)(1) Funds appropriated to carry out section 4 of
    this Act during any fiscal year shall be available for payment
    to the States for disbursement by [State educational agencies]
    State agencies in accordance with such agreements, not
    inconsistent with the provisions of this Act, as may be entered
    into by the Secretary and such [State educational agencies]
    State agencies for the purpose of assisting schools within the
    States in obtaining agricultural commodities and other foods
    for consumption by children in furtherance of the school lunch
    program authorized under this Act. For any school year, such
    payments shall be made to a State only if, during such school
    year, the amount of the State revenues (excluding State
    revenues derived from the operation of the program)
    appropriated or used specifically for program purposes (other
    than any State revenues expended for salaries and
    administrative expenses of the program at the State level) is
    not less than 30 percent of the funds made available to such
    State under section 4 of this Act for the school year beginning
    July 1, 1980.
      (2) If, for any school year, the per capita income of a State
    is less than the average per capita income of all the States,
    the amount required to be expended by a State under paragraph
    (1) for such year shall be an amount bearing the same ratio to
    the amount equal to 30 percent of the funds made available to
    such State under section 4 of this Act for the school year
    beginning July 1, 1980, as the per capita income of such State
    bears to the average per capita income of all the States.
      (b) The State revenues provided by any State to meet the
    requirement of subsection (a) shall, to the extent the State
    deems practicable, be disbursed to schools participating in the
    school lunch program under this Act. No State in which the
    [State educational agency] State agency is prohibited by law
    from disbursing State appropriated funds to private schools
    shall be required to match Federal funds made available for
    meals served in such schools, or to disburse, to such schools,
    any of the State revenues required to meet the requirements of
    subsection (a).
      (c) The Secretary shall certify to the Secretary of the
    Treasury, from time to time, the amounts to be paid to any
    State under this section and shall specify when such payments
    are to be made. The Secretary of the Treasury shall pay to the
    State, at the time or times fixed by the Secretary, the amounts
    so certified.
      (d) Notwithstanding any other provision of law, the Secretary
    may enter into an agreement with a State agency, acting on the
    request of a school food service authority, under which funds
    payable to the State under section 4 or 11 may be used by the
    Secretary for the purpose of purchasing commodities for use by
    the school food service authority in meals served under the
    school lunch program under this Act.

                         STATE DISBURSEMENT TO SCHOOLS

      Sec. 8. (a) Funds paid to any State during any fiscal year
    pursuant to section 4 shall be disbursed by the [State
    educational agency] State agency, in accordance with such
    agreements approved by the Secretary as may be entered into by
    such State agency and the schools in the State, to those
    schools in the State which the [State educational agency] State
    agency, taking into account need and attendance, determines are
    eligible to participate in the school lunch program.
      (b) The agreements described in subsection (a) shall be
    permanent agreements that may be amended as necessary.
      (c) The [State educational agency] State agency may suspend
    or terminate any such agreement in accordance with regulations
    prescribed by the Secretary.
      (d) Use of funds paid to States may include, in addition to
    the purchase price of agricultural commodities and other foods,
    the cost of processing, distributing, transporting, storing, or
    handling thereof.
      (e) In no event shall such disbursement for food to any
    school for any fiscal year exceed an amount determined by
    multiplying the number of lunches served in the school in the
    school lunch program under this Act during such year by the
    maximum per meal reimbursement rate for the State, for the type
    of lunch served, as prescribed by the Secretary.
      (f) In any fiscal year in which the national average payment
    per lunch determined under section 4 is increased above the
    amount prescribed in the previous fiscal year, the maximum per
    meal reimbursement rate for the type of lunch served, shall be
    increased by a like amount.
      (g) Lunch assistance disbursements to schools under this
    section and under section 11 of this Act may be made in advance
    or by way of reimbursement in accordance with procedures
    prescribed by the Secretary.

                  [NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS

      [Sec. 9. (a)(1)(A) Lunches served by schools participating in
    the school lunch program under this Act shall meet minimum
    nutritional requirements prescribed by the Secretary on the
    basis of tested nutritional research, except that the minimum
    nutritional requirements--
              [(i) shall not be construed to prohibit the
            substitution of foods to accommodate the medical or
            other special dietary needs of individual students; and
              [(ii) shall, at a minimum, be based on the weekly
            average of the nutrient content of school lunches.
      [(B) The Secretary shall provide technical assistance and
    training, including technical assistance and training in the
    preparation of lower-fat versions of foods commonly used in the
    school lunch program under this Act, to schools participating
    in the school lunch program to assist the schools in complying
    with the nutritional requirements prescribed by the Secretary
    pursuant to subparagraph (A) and in providing appropriate meals
    to children with medically certified special dietary needs. The
    Secretary shall provide additional technical assistance to
    schools that are having difficulty maintaining compliance with
    the requirements.]

    SEC. 9. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

      (a) Requirements.--
              (1) Technical assistance and training.--The Secretary
            shall provide--
                      (A) technical assistance and training to
                    schools participating in the school lunch
                    program to assist the schools in complying with
                    the nutritional requirements prescribed by the
                    Secretary pursuant to subsection (f) and in
                    providing appropriate meals to children with
                    medically certified special dietary needs,
                    including food allergies or other special
                    dietary needs of individual children, including
                    religious dietary restrictions; and
                      (B) additional technical assistance to
                    schools that are having difficulty maintaining
                    compliance with the requirements.
              (2) Fluid milk.--
                      (A) In general.--Lunches served by schools
                    participating in the school lunch program under
                    this Act--
                              (i) shall offer students a variety of
                            fluid milk. Such milk shall be
                            consistent with the most recent Dietary
                            Guidelines for Americans published
                            under section 301 of the National
                            Nutrition Monitoring and Related
                            Research Act of 1990 (7 U.S.C. 5341);
                              (ii) may offer students flavored and
                            unflavored fluid milk and lactose-free
                            fluid milk; and
                              (iii) shall provide a substitute for
                            fluid milk for students whose
                            disability restricts their diet, on
                            receipt of a written statement from a
                            licensed physician that identifies the
                            disability that restricts the student's
                            diet and that specifies the substitute
                            for fluid milk.
                      (B) Substitutes.--
                              (i) Standards for substitution.--A
                            school may substitute for the fluid
                            milk provided under subparagraph (A), a
                            nondairy beverage that is nutritionally
                            equivalent to fluid milk and meets
                            nutritional standards established by
                            the Secretary (which shall, among other
                            requirements to be determined by the
                            Secretary, include fortification of
                            calcium, protein, vitamin A, and
                            vitamin D to levels found in cow's
                            milk) for students who cannot consume
                            fluid milk because of a medical or
                            other special dietary need other than a
                            disability described in subparagraph
                            (A)(iii).
                              (ii) Notice.--The substitutions may
                            be made if the school notifies the
                            State agency that the school is
                            implementing a variation allowed under
                            this subparagraph, and if the
                            substitution is requested by written
                            statement of a medical authority or by
                            a student's parent or legal guardian
                            that identifies the medical or other
                            special dietary need that restricts the
                            student's diet, except that the school
                            shall not be required to provide
                            beverages other than beverages the
                            school has identified as acceptable
                            substitutes.
                              (iii) Excess expenses borne by school
                            food authority.--Expenses incurred in
                            providing substitutions under this
                            subparagraph that are in excess of
                            expenses covered by reimbursements
                            under this Act shall be paid by the
                            school food authority.
                      (C) Restrictions on sale of milk
                    prohibited.--A school that participates in the
                    school lunch program under this Act shall not
                    directly or indirectly restrict the sale or
                    marketing of fluid milk products by the school
                    (or by a person approved by the school) at any
                    time or any place--
                              (i) on the school premises; or
                              (ii) at any school-sponsored event.
                      (D) Fluid milk considerations.--In
                    determining varieties of fluid milk that shall
                    be available with school meals programs under
                    this Act and section 4 of the Child Nutrition
                    Act of 1966 (42 U.S.C. 1773) and outside of the
                    school meal programs, the Secretary, not later
                    than 90 days after the date of enactment of the
                    Improving Child Nutrition and Education Act of
                    2016, shall carry out the following:
                              (i) Consider the critical nutrient
                            needs of children who may be at risk
                            for inadequate intake of the
                            recommended daily servings of milk and
                            dairy products under the most recent
                            Dietary Guidelines described in
                            subparagraph (A)(i) and conform the
                            applicable regulations to such
                            guidelines.
                              (ii) Analyze milk consumption data
                            and trends for school-aged children,
                            and to the extent practicable, increase
                            actual milk consumption in schools in a
                            manner consistent with the number of
                            servings recommended under such Dietary
                            Guidelines, and ensure that schools may
                            offer any type of milk with fat levels
                            that are in compliance with such
                            Dietary Guidelines.
                      (E) Milk variety considerations.--In
                    determining milk varieties eligible for schools
                    to offer with school meal programs under this
                    Act and section 4 of the Child Nutrition Act of
                    1966 (42 U.S.C. 1773) and outside of the school
                    meal programs, the Secretary shall consider the
                    most commonly available types, sizes,
                    containers, and varieties of milk in local,
                    regional, and national commercial markets from
                    which local educational agencies procure milk,
                    to promote competition and reduce milk waste.
      (3) Students in senior high schools that participate in the
    school lunch program under this Act (and, when approved by the
    local school district or nonprofit private schools, students in
    any other grade level) shall not be required to accept offered
    foods they do not intend to consume, and any such failure to
    accept offered foods shall not affect the full charge to the
    student for a lunch meeting the requirements of this subsection
    or the amount of payments made under this Act to any such
    school for such lunch.
              [(4) Provision of information.--
                      [(A) Guidance.--Prior to the beginning of the
                    school year beginning July 2004, the Secretary
                    shall issue guidance to States and school food
                    authorities to increase the consumption of
                    foods and food ingredients that are recommended
                    for increased serving consumption in the most
                    recent Dietary Guidelines for Americans
                    published under section 301 of the National
                    Nutrition Monitoring and Related Research Act
                    of 1990 (7 U.S.C. 5341).
                      [(B) Rules.--Not later than 2 years after the
                    date of enactment of this paragraph, the
                    Secretary shall promulgate rules, based on the
                    most recent Dietary Guidelines for Americans,
                    that reflect specific recommendations,
                    expressed in serving recommendations, for
                    increased consumption of foods and food
                    ingredients offered in school nutrition
                    programs under this Act and the Child Nutrition
                    Act of 1966 (42 U.S.C. 1771 et seq.).
                      [(C) Procurement and processing of food
                    service products and commodities.--The
                    Secretary]
              (4) Procurement and processing of food service
            products and commodities.--The Secretary shall--
                      [(i)] (A) identify, develop, and disseminate
                    to State departments of agriculture and
                    education, school food authorities, local
                    educational agencies, and local processing
                    entities, model product specifications and
                    practices for foods offered in school nutrition
                    programs under this Act and the Child Nutrition
                    Act of 1966 (42 U.S.C. 1771 et seq.) to ensure
                    that the foods reflect the most recent Dietary
                    Guidelines for Americans published under
                    section 301 of the National Nutrition
                    Monitoring and Related Research Act of 1990 (7
                    U.S.C. 5341);
                      [(ii)] (B) not later than 1 year after the
                    date of enactment of this subparagraph--
                              [(I)] (i) carry out a study to
                            analyze the quantity and quality of
                            nutritional information available to
                            school food authorities about food
                            service products and commodities; and
                              [(II)] (ii) submit to Congress a
                            report on the results of the study that
                            contains such legislative
                            recommendations as the Secretary
                            considers necessary to ensure that
                            school food authorities have access to
                            the nutritional information needed for
                            menu planning and compliance
                            assessments; and
                      [(iii)] (C) to the maximum extent
                    practicable, in purchasing and processing
                    commodities for use in school nutrition
                    programs under this Act and the Child Nutrition
                    Act of 1966 (42 U.S.C. 1771 et seq.), purchase
                    the widest variety of healthful foods that
                    reflect the most recent Dietary Guidelines for
                    Americans.
              (5) Water.--Schools participating in the school lunch
            program under this Act shall make available to children
            free of charge, as nutritionally appropriate, potable
            water for consumption in the place where meals are
            served during meal service.
              (6) Emergency access to potable water.--
                      (A) In general.--To ensure that children have
                    access to potable water during meal service,
                    the Secretary may award funds to State agencies
                    to assist such agencies in providing bottled
                    water for a period of not more than 90 days
                    (except as otherwise provided under
                    subparagraph (C)) when--
                              (i) a major disaster or emergency has
                            been declared by the President under
                            the Robert T. Stafford Disaster Relief
                            and Emergency Assistance Act (42 U.S.C.
                            5121 et seq.); and
                              (ii) the Secretary determines that
                            there is a significant risk to the
                            health of school children posed by the
                            public water system (as defined under
                            section 1401(4) of the Safe Drinking
                            Water Act (42 U.S.C. 300f)).
                      (B) Matching requirement.--To receive funds
                    under this paragraph, a State agency shall
                    assure the Secretary that the State will
                    utilize donated water supplies and State
                    funding to supplement the funds that the State
                    receives under this paragraph to provide
                    bottled water as necessary for students.
                      (C) Extension of authority.--If the risk
                    described in subparagraph (A)(ii) persists in a
                    State after the first 90-day period for which
                    funds under this paragraph are provided to such
                    State, funds may be provided under this
                    paragraph to such State for an additional 90-
                    day period.
                      (D) Funding.--Not more than $475,000 may be
                    provided under this paragraph for a fiscal
                    year.
      (b)(1)(A) Not later than June 1 of each fiscal year, the
    Secretary shall prescribe income guidelines for determining
    eligibility for free and reduced price lunches during the 12-
    month period beginning July 1 of such fiscal year and ending
    June 30 of the following fiscal year. The income guidelines for
    determining eligibility for free lunches shall be 130 percent
    of the applicable family size income levels contained in the
    nonfarm income poverty guidelines prescribed by the Office of
    Management and Budget, as adjusted annually in accordance with
    subparagraph (B). The income guidelines for determining
    eligibility for reduced price lunches for any school year shall
    be 185 percent of the applicable family size income levels
    contained in the nonfarm income poverty guidelines prescribed
    by the Office of Management and Budget, as adjusted annually in
    accordance with subparagraph (B). The Office of Management and
    Budget guidelines shall be revised at annual intervals, or at
    any shorter interval deemed feasible and desirable.
      (B) The revision required by subparagraph (A) of this
    paragraph shall be made by multiplying--
              (i) the official poverty line (as defined by the
            Office of Management and Budget); by
              (ii) the percentage change in the Consumer Price
            Index during the annual or other interval immediately
            preceding the time at which the adjustment is made.
    Revisions under this subparagraph shall be made not more than
    30 days after the date on which the consumer price index data
    required to compute the adjustment becomes available.
      (2)(A) Following the determination by the Secretary under
    paragraph (1) of this subsection of the income eligibility
    guidelines for each school year, each [State educational
    agency] State agency shall announce the income eligibility
    guidelines, by family size, to be used by schools in the State
    in making determinations of eligibility for free and reduced
    price lunches. Local school authorities shall, each year,
    publicly announce the income eligibility guidelines for free
    and reduced price lunches on or before the opening of school.
              (B) Applications and descriptive material.--
                      (i) In general.--Applications for free and
                    reduced price lunches, in such form as the
                    Secretary may prescribe or approve, and any
                    descriptive material, shall be distributed to
                    the parents or guardians of children in
                    attendance at the school[, and shall contain
                    only the family size income levels for reduced
                    price meal eligibility with the explanation
                    that households with incomes less than or equal
                    to these values would be eligible for free or
                    reduced price lunches].
                      (ii) Income eligibility guidelines.--Forms
                    and descriptive material distributed in
                    accordance with clause (i) may not contain the
                    income eligibility guidelines for free or
                    reduced price lunches.
                      (iii) Contents of descriptive material.--
                              (I) In general.--Descriptive material
                            distributed in accordance with clause
                            (i) shall contain a notification that--
                                      (aa) participants in the
                                    programs listed in subclause
                                    (II) may be eligible for free
                                    or reduced price meals; [and]
                                      (bb) documentation may be
                                    requested for verification of
                                    eligibility for free or reduced
                                    price meals[.]; and
                                      (cc) individuals may report
                                    alleged fraud to the Office of
                                    the Inspector General of the
                                    Department of Agriculture.
                              (II) Programs.--The programs referred
                            to in subclause (I)(aa) are--
                                      (aa) the special supplemental
                                    nutrition program for women,
                                    infants, and children
                                    established by section 17 of
                                    the Child Nutrition Act of 1966
                                    (42 U.S.C. 1786);
                                      (bb) the supplemental
                                    nutrition assistance program
                                    established under the Food and
                                    Nutrition Act of 2008 (7 U.S.C.
                                    2011 et seq.);
                                      (cc) the food distribution
                                    program on Indian reservations
                                    established under section 4(b)
                                    of the Food and Nutrition Act
                                    of 2008 (7 U.S.C. 2013(b)); and
                                      (dd) a State program funded
                                    under the program of block
                                    grants to States for temporary
                                    assistance for needy families
                                    established under part A of
                                    title IV of the Social Security
                                    Act (42 U.S.C. 601 et seq.).
                      (iv) Reporting of fraud.--The Secretary shall
                    ensure that the Internet website of the
                    Department of Agriculture prominently displays
                    a link to the Internet website of the Office of
                    the Inspector General of the Department and the
                    phone number of the Office of the Inspector
                    General through which an individual may report
                    any alleged fraud.
                      (v) Application forms.--Not later than 120
                    days after the date of the enactment of the
                    Improving Child Nutrition and Education Act of
                    2016, the Secretary shall--
                              (I) review a sample of application
                            forms, including paper and digital
                            forms, used to apply for participation
                            in the school lunch program authorized
                            under this Act and the school breakfast
                            program established by section 4 of the
                            Child Nutrition Act of 1966 (42 U.S.C.
                            1773);
                              (II) provide to States guidance
                            relating to best practices, including a
                            standard application form local
                            educational agencies or schools may
                            use;
                              (III) provide to States guidance
                            relating to how to improve the
                            application to ensure families
                            understand and can enroll in the school
                            lunch program and the school breakfast
                            program; and
                              (IV) provide to States such
                            information as is necessary to ensure
                            that States understand school food
                            authorities may not--
                                      (aa) require or mandate
                                    families apply for either
                                    program;
                                      (bb) request that a family
                                    apply for the program after the
                                    parent or guardian has informed
                                    the school that the family does
                                    not want to participate in the
                                    program or receive additional
                                    information about the program
                                    in that school year; or
                                      (cc) in the case of a family
                                    that has not informed the
                                    school about their choice,
                                    request more than twice in that
                                    school year that such family
                                    apply for the program if such
                                    family has not submitted an
                                    application, except that
                                    providing information about the
                                    application (including how and
                                    when the application will be
                                    sent to parents and how to fill
                                    out the application) shall not
                                    count as a request to apply.
              (3) Household applications.--
                      (A) Definition of household application.--In
                    this paragraph, the term ``household
                    application'' means an application for a child
                    of a household to receive free or reduced price
                    school lunches under this Act, or free or
                    reduced price school breakfasts under the Child
                    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.),
                    for which an eligibility determination is made
                    other than under paragraph (4) or (5).
                      (B) Eligibility determination.--
                              (i) In general.--An eligibility
                            determination shall be made on the
                            basis of a complete household
                            application executed by an adult member
                            of the household or in accordance with
                            guidance issued by the Secretary.
                              (ii) Electronic signatures and
                            applications.--A household application
                            may be executed using an electronic
                            signature if--
                                      (I) the application is
                                    submitted electronically; and
                                      (II) the electronic
                                    application filing system meets
                                    confidentiality standards
                                    established by the Secretary.
                      (C) Children in household.--
                              (i) In general.--The household
                            application shall identify the names of
                            each child in the household for whom
                            meal benefits are requested.
                              (ii) Separate applications.--A [State
                            educational agency] State agency or
                            local educational agency may not
                            request a separate application for each
                            child in the household that attends
                            schools under the same local
                            educational agency.
                      [(D) Verification of sample.--
                              [(i) Definitions.--In this
                            subparagraph:
                                      [(I) Error prone
                                    application.--The term ``error
                                    prone application'' means an
                                    approved household application
                                    that--
                                              [(aa) indicates
                                            monthly income that is
                                            within $100, or an
                                            annual income that is
                                            within $1,200, of the
                                            income eligibility
                                            limitation for free or
                                            reduced price meals; or
                                              [(bb) in lieu of the
                                            criteria established
                                            under item (aa), meets
                                            criteria established by
                                            the Secretary.
                                      [(II) Non-response rate.--The
                                    term ``non-response rate''
                                    means (in accordance with
                                    guidelines established by the
                                    Secretary) the percentage of
                                    approved household applications
                                    for which verification
                                    information has not been
                                    obtained by a local educational
                                    agency after attempted
                                    verification under
                                    subparagraphs (F) and (G).
                              [(ii) Verification of sample.--Each
                            school year, a local educational agency
                            shall verify eligibility of the
                            children in a sample of household
                            applications approved for the school
                            year by the local educational agency,
                            as determined by the Secretary in
                            accordance with this subsection.
                              [(iii) Sample size.--Except as
                            otherwise provided in this paragraph,
                            the sample for a local educational
                            agency for a school year shall equal
                            the lesser of--
                                      [(I) 3 percent of all
                                    applications approved by the
                                    local educational agency for
                                    the school year, as of October
                                    1 of the school year, selected
                                    from error prone applications;
                                    or
                                      [(II) 3,000 error prone
                                    applications approved by the
                                    local educational agency for
                                    the school year, as of October
                                    1 of the school year.
                              [(iv) Alternative sample size.--
                                      [(I) In general.--If the
                                    conditions described in
                                    subclause (IV) are met, the
                                    verification sample size for a
                                    local educational agency shall
                                    be the sample size described in
                                    subclause (II) or (III), as
                                    determined by the local
                                    educational agency.
                                      [(II)  3,000/3 percent
                                    option.--The sample size
                                    described in this subclause
                                    shall be the lesser of 3,000,
                                    or 3 percent of, applications
                                    selected at random from
                                    applications approved by the
                                    local educational agency for
                                    the school year, as of October
                                    1 of the school year.
                                      [(III)  1,000/1 percent plus
                                    option.--
                                              [(aa) In general.--
                                            The sample size
                                            described in this
                                            subclause shall be the
                                            sum of--
                                                      [(AA) the
                                                    lesser of
                                                    1,000, or 1
                                                    percent of, all
                                                    applications
                                                    approved by the
                                                    local
                                                    educational
                                                    agency for the
                                                    school year, as
                                                    of October 1 of
                                                    the school
                                                    year, selected
                                                    from error
                                                    prone
                                                    applications;
                                                    and
                                                      [(BB) the
                                                    lesser of 500,
                                                    or \1/2\ of 1
                                                    percent of,
                                                    applications
                                                    approved by the
                                                    local
                                                    educational
                                                    agency for the
                                                    school year, as
                                                    of October 1 of
                                                    the school
                                                    year, that
                                                    provide a case
                                                    number (in lieu
                                                    of income
                                                    information)
                                                    showing
                                                    participation
                                                    in a program
                                                    described in
                                                    item (bb)
                                                    selected from
                                                    those approved
                                                    applications
                                                    that provide a
                                                    case number (in
                                                    lieu of income
                                                    information)
                                                    verifying the
                                                    participation.
                                              [(bb) Programs.--The
                                            programs described in
                                            this item are--
                                                      [(AA) the
                                                    supplemental
                                                    nutrition
                                                    assistance
                                                    program
                                                    established
                                                    under the Food
                                                    and Nutrition
                                                    Act of 2008 (7
                                                    U.S.C. 2011 et
                                                    seq.);
                                                      [(BB) the
                                                    food
                                                    distribution
                                                    program on
                                                    Indian
                                                    reservations
                                                    established
                                                    under section
                                                    4(b) of the
                                                    Food and
                                                    Nutrition Act
                                                    of 2008 (7
                                                    U.S.C.
                                                    2013(b)); and
                                                      [(CC) a State
                                                    program funded
                                                    under the
                                                    program of
                                                    block grants to
                                                    States for
                                                    temporary
                                                    assistance for
                                                    needy families
                                                    established
                                                    under part A of
                                                    title IV of the
                                                    Social Security
                                                    Act (42 U.S.C.
                                                    601 et seq.)
                                                    that the
                                                    Secretary
                                                    determines
                                                    complies with
                                                    standards
                                                    established by
                                                    the Secretary
                                                    that ensure
                                                    that the
                                                    standards under
                                                    the State
                                                    program are
                                                    comparable to
                                                    or more
                                                    restrictive
                                                    than those in
                                                    effect on June
                                                    1, 1995.
                                      [(IV) Conditions.--The
                                    conditions referred to in
                                    subclause (I) shall be met for
                                    a local educational agency for
                                    a school year if--
                                              [(aa) the nonresponse
                                            rate for the local
                                            educational agency for
                                            the preceding school
                                            year is less than 20
                                            percent; or
                                              [(bb) the local
                                            educational agency has
                                            more than 20,000
                                            children approved by
                                            application by the
                                            local educational
                                            agency as eligible for
                                            free or reduced price
                                            meals for the school
                                            year, as of October 1
                                            of the school year,
                                            and--
                                                      [(AA) the
                                                    nonresponse
                                                    rate for the
                                                    preceding
                                                    school year is
                                                    at least 10
                                                    percent below
                                                    the nonresponse
                                                    rate for the
                                                    second
                                                    preceding
                                                    school year; or
                                                      [(BB) in the
                                                    case of the
                                                    school year
                                                    beginning July
                                                    2005, the local
                                                    educational
                                                    agency attempts
                                                    to verify all
                                                    approved
                                                    household
                                                    applications
                                                    selected for
                                                    verification
                                                    through use of
                                                    public agency
                                                    records from at
                                                    least 2 of the
                                                    programs or
                                                    sources of
                                                    information
                                                    described in
                                                    subparagraph
                                                    (F)(i).
                              [(v) Additional selected
                            applications.--A sample for a local
                            educational agency for a school year
                            under clauses (iii) and (iv)(III)(AA)
                            shall include the number of additional
                            randomly selected approved household
                            applications that are required to
                            comply with the sample size
                            requirements in those clauses.]
                      (D) Verification.--
                              (i) Standard verification of
                            applications.--
                                      (I) In general.--Beginning
                                    with the second school year
                                    that begins after the date of
                                    the enactment of the Improving
                                    Child Nutrition and Education
                                    Act of 2016, each school year,
                                    each local educational agency
                                    shall verify the eligibility of
                                    the children in a portion of
                                    the household applications
                                    approved for the school year by
                                    the local educational agency,
                                    as of November 1 of the school
                                    year, as determined by the
                                    Secretary in accordance with
                                    this subsection.
                                      (II) Sample size.--
                                              (aa) In general.--The
                                            portion for a local
                                            educational agency for
                                            a school year shall
                                            equal the lesser of--
                                                      (AA) 10,000;
                                                    or
                                                      (BB) 10
                                                    percent of
                                                    approved
                                                    household
                                                    applications.
                                              (bb) Calculation.--
                                            Not later than July 1
                                            of each year, the
                                            Secretary shall
                                            calculate the sample
                                            size under this
                                            subparagraph for each
                                            local educational
                                            agency based on data
                                            from the 2 most recent
                                            school years available.
                                      (III) Sample selection.--
                                    Applications shall be selected
                                    for verification by the local
                                    educational agency based on
                                    indications that information
                                    relevant to eligibility is
                                    inconsistent with the
                                    information provided on the
                                    application, including at a
                                    minimum the following:
                                              (aa) The household
                                            has submitted
                                            information in writing
                                            to the local
                                            educational agency that
                                            is inconsistent with
                                            the information on the
                                            application.
                                              (bb) The information
                                            provided on the
                                            application is
                                            consistent with a
                                            pattern of error or
                                            fraud detected by the
                                            local educational
                                            agency, the State
                                            agency, or the
                                            Secretary.
                                              (cc) For not more
                                            than \1/4\ of the
                                            sample, students who
                                            are directly certified
                                            or the application
                                            provides a case number
                                            (in lieu of income
                                            information) showing
                                            participation in--
                                                      (AA) the
                                                    supplemental
                                                    nutrition
                                                    assistance
                                                    program
                                                    established
                                                    under the Food
                                                    and Nutrition
                                                    Act of 2008 (7
                                                    U.S.C. 2011 et
                                                    seq.); or
                                                      (BB) a State
                                                    program funded
                                                    under the
                                                    program of
                                                    block grants to
                                                    States for
                                                    temporary
                                                    assistance for
                                                    needy families
                                                    established
                                                    under part A of
                                                    title IV of the
                                                    Social Security
                                                    Act (42 U.S.C.
                                                    601 et seq.)
                                                    that the
                                                    Secretary
                                                    determines
                                                    complies with
                                                    standards
                                                    established by
                                                    the Secretary
                                                    that ensure
                                                    that the
                                                    eligibility
                                                    requirements
                                                    under the State
                                                    program are
                                                    comparable to
                                                    the
                                                    requirements
                                                    for
                                                    participation
                                                    in accordance
                                                    with this Act
                                                    and the Child
                                                    Nutrition Act
                                                    of 1966 (42
                                                    U.S.C. 1771 et
                                                    seq.).
                                              (dd) For not more
                                            than \1/4\ of the
                                            sample, the income
                                            information provided on
                                            the application is
                                            close to the income
                                            limit for free or
                                            reduced price meals, as
                                            determined by the local
                                            educational agency each
                                            year.
                                              (ee) Such other
                                            criteria as is
                                            determined by the
                                            State.
                                      (IV) Additional verification
                                    of applications.--If the number
                                    of applications that match the
                                    criteria described in subclause
                                    (III) is insufficient to meet
                                    the number of applications
                                    determined under subclause
                                    (II), the local educational
                                    agency shall select additional
                                    applications at random.
                              (ii) Verification for cause.--In
                            addition to conducting verification of
                            a sample of applications as described
                            in clause (i), a local educational
                            agency may verify any household
                            application at any point in the school
                            year if the household application meets
                            the criteria described in item (aa),
                            (bb), or (cc) of clause (i)(III) or
                            such other criteria as is determined by
                            the Secretary.
                              (iii) Compliance.--In conducting
                            verification under this subparagraph, a
                            State agency or local educational
                            agency shall not select applications in
                            a manner that violates section
                            12(l)(4)(M).
                      (E) Preliminary review.--
                              (i) Review for accuracy.--
                                      (I) In general.--Prior to
                                    conducting any other
                                    verification activity for
                                    approved household applications
                                    selected for verification, the
                                    local educational agency shall
                                    ensure that the initial
                                    eligibility determination for
                                    each approved household
                                    application is reviewed for
                                    accuracy by an individual other
                                    than the individual making the
                                    initial eligibility
                                    determination, unless otherwise
                                    determined by the Secretary.
                                      (II) Waiver.--The
                                    requirements of subclause (I)
                                    shall be waived for a local
                                    educational agency if the local
                                    educational agency is using a
                                    technology-based solution that
                                    demonstrates a high level of
                                    accuracy, to the satisfaction
                                    of the Secretary, in processing
                                    an initial eligibility
                                    determination in accordance
                                    with the income eligibility
                                    guidelines of the school lunch
                                    program.
                              (ii) Correct eligibility
                            determination.--If the review indicates
                            that the initial eligibility
                            determination is correct, the local
                            educational agency shall verify the
                            approved household application.
                              (iii) Incorrect eligibility
                            determination.--If the review indicates
                            that the initial eligibility
                            determination is incorrect, the local
                            educational agency shall (as determined
                            by the Secretary)--
                                      (I) correct the eligibility
                                    status of the household;
                                      (II) notify the household of
                                    the change;
                                      (III) in any case in which
                                    the review indicates that the
                                    household is not eligible for
                                    free or reduced-price meals,
                                    notify the household of the
                                    reason for the ineligibility
                                    and that the household may
                                    reapply with income
                                    documentation for free or
                                    reduced-price meals; and
                                      (IV) in any case in which the
                                    review indicates that the
                                    household is eligible for free
                                    or reduced-price meals, verify
                                    the approved household
                                    application.
                      (F) Direct verification.--
                              (i) In general.--Subject to clauses
                            (ii) and (iii), to verify eligibility
                            for free or reduced price meals for
                            approved household applications
                            selected for verification, the local
                            educational agency [may] shall (in
                            accordance with criteria established by
                            the Secretary) first obtain and use
                            income and program participation
                            information from a public agency
                            administering--
                                      (I) the supplemental
                                    nutrition assistance program
                                    established under the Food and
                                    Nutrition Act of 2008 (7 U.S.C.
                                    2011 et seq.);
                                      (II) the food distribution
                                    program on Indian reservations
                                    established under section 4(b)
                                    of the Food and Nutrition Act
                                    of 2008 (7 U.S.C. 2013(b));
                                      (III) the temporary
                                    assistance for needy families
                                    program funded under part A of
                                    title IV of the Social Security
                                    Act (42 U.S.C. 601 et seq.);
                                      (IV) the State medicaid
                                    program under title XIX of the
                                    Social Security Act (42 U.S.C.
                                    1396 et seq.); or
                                      (V) a similar income-tested
                                    program or other source of
                                    information, as determined by
                                    the Secretary.
                              (ii) Free meals.--Public agency
                            records that may be obtained and used
                            under clause (i) to verify eligibility
                            for free meals for approved household
                            applications selected for verification
                            shall include the most recent available
                            information (other than information
                            reflecting program participation or
                            income before the 180-day period ending
                            on the date of application for free
                            meals) that is relied on to
                            administer--
                                      (I) a program or source of
                                    information described in clause
                                    (i) (other than clause
                                    (i)(IV)); or
                                      (II) the State plan for
                                    medical assistance under title
                                    XIX of the Social Security Act
                                    (42 U.S.C. 1396 et seq.) in--
                                              (aa) a State in which
                                            the income eligibility
                                            limit applied under
                                            section 1902(l)(2)(C)
                                            of that Act (42 U.S.C.
                                            1396a(l)(2)(C)) is not
                                            more than 133 percent
                                            of the official poverty
                                            line described in
                                            section 1902(l)(2)(A)
                                            of that Act (42 U.S.C.
                                            1396a(l)(2)(A)); or
                                              (bb) a State that
                                            otherwise identifies
                                            households that have
                                            income that is not more
                                            than 133 percent of the
                                            official poverty line
                                            described in section
                                            1902(l)(2)(A) of that
                                            Act (42 U.S.C.
                                            1396a(l)(2)(A)).
                              (iii) Reduced price meals.--Public
                            agency records that may be obtained and
                            used under clause (i) to verify
                            eligibility for reduced price meals for
                            approved household applications
                            selected for verification shall include
                            the most recent available information
                            (other than information reflecting
                            program participation or income before
                            the 180-day period ending on the date
                            of application for reduced price meals)
                            that is relied on to administer--
                                      (I) a program or source of
                                    information described in clause
                                    (i) (other than clause
                                    (i)(IV)); or
                                      (II) the State plan for
                                    medical assistance under title
                                    XIX of the Social Security Act
                                    (42 U.S.C. 1396 et seq.) in--
                                              (aa) a State in which
                                            the income eligibility
                                            limit applied under
                                            section 1902(l)(2)(C)
                                            of that Act (42 U.S.C.
                                            1396a(l)(2)(C)) is not
                                            more than 185 percent
                                            of the official poverty
                                            line described in
                                            section 1902(l)(2)(A)
                                            of that Act (42 U.S.C.
                                            1396a(l)(2)(A)); or
                                              (bb) a State that
                                            otherwise identifies
                                            households that have
                                            income that is not more
                                            than 185 percent of the
                                            official poverty line
                                            described in section
                                            1902(l)(2)(A) of that
                                            Act (42 U.S.C.
                                            1396a(l)(2)(A)).
                              [(iv) Evaluation.--Not later than 3
                            years after the date of enactment of
                            this subparagraph, the Secretary shall
                            complete an evaluation of--
                                      [(I) the effectiveness of
                                    direct verification carried out
                                    under this subparagraph in
                                    decreasing the portion of the
                                    verification sample that must
                                    be verified under subparagraph
                                    (G) while ensuring that
                                    adequate verification
                                    information is obtained; and
                                      [(II) the feasibility of
                                    direct verification by State
                                    agencies and local educational
                                    agencies.
                              [(v) Expanded use of direct
                            verification.--If the Secretary
                            determines that direct verification
                            significantly decreases the portion of
                            the verification sample that must be
                            verified under subparagraph (G), while
                            ensuring that adequate verification
                            information is obtained, and can be
                            conducted by most State agencies and
                            local educational agencies, the
                            Secretary may require a State agency or
                            local educational agency to implement
                            direct verification through 1 or more
                            of the programs described in clause
                            (i), as determined by the Secretary,
                            unless the State agency or local
                            educational agency demonstrates (under
                            criteria established by the Secretary)
                            that the State agency or local
                            educational agency lacks the capacity
                            to conduct, or is unable to implement,
                            direct verification.]
                              (iv) Direct certification.--If
                            eligibility for a household application
                            is confirmed using direct verification,
                            each child in the household shall be
                            considered directly certified.
                      (G) Household verification.--
                              (i) In general.--If an approved
                            household application is not verified
                            through the use of public agency
                            records, a local educational agency
                            shall provide to the household written
                            notice that--
                                      (I) the approved household
                                    application has been selected
                                    for verification; and
                                      (II) the household is
                                    required to submit verification
                                    information to confirm
                                    eligibility for free or reduced
                                    price meals.
                              (ii) Phone number.--The written
                            notice in clause (i) shall include a
                            toll-free phone number that parents and
                            legal guardians in households selected
                            for verification can call for
                            assistance with the verification
                            process.
                              (iii) Followup activities.--If a
                            household does not respond to a
                            verification request, a local
                            educational agency shall make at least
                            [1 attempt] 2 attempts to obtain the
                            necessary verification from the
                            household in accordance with guidelines
                            and regulations promulgated by the
                            Secretary.
                              (iv) Contract authority for school
                            food authorities.--A local educational
                            agency may contract (under standards
                            established by the Secretary) with a
                            third party to assist the local
                            educational agency in carrying out
                            clause (iii).
                              (v) Validity of verification
                            results.--
                                      (I) Definitions.--In this
                                    clause:
                                              (aa) Approved
                                            application.--The term
                                            ``approved
                                            application'' includes
                                            each student on a paper
                                            or electronic
                                            application approved by
                                            the local educational
                                            agency for free or
                                            reduced price lunches
                                            for the school year.
                                              (bb) Response rate.--
                                            The term ``response
                                            rate'' means the
                                            percentage of the
                                            approved household
                                            applications of the
                                            local educational
                                            agency for which
                                            verification
                                            information was
                                            obtained after
                                            attempted verification
                                            under this section.
                                              (cc) Nonresponse
                                            rate.--The term
                                            ``nonresponse rate''
                                            means the percentage of
                                            the approved household
                                            applications of the
                                            local educational
                                            agency for which
                                            verification
                                            information was not
                                            obtained after
                                            attempted verification
                                            under this section.
                                              (dd) Confirmation
                                            rate.-- The term
                                            ``confirmation rate''
                                            means the percentage of
                                            approved household
                                            applications and
                                            directly certified
                                            students selected by
                                            the local educational
                                            agency for verification
                                            under this subparagraph
                                            that had the level of
                                            benefits confirmed as a
                                            result of information
                                            obtained during the
                                            verification process.
                                      (II) Reductions.--
                                              (aa) In general.--The
                                            sample under
                                            subparagraph (D)(i)(II)
                                            may be reduced by not
                                            more than the lesser of
                                            2,500 applications or
                                            2.5 percentage points
                                            for each of the
                                            criteria described in
                                            subclause (III) that
                                            are met by the local
                                            educational agency.
                                              (bb) Limitation.--
                                            Reductions under item
                                            (aa) may result in a
                                            sample of not less than
                                            2.5 percent of approved
                                            applications.
                                      (III) Criteria.--The criteria
                                    referred to in subclause
                                    (II)(aa) are as follows:
                                              (aa) Response rate.--
                                            For the preceding
                                            school year the
                                            response rate was more
                                            than 85 percent.
                                              (bb) Nonresponse rate
                                            reduction.--The
                                            nonresponse rate was at
                                            least 15 percent below
                                            the nonresponse rate
                                            for the second
                                            preceding school year.
                                              (cc) Confirmation
                                            rate.--The confirmation
                                            rate is 100 percent or
                                            has increased by at
                                            least 5 percent over
                                            the two most recent
                                            school years for which
                                            data is available.
                                              (dd) Administrative
                                            burden reduction.--
                                                      (AA) In
                                                    general.--The
                                                    local
                                                    educational
                                                    agency receives
                                                    a determination
                                                    from the
                                                    Secretary that
                                                    compliance with
                                                    subparagraph
                                                    (D)(i)(II)
                                                    would render
                                                    the local
                                                    educational
                                                    agency unable
                                                    to administer
                                                    the program.
                                                      (BB)
                                                    Requirement.--
                                                    The Secretary
                                                    shall develop a
                                                    system by which
                                                    to measure cost
                                                    and
                                                    administrative
                                                    burden
                                                    associated with
                                                    compliance with
                                                    subparagraph
                                                    (D)(i)(II) and
                                                    shall consider
                                                    requests from
                                                    local
                                                    educational
                                                    agencies based
                                                    on that system.
                      (H) Verification deadline.--
                              (i) General deadline.--
                                      (I) In general.--Subject to
                                    subclause (II), not later than
                                    [November] December 15 of each
                                    school year, a local
                                    educational agency shall
                                    complete the verification
                                    activities required for the
                                    school year (including followup
                                    activities).
                                      (II) Extension.--Under
                                    criteria established by the
                                    Secretary, a State may extend
                                    the deadline established under
                                    subclause (I) for a school year
                                    for a local educational agency
                                    to [December] January 15 of the
                                    school year.
                              (ii) Eligibility changes.--Based on
                            the verification activities, the local
                            educational agency shall make
                            appropriate modifications to the
                            eligibility determinations made for
                            household applications in accordance
                            with criteria established by the
                            Secretary.
                      (I) Local conditions.--In the case of a
                    natural disaster, civil disorder, strike, or
                    other local condition (as determined by the
                    Secretary), the Secretary may substitute
                    alternatives for--
                              (i) the sample size and sample
                            selection criteria established under
                            subparagraph (D); and
                              (ii) the verification deadline
                            established under subparagraph (H).
                      (J) Individual review.--In accordance with
                    criteria established by the Secretary, the
                    local educational agency may, on individual
                    review--
                              (i) decline to verify no more than 5
                            percent of approved household
                            applications selected under
                            subparagraph (D); and
                              (ii) replace the approved household
                            applications with other approved
                            household applications to be verified.
                      (K) Feasibility study.--
                              (i) In general.--The Secretary shall
                            conduct a study of the feasibility of
                            using computer technology (including
                            [data mining] analyses of data) to
                            reduce--
                                      (I) overcertification errors
                                    in the school lunch program
                                    under this Act;
                                      (II) waste, fraud, and abuse
                                    in connection with this
                                    paragraph; and
                                      (III) errors, waste, fraud,
                                    and abuse in other nutrition
                                    programs, as determined to be
                                    appropriate by the Secretary.
                              [(ii) Report.--Not later than 180
                            days after the date of enactment of
                            this paragraph, the Secretary shall
                            submit to the Committee on Education
                            and the Workforce of the House of
                            Representatives and the Committee on
                            Agriculture, Nutrition, and Forestry of
                            the Senate a report describing--
                                      [(I) the results of the
                                    feasibility study conducted
                                    under this subsection;
                                      [(II) how a computer system
                                    using technology described in
                                    clause (i) could be
                                    implemented;
                                      [(III) a plan for
                                    implementation; and
                                      [(IV) proposed legislation,
                                    if necessary, to implement the
                                    system.]
                              (ii) Report.--Not later than two
                            years after the date of the enactment
                            of the Improving Child Nutrition and
                            Education Act of 2016, the Secretary
                            shall submit to the Committee on
                            Education and the Workforce of the
                            House of Representatives and Committee
                            on Agriculture, Nutrition, and Forestry
                            of the Senate a report describing--
                                      (I) the results of the
                                    feasibility study conducted
                                    under this subsection;
                                      (II) how a computer system--
                                              (aa) used to reduce
                                            verification and
                                            certification errors
                                            can be adapted to
                                            further reduce errors;
                                            and
                                              (bb) using technology
                                            described in clause (i)
                                            could be implemented;
                                            and
                                      (III) a plan to adapt or
                                    implement such system.
                      (L) Enhanced verification methods.--
                              (i) Requirements.--
                                      (I) In general.--The
                                    Secretary shall help local
                                    educational agencies engage in
                                    alternative and enhanced
                                    methods of certification and
                                    verification to increase the
                                    effectiveness of the process,
                                    reduce certification errors,
                                    and produce more meaningful
                                    management information to
                                    facilitate local educational
                                    agency, State, and Federal
                                    oversight with respect to
                                    program integrity in the school
                                    meal programs.
                                      (II) Best practices.--The
                                    Secretary shall encourage local
                                    educational agencies to adopt
                                    proven best practices with
                                    regard to verification.
                                      (III) Selection for
                                    implementation.--To the extent
                                    necessary to refine alternative
                                    verification methods or assess
                                    the feasibility, impact, or
                                    efficacy of the methods prior
                                    to recommending the methods,
                                    the Secretary shall select
                                    States and local educational
                                    agencies that have requested to
                                    participate in the development
                                    of best practices to implement
                                    methods subject to clause
                                    (iii).
                              (ii) Requirements.--The certification
                            and verification methods shall--
                                      (I) meet such terms and
                                    conditions as the Secretary
                                    considers appropriate; and
                                      (II) except as otherwise
                                    provided in this subparagraph,
                                    be conducted in accordance with
                                    this subsection.
                              (iii) Selection criteria.--In
                            selecting methods, including methods
                            for implementation under clause
                            (i)(III), the Secretary shall--
                                      (I) consider the degree to
                                    which the method would improve
                                    certification accuracy and
                                    program integrity within the
                                    school meal programs;
                                      (II) consider whether there
                                    is evidence that the method
                                    could be replicated easily by
                                    other local educational
                                    agencies or political
                                    subdivisions;
                                      (III) consider whether the
                                    method would increase the
                                    efficiency and effectiveness of
                                    the verification process;
                                      (IV) consider whether the
                                    local educational agency or
                                    State agency has a demonstrated
                                    capacity to undertake the
                                    method and to produce the data
                                    necessary to support the
                                    evaluation; and
                                      (V) ensure the methods
                                    implemented under clause
                                    (i)(III) are implemented across
                                    a range of geographic areas and
                                    States, including rural and
                                    urban areas, and, when
                                    considered as a group, allow
                                    for an assessment of a range of
                                    strategies regarding
                                    verification sample selection,
                                    obtaining eligibility
                                    documentation, and the entity
                                    conducting verification,
                                    including strategies that--
                                              (aa) use analyses of
                                            data, particularly in
                                            large local educational
                                            agencies to develop
                                            algorithms to select
                                            error-prone
                                            applications for
                                            verification;
                                              (bb) use third-party
                                            data sources to confirm
                                            eligibility prior to
                                            conducting household
                                            verification under
                                            subparagraph (G);
                                              (cc) rely on
                                            alternative methods,
                                            including message
                                            testing, of
                                            communicating with
                                            households to assess
                                            which methods most
                                            effectively result in
                                            household responses;
                                              (dd) rely on agencies
                                            or organizations other
                                            than the local
                                            educational agency to
                                            conduct verification,
                                            including at a minimum
                                            the State agency; and
                                              (ee) could reduce the
                                            administrative burden
                                            of conducting
                                            verification for a
                                            consortia of local
                                            educational agencies,
                                            including shared online
                                            applications and shared
                                            verification
                                            procedures.
                              (iv) Reduction.--Notwithstanding the
                            limitation in subparagraph
                            (D)(v)(II)(bb), a local educational
                            agency that uses the strategies
                            described in clause (iii)(V) may
                            qualify for a reduction of additional
                            0.25 percentage points under such
                            subparagraph, creating a floor of 2.25
                            percent for the verification sample
                            size.
              (4) Direct certification for children in supplemental
            nutrition assistance program households.--
                      (A) In general.--Subject to subparagraph (D),
                    each State agency shall enter into an agreement
                    with the State agency conducting eligibility
                    determinations for the supplemental nutrition
                    assistance program established under the Food
                    and Nutrition Act of 2008 (7 U.S.C. 2011 et
                    seq.).
                      (B) Procedures.--Subject to paragraph (6),
                    the agreement shall establish procedures under
                    which a child, including a child enrolled in a
                    nonpublic school, who is a member of a
                    household receiving assistance under the
                    supplemental nutrition assistance program shall
                    be certified as eligible for free lunches under
                    this Act and free breakfasts under the Child
                    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.),
                    without further application.
                      (C) Certification.--Subject to paragraph (6),
                    under the agreement, the local educational
                    agency conducting eligibility determinations
                    for a school lunch program under this Act and a
                    school breakfast program under the Child
                    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.)
                    shall certify a child who is a member of a
                    household receiving assistance under the
                    supplemental nutrition assistance program as
                    eligible for free lunches under this Act and
                    free breakfasts under the Child Nutrition Act
                    of 1966 (42 U.S.C. 1771 et seq.), without
                    further application.
                      (D) Applicability.--This paragraph applies
                    to--
                              (i) in the case of the school year
                            beginning July 2006, a school district
                            that had an enrollment of 25,000
                            students or more in the preceding
                            school year;
                              (ii) in the case of the school year
                            beginning July 2007, a school district
                            that had an enrollment of 10,000
                            students or more in the preceding
                            school year; and
                              (iii) in the case of the school year
                            beginning July 2008 and each subsequent
                            school year, each local educational
                            agency.
                      [(E) Performance awards.--
                              [(i) In general.--Effective for each
                            of the school years beginning July 1,
                            2011, July 1, 2012, and July 1, 2013,
                            the Secretary shall offer performance
                            awards to States to encourage the
                            States to ensure that all children
                            eligible for direct certification under
                            this paragraph are certified in
                            accordance with this paragraph.
                              [(ii) Requirements.--For each school
                            year described in clause (i), the
                            Secretary shall--
                                      [(I) consider State data from
                                    the prior school year,
                                    including estimates contained
                                    in the report required under
                                    section 4301 of the Food,
                                    Conservation, and Energy Act of
                                    2008 (42 U.S.C. 1758a); and
                                      [(II) make performance awards
                                    to not more than 15 States that
                                    demonstrate, as determined by
                                    the Secretary--
                                              [(aa) outstanding
                                            performance; and
                                              [(bb) substantial
                                            improvement.
                              [(iii) Use of funds.--A State agency
                            that receives a performance award under
                            clause (i)--
                                      [(I) shall treat the funds as
                                    program income; and
                                      [(II) may transfer the funds
                                    to school food authorities for
                                    use in carrying out the
                                    program.
                              [(iv) Funding.--
                                      [(I) In general.--On October
                                    1, 2011, and each subsequent
                                    October 1 through October 1,
                                    2013, out of any funds in the
                                    Treasury not otherwise
                                    appropriated, the Secretary of
                                    the Treasury shall transfer to
                                    the Secretary--
                                              [(aa) $2,000,000 to
                                            carry out clause
                                            (ii)(II)(aa); and
                                              [(bb) $2,000,000 to
                                            carry out clause
                                            (ii)(II)(bb).
                                      [(II) Receipt and
                                    acceptance.--The Secretary
                                    shall be entitled to receive,
                                    shall accept, and shall use to
                                    carry out this clause the funds
                                    transferred under subclause
                                    (I), without further
                                    appropriation.
                              [(v) Payments not subject to judicial
                            review.--A determination by the
                            Secretary whether, and in what amount,
                            to make a performance award under this
                            subparagraph shall not be subject to
                            administrative or judicial review.]
                      [(F)] (E) Continuous improvement plans.--
                              (i) Definition of required
                            percentage.--In this subparagraph, the
                            term ``required percentage'' [means--]
                                      [(I) for the school year
                                    beginning July 1, 2011, 80
                                    percent;
                                      [(II) for the school year
                                    beginning July 1, 2012, 90
                                    percent; and
                                      [(III) for the school year
                                    beginning July 1, 2013, and
                                    each school year thereafter]
                                    means, for the school year, 95
                                    percent.
                              (ii) Requirements.--Each school year,
                            the Secretary shall--
                                      (I) identify, using data from
                                    the prior year, including
                                    estimates contained in the
                                    report required under section
                                    4301 of the Food, Conservation,
                                    and Energy Act of 2008 (42
                                    U.S.C. 1758a), States that
                                    directly certify less than the
                                    required percentage of the
                                    total number of children in the
                                    State who are eligible for
                                    direct certification under this
                                    paragraph;
                                      (II) require the States
                                    identified under subclause (I)
                                    to implement a continuous
                                    improvement plan to fully meet
                                    the requirements of this
                                    paragraph, which shall include
                                    a plan to improve direct
                                    certification for the following
                                    school year; [and]
                                      (III) assist the States
                                    identified under subclause (I)
                                    to develop and implement a
                                    continuous improvement plan in
                                    accordance with subclause
                                    (II)[.];
                                      (IV) include in the report
                                    required under section 4301 of
                                    the Food, Conservation, and
                                    Energy Act of 2008 (42 U.S.C.
                                    1758a), a description of
                                    technical assistance provided
                                    to and progress of States
                                    identified under subclause (I)
                                    toward implementing the
                                    measures and meeting the goals
                                    established by the State as
                                    required under clause
                                    (iii)(II); and
                                      (V) provide guidance to
                                    schools on providing meals and
                                    collecting payment for any
                                    student who is no longer able
                                    to receive meals because the
                                    student did not provide a
                                    response to the verification
                                    request for the student's
                                    school meal application.
                              (iii) Failure to meet performance
                            standard.--
                                      (I) In general.--A State that
                                    is required to develop and
                                    implement a continuous
                                    improvement plan under clause
                                    (ii)(II) shall be required to
                                    submit the continuous
                                    improvement plan to the
                                    Secretary, for the approval of
                                    the Secretary.
                                      (II) Requirements.--At a
                                    minimum, a continuous
                                    improvement plan under
                                    subclause (I) shall include--
                                              (aa) specific
                                            measures that the State
                                            will use to identify
                                            more children who are
                                            eligible for direct
                                            certification,
                                            including improvements
                                            or modifications to
                                            technology, information
                                            systems, or databases;
                                              (bb) a timeline for
                                            the State to implement
                                            those measures within 3
                                            school years; and
                                              (cc) goals for the
                                            State to improve direct
                                            certification results.
                      [(G)] (F) Without further application.--
                              (i) In general.--In this paragraph,
                            the term ``without further
                            application'' means that no action is
                            required by the household of the child.
                              (ii) Clarification.--A requirement
                            that a household return a letter
                            notifying the household of eligibility
                            for direct certification or eligibility
                            for free school meals does not meet the
                            requirements of clause (i).
              (5) Discretionary certification.--Subject to
            paragraph (6), any local educational agency may certify
            any child as eligible for free lunches or breakfasts,
            without further application, by directly communicating
            with the appropriate State or local agency to obtain
            documentation of the status of the child as--
                      (A) a member of a family that is receiving
                    assistance under the temporary assistance for
                    needy families program funded under part A of
                    title IV of the Social Security Act (42 U.S.C.
                    601 et seq.) that the Secretary determines
                    complies with standards established by the
                    Secretary that ensure that the standards under
                    the State program are comparable to or more
                    restrictive than those in effect on June 1,
                    1995;
                      (B) a homeless child or youth (defined as 1
                    of the individuals described in section 725(2)
                    of the McKinney-Vento Homeless Assistance Act
                    [(42 U.S.C. 11434a(2))] (42 U.S.C. 11434a(2)));
                      (C) served by the runaway and homeless youth
                    grant program established under the Runaway and
                    Homeless Youth Act (42 U.S.C. 5701 et seq.);
                      (D) a migratory child (as defined in section
                    1309 of the Elementary and Secondary Education
                    Act of 1965 (20 U.S.C. 6399)); or
                      (E)(i) a [foster child] foster youth whose
                    care and placement is the responsibility of an
                    agency that administers a State plan under part
                    B or E of title IV of the Social Security Act
                    (42 U.S.C. 621 et seq.); or
                      (ii) a [foster child] foster youth who a
                    court has placed with a caretaker household.
              (6) Use or disclosure of information.--
                      (A) In general.--The use or disclosure of any
                    information obtained from an application for
                    free or reduced price meals, or from a State or
                    local agency referred to in paragraph (3)(F),
                    (4), or (5), shall be limited to--
                              (i) a person directly connected with
                            the administration or enforcement of
                            this Act or the Child Nutrition Act of
                            1966 (42 U.S.C. 1771 et seq.)
                            (including a regulation promulgated
                            under either Act);
                              (ii) a person directly connected with
                            the administration or enforcement of--
                                      (I) a Federal education
                                    program;
                                      (II) a State health or
                                    education program administered
                                    by the State or local
                                    educational agency (other than
                                    a program carried out under
                                    title XIX or XXI of the Social
                                    Security Act (42 U.S.C. 1396 et
                                    seq.; 42 U.S.C. 1397aa et
                                    seq.)); or
                                      (III) a Federal, State, or
                                    local means-tested nutrition
                                    program with eligibility
                                    standards comparable to the
                                    school lunch program under this
                                    Act;
                              (iii)(I) the Comptroller General of
                            the United States for audit and
                            examination authorized by any other
                            provision of law; and
                              (II) notwithstanding any other
                            provision of law, a Federal, State, or
                            local law enforcement official for the
                            purpose of investigating an alleged
                            violation of any program covered by
                            this paragraph or paragraph (3)(F),
                            (4), or (5);
                              (iv) a person directly connected with
                            the administration of the State
                            medicaid program under title XIX of the
                            Social Security Act (42 U.S.C. 1396 et
                            seq.) or the State children's health
                            insurance program under title XXI of
                            that Act (42 U.S.C. 1397aa et seq.)
                            solely for the purposes of--
                                      (I) identifying children
                                    eligible for benefits under,
                                    and enrolling children in,
                                    those programs, except that
                                    this subclause shall apply only
                                    to the extent that the State
                                    and the local educational
                                    agency or school food authority
                                    so elect; and
                                      (II) verifying the
                                    eligibility of children for
                                    programs under this Act or the
                                    Child Nutrition Act of 1966 (42
                                    U.S.C. 1771 et seq.); and
                              (v) a third party contractor
                            described in paragraph (3)(G)(iv).
                      (B) Limitation on information provided.--
                    Information provided under clause (ii) or (v)
                    of subparagraph (A) shall be limited to the
                    income eligibility status of the child for whom
                    application for free or reduced price meal
                    benefits is made or for whom eligibility
                    information is provided under paragraph (3)(F),
                    (4), or (5), unless the consent of the parent
                    or guardian of the child for whom application
                    for benefits was made is obtained.
                      (C) Criminal penalty.--A person described in
                    subparagraph (A) who publishes, divulges,
                    discloses, or makes known in any manner, or to
                    any extent not authorized by Federal law
                    (including a regulation), any information
                    obtained under this subsection shall be fined
                    not more than $1,000 or imprisoned not more
                    than 1 year, or both.
                      (D) Requirements for waiver of
                    confidentiality.--A State that elects to
                    exercise the option described in subparagraph
                    (A)(iv)(I) shall ensure that any local
                    educational agency or school food authority
                    acting in accordance with that option--
                              (i) has a written agreement with 1 or
                            more State or local agencies
                            administering health programs for
                            children under titles XIX and XXI of
                            the Social Security Act (42 U.S.C. 1396
                            et seq. and 1397aa et seq.) that
                            requires the health agencies to use the
                            information obtained under subparagraph
                            (A) to seek to enroll children in those
                            health programs; and
                              (ii)(I) notifies each household, the
                            information of which shall be disclosed
                            under subparagraph (A), that the
                            information disclosed will be used only
                            to enroll children in health programs
                            referred to in subparagraph (A)(iv);
                            and
                              (II) provides each parent or guardian
                            of a child in the household with an
                            opportunity to elect not to have the
                            information disclosed.
                      (E) Use of disclosed information.--A person
                    to which information is disclosed under
                    subparagraph (A)(iv)(I) shall use or disclose
                    the information only as necessary for the
                    purpose of enrolling children in health
                    programs referred to in subparagraph (A)(iv).
              (7) Free and reduced price policy statement.--
                      (A) In general.--After the initial
                    submission, a local educational agency shall
                    not be required to submit a free and reduced
                    price policy statement to a [State educational
                    agency] State agency under this Act unless
                    there is a substantive change in the free and
                    reduced price policy of the local educational
                    agency.
                      (B) Routine change.--A routine change in the
                    policy of a local educational agency (such as
                    an annual adjustment of the income eligibility
                    guidelines for free and reduced price meals)
                    shall not be sufficient cause for requiring the
                    local educational agency to submit a policy
                    statement.
              (8) Communications.--
                      (A) In general.--Any communication with a
                    household under this subsection or subsection
                    (d) shall be in an understandable and uniform
                    format and, to the maximum extent practicable,
                    in a language that parents and legal guardians
                    can understand.
                      (B) Electronic availability.--In addition to
                    the distribution of applications and
                    descriptive material in paper form as provided
                    for in this paragraph, the applications and
                    material may be made available electronically
                    via the Internet.
              (9) Eligibility for free and reduced price lunches.--
                      (A) Free lunches.--Any child who is a member
                    of a household whose income, at the time the
                    application is submitted, is at an annual rate
                    which does not exceed the applicable family
                    size income level of the income eligibility
                    guidelines for free lunches, as determined
                    under paragraph (1), shall be served a free
                    lunch.
                      (B) Reduced price lunches.--
                              (i) In general.--Any child who is a
                            member of a household whose income, at
                            the time the application is submitted,
                            is at an annual rate greater than the
                            applicable family size income level of
                            the income eligibility guidelines for
                            free lunches, as determined under
                            paragraph (1), but less than or equal
                            to the applicable family size income
                            level of the income eligibility
                            guidelines for reduced price lunches,
                            as determined under paragraph (1),
                            shall be served a reduced price lunch.
                              (ii) Maximum price.--The price
                            charged for a reduced price lunch shall
                            not exceed 40 cents.
                      (C) Duration.--Except as otherwise specified
                    in paragraph (3)(E), (3)(H)(ii), and section
                    11(a), eligibility for free or reduced price
                    meals for any school year shall remain in
                    effect--
                              (i) beginning on the date of
                            eligibility approval for the current
                            school year; and
                              (ii) ending on a date during the
                            subsequent school year determined by
                            the Secretary.
      (10) No physical segregation of or other discrimination
    against any child eligible for a free lunch or a reduced price
    lunch under this subsection shall be made by the school nor
    shall there be any overt identification of any child by special
    tokens or tickets, announced or published list of names, or by
    other means.
      (11) Any child who has a parent or guardian who (A) is
    responsible for the principal support of such child and (B) is
    unemployed shall be served a free or reduced price lunch,
    respectively, during any period (i) in which such child's
    parent or guardian continues to be unemployed and (ii) the
    income of the child's parents or guardians during such period
    of unemployment falls within the income eligibility criteria
    for free lunches or reduced price lunches, respectively, based
    on the current rate of income of such parents or guardians.
    Local educational agencies shall publicly announce that such
    children are eligible for free or reduced price lunch, and
    shall make determinations with respect to the status of any
    parent or guardian of any child under clauses (A) and (B) of
    the preceding sentence on the basis of a statement executed in
    such form as the Secretary may prescribe by such parent or
    guardian. No physical segregation of, or other discrimination
    against, any child eligible for a free or reduced price lunch
    under this paragraph shall be made by the school nor shall
    there be any overt identification of any such child by special
    tokens or tickets, announced or published lists of names, or by
    any other means.
      (12)(A) A child shall be considered automatically eligible
    for a free lunch and breakfast under this Act and the Child
    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), respectively,
    without further application or eligibility determination, if
    the child is--
              (i) a member of a household receiving assistance
            under the supplemental nutrition assistance program
            authorized under the Food and Nutrition Act of 2008 (7
            U.S.C. 2011 et seq.);
              (ii) a member of a family (under the State program
            funded under part A of title IV of the Social Security
            Act (42 U.S.C. 601 et seq.)) that the Secretary
            determines complies with standards established by the
            Secretary that ensure that the standards under the
            State program are comparable to or more restrictive
            than those in effect on June 1, 1995;
              (iii) enrolled as a participant in a Head Start
            program authorized under the Head Start Act (42 U.S.C.
            9831 et seq.), on the basis of a determination that the
            child meets the eligibility criteria prescribed under
            section 645(a)(1)(B) of the Head Start Act (42 U.S.C.
            9840(a)(1)(B));
                      (iv) a homeless child or youth (defined as 1
                    of the individuals described in section 725(2)
                    of the McKinney-Vento Homeless Assistance Act
                    (42 U.S.C. 11434a(2)));
                      (v) served by the runaway and homeless youth
                    grant program established under the Runaway and
                    Homeless Youth Act (42 U.S.C. 5701 et seq.);
                      (vi) a migratory child (as defined in section
                    1309 of the Elementary and Secondary Education
                    Act of 1965 (20 U.S.C. 6399)); or
                      (vii)(I) a [foster child] foster youth whose
                    care and placement is the responsibility of an
                    agency that administers a State plan under part
                    B or E of title IV of the Social Security Act
                    (42 U.S.C. 621 et seq.); or
                              (II) a [foster child] foster youth
                            who a court has placed with a caretaker
                            household.
      (B) Proof of receipt of supplemental nutrition assistance
    program benefits or assistance under the State program funded
    under part A of title IV of the Social Security Act (42 U.S.C.
    601 et seq.) that the Secretary determines complies with
    standards established by the Secretary that ensure that the
    standards under the State program are comparable to or more
    restrictive than those in effect on June 1, 1995, or of
    enrollment or participation in a Head Start program on the
    basis described in subparagraph (A)(iii), shall be sufficient
    to satisfy any verification requirement imposed under this
    subsection.
              (13) Exclusion of certain military housing
            allowances.--The amount of a basic allowance provided
            under section 403 of title 37, United States Code, on
            behalf of a member of a uniformed service for housing
            that is acquired or constructed under subchapter IV of
            chapter 169 of title 10, United States Code, or any
            related provision of law, shall not be considered to be
            income for the purpose of determining the eligibility
            of a child who is a member of the household of the
            member of a uniformed service for free or reduced price
            lunches under this Act.
              (14) Combat pay.--
                      (A) Definition of combat pay.--In this
                    paragraph, the term ``combat pay'' means any
                    additional payment under chapter 5 of title 37,
                    United States Code, or otherwise designated by
                    the Secretary to be appropriate for exclusion
                    under this paragraph, that is received by or
                    from a member of the United States Armed Forces
                    deployed to a designated combat zone, if the
                    additional pay--
                              (i) is the result of deployment to or
                            service in a combat zone; and
                              (ii) was not received immediately
                            prior to serving in a combat zone.
                      (B) Exclusion.--Combat pay shall not be
                    considered to be income for the purpose of
                    determining the eligibility for free or reduced
                    price meals of a child who is a member of the
                    household of a member of the United States
                    Armed Forces.
              (15) Direct certification for children receiving
            medicaid benefits.--
                      (A) Definitions.--In this paragraph:
                              (i) Eligible child.--The term
                            ``eligible child'' means a child--
                                      (I)(aa) who is eligible for
                                    and receiving medical
                                    assistance under the Medicaid
                                    program; and
                                      (bb) who is a member of a
                                    family with an income as
                                    measured by the Medicaid
                                    program before the application
                                    of any expense, block, or other
                                    income disregard, that does not
                                    exceed 133 percent of the
                                    poverty line (as defined in
                                    section 673(2) of the Community
                                    Services Block Grant Act (42
                                    U.S.C. 9902(2), including any
                                    revision required by such
                                    section)) applicable to a
                                    family of the size used for
                                    purposes of determining
                                    eligibility for the Medicaid
                                    program; or
                                      (II) who is a member of a
                                    household (as that term is
                                    defined in section 245.2 of
                                    title 7, Code of Federal
                                    Regulations (or successor
                                    regulations) with a child
                                    described in subclause (I).
                              (ii) Medicaid program.--The term
                            ``Medicaid program'' means the program
                            of medical assistance established under
                            title XIX of the Social Security Act
                            (42 U.S.C. 1396 et seq.).
                      (B) Demonstration project.--
                              (i) In general.--The Secretary,
                            acting through the Administrator of the
                            Food and Nutrition Service and in
                            cooperation with selected State
                            agencies, shall conduct a demonstration
                            project in selected local educational
                            agencies to determine whether direct
                            certification of eligible children is
                            an effective method of certifying
                            children for free lunches and
                            breakfasts under [section 9(b)(1)(A) of
                            this Act] paragraph (1)(A) and section
                            4(e)(1)(A) of the Child Nutrition Act
                            of 1966 (42 U.S.C. 1773(e)(1)(A)).
                              (ii) Scope of project.--The Secretary
                            shall carry out the demonstration
                            project under this subparagraph--
                                      (I) for the school year
                                    beginning July 1, 2012, in
                                    selected local educational
                                    agencies that collectively
                                    serve 2.5 percent of students
                                    certified for free and reduced
                                    price meals nationwide, based
                                    on the most recent available
                                    data;
                                      (II) for the school year
                                    beginning July 1, 2013, in
                                    selected local educational
                                    agencies that collectively
                                    serve 5 percent of students
                                    certified for free and reduced
                                    price meals nationwide, based
                                    on the most recent available
                                    data; and
                                      (III) for the school year
                                    beginning July 1, 2014, and
                                    each subsequent school year, in
                                    selected local educational
                                    agencies that collectively
                                    serve 10 percent of students
                                    certified for free and reduced
                                    price meals nationwide, based
                                    on the most recent available
                                    data.
                              (iii) Purposes of the project.--At a
                            minimum, the purposes of the
                            demonstration project shall be--
                                      (I) to determine the
                                    potential of direct
                                    certification with the Medicaid
                                    program to reach children who
                                    are eligible for free meals but
                                    not certified to receive the
                                    meals;
                                      (II) to determine the
                                    potential of direct
                                    certification with the Medicaid
                                    program to directly certify
                                    children who are enrolled for
                                    free meals based on a household
                                    application; and
                                      (III) to provide an estimate
                                    of the effect on Federal costs
                                    and on participation in the
                                    school lunch program under this
                                    Act and the school breakfast
                                    program established by section
                                    4 of the Child Nutrition Act of
                                    1966 (42 U.S.C. 1773) of direct
                                    certification with the Medicaid
                                    program.
                              (iv) Cost estimate.--For each of 2
                            school years of the demonstration
                            project, the Secretary shall estimate
                            the cost of the direct certification of
                            eligible children for free school meals
                            through data derived from--
                                      (I) the school meal programs
                                    authorized under this Act and
                                    the Child Nutrition Act of 1966
                                    (42 U.S.C. 1771 et seq.);
                                      (II) the Medicaid program;
                                    and
                                      (III) interviews with a
                                    statistically representative
                                    sample of households.
                      (C) Agreement.--
                              (i) In general.--Not later than July
                            1 of the first school year during which
                            a State agency will participate in the
                            demonstration project, the State agency
                            shall enter into an agreement with the
                            1 or more State agencies conducting
                            eligibility determinations for the
                            Medicaid program.
                              (ii) Without further application.--
                            Subject to paragraph (6), the agreement
                            described in subparagraph (D) shall
                            establish procedures under which an
                            eligible child shall be certified for
                            free lunches under this Act and free
                            breakfasts under section 4 of the Child
                            Nutrition Act of 1966 (42 U.S.C. 1773),
                            without further application (as defined
                            in [paragraph (4)(G)] paragraph
                            (4)(F)).
                      (D) Certification.--For the school year
                    beginning on July 1, 2012, and each subsequent
                    school year, subject to paragraph (6), the
                    local educational agencies participating in the
                    demonstration project shall certify an eligible
                    child as eligible for free lunches under this
                    Act and free breakfasts under the Child
                    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.),
                    without further application (as defined in
                    [paragraph (4)(G)] paragraph (4)(F)).
                      (E) Site selection.--
                              (i) In general.--To be eligible to
                            participate in the demonstration
                            project under this subsection, a State
                            agency shall submit to the Secretary an
                            application at such time, in such
                            manner, and containing such information
                            as the Secretary may require.
                              (ii) Considerations.--In selecting
                            States and local educational agencies
                            for participation in the demonstration
                            project, the Secretary may take into
                            consideration such factors as the
                            Secretary considers to be appropriate,
                            which may include--
                                      (I) the rate of direct
                                    certification;
                                      (II) the share of individuals
                                    who are eligible for benefits
                                    under the supplemental
                                    nutrition assistance program
                                    established under the Food and
                                    Nutrition Act of 2008 (7 U.S.C.
                                    2011 et seq.) who participate
                                    in the program, as determined
                                    by the Secretary;
                                      (III) the income eligibility
                                    limit for the Medicaid program;
                                      (IV) the feasibility of
                                    matching data between local
                                    educational agencies and the
                                    Medicaid program;
                                      (V) the socioeconomic profile
                                    of the State or local
                                    educational agencies; and
                                      (VI) the willingness of the
                                    State and local educational
                                    agencies to comply with the
                                    requirements of the
                                    demonstration project.
                      (F) Access to data.--For purposes of
                    conducting the demonstration project under this
                    paragraph, the Secretary shall have access to--
                              (i) educational and other records of
                            State and local educational and other
                            agencies and institutions receiving
                            funding or providing benefits for 1 or
                            more programs authorized under this Act
                            or the Child Nutrition Act of 1966 (42
                            U.S.C. 1771 et seq.); and
                              (ii) income and program participation
                            information from public agencies
                            administering the Medicaid program.
                      (G) Report to congress.--
                              (i) In general.--Not later than
                            October 1, 2014, the Secretary shall
                            submit to the [Committee on Education
                            and Labor] Committee on Education and
                            the Workforce of the House of
                            Representatives and the Committee on
                            Agriculture, Nutrition, and Forestry of
                            the Senate, an interim report that
                            describes the results of the
                            demonstration project required under
                            this paragraph.
                              (ii) Final report.--Not later than
                            October 1, 2015, the Secretary shall
                            submit a final report to the committees
                            described in clause (i).
                      (H) Funding.--
                              (i) In general.--On October 1, 2010,
                            out of any funds in the Treasury not
                            otherwise appropriated, the Secretary
                            of the Treasury shall transfer to the
                            Secretary to carry out subparagraph (G)
                            $5,000,000, to remain available until
                            expended.
                              (ii) Receipt and acceptance.--The
                            Secretary shall be entitled to receive,
                            shall accept, and shall use to carry
                            out subparagraph (G) the funds
                            transferred under clause (i), without
                            further appropriation.
      (c) School lunch programs under this Act shall be operated on
    a nonprofit basis. Commodities purchased under the authority of
    section 32 of the Act of August 24, 1935, may be donated by the
    Secretary to schools, in accordance with the needs as
    determined by local school authorities, for utilization in the
    school lunch program under this Act as well as to other schools
    carrying out nonprofit school lunch programs and institutions
    authorized to receive such commodities. The requirements of
    this section relating to the service of meals without cost or
    at a reduced cost shall apply to the lunch program of any
    school utilizing commodities donated under any provision of
    law.
      (d)(1) The Secretary shall require as a condition of
    eligibility for receipt of free or reduced price lunches that
    the member of the household who executes the application
    furnish the last 4 digits of the social security account number
    of the parent or guardian who is the primary wage earner
    responsible for the care of the child for whom the application
    is made, or that of another appropriate adult member of the
    child's household, as determined by the Secretary.
      (2) No member of a household may be provided a free or
    reduced price lunch under this Act unless--
              (A) appropriate documentation relating to the income
            of such household (as prescribed by the Secretary) has
            been provided to the appropriate local educational
            agency so that the local educational agency may
            calculate the total income of such household;
              (B) documentation showing that the household is
            participating in the supplemental nutrition assistance
            program under the Food and Nutrition Act of 2008 has
            been provided to the appropriate local educational
            agency;
              (C) documentation has been provided to the
            appropriate local educational agency showing that the
            family is receiving assistance under the State program
            funded under part A of title IV of the Social Security
            Act that the Secretary determines complies with
            standards established by the Secretary that ensure that
            the standards under the State program are comparable to
            or more restrictive than those in effect on June 1,
            1995;
              (D) documentation has been provided to the
            appropriate local educational agency showing that the
            child meets the criteria specified in clauses (iv) or
            (v) of subsection (b)(12)(A);
              (E) documentation has been provided to the
            appropriate local educational agency showing the status
            of the child as a migratory child (as defined in
            section 1309 of the Elementary and Secondary Education
            Act of 1965 (20 U.S.C. 6399));
              (F)(i) documentation has been provided to the
            appropriate local educational agency showing the status
            of the child as a [foster child] foster youth whose
            care and placement is the responsibility of an agency
            that administers a State plan under part B or E of
            title IV of the Social Security Act (42 U.S.C. 621 et
            seq.); or
                      (ii) documentation has been provided to the
                    appropriate local educational agency showing
                    the status of the child as a [foster child]
                    foster youth who a court has placed with a
                    caretaker household; or
              (G) documentation has been provided to the
            appropriate local educational agency showing the status
            of the child as an eligible child (as defined in
            subsection (b)(15)(A)).
      (e) A school or school food authority participating in a
    program under this Act may not contract with a food service
    company to provide a la carte food service unless the company
    agrees to offer free, reduced price, and full-price
    reimbursable meals to all eligible children.
      (f) Nutritional Requirements.--
              (1) In general.--Schools that are participating in
            the school lunch program or school breakfast program
            shall serve lunches and breakfasts that--
                      (A) are consistent with the goals of the most
                    recent Dietary Guidelines for Americans
                    published under section 301 of the National
                    Nutrition Monitoring and Related Research Act
                    of 1990 (7 U.S.C. 5341); [and]
                      (B) consider the nutrient needs of children
                    who may be at risk for inadequate food intake
                    and food insecurity[.]; and
                      (C) meet minimum nutritional requirements
                    prescribed by the Secretary on the basis of
                    tested nutritional research specifically
                    conducted to understand the impact for
                    children, except that the minimum nutritional
                    requirements--
                              (i) may not prohibit the substitution
                            of foods to accommodate the medical,
                            including allergies, or other special
                            dietary needs of individual students,
                            including religious dietary
                            restrictions; and
                              (ii) shall, as possible in
                            accommodating the medical or other
                            special dietary needs of such students,
                            be based on the weekly average of the
                            nutrient content of school lunches.
      (2) To assist schools in meeting the requirements of this
    subsection, the Secretary--
              (A) shall--
                      (i) develop, and provide to schools,
                    standardized recipes, menu cycles, and food
                    product specification and preparation
                    techniques; and
                      (ii) provide to schools information regarding
                    nutrient standard menu planning, assisted
                    nutrient standard menu planning, and food-based
                    menu systems; and
              (B) may provide to schools information regarding
            other approaches, as determined by the Secretary.
      (3) Use of any reasonable approach.--
              (A) In general.--A school food service authority may
            use any reasonable approach, within guidelines
            established by the Secretary in a timely manner, to
            meet the requirements of this subsection, including--
                      (i) using the school nutrition meal pattern
                    in effect for the 1994-1995 school year; and
                      (ii) using any of the approaches described in
                    [paragraph (3)] paragraph (2).
              (B) Nutrient analysis.--The Secretary may not require
            a school to conduct or use a nutrient analysis to meet
            the requirements of this subsection.
              [(4) Waiver of requirement for weighted averages for
            nutrient analysis.--During the period ending on
            September 30, 2010, the Secretary shall not require the
            use of weighted averages for nutrient analysis of menu
            items and foods offered or served as part of a meal
            offered or served 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).]
              (4) Regulations, review, and relief.--
                      (A) Review regulations.--The Secretary shall,
                    at least every 3 years--
                              (i) review the regulations
                            promulgated in accordance with this Act
                            for the school meal programs described
                            in paragraph (1) (in this paragraph
                            referred to as the ``school meal
                            programs'');
                              (ii) with consultation from a parent,
                            a pediatrician, a dietician who
                            conducts child nutrition research, and
                            stakeholders in schools (including
                            school leaders, school boards, local
                            educational agency administrators, and
                            school food nutrition directors),
                            certify that the regulations are--
                                      (I) appropriate for the age
                                    of children participating in
                                    the school meal programs,
                                    including for the health of
                                    children;
                                      (II) in compliance with the
                                    preponderance of the latest
                                    high-quality research based on
                                    school-aged children conducted
                                    to examine the health and
                                    safety of children
                                    participating in the school
                                    meal programs;
                                      (III) not increasing the cost
                                    to implement the requirements
                                    of the school meal programs
                                    (which costs shall be
                                    considered the total costs to
                                    implement the regulations and
                                    not limited to the cost of any
                                    changes to the regulations);
                                    and
                                      (IV) not discouraging
                                    students from participating in
                                    the school meal programs;
                              (iii) if necessary to meet the
                            requirements of clause (ii), revise the
                            regulations to meet such requirements;
                              (iv) not later than 30 days prior to
                            publication under clause (v)(II) of the
                            revised regulations--
                                      (I) submit the revised
                                    regulations for comment to the
                                    Committee on Education and the
                                    Workforce of the House of
                                    Representatives and the
                                    Committee on Agriculture,
                                    Nutrition, and Forestry of the
                                    Senate;
                                      (II) review any comments
                                    provided under subclause (I),
                                    and further revise the
                                    regulations, if necessary to
                                    ensure the revised regulations
                                    are in compliance with clause
                                    (i); and
                                      (III) provide a public notice
                                    and comment period of not less
                                    than 60 days, review the public
                                    comments, and further revise
                                    the regulations, if necessary
                                    to ensure the revised
                                    regulations are in compliance
                                    with clause (i); and
                              (v) publish in the Federal Register,
                            and 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--
                                      (I) a notice that no changes
                                    to the regulations are required
                                    and the certification described
                                    in clause (ii); or
                                      (II) the regulations, as
                                    revised under clause (iv), and
                                    the certification described in
                                    clause (ii).
                      (B) First review.--The first review required
                    under subparagraph (A) after the date of
                    enactment of the Improving Child Nutrition and
                    Education Act of 2016 shall--
                              (i) be concluded not later than
                            December 31, 2016;
                              (ii) include a review of the sodium
                            and whole grain requirements under the
                            regulations for the school meal
                            programs; and
                              (iii) ensure that such requirements--
                                      (I) maintain the sodium
                                    target requirements established
                                    for the school lunch program
                                    and school breakfast program
                                    under sections 210.10(f) and
                                    220.8(f) of title 7, Code of
                                    Federal Regulations,
                                    respectively (as such
                                    regulations are in effect on
                                    the day before the date of the
                                    enactment of the Improving
                                    Child Nutrition and Education
                                    Act of 2016) until such
                                    requirements are revised in
                                    accordance with subclause (II);
                                    and
                                      (II) in a case in which the
                                    sodium target requirements are
                                    revised as a result of the
                                    review described in this
                                    subparagraph, ensure that such
                                    a revision--
                                              (aa) is based on
                                            health requirements for
                                            children;
                                              (bb) is supported by
                                            a majority of research
                                            focused on school-aged
                                            children that directly
                                            establishes, through
                                            well-controlled
                                            randomized trials or
                                            well-designed, long-
                                            term observational
                                            studies, that sodium
                                            reductions are both
                                            safe and produce
                                            beneficial health
                                            outcomes for such
                                            children;
                                              (cc) is able to
                                            support food safety and
                                            be produced in a manner
                                            that does not
                                            significantly increase
                                            the cost of food; and
                                              (dd) does not take
                                            effect until 3 years
                                            after the revision has
                                            been published in the
                                            Federal Register.
                      (C) Special rule for regulation relief for
                    family meal days.--
                              (i) In general.--Subject to clause
                            (ii), the Secretary shall issue
                            guidance, or promulgate new rules as
                            necessary, to ensure each State agency
                            provides guidance to school food
                            authorities with respect to the
                            allowance of up to 4 family meal days,
                            as designated by a school, which shall
                            be exempt from the meal pattern rules
                            specified under the regulations for the
                            school meal programs, during which the
                            school may--
                                      (I) invite parents to
                                    participate in special meals,
                                    such as a Thanksgiving meal or
                                    a parents' day meal; and
                                      (II) provide additional
                                    nutrition education, such as
                                    recipe building or healthy
                                    cooking classes to parents and
                                    families on making healthy meal
                                    options at home, which may be
                                    provided by an entity or
                                    individual other than a school
                                    food service director or food
                                    service personnel.
                              (ii) Clarification.--In issuing
                            guidance or promulgating rules under
                            clause (i), the Secretary shall not
                            establish any requirements or
                            limitations for family meal days,
                            except to ensure that schools have the
                            authority to hold up to 4 family meal
                            days per school year.
                      (D) Regulation flexibility.--The Secretary
                    shall provide guidance, when there is
                    difficulty in procuring food to comply with the
                    regulations, to allow a school food authority
                    to substitute food items across food groups and
                    subgroups, including in-season, locally-
                    produced fruits and vegetables, notwithstanding
                    the food-based meal patterns and menu planning
                    requirements of this subsection, provided that
                    the school food authority continues to meet
                    applicable daily and weekly nutrient and
                    dietary requirements under this subsection.
              (5) Accommodations.--The accommodation requirements
            described in paragraph (1)(C)(i) shall apply to all
            programs under this Act and all programs under the
            Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.),
            except for section 17 of such Act (42 U.S.C. 1786).
      [(g) Not later than 1 year after the date of enactment of
    this subsection, the Secretary shall provide a notification to
    Congress that justifies the need for production records
    required under section 210.10(b) of title 7, Code of Federal
    Regulations, and describes how the Secretary has reduced
    paperwork relating to the school lunch and school breakfast
    programs.]
      [(h)] (g) Food Safety.--
              (1) In general.--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) shall--
                      (A) at least twice during each school year,
                    obtain a food safety inspection conducted by a
                    State or local governmental agency responsible
                    for food safety inspections;
                      (B) post in a publicly visible location a
                    report on the most recent inspection conducted
                    under subparagraph (A); and
                      (C) on request, provide a copy of the report
                    to a member of the public.
              (2) State and local government inspections.--Nothing
            in paragraph (1) prevents any State or local government
            from adopting or enforcing any requirement for more
            frequent food safety inspections of schools.
              (3) Audits and reports by states.--For each of fiscal
            years [2011 through 2015] 2017 through 2021, each State
            shall annually--
                      (A) audit food safety inspections of schools
                    conducted under paragraphs (1) and (2); and
                      (B) submit to the Secretary a report of the
                    results of the audit.
              (4) Audit by the secretary.--For each of fiscal years
            [2011 through 2015] 2017 through 2021, the Secretary
            shall annually audit State reports of food safety
            inspections of schools submitted under paragraph (3).
              (5) School food safety program.--
                      (A) In general.--Each school food authority
                    shall implement a school food safety program,
                    in the preparation and service of each meal
                    served to children, that complies with any
                    hazard analysis and critical control point
                    system established by the Secretary.
                      (B) Applicability.--Subparagraph (A) shall
                    apply to any facility or part of a facility in
                    which food is stored, prepared, or served for
                    the purposes of the school nutrition programs
                    under this Act or section 4 of the Child
                    Nutrition Act of 1966 (42 U.S.C. 1773).
      [(i)] (h) Single Permanent Agreement Between State Agency and
    School Food Authority; Common Claims Form.--
              (1) In general.--If a single State agency administers
            any combination of 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, the agency
            shall--
                      (A) require each school food authority to
                    submit to the State agency a single agreement
                    with respect to the operation by the authority
                    of the programs administered by the State
                    agency; and
                      (B) use a common claims form with respect to
                    meals and supplements served under the programs
                    administered by the State agency.
              (2) Additional requirement.--The agreement described
            in paragraph (1)(A) shall be a permanent agreement that
            may be amended as necessary.
      [(j)] (i) Purchases of Locally Produced Foods.--The Secretary
    shall--
              (1) encourage institutions receiving funds under this
            Act and the Child Nutrition Act of 1966 (42 U.S.C. 1771
            et seq.) to purchase unprocessed agricultural products,
            both locally grown and locally raised, to the maximum
            extent practicable and appropriate;
              (2) advise institutions participating in a program
            described in paragraph (1) of the policy described in
            that paragraph and paragraph (3) and post information
            concerning the policy on the website maintained by the
            Secretary; and
              (3) allow institutions receiving funds under this Act
            and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et
            seq.), including the Department of Defense Fresh Fruit
            and Vegetable Program, to use a geographic preference
            for the procurement of unprocessed agricultural
            products, both locally grown and locally raised.
      [(k) Information on the School Nutrition Environment.--
              [(1) In general.--The Secretary shall--
                      [(A) establish requirements for local
                    educational agencies participating in the
                    school lunch program under this Act and the
                    school breakfast program established by section
                    4 of the Child Nutrition Act of 1966 (42 U.S.C.
                    1773) to report information about the school
                    nutrition environment, for all schools under
                    the jurisdiction of the local educational
                    agencies, to the Secretary and to the public in
                    the State on a periodic basis; and
                      [(B) provide training and technical
                    assistance to States and local educational
                    agencies on the assessment and reporting of the
                    school nutrition environment, including the use
                    of any assessment materials developed by the
                    Secretary.
              [(2) Requirements.--In establishing the requirements
            for reporting on the school nutrition environment under
            paragraph (1), the Secretary shall--
                      [(A) include information pertaining to food
                    safety inspections, local wellness policies,
                    meal program participation, the nutritional
                    quality of program meals, and other information
                    as determined by the Secretary; and
                      [(B) ensure that information is made
                    available to the public by local educational
                    agencies in an accessible, easily understood
                    manner in accordance with guidelines
                    established by the Secretary.
              [(3) Authorization of appropriations.--There are
            authorized to be appropriated to carry out this
            subsection such sums as are necessary for each of
            fiscal years 2011 through 2015.]
      [(l)] (j) Food Donation Program.--
              (1) In general.--Each school and local educational
            agency participating in the school lunch program under
            this Act may donate any food not consumed under such
            program to eligible local food banks or charitable
            organizations.
              (2) Guidance.--
                      (A) In general.--Not later than 180 days
                    after the date of the enactment of this
                    subsection, the Secretary shall develop and
                    publish guidance to schools and local
                    educational agencies participating in the
                    school lunch program under this Act to assist
                    such schools and local educational agencies in
                    donating food under this subsection.
                      (B) Updates.--The Secretary shall update such
                    guidance as necessary.
              (3) Liability.--Any school or local educational
            agency making donations pursuant to this subsection
            shall be exempt from civil and criminal liability to
            the extent provided under the Bill Emerson Good
            Samaritan Food Donation Act (42 U.S.C. 1791).
              (4) Definition.--In this subsection, the term
            ``eligible local food banks or charitable
            organizations'' means any food bank or charitable
            organization which is exempt from tax under section
            501(c)(3) of the Internal Revenue Code of 1986 (26
            U.S.C. 501(c)(3)).

    SEC. 9A. LOCAL SCHOOL WELLNESS POLICY.

      (a) In General.--Each local educational agency participating
    in a program authorized by this Act or the Child Nutrition Act
    of 1966 (42 U.S.C. 1771 et seq.) shall establish a local school
    wellness policy for all schools under the jurisdiction of the
    local educational agency.
      (b) Guidelines.--The Secretary shall promulgate regulations
    that provide the framework and guidelines for local educational
    agencies to establish local school wellness policies,
    including, at a minimum,--
              (1) goals for nutrition promotion and education,
            physical activity, and other school-based activities
            that promote student wellness;
              (2) for all foods available on each school campus
            under the jurisdiction of the local educational agency
            during the school day, nutrition guidelines that--
                      (A) are consistent with sections 9 and 17 of
                    this Act, and sections 4 and 10 of the Child
                    Nutrition Act of 1966 (42 U.S.C. 1773, 1779);
                    and
                      (B) promote student health and reduce
                    childhood obesity;
              (3) a requirement that the local educational agency
            permit parents, students, representatives of the school
            food authority, teachers of physical education, school
            health professionals, the school board, school
            administrators, and the general public to participate
            in the development, implementation, and periodic review
            and update of the local school wellness policy;
              (4) a requirement that the local educational agency
            inform and update the public (including parents,
            students, and others in the community) about the
            content and implementation of the local school wellness
            policy; and
              (5) a requirement that the local educational agency--
                      (A) periodically measure and make available
                    to the public an assessment on the
                    implementation of the local school wellness
                    policy, including--
                              (i) the extent to which schools under
                            the jurisdiction of the local
                            educational agency are in compliance
                            with the local school wellness policy;
                              (ii) the extent to which the local
                            school wellness policy of the local
                            educational agency compares to model
                            local school wellness policies; and
                              (iii) a description of the progress
                            made in attaining the goals of the
                            local school wellness policy; and
                      (B) designate 1 or more local educational
                    agency officials or school officials, as
                    appropriate, to ensure that each school
                    complies with the local school wellness policy.
      (c) Local Discretion.--The local educational agency shall use
    the guidelines promulgated by the Secretary under subsection
    (b) to determine specific policies appropriate for the schools
    under the jurisdiction of the local educational agency.
      (d) Technical Assistance and Best Practices.--
              (1) In general.--The Secretary, in consultation with
            the Secretary of Education and the Secretary of Health
            and Human Services, acting through the Centers for
            Disease Control and Prevention, shall provide
            information and technical assistance to local
            educational agencies, school food authorities, and
            [State educational agencies] State agencies for use in
            establishing healthy school environments that are
            intended to promote student health and wellness.
              (2) Content.--The Secretary shall provide technical
            assistance that--
                      (A) includes resources and training on
                    designing, implementing, promoting,
                    disseminating, and evaluating local school
                    wellness policies and overcoming barriers to
                    the adoption of local school wellness policies;
                      (B) includes model local school wellness
                    policies and best practices recommended by
                    Federal agencies, State agencies, and
                    nongovernmental organizations;
                      (C) includes such other technical assistance
                    as is required to promote sound nutrition and
                    establish healthy school nutrition
                    environments; and
                      (D) is consistent with the specific needs and
                    requirements of local educational agencies.
              (3) Study and report.--
                      (A) In general.--Subject to the availability
                    of appropriations, the Secretary, in
                    conjunction with the Director of the Centers
                    for Disease Control and Prevention, shall
                    prepare a report on the implementation,
                    strength, and effectiveness of the local school
                    wellness policies carried out in accordance
                    with this section.
                      (B) Study of local school wellness
                    policies.--The study described in subparagraph
                    (A) shall include----
                              (i) an analysis of the strength and
                            weaknesses of local school wellness
                            policies and how the policies compare
                            with model local wellness policies
                            recommended under paragraph (2)(B); and
                              (ii) an assessment of the impact of
                            the local school wellness policies in
                            addressing the requirements of
                            subsection (b).
                      (C) Report.--Not later than January 1, 2014,
                    the Secretary shall submit to the [Committee on
                    Education and Labor] Committee on Education and
                    the Workforce of the House of Representatives
                    and the Committee on Agriculture, Nutrition,
                    and Forestry of the Senate a report that
                    describes the findings of the study.
                      (D) Authorization of appropriations.--There
                    are authorized to be appropriated to carry out
                    this paragraph $3,000,000 for fiscal year 2011,
                    to remain available until expended.

                    DISBURSEMENT TO SCHOOLS BY THE SECRETARY

      Sec. 10. (a) The Secretary shall withhold funds payable to a
    State under this Act and disburse the funds directly to
    schools, institutions, or service institutions within the State
    for the purposes authorized by this Act to the extent that the
    Secretary has so withheld and disbursed such funds continuously
    since October 1, 1980, but only to such extent (except as
    otherwise required by subsection (b)). Any funds so withheld
    and disbursed by the Secretary shall be used for the same
    purposes, and shall be subject to the same conditions, as
    applicable to a State disbursing funds made available under
    this Act. If the Secretary is administering (in whole or in
    part) any program authorized under this Act, the State in which
    the Secretary is administering the program may, upon request to
    the Secretary, assume administration of that program.
      (b) If a [State educational agency] State agency is not
    permitted by law to disburse the funds paid to it under this
    Act to any of the nonpublic schools in the State, the Secretary
    shall disburse the funds directly to such schools within the
    State for the same purposes and subject to the same conditions
    as are authorized or required with respect to the disbursements
    to public schools within the State by the [State educational
    agency] State agency.

                               SPECIAL ASSISTANCE

      Sec. 11. (a)(1)(A) Except as provided in section 10 of this
    Act, in each fiscal year each [State educational agency] State
    agency shall receive special assistance payments in an amount
    equal to the sum of the product obtained by multiplying the
    number of lunches (consisting of a combination of foods which
    meet the minimum nutritional requirements prescribed by the
    Secretary pursuant to subsection 9(a) of this Act) served free
    to children eligible for such lunches in schools within that
    State during such fiscal year by the special assistance factor
    for free lunches prescribed by the Secretary for such fiscal
    year and the product obtained by multiplying the number of
    lunches served at a reduced price to children eligible for such
    reduced price lunches in schools within that State during such
    fiscal year by the special assistance factor for reduced price
    lunches prescribed by the Secretary for such fiscal year.
      (B) Except as provided in subparagraph (C), (D), (E), or (F),
    in the case of any school which determines that at least 80
    percent of the children in attendance during a school year
    (hereinafter in this sentence referred to as the ``first school
    year'') are eligible for free lunches or reduced price lunches,
    special assistance payments shall be paid to the [State
    educational agency] State agency with respect to that school,
    if that school so requests for the school year following the
    first school year, on the basis of the number of free lunches
    or reduced priced lunches, as the case may be, that are served
    by that school during the school year for which the request is
    made, to those children who were determined to be so eligible
    in the first school year and the number of free lunches and
    reduced price lunches served during that year to other children
    determined for that year to be eligible for such lunches.
      (C)(i) Except as provided in subparagraph (D), in the case of
    any school or school district that--
              (I) elects to serve all children in the school or
            school district free lunches under the school lunch
            program during any period of 4 successive school years,
            or in the case of a school or school district that
            serves both lunches and breakfasts, elects to serve all
            children in the school or school district free lunches
            and free breakfasts under the school lunch program and
            the school breakfast program established under section
            4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773)
            during any period of 4 successive school years; and
              (II) pays, from sources other than Federal funds, for
            the costs of serving the lunches or breakfasts that are
            in excess of the value of assistance received under
            this Act and the Child Nutrition Act of 1966 (42 U.S.C.
            1771 et seq.) with respect to the number of lunches or
            breakfasts served during the period;
    special assistance payments shall be paid to the [State
    educational agency] State agency with respect to the school or
    school district during the period on the basis of the number of
    lunches or breakfasts determined under clause (ii) or (iii).
      (ii) For purposes of making special assistance payments under
    clause (i), except as provided in clause (iii), the number of
    lunches or breakfasts served by a school or school district to
    children who are eligible for free lunches or breakfasts or
    reduced price lunches or breakfasts during each school year of
    the 4-school-year period shall be considered to be equal to the
    number of lunches or breakfasts served by the school or school
    district to children eligible for free lunches or breakfasts or
    reduced price lunches or breakfasts during the first school
    year of the period.
      (iii) For purposes of computing the amount of the payments, a
    school or school district may elect to determine on a more
    frequent basis the number of children who are eligible for free
    or reduced price lunches or breakfasts who are served lunches
    or breakfasts during the 4-school-year period.
      (D)(i) In the case of any school or school district that is
    receiving special assistance payments under this paragraph for
    a 4-school-year period described in subparagraph (C), the State
    may grant, at the end of the 4-school-year period, an extension
    of the period for an additional 4 school years, if the State
    determines, through available socioeconomic data approved by
    the Secretary, that the income level of the population of the
    school or school district has remained stable.
      (ii) A school or school district described in clause (i) may
    reapply to the State at the end of the 4-school-year period,
    and at the end of each 4-school-year period thereafter for
    which the school or school district receives special assistance
    payments under this paragraph, for the purpose of continuing to
    receive the payments for a subsequent 4-school-year period.
      (iii) If the Secretary determines after considering the best
    available socioeconomic data that the income level of families
    of children enrolled in a school or school district has not
    remained stable, the Secretary may require the submission of
    applications for free and reduced price lunches, or for free
    and reduced price lunches and breakfasts, in the first school
    year of any 4-school-year period for which the school or school
    district receives special assistance payments under this
    paragraph, for the purpose of calculating the special
    assistance payments.
      (iv) For the purpose of updating information and
    reimbursement levels, a school or school district described in
    clause (i) that carries out a school lunch or school breakfast
    program may at any time require submission of applications for
    free and reduced price lunches or for free and reduced price
    lunches and breakfasts.
      (E)(i) In the case of any school or school district that--
              (I) elects to serve all children in the school or
            school district free lunches under the school lunch
            program during any period of 4 successive school years,
            or in the case of a school or school district that
            serves both lunches and breakfasts, elects to serve all
            children in the school or school district free lunches
            and free breakfasts under the school lunch program and
            the school breakfast program during any period of 4
            successive school years; and
              (II) pays, from sources other than Federal funds, for
            the costs of serving the lunches or breakfasts that are
            in excess of the value of assistance received under
            this Act and the Child Nutrition Act of 1966 (42 U.S.C.
            1771 et seq.) with respect to the number of lunches or
            breakfasts served during the period;
    total Federal cash reimbursements and total commodity
    assistance shall be provided to the [State educational agency]
    State agency with respect to the school or school district at a
    level that is equal to the total Federal cash reimbursements
    and total commodity assistance received by the school or school
    district in the last school year for which the school or school
    district accepted applications under the school lunch or school
    breakfast program, adjusted annually for inflation in
    accordance with paragraph (3)(B) and for changes in enrollment,
    to carry out the school lunch or school breakfast program.
      (ii) A school or school district described in clause (i) may
    reapply to the State at the end of the 4-school-year period
    described in clause (i), and at the end of each 4-school-year
    period thereafter for which the school or school district
    receives reimbursements and assistance under this subparagraph,
    for the purpose of continuing to receive the reimbursements and
    assistance for a subsequent 4-school-year period. The State may
    approve an application under this clause if the State
    determines, through available socioeconomic data approved by
    the Secretary, that the income level of the population of the
    school or school district has remained consistent with the
    income level of the population of the school or school district
    in the last school year for which the school or school district
    accepted the applications described in clause (i).
                      (F) Universal meal service in high poverty
                    areas.--
                              (i) Definition of identified
                            students.--The term ``identified
                            students'' means students certified
                            based on documentation of benefit
                            receipt or categorical eligibility as
                            described in section 245.6a(c)(2) of
                            title 7, Code of Federal Regulations
                            (or successor regulations).
                              (ii) Election of special assistance
                            payments.--
                                      (I) In general.--A local
                                    educational agency may, for all
                                    schools in the district or on
                                    behalf of certain schools
                                    (including a subset of schools
                                    within the local educational
                                    agency if the result obtained
                                    by dividing the total number of
                                    the identified students
                                    enrolled in such schools by the
                                    total number of all students
                                    enrolled in such schools, is
                                    above the threshold in clause
                                    (viii)) in the district, elect
                                    to receive special assistance
                                    payments under this
                                    subparagraph in lieu of special
                                    assistance payments otherwise
                                    made available under this
                                    paragraph based on applications
                                    for free and reduced price
                                    lunches if--
                                              (aa) during a period
                                            of 4 successive school
                                            years, the local
                                            educational agency
                                            elects to serve all
                                            children in the
                                            applicable schools free
                                            lunches and breakfasts
                                            under the school lunch
                                            program under this Act
                                            and the school
                                            breakfast program
                                            established under
                                            section 4 of the Child
                                            Nutrition Act of 1966
                                            (42 U.S.C. 1773);
                                              (bb) the local
                                            educational agency
                                            pays, from sources
                                            other than Federal
                                            funds, the costs of
                                            serving the lunches or
                                            breakfasts that are in
                                            excess of the value of
                                            assistance received
                                            under this Act and the
                                            Child Nutrition Act of
                                            1966 (42 U.S.C. 1771 et
                                            seq.);
                                              (cc) the local
                                            educational agency is
                                            not a residential child
                                            care institution (as
                                            that term is used in
                                            section 210.2 of title
                                            7, Code of Federal
                                            Regulations (or
                                            successor
                                            regulations)); and
                                              (dd) during the
                                            school year prior to
                                            the first year of the
                                            period for which the
                                            local educational
                                            agency elects to
                                            receive special
                                            assistance payments
                                            under this
                                            subparagraph, the local
                                            educational agency or
                                            school had a percentage
                                            of enrolled students
                                            who were identified
                                            students that meets or
                                            exceeds the threshold
                                            described in clause
                                            (viii).
                                      (II) Election to stop
                                    receiving payments.--A local
                                    educational agency may, for all
                                    schools in the district or on
                                    behalf of certain schools in
                                    the district, elect to stop
                                    receiving special assistance
                                    payments under this
                                    subparagraph for the following
                                    school year by notifying the
                                    State agency not later than
                                    June 30 of the current school
                                    year of the intention to stop
                                    receiving special assistance
                                    payments under this
                                    subparagraph.
                              (iii) First year of option.--
                                      (I) Special assistance
                                    payment.--For each month of the
                                    first school year of the 4-year
                                    period during which a school or
                                    local educational agency elects
                                    to receive payments under this
                                    subparagraph, special
                                    assistance payments at the rate
                                    for free meals shall be made
                                    under this subparagraph for a
                                    percentage of all reimbursable
                                    meals served in an amount equal
                                    to the product obtained by
                                    multiplying--
                                              (aa) the multiplier
                                            described in clause
                                            (vii); by
                                              (bb) the percentage
                                            of identified students
                                            at the school or local
                                            educational agency as
                                            of April 1 of the prior
                                            school year, up to a
                                            maximum of 100 percent.
                                      (II) Payment for other
                                    meals.--The percentage of meals
                                    served that is not described in
                                    subclause (I) shall be
                                    reimbursed at the rate provided
                                    under section 4.
                              (iv) Second, third, or fourth year of
                            option.--
                                      (I) Special assistance
                                    payment.--For each month of the
                                    second, third, or fourth school
                                    year of the 4-year period
                                    during which a school or local
                                    educational agency elects to
                                    receive payments under this
                                    subparagraph, special
                                    assistance payments at the rate
                                    for free meals shall be made
                                    under this subparagraph for a
                                    percentage of all reimbursable
                                    meals served in an amount equal
                                    to the product obtained by
                                    multiplying--
                                              (aa) the multiplier
                                            described in clause
                                            (vii); by
                                              (bb) the higher of
                                            the percentage of
                                            identified students at
                                            the school or local
                                            educational agency as
                                            of April 1 of the prior
                                            school year or the
                                            percentage of
                                            identified students at
                                            the school or local
                                            educational agency as
                                            of April 1 of the
                                            school year prior to
                                            the first year that the
                                            school or local
                                            educational agency
                                            elected to receive
                                            special assistance
                                            payments under this
                                            subparagraph, up to a
                                            maximum of 100 percent.
                                      (II) Payment for other
                                    meals.--The percentage of meals
                                    served that is not described in
                                    subclause (I) shall be
                                    reimbursed at the rate provided
                                    under section 4.
                              (v) Grace year.--
                                      (I) In general.--If, not
                                    later than April 1 of the
                                    fourth year of a 4-year period
                                    described in clause (ii)(I), a
                                    school or local educational
                                    agency has a percentage of
                                    enrolled students who are
                                    identified students that meets
                                    or exceeds a percentage that is
                                    10 percentage points lower than
                                    the threshold described in
                                    clause (viii), the school or
                                    local educational agency may
                                    elect to receive special
                                    assistance payments under
                                    subclause (II) for an
                                    additional grace year.
                                      (II) Special assistance
                                    payment.--For each month of a
                                    grace year, special assistance
                                    payments at the rate for free
                                    meals shall be made under this
                                    subparagraph for a percentage
                                    of all reimbursable meals
                                    served in an amount equal to
                                    the product obtained by
                                    multiplying--
                                              (aa) the multiplier
                                            described in clause
                                            (vii); by
                                              (bb) the percentage
                                            of identified students
                                            at the school or local
                                            educational agency as
                                            of April 1 of the prior
                                            school year, up to a
                                            maximum of 100 percent.
                                      (III) Payment for other
                                    meals.--The percentage of meals
                                    served that is not described in
                                    subclause (II) shall be
                                    reimbursed at the rate provided
                                    under section 4.
                              (vi) Applications.--A school or local
                            educational agency that receives
                            special assistance payments under this
                            subparagraph may not be required to
                            collect applications for free and
                            reduced price lunches.
                              (vii) Multiplier.--
                                      (I) Phase-in.--For each
                                    school year beginning on or
                                    before July 1, 2013, the
                                    multiplier shall be 1.6.
                                      (II) Full implementation.--
                                    For each school year beginning
                                    on or after July 1, 2014, the
                                    Secretary may use, as
                                    determined by the Secretary--
                                              (aa) a multiplier
                                            between 1.3 and 1.6;
                                            and
                                              (bb) subject to item
                                            (aa), a different
                                            multiplier for
                                            different schools or
                                            local educational
                                            agencies.
                              [(viii) Threshold.--
                                      [(I) Phase-in.--For each
                                    school year beginning on or
                                    before July 1, 2013, the
                                    threshold shall be 40 percent.
                                      [(II) Full implementation.--
                                    For each school year beginning
                                    on or after July 1, 2014, the
                                    Secretary may use a threshold
                                    that is less than 40 percent.]
                      (viii) Threshold.--
                              (I) In general.--For each school year
                            beginning on or after July 1, 2017, the
                            Secretary shall use a threshold that is
                            not less than 60 percent.
                              (II) Community eligibility selection
                            transition.--In the case of a school
                            that received special assistance
                            payments under this subparagraph during
                            the school year immediately prior to
                            the school year in which the Improving
                            Child Nutrition and Education Act of
                            2016 was enacted, such school shall,
                            not later than June 30, 2018--
                                      (aa) meet the threshold
                                    described in subclause (I); or
                                      (bb) transition from
                                    receiving payments under this
                                    subparagraph in accordance with
                                    subclause (III).
                              (III) Technical assistance.--In the
                            case of schools described in subclause
                            (II)(bb), the Secretary shall provide
                            technical assistance to ensure that
                            such schools are able to effectively
                            and efficiently transition from
                            receiving payments under this
                            subparagraph to receiving special
                            assistance payments otherwise made
                            available under this paragraph,
                            including communicating the application
                            process to families in a timely manner
                            to ensure continuity of services for
                            eligible families.
                              (ix) Phase-in.--
                                      (I) In general.--In selecting
                                    States for participation during
                                    the phase-in period, the
                                    Secretary shall select States
                                    with an adequate number and
                                    variety of schools and local
                                    educational agencies that could
                                    benefit from the option under
                                    this subparagraph, as
                                    determined by the Secretary.
                                      (II) Limitation.--The
                                    Secretary may not approve
                                    additional schools and local
                                    educational agencies to receive
                                    special assistance payments
                                    under this subparagraph after
                                    the Secretary has approved
                                    schools and local educational
                                    agencies in--
                                              (aa) for the school
                                            year beginning on July
                                            1, 2011, 3 States; and
                                              (bb) for each of the
                                            school years beginning
                                            July 1, 2012 and July
                                            1, 2013, an additional
                                            4 States per school
                                            year.
                              (x) Election of option.--
                                      (I) In general.--For each
                                    school year beginning on or
                                    after July 1, 2014, any local
                                    educational agency eligible to
                                    make the election described in
                                    clause (ii) for all schools in
                                    the district or on behalf of
                                    certain schools in the district
                                    may elect to receive special
                                    assistance payments under
                                    clause (iii) for the next
                                    school year if, not later than
                                    June 30 of the current school
                                    year, the local educational
                                    agency submits to the State
                                    agency the percentage of
                                    identified students at the
                                    school or local educational
                                    agency.
                                      (II) State agency
                                    notification.--Not later than
                                    May 1 of each school year
                                    beginning on or after July 1,
                                    2011, each State agency with
                                    schools or local educational
                                    agencies that may be eligible
                                    to elect to receive special
                                    assistance payments under this
                                    subparagraph shall notify--
                                              (aa) each local
                                            educational agency that
                                            meets or exceeds the
                                            threshold described in
                                            clause (viii) that the
                                            local educational
                                            agency is eligible to
                                            elect to receive
                                            special assistance
                                            payments under clause
                                            (iii) for the next 4
                                            school years, of the
                                            blended reimbursement
                                            rate the local
                                            educational agency
                                            would receive under
                                            clause (iii), and of
                                            the procedures for the
                                            local educational
                                            agency to make the
                                            election;
                                              (bb) each local
                                            educational agency that
                                            receives special
                                            assistance payments
                                            under clause (iii) of
                                            the blended
                                            reimbursement rate the
                                            local educational
                                            agency would receive
                                            under clause (iv);
                                              (cc) each local
                                            educational agency in
                                            the fourth year of
                                            electing to receive
                                            special assistance
                                            payments under this
                                            subparagraph that meets
                                            or exceeds a percentage
                                            that is 10 percentage
                                            points lower than the
                                            threshold described in
                                            clause (viii) and that
                                            receives special
                                            assistance payments
                                            under clause (iv), that
                                            the local educational
                                            agency may continue to
                                            receive such payments
                                            for the next school
                                            year, of the blended
                                            reimbursement rate the
                                            local educational
                                            agency would receive
                                            under clause (v), and
                                            of the procedures for
                                            the local educational
                                            agency to make the
                                            election; and
                                              (dd) each local
                                            educational agency that
                                            meets or exceeds a
                                            percentage that is 10
                                            percentage points lower
                                            than the threshold
                                            described in clause
                                            (viii) that the local
                                            educational agency may
                                            be eligible to elect to
                                            receive special
                                            assistance payments
                                            under clause (iii) if
                                            the threshold described
                                            in clause (viii) is met
                                            by April 1 of the
                                            school year or if the
                                            threshold is met for a
                                            subsequent school year.
                                      (III) Public notification of
                                    local educational agencies.--
                                    Not later than May 1 of each
                                    school year beginning on or
                                    after July 1, 2011, each State
                                    agency with 1 or more schools
                                    or local educational agencies
                                    eligible to elect to receive
                                    special assistance payments
                                    under clause (iii) shall submit
                                    to the Secretary, and the
                                    Secretary shall publish, lists
                                    of the local educational
                                    agencies receiving notices
                                    under subclause (II).
                                      (IV) Public notification of
                                    schools.--Not later than May 1
                                    of each school year beginning
                                    on or after July 1, 2011, each
                                    local educational agency in a
                                    State with 1 or more schools
                                    eligible to elect to receive
                                    special assistance payments
                                    under clause (iii) shall submit
                                    to the State agency, and the
                                    State agency shall publish--
                                              (aa) a list of the
                                            schools that meet or
                                            exceed the threshold
                                            described in clause
                                            (viii);
                                              (bb) a list of the
                                            schools that meet or
                                            exceed a percentage
                                            that is 10 percentage
                                            points lower than the
                                            threshold described in
                                            clause (viii) and that
                                            are in the fourth year
                                            of receiving special
                                            assistance payments
                                            under clause (iv); and
                                              (cc) a list of the
                                            schools that meet or
                                            exceed a percentage
                                            that is 10 percentage
                                            points lower than the
                                            threshold described in
                                            clause (viii).
                              (xi) Implementation.--
                                      (I) Guidance.--Not later than
                                    90 days after the date of
                                    enactment of this subparagraph,
                                    the Secretary shall issue
                                    guidance to implement this
                                    subparagraph.
                                      (II) Regulations.--[Not later
                                    than December 31, 2013] Not
                                    later than one year after the
                                    date of enactment of the
                                    Improving Child Nutrition and
                                    Education Act of 2016, the
                                    Secretary shall promulgate
                                    regulations that establish
                                    procedures for State agencies,
                                    local educational agencies, and
                                    schools to meet the
                                    requirements of this
                                    subparagraph, including
                                    exercising the option described
                                    in this subparagraph.
                                      (III) Publication.--[If the
                                    Secretary uses the authority
                                    provided in clause
                                    (vii)(II)(bb) to use a
                                    different multiplier for
                                    different schools or local
                                    educational agencies, for each
                                    school year beginning on or
                                    after July 1, 2014, not later
                                    than April 1, 2014] If the
                                    Secretary uses the authority
                                    provided in clause (vii), for
                                    each school year beginning on
                                    or after July 1, 2017, not less
                                    than one year prior to the
                                    Secretary electing to use such
                                    authority,, the Secretary shall
                                    publish on the website of the
                                    Secretary a table that
                                    indicates--
                                              (aa) each local
                                            educational agency that
                                            may elect to receive
                                            special assistance
                                            payments under clause
                                            (ii);
                                              (bb) the blended
                                            reimbursement rate that
                                            each local educational
                                            agency would receive;
                                            and
                                              (cc) an explanation
                                            of the methodology used
                                            to calculate the
                                            multiplier or threshold
                                            for each school or
                                            local educational
                                            agency.
                              (xii) Report.--Not later than
                            December 31, 2013, the Secretary shall
                            publish a report that describes--
                                      (I) an estimate of the number
                                    of schools and local
                                    educational agencies eligible
                                    to elect to receive special
                                    assistance payments under this
                                    subparagraph that do not elect
                                    to receive the payments;
                                      (II) for schools and local
                                    educational agencies described
                                    in subclause (I)--
                                              (aa) barriers to
                                            participation in the
                                            special assistance
                                            option under this
                                            subparagraph, as
                                            described by the
                                            nonparticipating
                                            schools and local
                                            educational agencies;
                                            and
                                              (bb) changes to the
                                            special assistance
                                            option under this
                                            subparagraph that would
                                            make eligible schools
                                            and local educational
                                            agencies more likely to
                                            elect to receive
                                            special assistance
                                            payments;
                                      (III) for schools and local
                                    educational agencies that elect
                                    to receive special assistance
                                    payments under this
                                    subparagraph--
                                              (aa) the number of
                                            schools and local
                                            educational agencies;
                                              (bb) an estimate of
                                            the percentage of
                                            identified students and
                                            the percentage of
                                            enrolled students who
                                            were certified to
                                            receive free or reduced
                                            price meals in the
                                            school year prior to
                                            the election to receive
                                            special assistance
                                            payments under this
                                            subparagraph, and a
                                            description of how the
                                            ratio between those
                                            percentages compares to
                                            1.6;
                                              (cc) an estimate of
                                            the number and share of
                                            schools and local
                                            educational agencies in
                                            which more than 80
                                            percent of students are
                                            certified for free or
                                            reduced price meals
                                            that elect to receive
                                            special assistance
                                            payments under that
                                            clause; and
                                              (dd) whether any of
                                            the schools or local
                                            educational agencies
                                            stopped electing to
                                            receive special
                                            assistance payments
                                            under this
                                            subparagraph;
                                      (IV) the impact of electing
                                    to receive special assistance
                                    payments under this
                                    subparagraph on--
                                              (aa) program
                                            integrity;
                                              (bb) whether a
                                            breakfast program is
                                            offered;
                                              (cc) the type of
                                            breakfast program
                                            offered;
                                              (dd) the nutritional
                                            quality of school
                                            meals; and
                                              (ee) program
                                            participation; and
                                      (V) the multiplier and
                                    threshold, as described in
                                    clauses (vii) and (viii)
                                    respectively, that the
                                    Secretary will use for each
                                    school year beginning on or
                                    after July 1, 2014 and the
                                    rationale for any change in the
                                    multiplier or threshold.
                              (xiii) Funding.--
                                      (I) In general.--On October
                                    1, 2010, out of any funds in
                                    the Treasury not otherwise
                                    appropriated, the Secretary of
                                    the Treasury shall transfer to
                                    the Secretary to carry out
                                    clause (xii) $5,000,000, to
                                    remain available until
                                    September 30, 2014.
                                      (II) Receipt and
                                    acceptance.--The Secretary
                                    shall be entitled to receive,
                                    shall accept, and shall use to
                                    carry out clause (xii) the
                                    funds transferred under
                                    subclause (I), without further
                                    appropriation.
      (2) The special assistance factor prescribed by the Secretary
    for free lunches shall be 98.75 cents and the special
    assistance factor for reduced price lunches shall be 40 cents
    less than the special assistance factor for free lunches.
      (3)(A) The Secretary shall prescribe on [July 1] February 15,
    1982, and on each subsequent July 1, an annual adjustment in
    the following:
              (i) The national average payment rates for lunches
            (as established under section 4 of this Act).
              (ii) the special assistance factor for lunches (as
            established under paragraph (2) of this subsection).
              (iii) The national average payment rates for
            breakfasts (as established under section 4(b) of the
            Child Nutrition Act of 1966 ).
              (iv) The national average payment rates for
            supplements (as established under section 17(c) of this
            Act).
              (B) Computation of adjustment.--
                      (i) In general.--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.
                      (ii) Basis.--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.
                      (iii) Rounding.--On July 1, 1999, and on each
                    subsequent July 1, the national average payment
                    rates for meals and supplements shall be
                    adjusted to the nearest lower cent increment
                    and shall be based on the unrounded amounts for
                    the preceding 12-month period.
      (b) Except as provided in section 10 of the Child Nutrition
    Act of 1966, the special assistance payments made to each State
    agency during each fiscal year under the provisions of this
    section shall be used by such State agency to assist schools of
    that State in providing free and reduced price lunches served
    to children pursuant to subsection 9(b) of this Act. The amount
    of such special assistance funds that a school shall from time
    to time receive, within a maximum per lunch amount established
    by the Secretary for all States, shall be based on the need of
    the school for such special assistance. Such maximum per lunch
    amount established by the Secretary shall not be less than 60
    cents.
      (c) Special assistance payments to any State under this
    section shall be made as provided in the last sentence of
    section 7 of this Act.
      (d)(1) The Secretary, when appropriate, may request each
    school participating in the school lunch program under this Act
    to report monthly to the [State educational agency] State
    agency the average number of children in the school who
    received free lunches and the average number of children who
    received reduced price lunches during the immediately preceding
    month.
      (2) On request of the Secretary, the [State educational
    agency] State agency of each State shall report to the
    Secretary the average number of children in the State who
    received free lunches and the average number of children in the
    State who received reduced price lunches during the immediately
    preceding month.
      (e) Commodity only schools shall also be eligible for special
    assistance payments under this section. Such schools shall
    serve meals free to children who meet the eligibility
    requirements for free meals under section 9(b) of this Act, and
    shall serve meals at a reduced price, not exceeding the price
    specified in section 9(b)(9) of this Act, to children meeting
    the eligibility requirements for reduced price meals under such
    section. No physical segregation of, or other discrimination
    against, any child eligible for a free or reduced priced lunch
    shall be made by the school, nor shall there by any overt
    identification of any such child by any means.
      (g) Universal Meal Service Through Census Data.--
              (1) In general.--To the maximum extent practicable,
            the Secretary shall identify alternatives to--
                      (A) the daily counting by category of meals
                    provided by school lunch programs under this
                    Act and the school breakfast program
                    established by section 4 of the Child Nutrition
                    Act of 1966 (42 U.S.C. 1773); and
                      (B) the use of annual applications as the
                    basis for eligibility to receive free meals or
                    reduced price meals under this Act.
              (2) Recommendations.--
                      (A) Considerations.--
                              (i) In general.--In identifying
                            alternatives under paragraph (1), the
                            Secretary shall consider the
                            recommendations of the Committee on
                            National Statistics of the National
                            Academy of Sciences relating to use of
                            the American Community Survey of the
                            Bureau of the Census and other data
                            sources.
                              (ii) Socioeconomic survey.--The
                            Secretary shall consider use of a
                            periodic socioeconomic survey of
                            households of children attending school
                            in the school food authority in not
                            more than 3 school food authorities
                            participating in the school lunch
                            program under this Act.
                              (iii) Survey parameters.--The
                            Secretary shall establish requirements
                            for the use of a socioeconomic survey
                            under clause (ii), which shall--
                                      (I) include criteria for
                                    survey design, sample frame
                                    validity, minimum level of
                                    statistical precision, minimum
                                    survey response rates,
                                    frequency of data collection,
                                    and other criteria as
                                    determined by the Secretary;
                                      (II) be consistent with the
                                    Standards and Guidelines for
                                    Statistical Surveys, as
                                    published by the Office of
                                    Management and Budget;
                                      (III) be consistent with
                                    standards and requirements that
                                    ensure proper use of Federal
                                    funds; and
                                      (IV) specify that the
                                    socioeconomic survey be
                                    conducted at least once every 4
                                    years.
                      (B) Use of alternatives.--Alternatives
                    described in subparagraph (A) that provide
                    accurate and effective means of providing meal
                    reimbursement consistent with the eligibility
                    status of students may be--
                              (i) implemented for use in schools or
                            by school food authorities that agree--
                                      (I) to serve all breakfasts
                                    and lunches to students at no
                                    cost in accordance with
                                    regulations issued by the
                                    Secretary; and
                                      (II) to pay, from sources
                                    other than Federal funds, the
                                    costs of serving any lunches
                                    and breakfasts that are in
                                    excess of the value of
                                    assistance received under this
                                    Act or the Child Nutrition Act
                                    of 1966 (42 U.S.C. 1771 et
                                    seq.) with respect to the
                                    number of lunches and
                                    breakfasts served during the
                                    applicable period; or
                              (ii) further tested through
                            demonstration projects carried out by
                            the Secretary in accordance with
                            subparagraph (C).
                      (C) Demonstration projects.--
                              (i) In general.--For the purpose of
                            carrying out demonstration projects
                            described in subparagraph (B), the
                            Secretary may waive any requirement of
                            this Act relating to--
                                      (I) counting of meals
                                    provided by school lunch or
                                    breakfast programs;
                                      (II) applications for
                                    eligibility for free or reduced
                                    priced meals; or
                                      (III) required direct
                                    certification under section
                                    9(b)(4).
                              (ii) Number of projects.--The
                            Secretary shall carry out demonstration
                            projects under this paragraph in not
                            more than 5 local educational agencies
                            for each alternative model that is
                            being tested.
                              (iii) Limitation.--A demonstration
                            project carried out under this
                            paragraph shall have a duration of not
                            more than 3 years.
                              (iv) Evaluation.--The Secretary shall
                            evaluate each demonstration project
                            carried out under this paragraph in
                            accordance with procedures established
                            by the Secretary.
                              (v) Requirement.--In carrying out
                            evaluations under clause (iv), the
                            Secretary shall evaluate, using
                            comparisons with local educational
                            agencies with similar demographic
                            characteristics--
                                      (I) the accuracy of the 1 or
                                    more methodologies adopted as
                                    compared to the daily counting
                                    by category of meals provided
                                    by school meal programs under
                                    this Act or the Child Nutrition
                                    Act of 1966 (42 U.S.C. 1771 et
                                    seq.) and the use of annual
                                    applications as the basis for
                                    eligibility to receive free or
                                    reduced price meals under those
                                    Acts;
                                      (II) the effect of the 1 or
                                    more methodologies adopted on
                                    participation in programs under
                                    those Acts;
                                      (III) the effect of the 1 or
                                    more methodologies adopted on
                                    administration of programs
                                    under those Acts; and
                                      (IV) such other matters as
                                    the Secretary determines to be
                                    appropriate.

                    MISCELLANEOUS PROVISIONS AND DEFINITIONS

      Sec. 12. (a) States, [State educational agencies] State
    agencies, and schools participating in the school lunch program
    under this Act shall keep such accounts and records as may be
    necessary to enable the Secretary to determine whether the
    provisions of this Act are being complied with. Such accounts
    and records shall be available at any reasonable time for
    inspection and audit by representatives of the Secretary and
    shall be preserved for such period of time, not in excess of
    five years, as the Secretary determines is necessary.
      (b) Agreements.--
              (1) In general.--The Secretary shall incorporate, in
            the agreement of the Secretary with the State agencies
            administering programs authorized under this Act or the
            Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.),
            the express requirements with respect to the operation
            of the programs to the extent applicable and such other
            provisions as in the opinion of the Secretary are
            reasonably necessary or appropriate to effectuate the
            purposes of this Act and the Child Nutrition Act of
            1966 (42 U.S.C. 1771 et seq.).
              (2) Expectations for use of funds.--Agreements
            described in paragraph (1) shall include a provision
            that--
                      (A) supports full use of Federal funds
                    provided to State agencies for the
                    administration of programs authorized under
                    this Act or the Child Nutrition Act of 1966 (42
                    U.S.C. 1771 et seq.); and
                      (B) excludes the Federal funds from State
                    budget restrictions or limitations including,
                    at a minimum--
                              (i) hiring freezes;
                              (ii) work furloughs; and
                              (iii) travel restrictions.
      (c) In carrying out the provisions of this Act, the Secretary
    shall not impose any requirement with respect to teaching
    personnel, curriculum, instruction, methods of instruction, and
    materials of instruction in any school.
      (d) For the purposes of this Act--
              (1) Child.--
                      (A) In general.--The term ``child'' includes
                    an individual, regardless of age, who--
                              (i) is determined by a [State
                            educational agency] State agency, in
                            accordance with regulations prescribed
                            by the Secretary, to have one or more
                            disabilities; and
                              (ii) is attending any institution, as
                            defined in section 17(a), or any
                            nonresidential public or nonprofit
                            private school of high school grade or
                            under, for the purpose of participating
                            in a school program established for
                            individuals with disabilities.
                      (B) Relationship to child and adult care food
                    program.--No institution that is not otherwise
                    eligible to participate in the program under
                    section 17 shall be considered eligible because
                    of this paragraph.
              (2) ``Commodity only schools'' means schools that do
            not participate in the school lunch program under this
            Act, but which receive commodities made available by
            the Secretary for use by such schools in nonprofit
            lunch programs.
              (3) Disability.--The term ``disability'' has the
            meaning given the term in the Rehabilitation Act of
            1973 for purposes of title II of that Act (29 [U.S.C]
            U.S.C. 760 et seq.).
              (4) Local educational agency.--
                      (A) In general.--The term ``local educational
                    agency'' has the meaning given the term in
                    section 8101 of the Elementary and Secondary
                    Education Act of 1965.
                      (B) Inclusion.--The term ``local educational
                    agency'' includes, in the case of a private
                    nonprofit school, an appropriate entity
                    determined by the Secretary.
              (5) ``School'' means (A) any public or nonprofit
            private school of high school grade or under, and (B)
            any public or licensed nonprofit private residential
            child care institution (including, but not limited to,
            orphanages and homes for the mentally retarded, but
            excluding Job Corps Centers funded by the Department of
            Labor). For purposes of this paragraph, the term
            ``nonprofit'', when applied to any such private school
            or institution, means any such school or institution
            which is exempt from tax under section 501(c)(3) of the
            Internal Revenue Code of 1986.
              (6) ``School year'' means the annual period from July
            1 through June 30.
              (7) ``Secretary'' means the Secretary of Agriculture.
              (8) ``State'' means any of the fifty States, the
            District of Columbia, the Commonwealth of Puerto Rico,
            the Virgin Islands, Guam, American Samoa, or the
            Commonwealth of the Northern Mariana Islands.
              [(9) `` State educational agency '' means, as the
            State legislature may determine, (A) the chief State
            school officer (such as the State superintendent of
            public instruction, commissioner of education, or
            similar officer), or (B) a board of education
            controlling the State department of education.]
              (9) State agency.--The term ``State agency'' means--
                      (A) the chief State school officer (such as
                    the State superintendent of public instruction,
                    commissioner of education, or similar officer);
                      (B) a board of education controlling the
                    State department of education;
                      (C) the State Commissioner or individual who
                    administers agricultural programs in the State;
                    or
                      (D) a State official the State legislature
                    designates to administer the programs under
                    this Act.
      (e) The value of assistance to children under this Act shall
    not be considered to be income or resources for any purposes
    under any Federal or State laws, including laws relating to
    taxation and welfare and public assistance programs.
      (f) In providing assistance for 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, 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 meals and supplements in those States and the costs
    of providing meals and supplements in all other States.
      (g) Whoever embezzles, willfully misapplies, steals, or
    obtains by fraud any funds, assets, or property that are the
    subject of a grant or other form of assistance under this Act
    or the Child Nutrition Act of 1966, whether received directly
    or indirectly from the United States Department of Agriculture,
    or whoever receives, conceals, or retains such funds, assets,
    or property to personal use or gain, knowing such funds,
    assets, or property have been embezzled, willfully misapplied,
    stolen, or obtained by fraud shall, if such funds, assets, or
    property are of the value of $100 or more, be fined not more
    than $25,000 or imprisoned not more than five years, or both,
    or, if such funds, assets, or property are of a value of less
    than $100, shall be fined not more than $1,000 or imprisoned
    for not more than one year, or both.
      (h) No provision of this Act or of the Child Nutrition Act of
    1966 shall require any school receiving funds under this Act
    and the Child Nutrition Act of 1966 to account separately for
    the cost incurred in the school lunch and school breakfast
    programs.
      (i) Facilities, equipment, and personnel provided to a school
    food authority for a program authorized under this Act or the
    Child Nutrition Act of 1966 may be used, as determined by a
    local educational agency, to support a nonprofit nutrition
    program for the elderly, including a program funded under the
    Older Americans Act of 1965.
      (j)(1) Except as provided in paragraph (2), the Secretary may
    provide reimbursements for final claims for service of meals,
    supplements, and milk submitted to State agencies by eligible
    schools, summer camps, family day care homes, institutions, and
    service institutions only if--
              (A) the claims have been submitted to the State
            agencies not later than 60 days after the last day of
            the month for which the reimbursement is claimed; and
              (B) the final program operations report for the month
            is submitted to the Secretary not later than 90 days
            after the last day of the month.
      (2) The Secretary may waive the requirements of paragraph (1)
    at the discretion of the Secretary.
      (l)(1)(A) Except as provided in paragraph (4), the Secretary
    may waive any requirement under this Act or the Child Nutrition
    Act of 1966 (42 U.S.C. 1771 et seq.), or any regulation issued
    under either such Act, for a State or eligible service provider
    that requests a waiver if--
              (i) the Secretary determines that the waiver of the
            requirement would facilitate the ability of the State
            or eligible service provider to carry out the purpose
            of the program;
              (ii) the State or eligible service provider has
            provided notice and information to the public regarding
            the proposed waiver; and
              (iii) the State or eligible service provider
            demonstrates to the satisfaction of the Secretary that
            the waiver will not increase the overall cost of the
            program to the Federal Government, and, if the waiver
            does increase the overall cost to the Federal
            Government, the cost will be paid from non-Federal
            funds.
      (B) The notice and information referred to in subparagraph
    (A)(ii) shall be provided in the same manner in which the State
    or eligible service provider customarily provides similar
    notices and information to the public.
      (2)(A) To request a waiver under paragraph (1), a State or
    eligible service provider (through the appropriate
    administering State agency) shall submit an application to the
    Secretary that--
              (i) identifies the statutory or regulatory
            requirements that are requested to be waived;
              (ii) in the case of a State requesting a waiver,
            describes actions, if any, that the State has
            undertaken to remove State statutory or regulatory
            barriers;
              (iii) describes the goal of the waiver to improve
            services under the program and the expected outcomes if
            the waiver is granted; and
              (iv) includes a description of the impediments to the
            efficient operation and administration of the program.
      (B) An application described in subparagraph (A) shall be
    developed by the State or eligible service provider and shall
    be submitted to the Secretary by the State.
      (3) The Secretary shall act promptly on a waiver request
    contained in an application submitted under paragraph (2) and
    shall either grant or deny the request. The Secretary shall
    state in writing the reasons for granting or denying the
    request.
      (4) The Secretary may not grant a waiver under this
    subsection that increases Federal costs or that relates to--
              (A) the nutritional content of meals served;
              (B) Federal reimbursement rates;
              (C) the provision of free and reduced price meals;
              (D) limits on the price charged for a reduced price
            meal;
              (E) maintenance of effort;
              (F) equitable participation of children in private
            schools;
              (G) distribution of funds to State and local school
            food service authorities and service institutions
            participating in a program under this Act and the Child
            Nutrition Act of 1966 (42 U.S.C. 1771 et seq.);
              (H) the disclosure of information relating to
            students receiving free or reduced price meals and
            other recipients of benefits;
              (I) prohibiting the operation of a profit producing
            program;
              (J) the sale of competitive foods;
              (K) the commodity distribution program under section
            14;
              (L) the special supplemental nutrition program
            authorized under section 17 of the Child Nutrition Act
            of 1966 (42 U.S.C. 1786); or
              (M) enforcement of any constitutional or statutory
            right of an individual, including any right under--
                      (i) title VI of the Civil Rights Act of 1964
                    (42 U.S.C. 2000d et seq.);
                      (ii) section 504 of the Rehabilitation Act of
                    1973 (29 U.S.C. 794);
                      (iii) title IX of the Education Amendments of
                    1972 (20 U.S.C. 1681 et seq.);
                      (iv) the Age Discrimination Act of 1975 (42
                    U.S.C. 6101 et seq.);
                      (v) the Americans with Disabilities Act of
                    1990 (42 U.S.C. 12101 et seq.); and
                      (vi) the Individuals with Disabilities
                    Education Act (20 U.S.C. 1400 et seq.).
      (5) The Secretary shall periodically review the performance
    of any State or eligible service provider for which the
    Secretary has granted a waiver under this subsection and shall
    terminate the waiver if the performance of the State or service
    provider has been inadequate to justify a continuation of the
    waiver. The Secretary shall terminate the waiver if, after
    periodic review, the Secretary determines that the waiver has
    resulted in an increase in the overall cost of the program to
    the Federal Government and the increase has not been paid for
    in accordance with paragraph (1)(A)(iii).
      (6) The Secretary shall annually submit to the [Committee on
    Education and Labor] Committee on Education and the Workforce
    of the House of Representatives and the Committee on
    Agriculture, Nutrition, and Forestry of the Senate, a report--
              (A) summarizing the use of waivers by the State and
            eligible service providers;
              (B) describing whether the waivers resulted in
            improved services to children;
              (C) describing the impact of the waivers on providing
            nutritional meals to participants; and
              (D) describing how the waivers reduced the quantity
            of paperwork necessary to administer the program.
      (7) As used in this subsection, the term ``eligible service
    provider'' means--
              (A) a local school food service authority;
              (B) a service institution or private nonprofit
            organization described in section 13; or
              (C) a family or group day care home sponsoring
            organization described in section 17.
      (m) Procurement Training.--
              (1) In general.--Subject to the availability of funds
            made available under paragraph (4), the Secretary shall
            provide technical assistance and training to States,
            State agencies, schools, and school food authorities in
            the procurement of goods and services for programs
            under this Act or the Child Nutrition Act of 1966 (42
            U.S.C. 1771 et seq.) (other than section 17 of that Act
            (42 U.S.C. 1786)).
              (2) Buy american training.--Activities carried out
            under paragraph (1) shall include technical assistance
            and training to ensure compliance with subsection (n).
              (3) Procuring safe foods.--Activities carried out
            under paragraph (1) shall include technical assistance
            and training on procuring safe foods, including the use
            of model specifications for procuring safe foods.
              (4) Authorization of appropriations.--There is
            authorized to be appropriated to carry out this
            subsection $1,000,000 for each of fiscal years 2010
            through [2015] 2021, to remain available until
            expended.
      (n) Buy American.--
              (1) Definition of domestic commodity or product.--In
            this subsection, the term ``domestic commodity or
            product'' means--
                      (A) an agricultural commodity that is
                    produced in the United States; and
                      (B) a food product that is processed in the
                    United States substantially using agricultural
                    commodities that are produced in the United
                    States.
              (2) Requirement.--
                      (A) In general.--Subject to subparagraph (B),
                    the Secretary shall require that a school food
                    authority purchase, to the maximum extent
                    practicable, domestic commodities or products.
                      (B) Limitations.--Subparagraph (A) shall
                    apply
                    only to--
                              (i) a school food authority located
                            in the
                            contiguous United States; and
                              (ii) a purchase of a domestic
                            commodity or product for 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) Applicability to hawaii.--Paragraph (2)(A) shall
            apply to a school food authority in Hawaii with respect
            to domestic commodities or products that are produced
            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).
              (4) Applicability to puerto rico.--Paragraph (2)(A)
            shall apply to a school food authority in the
            Commonwealth of Puerto Rico with respect to domestic
            commodities or products that are produced in the
            Commonwealth of Puerto Rico 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).
      (o) Procurement Contracts.--In acquiring a good or service
    for programs under this Act or the Child Nutrition Act of 1966
    (42 U.S.C. 1771 et seq.) (other than section 17 of that Act (42
    U.S.C. 1786)), a State, State agency, school, or school food
    authority may enter into a contract with a person that has
    provided specification information to the State, State agency,
    school, or school food authority for use in developing contract
    specifications for acquiring such good or service.
      [(p) Price for a Paid Lunch.--
              [(1) Definition of paid lunch.--In this subsection,
            the term ``paid lunch'' means a reimbursable lunch
            served to students who are not certified to receive
            free or reduced price meals.
              [(2) Requirement.--
                      [(A) In general.--For each school year
                    beginning July 1, 2011, each school food
                    authority shall establish a price for paid
                    lunches in accordance with this subsection.
                      [(B) Lower price.--
                              [(i) In general.--In the case of a
                            school food authority that established
                            a price for a paid lunch in the
                            previous school year that was less than
                            the difference between the total
                            Federal reimbursement for a free lunch
                            and the total Federal reimbursement for
                            a paid lunch, the school food authority
                            shall establish an average price for a
                            paid lunch that is not less than the
                            price charged in the previous school
                            year, as adjusted by a percentage equal
                            to the sum obtained by adding--
                                      [(I) 2 percent; and
                                      [(II) the percentage change
                                    in the Consumer Price Index for
                                    All Urban Consumers (food away
                                    from home index) used to
                                    increase the Federal
                                    reimbursement rate under
                                    section 11 for the most recent
                                    school year for which data are
                                    available, as published in the
                                    Federal Register.
                              [(ii) Rounding.--A school food
                            authority may round the adjusted price
                            for a paid lunch under clause (i) down
                            to the nearest 5 cents.
                              [(iii) Maximum required price
                            increase.--
                                      [(I) In general.--The maximum
                                    annual average price increase
                                    required to meet the
                                    requirements of this
                                    subparagraph shall not exceed
                                    10 cents for any school food
                                    authority.
                                      [(II) Discretionary
                                    increase.--A school food
                                    authority may increase the
                                    average price for a paid lunch
                                    for a school year by more than
                                    10 cents.
                      [(C) Equal or greater price.--
                              [(i) In general.--In the case of a
                            school food authority that established
                            an average price for a paid lunch in
                            the previous school year that was equal
                            to or greater than the difference
                            between the total Federal reimbursement
                            for a free lunch and the total Federal
                            reimbursement for a paid lunch, the
                            school food authority shall establish
                            an average price for a paid lunch that
                            is not less than the difference between
                            the total Federal reimbursement for a
                            free lunch and the total Federal
                            reimbursement for a paid lunch.
                              [(ii) Rounding.--A school food
                            authority may round the adjusted price
                            for a paid lunch under clause (i) down
                            to the nearest 5 cents.
              [(3) Exceptions.--
                      [(A) Reduction in price.--A school food
                    authority may reduce the average price of a
                    paid lunch established under this subsection if
                    the State agency ensures that funding from non-
                    Federal sources (other than in-kind
                    contributions) is added to the nonprofit school
                    food service account of the school food
                    authority in an amount estimated to be equal to
                    at least the difference between--
                              [(i) the average price required of
                            the school food authority for the paid
                            lunches under paragraph (2); and
                              [(ii) the average price charged by
                            the school food authority for the paid
                            lunches.
                      [(B) Non-federal sources.--For the purposes
                    of subparagraph (A), non-Federal sources does
                    not include revenue from the sale of foods sold
                    in competition with meals served under the
                    school lunch program authorized under this Act
                    or the school breakfast program established by
                    section 4 of the Child Nutrition Act of 1966
                    (42 U.S.C. 1773).
                      [(C) Other programs.--This subsection shall
                    not apply to lunches provided under section 17
                    of this Act.
              [(4) Regulations.--The Secretary shall establish
            procedures to carry out this subsection, including
            collecting and publishing the prices that school food
            authorities charge for paid meals on an annual basis
            and procedures that allow school food authorities to
            average the pricing of paid lunches at schools
            throughout the jurisdiction of the school food
            authority.]
      [(q)] (p) Nonprogram Food Sales.--
              (1) Definition of nonprogram food.--In this
            subsection:
                      (A) In general.--The term ``nonprogram food''
                    means food that is--
                              (i) sold in a participating school
                            other than a reimbursable meal provided
                            under this Act or the Child Nutrition
                            Act of 1966 (42 U.S.C. 1771 et seq.);
                            and
                              (ii) purchased using funds from the
                            nonprofit school food service account
                            of the school food authority of the
                            school.
                      (B) Inclusion.--The term ``nonprogram food''
                    includes food that is sold in competition with
                    a program established under this Act or the
                    Child Nutrition Act of 1966 (42 U.S.C. 1771 et
                    seq.).
              (2) Revenues.--
                      (A) In general.--The proportion of total
                    school food service revenue provided by the
                    sale of nonprogram foods to the total revenue
                    of the school food service account shall be
                    equal to or greater than the proportion of
                    total food costs associated with obtaining
                    nonprogram foods to the total costs associated
                    with obtaining program and nonprogram foods
                    from the account.
                      (B) Accrual.--All revenue from the sale of
                    nonprogram foods shall accrue to the nonprofit
                    school food service account of a participating
                    school food authority.
                      (C) Effective date.--This subsection shall be
                    effective beginning on July 1, 2011.
      [(r)] (q) Disqualified Schools, Institutions, and
    Individuals.--Any school, institution, service institution,
    facility, or individual that has been terminated from any
    program authorized under this Act or the Child Nutrition Act of
    1966 (42 U.S.C. 1771 et seq.) and is on a list of disqualified
    institutions and individuals under section 13 or section
    17(d)(5)(E) of this Act may not be approved to participate in
    or administer any program authorized under this Act or the
    Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).

    SEC. 13. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

      (a) In General.--
              (1) Definitions.--In this section:
                      (A) Area in which poor economic conditions
                    exist.--
                              (i) In general.--Subject to clause
                            (ii), the term ``area in which poor
                            economic conditions exist'', as the
                            term relates to an area in which a
                            program food service site is located,
                            means--
                                      (I) the attendance area of a
                                    school in which at least 50
                                    percent of the enrolled
                                    children have been determined
                                    eligible for free or reduced
                                    price school meals under this
                                    Act and the Child Nutrition Act
                                    of 1966 (42 U.S.C. 1771 et
                                    seq.);
                                      (II) a geographic area, as
                                    defined by the Secretary based
                                    on the most recent census data
                                    available, in which at least 50
                                    percent of the children
                                    residing in that area are
                                    eligible for free or reduced
                                    price school meals under this
                                    Act and the Child Nutrition Act
                                    of 1966 (42 U.S.C. 1771 et
                                    seq.);
                                      (III) an area--
                                              (aa) for which the
                                            program food service
                                            site documents the
                                            eligibility of enrolled
                                            children through the
                                            collection of income
                                            eligibility statements
                                            from the families of
                                            enrolled children or
                                            other means; and
                                              (bb) at least 50
                                            percent of the children
                                            enrolled at the program
                                            food service site meet
                                            the income standards
                                            for free or reduced
                                            price school meals
                                            under this Act and the
                                            Child Nutrition Act of
                                            1966 (42 U.S.C. 1771 et
                                            seq.);
                                      (IV) a geographic area, as
                                    defined by the Secretary based
                                    on information provided from a
                                    department of welfare or zoning
                                    commission, in which at least
                                    50 percent of the children
                                    residing in that area are
                                    eligible for free or reduced
                                    price school meals under this
                                    Act and the Child Nutrition Act
                                    of 1966 (42 U.S.C. 1771 et
                                    seq.); or
                                      (V) an area for which the
                                    program food service site
                                    demonstrates through other
                                    means approved by the Secretary
                                    that at least 50 percent of the
                                    children enrolled at the
                                    program food service site are
                                    eligible for free or reduced
                                    price school meals under this
                                    Act and the Child Nutrition Act
                                    of 1966 (42 U.S.C. 1771 et
                                    seq.).
                              (ii) Duration of determination.--A
                            determination that an area is an ``area
                            in which poor economic conditions
                            exist'' under clause (i) shall be in
                            effect for--
                                      (I) in the case of an area
                                    described in clause (i)(I), 5
                                    years;
                                      (II) in the case of an area
                                    described in clause (i)(II),
                                    until more recent census data
                                    are available;
                                      (III) in the case of an area
                                    described in clause (i)(III), 1
                                    year; and
                                      (IV) in the case of an area
                                    described in subclause (IV) or
                                    (V) of clause (i), a period of
                                    time to be determined by the
                                    Secretary, but not less than 1
                                    year.
                      (B) Children.--The term ``children'' means--
                              (i) individuals who are 18 years of
                            age and under; and
                              (ii) individuals who are older than
                            18 years of age who are--
                                      (I) determined by a [State
                                    educational agency] State
                                    agency or a local public
                                    educational agency of a State,
                                    in accordance with regulations
                                    promulgated by the Secretary,
                                    to have a disability, and
                                      (II) participating in a
                                    public or nonprofit private
                                    school program established for
                                    individuals who have a
                                    disability.
                      (C) Program.--The term ``program'' means the
                    summer food service program for children
                    authorized by this section.
                      (D) Service institution.--The term ``service
                    institution'' means a public or private
                    nonprofit school food authority, local,
                    municipal, or county government, public or
                    private nonprofit higher education institution
                    participating in the National Youth Sports
                    Program, or residential public or private
                    nonprofit summer camp, that develops special
                    summer or school vacation programs providing
                    food service similar to food service made
                    available to children during the school year
                    under the school lunch program under this Act
                    or the school breakfast program under the Child
                    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).
                      (E) State.--The term ``State'' means--
                              (i) each of the several States of the
                            United States;
                              (ii) the District of Columbia;
                              (iii) the Commonwealth of Puerto
                            Rico;
                              (iv) Guam;
                              (v) American Samoa;
                              (vi) the Commonwealth of the Northern
                            Mariana Islands; and
                              (vii) the United States Virgin
                            Islands.
              (2) Program authorization.--
                      (A) In general.--The Secretary may carry out
                    a program to assist States, through grants-in-
                    aid and other means, to initiate and maintain
                    nonprofit summer food service programs for
                    children in service institutions.
                      (B) Preparation of food.--
                              (i) In general.--To the maximum
                            extent feasible, consistent with the
                            purposes of this section, any food
                            service under the program shall use
                            meals prepared at the facilities of the
                            service institution or at the food
                            service facilities of public and
                            nonprofit private schools.
                              (ii) Information and technical
                            assistance.--The Secretary shall assist
                            States in the development of
                            information and technical assistance to
                            encourage increased service of meals
                            prepared at the facilities of service
                            institutions and at public and
                            nonprofit private schools.
              (3) Eligible service institutions.--Eligible service
            institutions entitled to participate in the program
            shall be limited to those that--
                      (A) demonstrate adequate administrative and
                    financial responsibility to manage an effective
                    food service;
                      (B) have not been seriously deficient in
                    operating under the program;
                      (C)(i) conduct a regularly scheduled food
                    service for children from areas in which poor
                    economic conditions exist; or
                      (ii) qualify as camps; and
                      (D) provide an ongoing year-round service to
                    the community to be served under the program
                    (except that an otherwise eligible service
                    institution shall not be disqualified for
                    failure to meet this requirement for ongoing
                    year-round service if the State determines that
                    its disqualification would result in an area in
                    which poor economic conditions exist not being
                    served or in a significant number of needy
                    children not having reasonable access to a
                    summer food service program).
              (4) Priority.--
                      (A) In general.--The following order of
                    priority shall be used by the State in
                    determining participation where more than one
                    eligible service institution proposes to serve
                    the same area:
                              (i) Local schools.
                              (ii) All other service institutions
                            and private nonprofit organizations
                            eligible under paragraph (7) that have
                            demonstrated successful program
                            performance in a prior year.
                              (iii) New public institutions.
                              (iv) New private nonprofit
                            organizations eligible under paragraph
                            (7).
                      (B) Rural areas.--The Secretary and the
                    States, in carrying out their respective
                    functions under this section, shall actively
                    seek eligible service institutions located in
                    rural areas, for the purpose of assisting such
                    service institutions in applying to participate
                    in the program.
                      (C) Educational and enrichment activities.--
                    In determining participation under subparagraph
                    (A), the State shall prioritize applications
                    that include an educational or enrichment
                    activity, or demonstrate a partnership with an
                    entity providing such activity.
              (5) Camps.--Camps that satisfy all other eligibility
            requirements of this section shall receive
            reimbursement only for meals served to children who
            meet the eligibility requirements for free or reduced
            price meals, as determined under this Act and the Child
            Nutrition Act of 1966.
              (6) Government institutions.--Service institutions
            that are local, municipal, or county governments shall
            be eligible for reimbursement for meals served in
            programs under this section only if such programs are
            operated directly by such governments.
              (7) Private nonprofit organizations.--
                      (A) Definition of private nonprofit
                    organization.--In this paragraph, the term
                    ``private nonprofit organization'' means an
                    organization that--
                              (i) exercises full control and
                            authority over the operation of the
                            program at all sites under the
                            sponsorship of the organization;
                              (ii) provides ongoing year-round
                            activities for children or families;
                              (iii) demonstrates that the
                            organization has adequate management
                            and the fiscal capacity to operate a
                            program under this section;
                              (iv) is an organization described in
                            section 501(c) of the Internal Revenue
                            Code of 1986 and exempt from taxation
                            under 501(a) of that Code; and
                              (v) meets applicable State and local
                            health, safety, and sanitation
                            standards.
                      (B) Eligibility.--Private nonprofit
                    organizations (other than organizations
                    eligible under paragraph (1)) shall be eligible
                    for the program under the same terms and
                    conditions as other service institutions.
              [(8) Seamless summer option.--Except as otherwise
            determined by the Secretary, a service institution that
            is a public or private nonprofit school food authority
            may provide summer or school vacation food service in
            accordance with applicable provisions of law governing
            the school lunch program established under this Act or
            the school breakfast program established under the
            Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).
              [(9) Exemption.--
                      [(A) In general.--For each of calendar years
                    2005 and 2006 in rural areas of the State of
                    Pennsylvania (as determined by the Secretary),
                    the threshold for determining ``areas in which
                    poor economic conditions exist'' under
                    paragraph (1)(C) shall be 40 percent.
                      [(B) Evaluation.--
                              [(i) In general.--The Secretary,
                            acting through the Administrator of the
                            Food and Nutrition Service, shall
                            evaluate the impact of the eligibility
                            criteria described in subparagraph (A)
                            as compared to the eligibility criteria
                            described in paragraph (1)(C).
                              [(ii) Impact.--The evaluation shall
                            assess the impact of the threshold in
                            subparagraph (A) on--
                                      [(I) the number of sponsors
                                    offering meals through the
                                    summer food service program;
                                      [(II) the number of sites
                                    offering meals through the
                                    summer food service program;
                                      [(III) the geographic
                                    location of the sites;
                                      [(IV) services provided to
                                    eligible children; and
                                      [(V) other factors determined
                                    by the Secretary.
                              [(iii) Report.--Not later than
                            January 1, 2008, 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 describing the
                            results of the evaluation under this
                            subparagraph.
                              [(iv) Funding.--
                                      [(I) In general.--On January
                                    1, 2005, out of any funds in
                                    the Treasury not otherwise
                                    appropriated, the Secretary of
                                    the Treasury shall transfer to
                                    the Secretary of Agriculture to
                                    carry out this subparagraph
                                    $400,000, to remain available
                                    until expended.
                                      [(II) Receipt and
                                    acceptance.--The Secretary
                                    shall be entitled to receive,
                                    shall accept, and shall use to
                                    carry out this subparagraph the
                                    funds transferred under
                                    subclause (I), without further
                                    appropriation.
              [(10) Summer food service rural transportation.--
                      [(A) In general.--The Secretary shall provide
                    grants, through not more than 5 eligible State
                    agencies selected by the Secretary, to not more
                    than 60 eligible service institutions selected
                    by the Secretary to increase participation at
                    congregate feeding sites in the summer food
                    service program for children authorized by this
                    section through innovative approaches to
                    limited transportation in rural areas.
                      [(B) Eligibility.--To be eligible to receive
                    a grant under this paragraph--
                              [(i) a State agency shall submit an
                            application to the Secretary, in such
                            manner as the Secretary shall
                            establish, and meet criteria
                            established by the Secretary; and
                              [(ii) a service institution shall
                            agree to the terms and conditions of
                            the grant, as established by the
                            Secretary.
                      [(C) Duration.--A service institution that
                    receives a grant under this paragraph may use
                    the grant funds during the 3-fiscal year period
                    beginning in fiscal year 2006.
                      [(D) Reports.--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--
                              [(i) not later than January 1, 2008,
                            an interim report that describes--
                                      [(I) the use of funds made
                                    available under this paragraph;
                                    and
                                      [(II) any progress made by
                                    using funds from each grant
                                    provided under this paragraph;
                                    and
                              [(ii) not later than January 1, 2009,
                            a final report that describes--
                                      [(I) the use of funds made
                                    available under this paragraph;
                                      [(II) any progress made by
                                    using funds from each grant
                                    provided under this paragraph;
                                      [(III) the impact of this
                                    paragraph on participation in
                                    the summer food service program
                                    for children authorized by this
                                    section; and
                                      [(IV) any recommendations by
                                    the Secretary concerning the
                                    activities of the service
                                    institutions receiving grants
                                    under this paragraph.
                      [(E) Funding.--
                              [(i) In general.--Out of any funds in
                            the Treasury not otherwise
                            appropriated, the Secretary of the
                            Treasury shall transfer to the
                            Secretary of Agriculture to carry out
                            this paragraph--
                                      [(I) on October 1, 2005,
                                    $2,000,000; and
                                      [(II) on October 1, 2006, and
                                    October 1, 2007, $1,000,000.
                              [(ii) Receipt and acceptance.--The
                            Secretary shall be entitled to receive,
                            shall accept, and shall use to carry
                            out this paragraph the funds
                            transferred under clause (i), without
                            further appropriation.
                              [(iii) Availability of funds.--Funds
                            transferred under clause (i) shall
                            remain available until expended.
                              [(iv) Reallocation.--The Secretary
                            may reallocate any amounts made
                            available to carry out this paragraph
                            that are not obligated or expended, as
                            determined by the Secretary.]
              (8) Streamlining.--
                      (A) Seamless summer.--Except as otherwise
                    determined by the Secretary, a service
                    institution that is a public or private
                    nonprofit school food authority may provide
                    summer or school vacation food service in
                    accordance with applicable provisions of law
                    governing the school lunch program established
                    under this Act or the school breakfast program
                    established under the Child Nutrition Act of
                    1966 (42 U.S.C. 1771 et seq.).
                      (B) Summer and cacfp at-risk streamlining.--
                              (i) In general.--Notwithstanding
                            subsections (b)(2) and (c)(1), in order
                            for States and service institutions to
                            operate more effectively through the
                            year, a State may elect to streamline
                            and simplify program operations and
                            requirements by reducing paperwork and
                            other administrative burdens, and
                            consolidating training, monitoring, and
                            other requirements, while retaining
                            appropriate measures of program
                            integrity. Such State election may
                            include the utilization of technical
                            assistance provided to the State under
                            clause (iv) and shall apply to service
                            institutions that--
                                      (I) are described in
                                    paragraphs (6) or (7);
                                      (II) provide care to at-risk
                                    school children (as defined in
                                    section 17(r)(2)), and may be
                                    eligible child care centers or
                                    homes (as defined under section
                                    17(a)(2)); and
                                      (III) are not public schools.
                              (ii) Streamlined reimbursement.--
                            States that demonstrate streamlined and
                            simplified program operations under
                            clause (i) for service institutions,
                            and that are selected by the Secretary
                            under clause (v), shall streamline
                            reimbursements for such service
                            institutions by providing
                            reimbursements for--
                                      (I) lunch and either
                                    breakfast or a supplement
                                    served to at-risk school
                                    children--
                                              (aa) during each day
                                            of operation during the
                                            months of May through
                                            September; and
                                              (bb) in the case of a
                                            service institution
                                            that provides meal
                                            service to such
                                            children who are not in
                                            school for a period
                                            during the school year
                                            due to a natural
                                            disaster, building
                                            repair, court order, or
                                            similar cause, at any
                                            time during such period
                                            in that school year;
                                            and
                                      (II) up to 1 meal and 1
                                    supplement served to at-risk
                                    school children during each day
                                    of operation outside of school
                                    hours during the regular or
                                    continuous school calendar,
                                    including after school,
                                    weekends, and school holidays.
                              (iii) Rate of reimbursement.--The
                            State shall reimburse service
                            institutions seeking reimbursement
                            under this subparagraph at a rate that
                            is consistent with section 17(r)(4)(B).
                              (iv) Technical assistance.--
                                      (I) In general.--Not later
                                    than December 31, 2016, the
                                    Secretary shall develop
                                    guidance and provide technical
                                    assistance for States and
                                    service institutions to assist
                                    in the implementation of this
                                    subparagraph, including by
                                    identifying areas of
                                    programmatic overlap in the
                                    program under this section and
                                    the child and adult care food
                                    program under section 17 in
                                    order for States to simplify
                                    the administration and
                                    oversight of each such program.
                                      (II) Guidance.--Such guidance
                                    shall include information on
                                    possible ways States may ensure
                                    participation under this
                                    subparagraph will lead to
                                    reduced paperwork and other
                                    administrative burdens,
                                    including recommendations for
                                    streamlined program
                                    applications, reporting
                                    requirements, inspections, and
                                    other areas of potential
                                    duplication, while retaining
                                    appropriate measures of program
                                    integrity.
                                      (III) Other states.--
                                    Information provided under this
                                    clause shall be provided in
                                    such a manner that any State
                                    may identify areas of
                                    programmatic overlap, and
                                    reduce paperwork and other
                                    burdens, even if such State has
                                    not yet been selected to
                                    provide reimbursements to
                                    service institutions in
                                    accordance with this
                                    subparagraph.
                              (v) Successful implementation.--
                                      (I) In general.--A State
                                    seeking to provide
                                    reimbursements in accordance
                                    this subparagraph shall
                                    demonstrate to the Secretary
                                    the ways in which the State has
                                    used the election under clause
                                    (i) to reduce paperwork and
                                    other administrative burdens
                                    while retaining appropriate
                                    measures of program integrity,
                                    which may include the
                                    utilization of technical
                                    assistance provided to the
                                    State under clause (iv).
                                      (II) Initial selection of
                                    states.--
                                              (aa) In general.--The
                                            Secretary shall select
                                            not more than 5 States
                                            to provide
                                            reimbursements in
                                            accordance with this
                                            subparagraph, beginning
                                            in May 2017, if such
                                            States have the
                                            capacity to effectively
                                            implement this
                                            subparagraph, as
                                            demonstrated by
                                            streamlining and
                                            simplifying program
                                            operations in
                                            accordance with
                                            subclause (I).
                                              (bb) Update.--When
                                            appropriate, but not
                                            later than May 31,
                                            2018, and consistent
                                            with subclause (V)(bb),
                                            the Secretary shall
                                            update the information
                                            under clause (iv).
                                      (III) Next selection of
                                    states.--
                                              (aa) In general.--If
                                            the Secretary
                                            determines that
                                            additional States have
                                            the capacity described
                                            in subclause (I) and
                                            additional best
                                            practices could be
                                            provided by further
                                            implementation of this
                                            subparagraph, the
                                            Secretary may select
                                            not more than 5 such
                                            States to provide
                                            reimbursements in
                                            accordance with this
                                            subparagraph beginning
                                            in October 2018.
                                              (bb) Update.--Not
                                            later than September
                                            30, 2019, and
                                            consistent with
                                            subclause (V)(bb), the
                                            Secretary shall update
                                            the information under
                                            clause (iv) to reflect
                                            the further
                                            implementation of this
                                            subparagraph.
                                      (IV) Additional selection of
                                    states.--The Secretary may
                                    select additional States to
                                    provide reimbursements in
                                    accordance with this
                                    subparagraph beginning in May
                                    2020, and each year thereafter,
                                    if such States have the
                                    capacity described in subclause
                                    (I).
                                      (V) Best practices.--
                                              (aa) In general.--As
                                            a condition of being
                                            selected under this
                                            clause, a State shall
                                            provide, in such time
                                            and in such manner as
                                            the Secretary may
                                            reasonably require,
                                            information to the
                                            Secretary regarding
                                            best practices of
                                            successful
                                            implementation of this
                                            subparagraph.
                                              (bb) Update.--The
                                            Secretary shall
                                            continue to
                                            periodically update the
                                            information under
                                            clause (iv) to include
                                            the best practices
                                            provided under item
                                            (aa) for continued
                                            successful
                                            implementation of this
                                            subparagraph.
              [(11)] (9) Outreach to eligible families.--
                      (A) In general.--The Secretary shall require
                    each State agency that administers the national
                    school lunch program under this Act to ensure
                    that, to the maximum extent practicable, school
                    food authorities participating in the school
                    lunch program under this Act cooperate with
                    participating service institutions to
                    distribute materials to inform families of--
                              (i) the availability and location of
                            summer food service program meals; and
                              (ii) the availability of reimbursable
                            breakfasts served under the school
                            breakfast program established by
                            section 4 of the Child Nutrition Act of
                            1966 (42 U.S.C. 1773).
                      (B) Inclusions.--Informational activities
                    carried out under subparagraph (A) may
                    include--
                              (i) the development or dissemination
                            of printed materials, to be distributed
                            to all school children or the families
                            of school children prior to the end of
                            the school year, that inform families
                            of the availability and location of
                            summer food service program meals;
                              (ii) the development or dissemination
                            of materials, to be distributed using
                            electronic means to all school children
                            or the families of school children
                            prior to the end of the school year,
                            that inform families of the
                            availability and location of summer
                            food service program meals; and
                              (iii) such other activities as are
                            approved by the applicable State agency
                            to promote the availability and
                            location of summer food service program
                            meals to school children and the
                            families of school children.
                      (C) Multiple state agencies.--If the State
                    agency administering the program under this
                    section is not the same State agency that
                    administers the school lunch program under this
                    Act, the 2 State agencies shall work
                    cooperatively to implement this paragraph.
              [(12) Summer food service support grants.--
                      [(A) In general.--The Secretary shall use
                    funds made available to carry out this
                    paragraph to award grants on a competitive
                    basis to State agencies to provide to eligible
                    service institutions--
                              [(i) technical assistance;
                              [(ii) assistance with site
                            improvement costs; or
                              [(iii) other innovative activities
                            that improve and encourage sponsor
                            retention.
                      [(B) Eligibility.--To be eligible to receive
                    a grant under this paragraph, a State agency
                    shall submit an application to the Secretary in
                    such manner, at such time, and containing such
                    information as the Secretary may require.
                      [(C) Priority.--In making grants under this
                    paragraph, the Secretary shall give priority
                    to--
                              [(i) applications from States with
                            significant low-income child
                            populations; and
                              [(ii) State plans that demonstrate
                            innovative approaches to retain and
                            support summer food service programs
                            after the expiration of the start-up
                            funding grants.
                      [(D) Use of funds.--A State and eligible
                    service institution may use funds made
                    available under this paragraph to pay for such
                    costs as the Secretary determines are necessary
                    to establish and maintain summer food service
                    programs.
                      [(E) Reallocation.--The Secretary may
                    reallocate any amounts made available to carry
                    out this paragraph that are not obligated or
                    expended, as determined by the Secretary.
                      [(F) Authorization of appropriations.--There
                    is authorized to be appropriated to carry out
                    this paragraph $20,000,000 for fiscal years
                    2011 through 2015.]
              (10) Temporary allowance for off-site consumption.--
                      (A) In general.--Beginning in May 2017, the
                    Secretary shall grant requests made by a State
                    to allow children who are participating in the
                    program but for whom an operation under
                    paragraph (12) is not available, to consume
                    meals away from a congregate feeding site when
                    the program is available to such children at
                    the site, but--
                              (i) the site is closed due to extreme
                            weather conditions;
                              (ii) violence or other public safety
                            concerns in the area temporarily
                            prevent children from traveling safely
                            to the site; or
                              (iii) other emergency circumstances,
                            as defined by the State, prevent access
                            to the site.
                      (B) Limitations.--In granting a request under
                    subparagraph (A), the Secretary shall ensure
                    that--
                              (i) allowances are issued by a State
                            only between the months of May through
                            September;
                              (ii) allowances are granted in the
                            most efficient and effective manner to
                            ensure programs and States can quickly
                            respond and adapt to the circumstances
                            described in clauses (i) through (iii)
                            of subparagraph (A); and
                              (iii) once an allowance is issued,
                            any meal in which a component is
                            offered but not served is not
                            reimbursed under subsection (b).
                      (C) State plan.--As part of the management
                    and administration plan described in subsection
                    (n), a State shall describe--
                              (i) the approval process, including
                            the timeline, the State would undertake
                            to issue an allowance;
                              (ii) standards for what circumstances
                            merit an allowance, how long an
                            allowance will last, and when an
                            allowance may be extended; and
                              (iii) how the program would operate
                            once an allowance is issued.
              (11) Off-site consumption.--
                      (A) In general.--Beginning in May 2017, a
                    State may elect for service institutions to
                    carry out an off-site consumption operation in
                    the State to provide summer food service
                    program meals to children eligible to
                    participate in the program that such children
                    may consume away from a congregate feeding
                    site.
                      (B) Availability.--The operation described in
                    subparagraph (A) shall be available to a child
                    described in subparagraph (A) only if the child
                    lives in an area that is eligible to
                    participate in the summer food service program,
                    but that is not currently being served, and
                    such area--
                              (i) is rural, as defined by the
                            State; or
                              (ii) is not rural, and is an area in
                            which more than 80 percent of students
                            are certified as eligible for free or
                            reduced price meals.
                      (C) Administration.--
                              (i) In general.--The following shall
                            apply to an operation described in
                            subparagraph (A):
                                      (I) The number of meals
                                    served to each child in a
                                    single meal service is limited
                                    to 2 meals, and the number of
                                    meals in a seven-day period
                                    shall be limited to 10 meals.
                                      (II) Any meal served shall
                                    meet the same standards for
                                    nutrition, safety, and quality
                                    as a meal served at a
                                    congregate feeding site.
                                      (III) Any meal in which a
                                    component is offered but not
                                    served shall not be reimbursed
                                    under subsection (b).
                                      (IV) Each State shall give
                                    priority to children who are
                                    living where congregate feeding
                                    sites are not accessible.
                                      (V) Nothing in this section
                                    shall be construed to allow
                                    congregate feeding sites to
                                    cease from operating in order
                                    to be replaced by off-site
                                    consumption operations under
                                    this paragraph.
                                      (VI) A State shall not--
                                              (aa) operate an off-
                                            site consumption
                                            operation
                                            simultaneously in the
                                            same service area with
                                            a congregate feeding
                                            site;
                                              (bb) use more than 10
                                            percent of funds
                                            received for
                                            administrative expenses
                                            to carry out this
                                            paragraph; or
                                              (cc) implement an
                                            off-site consumption
                                            operation in all
                                            service areas in the
                                            State.
                              (ii) State plan.--Each State choosing
                            to provide summer food service program
                            meals through an off-site consumption
                            operation under this paragraph shall
                            describe how the State plans to
                            implement the operation in the
                            management and administration plan in
                            subsection (n), which shall include
                            information on how the State will--
                                      (I) document operation,
                                    including implementation;
                                      (II) determine the method for
                                    selecting eligible areas and
                                    eligible service institutions
                                    to most effectively deliver
                                    summer food service program
                                    meals in the manner described
                                    in this paragraph;
                                      (III) design mechanisms by
                                    which households with children
                                    eligible to participate in the
                                    program could indicate a need
                                    for meal service through such
                                    an operation;
                                      (IV) develop an appropriate
                                    maintenance of effort
                                    requirement for service
                                    institutions currently
                                    operating congregate feeding
                                    sites;
                                      (V) develop requirements for
                                    implementing safety and
                                    security measures to ensure
                                    that safety and security
                                    through such an operation is
                                    equivalent to such measures at
                                    a congregate feeding site; and
                                      (VI) periodically reevaluate
                                    the potential for children to
                                    be served at a congregate
                                    feeding site.
      (b) Service Institutions.--
              (1) Payments.--
                      (A) In general.--Subject to subparagraph (B)
                    and in addition to amounts made available under
                    paragraph (3), payments to service institutions
                    shall be--
                              (i) $1.97 for each lunch and supper
                            served;
                              (ii) $1.13 for each breakfast served;
                            and
                              (iii) 46 cents for each meal
                            supplement served.
                      (B) Adjustments.--Amounts specified in
                    subparagraph (A) shall be adjusted on January
                    1, 1997, and each January 1 thereafter, to the
                    nearest lower cent increment to reflect changes
                    for the 12-month period ending the preceding
                    November 30 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
                    adjustment shall be based on the unrounded
                    adjustment for the prior 12-month period.
                      (C) Seamless summer reimbursements.--A
                    service institution described in subsection
                    (a)(8) shall be reimbursed for meals and meal
                    supplements in accordance with the applicable
                    provisions under this Act (other than
                    subparagraphs (A) and (B) of this paragraph and
                    paragraph (4)) and the Child Nutrition Act of
                    1966 (42 U.S.C. 1771 et seq.), as determined by
                    the Secretary.
      (2) Any service institution may only serve lunch and either
    breakfast or a meal supplement during each day of operation,
    except that any service institution that is a camp or that
    serves meals primarily to migrant children may serve up to 3
    meals, or 2 meals and 1 supplement, during each day of
    operation, if (A) the service institution has the
    administrative capability and the food preparation and food
    holding capabilities (where applicable) to serve more than one
    meal per day, and (B) the service period of different meals
    does not coincide or overlap.
              (3) Permanent operating agreements and budget for
            administrative costs.--
                      (A) Permanent operating agreements.--
                              (i) In general.--Subject to clauses
                            (ii) and (iii), to participate in the
                            program, a service institution that
                            meets the conditions of eligibility
                            described in this section and in
                            regulations promulgated by the
                            Secretary, shall be required to enter
                            into a permanent agreement with the
                            applicable State agency.
                              (ii) Amendments.--A permanent
                            agreement described in clause (i) may
                            be amended as necessary to ensure that
                            the service institution is in
                            compliance with all requirements
                            established in this section or by the
                            Secretary.
                              (iii) Termination.--A permanent
                            agreement described in clause (i)--
                                      (I) may be terminated for
                                    convenience by the service
                                    institution and State agency
                                    that is a party to the
                                    permanent agreement; and
                                      (II) shall be terminated--
                                              (aa) for cause by the
                                            applicable State agency
                                            in accordance with
                                            subsection (q) and with
                                            regulations promulgated
                                            by the Secretary; or
                                              (bb) on termination
                                            of participation of the
                                            service institution in
                                            the program.
                      (B) Budget for administrative costs.--
                              (i) In general.--When applying for
                            participation in the program, and not
                            less frequently than annually
                            thereafter, each service institution
                            shall submit a complete budget for
                            administrative costs related to the
                            program, which shall be subject to
                            approval by the State.
                              (ii) Amount.--Payment to service
                            institutions for administrative costs
                            shall equal the levels determined by
                            the Secretary pursuant to the study
                            required in paragraph (4).
      (4)(A) The Secretary shall conduct a study of the food
    service operations carried out under the program. Such study
    shall include, but shall not be limited to--
              (i) an evaluation of meal quality as related to
            costs; and
              (ii) a determination whether adjustments in the
            maximum reimbursement levels for food service operation
            costs prescribed in paragraph (1) of this subsection
            should be made, including whether different
            reimbursement levels should be established for self-
            prepared meals and vendored meals and which site-
            related costs, if any, should be considered as part of
            administrative costs.
      (B) The Secretary shall also study the administrative costs
    of service institutions participating in the program and shall
    thereafter prescribe maximum allowable levels for
    administrative payments that reflect the costs of such service
    institutions, taking into account the number of sites and
    children served, and such other factors as the Secretary
    determines appropriate to further the goals of efficient and
    effective administration of the program.
      (C) The Secretary shall report the results of such studies to
    Congress not later than December 1, 1977.
      (c)(1) Payments shall be made to service institutions only
    for meals served during the months of May through September,
    except in the case of service institutions that operate food
    service programs for children on school vacation at any time
    under a continuous school calendar or that provide meal service
    at non-school sites to children who are not in school for a
    period during the months of October through April due to a
    natural disaster, building repair, court order, or similar
    cause.
      (2) Children participating in National Youth Sports Programs
    operated by higher education institutions shall be eligible to
    participate in the program under this paragraph on showing
    residence in areas in which poor economic conditions exist or
    on the basis of income eligibility statements for children
    enrolled in the program.
      (d) Not later than April 15, May 15, and July 1 of each year,
    the Secretary shall forward to each State a letter of credit
    (advance program payment) that shall be available to each State
    for the payment of meals to be served in the month for which
    the letter of credit is issued. The amount of the advance
    program payment shall be an amount which the State
    demonstrates, to the satisfaction of the Secretary, to be
    necessary for advance program payments to service institutions
    in accordance with subsection (e) of this section. The
    Secretary shall also forward such advance program payments, by
    the first day of the month prior to the month in which the
    program will be conducted, to States that operate the program
    in months other than May through September. The Secretary shall
    forward any remaining payments due pursuant to subsection (b)
    of this section not later than sixty days following receipt of
    valid claims therefor.
      (e)(1) Not later than June 1, July 15, and August 15 of each
    year, or, in the case of service institutions that operate
    under a continuous school calendar, the first day of each month
    of operation, the State shall forward advance program payments
    to each service institution. The State shall not release the
    second month's advance program payment to any service
    institution (excluding a school) that has not certified that it
    has held training sessions for its own personnel and the site
    personnel with regard to program duties and responsibilities.
    No advance program payment may be made for any month in which
    the service institution will operate under the program for less
    than ten days.
      (2) The amount of the advance program payment for any month
    in the case of any service institution shall be an amount equal
    to (A) the total program payment for meals served by such
    service institution in the same calendar month of the preceding
    calendar year, (B) 50 percent of the amount established by the
    State to be needed by such service institution for meals if
    such service institution contracts with a food service
    management company, or (C) 65 percent of the amount established
    by the State to be needed by such service institution for meals
    if such service institution prepares its own meals, whichever
    amount is greatest: Provided, That the advance program payment
    may not exceed the total amount estimated by the State to be
    needed by such service institution for meals to be served in
    the month for which such advance program payment is made or
    $40,000, whichever is less, except that a State may make a
    larger advance program payment to such service institution
    where the State determines that such larger payment is
    necessary for the operation of the program by such service
    institution and sufficient administrative and management
    capability to justify a larger payment is demonstrated. The
    State shall forward any remaining payment due a service
    institution not later than seventy-five days following receipt
    of valid claims. If the State has reason to believe that a
    service institution will not be able to submit a valid claim
    for reimbursement covering the period for which an advance
    program payment has been made, the subsequent month's advance
    program payment shall be withheld until such time as the State
    has received a valid claim. Program payments advanced to
    service institutions that are not subsequently deducted from a
    valid claim for reimbursement shall be repaid upon demand by
    the State. Any prior payment that is under dispute may be
    subtracted from an advance program payment.
      (f)(1) Service institutions receiving funds under this
    section shall serve meals consisting of a combination of foods
    and meeting minimum nutritional standards prescribed by the
    Secretary on the basis of tested nutritional research.
      (2) The Secretary shall provide technical assistance to
    service institutions and private nonprofit organizations
    participating in the program to assist the institutions and
    organizations in complying with the nutritional requirements
    prescribed by the Secretary pursuant to this subsection.
      (3) Meals described in paragraph (1) shall be served without
    cost to children attending service institutions approved for
    operation under this section, except that, in the case of
    camps, charges may be made for meals served to children other
    than those who meet the eligibility requirements for free or
    reduced price meals in accordance with subsection (a)(5) of
    this section.
      (4) To assure meal quality, States shall, with the assistance
    of the Secretary, prescribe model meal specifications and model
    food quality standards, and ensure that all service
    institutions contracting for the preparation of meals with food
    service management companies include in their contracts menu
    cycles, local food safety standards, and food quality standards
    approved by the State.
      (5) Such contracts shall require (A) periodic inspections, by
    an independent agency or the local health department for the
    locality in which the meals are served, of meals prepared in
    accordance with the contract in order to determine bacteria
    levels present in such meals, and (B) conformance with
    standards set by local health authorities.
      (6) Such inspections and any testing resulting therefrom
    shall be in accordance with the practices employed by such
    local health authority.
              (7) Offer versus serve.--A school food authority
            participating as a service institution may permit a
            child 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.
      (g) The Secretary shall publish proposed regulations relating
    to the implementation of the program by November 1 of each
    fiscal year, final regulations by January 1 of each fiscal
    year, and guidelines, applications and handbooks by February 1
    of each fiscal year. In order to improve program planning, the
    Secretary may provide that service institutions be paid as
    startup costs not to exceed 20 percent of the administrative
    funds provided for in the administrative budget approved by the
    State under subsection (b)(3) of this section. Any payments
    made for startup costs shall be subtracted from amounts
    otherwise payable for administrative costs subsequently made to
    service institutions under subsection (b)(3) of this section.
      (h) Each service institution shall, insofar as practicable,
    use in its food service under the program foods designated from
    time to time by the Secretary as being in abundance. The
    Secretary is authorized to donate to States, for distribution
    to service institutions, food available under section 416 of
    the Agricultural Act of 1949, or purchased under section 32 of
    the Act of August 24, 1935 or section 709 of the Food and
    Agriculture Act of 1965. Donated foods may be distributed only
    to service institutions that can use commodities efficiently
    and effectively, as determined by the Secretary.
      (j) Expenditures of funds from State and local sources for
    the maintenance of food programs for children shall not be
    diminished as a result of funds received under this section.
      (k)(1) The Secretary shall pay to each State for its
    administrative costs incurred under this section in any fiscal
    year an amount equal to (A) 20 percent of the first $50,000 in
    funds distributed to that State for the program in the
    preceding fiscal year; (B) 10 percent of the next $100,000
    distributed to that State for the program in the preceding
    fiscal year; (C) 5 percent of the next $250,000 in funds
    distributed to that State for the program in the preceding
    fiscal year, and (D) 2\1/2\ percent of any remaining funds
    distributed to that State for the program in the preceding
    fiscal year: Provided, That such amounts may be adjusted by the
    Secretary to reflect changes in the size of that State's
    program since the preceding fiscal year.
      (2) The Secretary shall establish standards and effective
    dates for the proper, efficient, and effective administration
    of the program by the State. If the Secretary finds that the
    State has failed without good cause to meet any of the
    Secretary's standards or has failed without good cause to carry
    out the approved State management and administration plan under
    subsection (n) of this section, the Secretary may withhold from
    the State such funds authorized under this subsection as the
    Secretary determines to be appropriate.
      [(3) To provide]
      (3) Nutritional and food quality monitoring._
              (A) In general._To provide for adequate nutritional
            and food quality monitoring, and to further the
            implementation of the program, an additional amount,
            not to exceed the lesser of actual costs or 1 percent
            of program funds, shall be made available by the
            Secretary to States to pay for State or local health
            department inspections, and to reinspect facilities and
            deliveries to test meal quality.
              (B) Insufficient funds.--
                      (i) In general.--If funds provided under
                    subparagraph (A) are insufficient to pay for
                    State or local health department inspections,
                    and to reinspect facilities and deliveries to
                    test meal quality, as required under this Act
                    or the Child Nutrition Act of 1966 (42 U.S.C.
                    1771 et seq.), State agencies may elect to use
                    funds described in paragraph (1) for those
                    activities.
                      (ii) Limitation.--Funds described in clause
                    (i) shall not exceed the lesser of--
                              (I) actual costs; or
                              (II) 1 percent of program funds.
      (l)(1) Service institutions may contract on a competitive
    basis 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.
      (2) Each State may provide for the registration of food
    service management companies.
      (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.
      (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.
      (m) States and service institutions participating in programs
    under this section shall keep such accounts and records as may
    be necessary to enable the Secretary to determine whether there
    has been compliance with this section and the regulations
    issued hereunder. Such accounts and records shall be available
    at any reasonable time for inspection and audit by
    representatives of the Secretary and shall be preserved for
    such period of time, not in excess of five years, as the
    Secretary determines necessary.
      [(n) Each State desiring to participate in the program shall
    notify the Secretary by January 1 of each year of its intent to
    administer the program and shall submit for approval by
    February 15 a management and administration plan for the
    program for the fiscal year, which shall include, but not be
    limited to, (1) the State's administrative budget for the
    fiscal year, and the State's plans to comply with any standards
    prescribed by the Secretary under subsection (k) of this
    section; (2) the State's plans for use of program funds and
    funds from within the State to the maximum extent practicable
    to reach needy children; (3) the State's plans for providing
    technical assistance and training eligible service
    institutions; (4) the State's plans for monitoring and
    inspecting service institutions, feeding sites, and food
    service management companies and for ensuring that such
    companies do not enter into contracts for more meals than they
    can provide effectively and efficiently; (5) the State's plan
    for timely and effective action against program violators; and
    (6) the State's plan for ensuring fiscal integrity by auditing
    service institutions not subject to auditing requirements
    prescribed by the Secretary.]
      (n) State Plan.--Each State desiring to participate in the
    program shall notify the Secretary by January 1 of each year of
    its intent to administer the program and shall submit, by
    February 15, a management and administration plan for the
    program for the fiscal year, which shall include, at a
    minimum--
              (1) the State's administrative budget for the fiscal
            year; and
              (2) the State's plans for--
                      (A) use of program funds and additional State
                    or private funds to reach children with the
                    greatest need, to the maximum extent
                    practicable;
                      (B) strengthening the congregate feeding
                    model for program delivery, including a process
                    for identifying gaps in service and barriers to
                    access;
                      (C) administrative and fiscal plans for using
                    the allowance described in subsection (a)(10)
                    and, if applicable, the option described in
                    subsection (a)(11) to assist service
                    institutions in reaching children with the
                    greatest need;
                      (D) providing technical assistance and
                    training for eligible service institutions;
                      (E) monitoring and inspecting service
                    institutions, feeding sites, and food service
                    management companies and ensuring that such
                    companies do not enter into contracts for more
                    meals than they can provide effectively and
                    efficiently, and in compliance with the
                    program;
                      (F) timely and effective action against
                    program violators; and
                      (G) ensuring fiscal integrity by auditing
                    service institutions not subject to auditing
                    requirements prescribed by the Secretary.
      (o)(1) Whoever, in connection with any application,
    procurement, recordkeeping entry, claim for reimbursement, or
    other document or statement made in connection with the
    program, knowingly and willfully falsifies, conceals, or covers
    up by any trick, scheme, or device a material fact, or makes
    any false, fictitious, or fraudulent statements or
    representations, or makes or uses any false writing or document
    knowing the same to contain any false, fictitious, or
    fraudulent statement or entry, or whoever, in connection with
    the program, knowingly makes an opportunity for any person to
    defraud the United States, or does or omits to do any act with
    intent to enable any person to defraud the United States, shall
    be fined not more than $10,000 or imprisoned not more than five
    years, or both.
      (2) Whoever being a partner, officer, director, or managing
    agent connected in any capacity with any partnership,
    association, corporation, business, or organization, either
    public or private, that receives benefits under the program,
    knowingly or willfully embezzles, misapplies, steals, or
    obtains by fraud, false statement, or forgery, any benefits
    provided by this section or any money, funds, assets, or
    property derived from benefits provided by this section, shall
    be fined not more than $10,000 or imprisoned for not more than
    five years, or both (but, if the benefits, money, funds,
    assets, or property involved is not over $200, then the penalty
    shall be a fine or not more than $1,000 or imprisonment for not
    more than one year, or both).
      (3) If two or more persons conspire or collude to accomplish
    any act made unlawful under this subsection, and one or more of
    such persons to any act to effect the object of the conspiracy
    or collusion, each shall be fined not more than $10,000 or
    imprisoned for not more than five years, or both.
      (p)(1) In addition to the normal monitoring of organizations
    receiving assistance under this section, the Secretary shall
    establish a system under which the Secretary and the States
    shall monitor the compliance of private nonprofit organizations
    with the requirements of this section and with regulations
    issued to implement this section.
      (2) In the fiscal year 1990 and each succeeding fiscal year,
    the Secretary may reserve for purposes of carrying out
    paragraph (1) not more than \1/2\ of 1 percent of amounts
    appropriated for purposes of carrying out this section.
      (q) Termination and Disqualification of Participating
    Organizations.--
              (1) In general.--Each State agency shall follow the
            procedures established by the Secretary for the
            termination of participation of institutions under the
            program.
              (2) Fair hearing.--The procedures described in
            paragraph (1) shall include provision for a fair
            hearing and prompt determination for any service
            institution aggrieved by any action of the State agency
            that affects--
                      (A) the participation of the service
                    institution in the program; or
                      (B) the claim of the service institution for
                    reimbursement under this section.
              (3) List of disqualified institutions and
            individuals.--
                      (A) In general.--The Secretary shall maintain
                    a list of service institutions and individuals
                    that have been terminated or otherwise
                    disqualified from participation in the program
                    under the procedures established pursuant to
                    paragraph (1).
                      (B) Availability.--The Secretary shall make
                    the list available to States for use in
                    approving or renewing applications by service
                    institutions for participation in the program.
      (r) For the period beginning October 1, 1977, and ending
    September 30, [2015] 2021, 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 shall--
              (1) use funds available to carry out the provisions
            of section 32 of the Act of August 24, 1935 (7 U.S.C.
            612c) which are not expended or needed to carry out
            such provisions, to purchase (without regard to the
            provisions of existing law governing the expenditure of
            public funds) agricultural commodities and their
            products of the types customarily purchased under such
            section (which may include domestic seafood commodities
            and their products), for donation to maintain the
            annually programmed level of assistance for programs
            carried on under this Act, the Child Nutrition Act of
            1966, and title III of the Older Americans Act of 1965;
            and
              (2) if stocks of the Commodity Credit Corporation are
            not available, use the funds of such Corporation to
            purchase agricultural commodities and their products of
            the types customarily available under section 416 of
            the Agricultural Act of 1949 (7 U.S.C. 1431), for such
            donation.
      (b)(1) The Secretary shall maintain and continue to improve
    the overall nutritional quality of entitlement commodities
    provided to schools to assist the schools in improving the
    nutritional content of meals.
      (2) The Secretary shall--
              (A) require that nutritional content information
            labels be placed on packages or shipments of
            entitlement commodities provided to the schools; or
              (B) otherwise provide nutritional content information
            regarding the commodities provided to the schools.
      (c) The Secretary may use funds appropriated from the general
    fund of the Treasury to purchase agricultural commodities and
    their products of the types customarily purchased for donation
    under [section 311(a)(4) of the Older Americans Act of 1965 (42
    U.S.C. 3030(a)(4))] section 311(c)(4) of the Older Americans
    Act of 1965 (42 U.S.C. 3030a(c)(4)) or for cash payments in
    lieu of such donations under section 311(b)(1) of such Act [(42
    U.S.C. 3030(b)(1))] (42 U.S.C. 3030a(b)(1)). There are hereby
    authorized to be appropriated such sums as are necessary to
    carry out the purposes of this subsection.
      (d) In providing assistance under this Act and the Child
    Nutrition Act of 1966 for school lunch and breakfast programs,
    the Secretary shall establish procedures which will--
              (1) ensure that the views of local school districts
            and private nonprofit schools with respect to the type
            of commodity assistance needed in schools are fully and
            accurately reflected in reports to the Secretary by the
            State with respect to State commodity preferences and
            that such views are considered by the Secretary in the
            purchase and distribution of commodities and by the
            States in the allocation of such commodities among
            schools within the States;
              (2) solicit the views of States with respect to the
            acceptability of commodities;
              (3) ensure that the timing of commodity deliveries to
            States is consistent with State school year calendars
            and that such deliveries occur with sufficient advance
            notice;
              (4) provide for systematic review of the costs and
            benefits of providing commodities of the kind and
            quantity that are suitable to the needs of local school
            districts and private nonprofit schools; and
              (5) make available technical assistance on the use of
            commodities available under this Act and the Child
            Nutrition Act of 1966.
      (e) Each State agency that receives food assistance payments
    under this section for any school year shall consult with
    representatives of schools in the State that participate in the
    school lunch program with respect to the needs of such schools
    relating to the manner of selection and distribution of
    commodity assistance for such program.
      (f) Commodity only schools shall be eligible to receive
    donated commodities equal in value to the sum of the national
    average value of donated foods established under section 6(c)
    of this Act and the national average payment established under
    section 4 of this Act. Such schools shall be eligible to
    receive up to 5 cents per meal of such value in cash for
    processing and handling expenses related to the use of such
    commodities. Lunches served in such schools shall consist of a
    combination of foods which meet the minimum nutritional
    requirements prescribed by the Secretary under [section 9(a) of
    this Act] section 9(f), and shall [represent the four basic
    food groups, including] include a serving of fluid milk.
      (g)(1) As used in this subsection, the term ``eligible school
    district'' has the same meaning given such term in section
    1581(a) of the Food Security Act of 1985.
      (2) In accordance with the terms and conditions of section
    1581 of such Act, the Secretary shall permit an eligible school
    district to continue to receive assistance in the form of cash
    or commodity letters of credit assistance, in lieu of
    commodities, to carry out the school lunch program operated in
    the district.
      [(h) Notice of Irradiated Food Products.--
              [(1) In general.--The Secretary shall develop a
            policy and establish procedures for the purchase and
            distribution of irradiated food products in school
            meals programs under this Act and the Child Nutrition
            Act of 1966 (42 U.S.C. 1771 et seq.).
              [(2) Minimum requirements.--The policy and procedures
            shall ensure, at a minimum, that--
                      [(A) irradiated food products are made
                    available only at the request of States and
                    school food authorities;
                      [(B) reimbursements to schools for irradiated
                    food products are equal to reimbursements to
                    schools for food products that are not
                    irradiated;
                      [(C) States and school food authorities are
                    provided factual information on the science and
                    evidence regarding irradiation technology,
                    including--
                              [(i) notice that irradiation is not a
                            substitute for safe food handling
                            techniques; and
                              [(ii) any other similar information
                            determined by the Secretary to be
                            necessary to promote food safety in
                            school meals programs;
                      [(D) States and school food authorities are
                    provided model procedures for providing to
                    school food authorities, parents, and
                    students--
                              [(i) factual information on the
                            science and evidence regarding
                            irradiation technology; and
                              [(ii) any other similar information
                            determined by the Secretary to be
                            necessary to promote food safety in
                            school meals;
                      [(E) irradiated food products distributed to
                    the Federal school meals program under this Act
                    and the Child Nutrition Act of 1966 (42 U.S.C.
                    1771 et seq.) are labeled with a symbol or
                    other printed notice that--
                              [(i) indicates that the product was
                            irradiated; and
                              [(ii) is prominently displayed in a
                            clear and understandable format on the
                            container;
                      [(F) irradiated food products are not
                    commingled in containers with food products
                    that are not irradiated; and
                      [(G) schools that offer irradiated food
                    products are encouraged to offer alternatives
                    to irradiated food products as part of the meal
                    plan used by the schools.]

               *       *       *       *       *       *       *

                       ELECTION TO RECEIVE CASH PAYMENTS

      Sec. 16. (a) Notwithstanding any other provision of law,
    where a State phased out its commodity distribution facilities
    prior to June 30, 1974, such State may, for purposes of the
    programs authorized by this Act and the Child Nutrition Act of
    1966, elect to receive cash payments in lieu of donated foods.
    Where such an election is made, the Secretary shall make cash
    payments to such State in an amount equivalent in value to the
    donated foods that the State would otherwise have received if
    it had retained its commodity distribution facilities. The
    amount of cash payments in the case of lunches shall be
    governed by section 6(c) of this Act.
      (b) When such payments are made, the [State educational
    agency] State agency shall promptly and equitably disburse any
    cash it receives in lieu of commodities to eligible schools and
    institutions, and such disbursements shall be used by such
    schools and institutions to purchase United States agricultural
    commodities and other foods for their food service programs.

    SEC. 17. CHILD AND ADULT CARE FOOD PROGRAM.

      (a) Program Purpose, Grant Authority and Institution
    Eligibility.--
              (1) In general.--
                      (A) Program purpose.--
                              (i) Findings.--Congress finds that--
                                      (I) eating habits and other
                                    wellness-related behavior
                                    habits are established early in
                                    life; and
                                      (II) good nutrition and
                                    wellness are important
                                    contributors to the overall
                                    health of young children and
                                    essential to cognitive
                                    development.
                              (ii) Purpose.--The purpose of the
                            program authorized by this section is
                            to provide aid to child and adult care
                            institutions and family or group day
                            care homes for the provision of
                            nutritious foods that contribute to the
                            wellness, healthy growth, and
                            development of young children, and the
                            health and wellness of older adults and
                            chronically impaired disabled persons.
                      (B) Grant authority.--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.
              (2) Definition of institution.--In this section, the
            term ``institution'' means--
                      (A) any public or private nonprofit
                    organization providing nonresidential child
                    care or day care outside school hours for
                    school children, including any child care
                    center, settlement house, recreational center,
                    Head Start center, and institution providing
                    child care facilities for children with
                    disabilities;
                      (B) any other private organization providing
                    nonresidential child care or day care outside
                    school hours for school children, [if] if,
                    during the month preceding the date of
                    submission of the applicable initial
                    application or reapplication--
                              (i) at least 25 percent of the
                            children served by the organization
                            meet the income eligibility criteria
                            established under section 9(b) for free
                            or reduced price meals; or
                              (ii) the organization receives
                            compensation from amounts granted to
                            the States under title XX of the Social
                            Security Act (42 U.S.C. 1397 et seq.)
                            (but only if the organization receives
                            compensation under that title for at
                            least 25 percent of its enrolled
                            children or 25 percent of its licensed
                            capacity, whichever is less);
                      (C) any public or private nonprofit
                    organization acting as a sponsoring
                    organization for one or more of the
                    organizations described in subparagraph (A) or
                    (B) or for an adult day care center (as defined
                    in subsection (o)(2));
                      (D) any other private organization acting as
                    a sponsoring organization for, and that is part
                    of the same legal entity as, one or more
                    organizations that are--
                              (i) described in subparagraph (B); or
                              (ii) proprietary title XIX or title
                            XX centers (as defined in subsection
                            (o)(2));
                      (E) any public or private nonprofit
                    organization acting as a sponsoring
                    organization for one or more family or group
                    day care homes; [and]
                      (F) any emergency shelter (as defined in
                    subsection (t))[.];
                      (G) any public or licensed nonprofit private
                    residential child care institution (as defined
                    in subsection (v)(1)) that is not concurrently
                    receiving reimbursement under the school lunch
                    program under this Act or the school breakfast
                    program under the Child Nutrition Act of 1966
                    (42 U.S.C. 1771 et seq.); and
                      (H) any boarding school funded by the Bureau
                    of Indian Education that is not concurrently
                    receiving reimbursements under such school
                    lunch program or school breakfast program.
              (3) Age limit.--Except as provided in [subsection
            (r)] subsections (r) and (v), 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 disabilities).
              (4) Additional guidelines.--The Secretary may
            establish separate guidelines for institutions that
            provide care to school children outside of school
            hours.
              (5) Licensing.--In order to be eligible, an
            institution (except a school or family or group day
            care home sponsoring organization) or family or group
            day care home shall--
                      (A)(i) be licensed, or otherwise have
                    approval, by the appropriate Federal, State, or
                    local licensing authority; or
                      (ii) be in compliance with appropriate
                    procedures for renewing participation in the
                    program, as prescribed by the Secretary, and
                    not be the subject of information possessed by
                    the State indicating that the license of the
                    institution or home will not be renewed;
                      (B) if Federal, State, or local licensing or
                    approval is not available--
                              (i) meet any alternate approval
                            standards established by the
                            appropriate State or local governmental
                            agency; or
                              (ii) 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 the institution, meet State
                    or local health and safety standards.
              (6) Eligibility criteria.--No institution shall be
            eligible to participate in the program unless it
            satisfies the following criteria:
                      (A) accepts final administrative and
                    financial responsibility for management of an
                    effective food service;
                      (B) has not been seriously deficient in its
                    operation of the child and adult care food
                    program, or any other program under this Act or
                    the Child Nutrition Act of 1966, or has not
                    been determined to be ineligible to participate
                    in any other publicly funded program by reason
                    of violation of the requirements of the
                    program, for a period of time specified by the
                    Secretary;
                      (C)(i) will provide adequate supervisory and
                    operational personnel for overall monitoring
                    and management of the child care food program;
                    and
                      (ii) in the case of a sponsoring
                    organization, the organization shall employ an
                    appropriate number of monitoring personnel
                    based on the number and characteristics of
                    child care centers and family or group day care
                    homes sponsored by the organization, as
                    approved by the State (in accordance with
                    regulations promulgated by the Secretary), to
                    ensure effective oversight of the operations of
                    the child care centers and family or group day
                    care homes;
                      (D) in the case of a family or group day care
                    home sponsoring organization that employs more
                    than one employee, the organization does not
                    base payments to an employee of the
                    organization on the number of family or group
                    day care homes recruited;
                      (E) in the case of a sponsoring organization,
                    the organization has in effect a policy that
                    restricts other employment by employees that
                    interferes with the responsibilities and duties
                    of the employees of the organization with
                    respect to the program; and
                      (F) in the case of a sponsoring organization
                    that applies for initial participation in the
                    program on or after the date of the enactment
                    of this subparagraph and that operates in a
                    State that requires such institutions to be
                    bonded under State law, regulation, or policy,
                    the institution is bonded in accordance with
                    such law, regulation, or policy.
              (7) Duration of determination.--With respect to an
            institution described in paragraph (2)(B), an
            eligibility determination under this subsection shall
            remain in effect for a period of 4 months after the
            date such institution is approved by the State under
            subsection (d).
      (b) [For the fiscal year ending September 30, 1979, and for
    each subsequent fiscal year, the] The Secretary shall provide
    cash assistance to States for meals as provided in subsection
    (f) of this section, except that, in any fiscal year, the
    aggregate amount of assistance provided to a State by the
    Secretary under this section shall not exceed the sum of (1)
    the Federal funds provided by the State to participating
    institutions within the State for that fiscal year and (2) any
    funds used by the State under section 10 of the Child Nutrition
    Act of 1966.
      (c)(1) For purposes of this section, except as provided in
    subsection (f)(3), the national average payment rate for free
    lunches and suppers, the national average payment rate for
    reduced price lunches and suppers, and the national average
    payment rate for paid lunches and suppers shall be the same as
    the national average payment rates for free lunches, reduced
    price lunches, and paid lunches, respectively, under sections 4
    and 11 of this Act as appropriate (as adjusted pursuant to
    section 11(a) of this Act).
      (2) For purposes of this section, except as provided in
    subsection (f)(3), the national average payment rate for free
    breakfasts, the national average payment rate for reduced price
    breakfasts, and the national average payment rate for paid
    breakfasts shall be the same as the national average payment
    rates for free breakfasts, reduced price breakfasts, and paid
    breakfasts, respectively, under section 4(b) of the Child
    Nutrition Act of 1966 (as adjusted pursuant to section 11(a) of
    this Act).
      (3) For purposes of this section, except as provided in
    subsection (f)(3), the national average payment rate for free
    supplements shall be 30 cents, the national average payment
    rate for reduced price supplements shall be one-half the rate
    for free supplements, and the national average payment rate for
    paid supplements shall be 2.75 cents (as adjusted pursuant to
    section 11(a) of this Act).
      (4) Determinations with regard to eligibility for free and
    reduced price meals and supplements shall be made in accordance
    with the income eligibility guidelines for free lunches and
    reduced price lunches, respectively, under section 9 of this
    Act.
      (5) A child shall be considered automatically eligible for
    benefits under this section without further application or
    eligibility determination, if the child is enrolled as a
    participant in a Head Start program authorized under the Head
    Start Act (42 U.S.C. 9831 et seq.), on the basis of a
    determination that the child meets the eligibility criteria
    prescribed under section 645(a)(1)(B) of the Head Start Act (42
    U.S.C. 9840(a)(1)(B)).
      (6) A child who has not yet entered kindergarten shall be
    considered automatically eligible for benefits under this
    section without further application or eligibility
    determination if the child is enrolled as a participant in the
    Even Start program under part B of chapter 1 of title I of the
    Elementary and Secondary Education Act of 1965 (20 U.S.C. 2741
    et seq.).
      (d) Institution Approval and Applications.--
              (1) Institution approval.--
                      (A) Administrative capability.--Subject to
                    subparagraph (B) and except as provided in
                    subparagraph (C), the State agency shall
                    approve an institution that meets the
                    requirements of this section for participation
                    in the child and adult care food program if the
                    State agency determines that the institution--
                              (i) is financially viable;
                              (ii) is administratively capable of
                            operating the program (including
                            whether the sponsoring organization has
                            business experience and management
                            plans appropriate to operate the
                            program) described in the application
                            of the institution; and
                              (iii) has internal controls in effect
                            to ensure program accountability.
                      (B) Approval of private institutions.--
                              (i) In general.--In addition to the
                            requirements established by
                            subparagraph (A) and subject to clause
                            (ii), the State agency shall approve a
                            private institution that meets the
                            requirements of this section for
                            participation in the child and adult
                            care food program only if--
                                      (I) the State agency conducts
                                    a satisfactory visit to the
                                    institution before approving
                                    the participation of the
                                    institution in the program; and
                                      (II) the institution--
                                              (aa) has tax exempt
                                            status under the
                                            Internal Revenue Code
                                            of 1986;
                                              (bb) is operating a
                                            Federal program
                                            requiring nonprofit
                                            status to participate
                                            in the program; or
                                              (cc) is described in
                                            subsection (a)(2)(B).
                              (ii) Exception for family or group
                            day care homes.--Clause (i) shall not
                            apply to a family or group day care
                            home.
                      (C) Exception for certain sponsoring
                    organizations.--
                              (i) In general.--The State agency may
                            approve an eligible institution acting
                            as a sponsoring organization for one or
                            more family or group day care homes or
                            centers that, at the time of
                            application, is not participating in
                            the child and adult care food program
                            only if the State agency determines
                            that--
                                      (I) the institution meets the
                                    requirements established by
                                    subparagraphs (A) and (B); and
                                      (II) the participation of the
                                    institution will help to ensure
                                    the delivery of benefits to
                                    otherwise unserved family or
                                    group day care homes or centers
                                    or to unserved children in an
                                    area.
                              (ii) Criteria for selection.--The
                            State agency shall establish criteria
                            for approving an eligible institution
                            acting as a sponsoring organization for
                            one or more family or group day care
                            homes or centers that, at the time of
                            application, is not participating in
                            the child and adult care food program
                            for the purpose of determining if the
                            participation of the institution will
                            help ensure the delivery of benefits to
                            otherwise unserved family or group day
                            care homes or centers or to unserved
                            children in an area.
                      (D) Notification to applicants.--Not later
                    than 30 days after the date on which an
                    applicant institution files a completed
                    application with the State agency, the State
                    agency shall notify the applicant institution
                    whether the institution has been approved or
                    disapproved to participate in the child and
                    adult care food program.
                      (E) Permanent operating agreements.--
                              (i) In general.--Subject to clauses
                            (ii) and (iii), to participate in the
                            child and adult care food program, an
                            institution that meets the conditions
                            of eligibility described in this
                            subsection shall be required to enter
                            into a permanent agreement with the
                            applicable State agency.
                              (ii) Amendments.--A permanent
                            agreement described in clause (i) may
                            be amended as necessary to ensure that
                            the institution is in compliance with
                            all requirements established in this
                            section or by the Secretary.
                              (iii) Termination.--A permanent
                            agreement described in clause (i)--
                                      (I) may be terminated for
                                    convenience by the institution
                                    or State agency that is a party
                                    to the permanent agreement; and
                                      (II) shall be terminated--
                                              (aa) for cause by the
                                            applicable State agency
                                            in accordance with
                                            paragraph (5); or
                                              (bb) on termination
                                            of participation of the
                                            institution in the
                                            child and adult care
                                            food program.
              (2) Program applications.--
                      (A) In general.--The Secretary shall develop
                    a policy under which each institution providing
                    child care that participates in the program
                    under this section shall--
                              (i) submit to the State agency an
                            initial application to participate in
                            the program that meets all requirements
                            established by the Secretary by
                            regulation;
                              (ii) annually confirm to the State
                            agency that the institution, and any
                            facilities of the institution in which
                            the program is operated by a sponsoring
                            organization, is in compliance with
                            subsection (a)(5); and
                              (iii) annually submit to the State
                            agency any additional information
                            necessary to confirm that the
                            institution is in compliance with all
                            other requirements to participate in
                            the program, as established in this Act
                            and by the Secretary by regulation.
                      (B) Required reviews of sponsored
                    facilities.--
                              (i) In general.--The Secretary shall
                            develop a policy under which each
                            sponsoring organization participating
                            in the program under this section shall
                            conduct--
                                      (I) periodic unannounced site
                                    visits at not less than 3-year
                                    intervals to sponsored child
                                    and adult care centers and
                                    family or group day care homes
                                    to identify and prevent
                                    management deficiencies and
                                    fraud and abuse under the
                                    program; and
                                      (II) at least 1 scheduled
                                    site visit each year to
                                    sponsored child and adult care
                                    centers and family or group day
                                    care homes to identify and
                                    prevent management deficiencies
                                    and fraud and abuse under the
                                    program and to improve program
                                    operations.
                              (ii) Varied timing.--Sponsoring
                            organizations shall vary the timing of
                            unannounced reviews under clause (i)(I)
                            in a manner that makes the reviews
                            unpredictable to sponsored facilities.
                      (C) Required reviews of institutions.--The
                    Secretary shall develop a policy under which
                    each State agency shall conduct--
                              (i) at least 1 scheduled site visit
                            at not less than 3-year intervals to
                            each institution under the State agency
                            participating in the program under this
                            section--
                                      (I) to identify and prevent
                                    management deficiencies and
                                    fraud and abuse under the
                                    program; and
                                      (II) to improve program
                                    operations; and
                              (ii) more frequent reviews of any
                            institution that--
                                      (I) sponsors a significant
                                    share of the facilities
                                    participating in the program;
                                      (II) conducts activities
                                    other than the program
                                    authorized under this section;
                                      (III) has serious management
                                    problems, as identified in a
                                    prior review, or is at risk of
                                    having serious management
                                    problems; or
                                      (IV) meets such other
                                    criteria as are defined by the
                                    Secretary.
                      (D) Detection and deterrence of erroneous
                    payments and false claims.--
                              (i) In general.--The Secretary may
                            develop a policy to detect and deter,
                            and recover erroneous payments to, and
                            false claims submitted by,
                            institutions, sponsored child and adult
                            care centers, and family or group day
                            care homes participating in the program
                            under this section.
                              (ii) Block claims.--
                                      (I) Definition of block
                                    claim.--In this clause, the
                                    term ``block claim'' has the
                                    meaning given the term in
                                    section 226.2 of title 7, Code
                                    of Federal Regulations (or
                                    successor regulations).
                                      (II) Program edit checks.--
                                    The Secretary may not require
                                    any State agency, sponsoring
                                    organization, or other
                                    institution to perform edit
                                    checks or on-site reviews
                                    relating to the detection of
                                    block claims by any child care
                                    facility.
                                      (III) Allowance.--
                                    Notwithstanding subclause (II),
                                    the Secretary may require any
                                    State agency, sponsoring
                                    organization, or other
                                    institution to collect, store,
                                    and transmit to the appropriate
                                    entity information necessary to
                                    develop any other policy
                                    developed under clause (i).
              (3) Program information.--
                      (A) In general.--On enrollment of a child in
                    a sponsored child care center or family or
                    group day care home participating in the
                    program, the center or home (or its sponsoring
                    organization) shall provide to the child's
                    parents or guardians--
                              (i) information that describes the
                            program and its benefits; and
                              (ii) the name and telephone number of
                            the sponsoring organization of the
                            center or home and the State agency
                            involved in the operation of the
                            program.
                      (B) Form.--The information described in
                    subparagraph (A) shall be in a form and, to the
                    maximum extent practicable, language easily
                    understandable by the child's parents or
                    guardians.
              (4) Allowable administrative expenses for sponsoring
            organizations.--[In consultation]
                      (A) In general._In consultation with State
                    agencies and sponsoring organizations, the
                    Secretary shall develop, and provide for the
                    dissemination to State agencies and sponsoring
                    organizations of, a list of allowable
                    reimbursable administrative expenses for
                    sponsoring organizations under the program.
                      (B) Reports.--Each sponsoring organization
                    shall, on an annual basis, submit to the
                    applicable State agency a report that
                    describes, with respect to the preceding fiscal
                    year--
                              (i) the expenditures of program funds
                            by the sponsoring organization; and
                              (ii) the amount of meal
                            reimbursements retained by the
                            sponsoring organization for
                            administrative costs, if applicable.
              (5) Termination or suspension of participating
            organizations.--
                      (A) In general.--The Secretary shall
                    establish procedures for the termination of
                    participation by institutions and family or
                    group day care homes under the program.
                      (B) Standards.--Procedures established
                    pursuant to subparagraph (A) shall include
                    standards for terminating the participation of
                    an institution or family or group day care home
                    that--
                              (i) engages in unlawful practices,
                            falsifies information provided to the
                            State agency, or conceals a criminal
                            background; or
                              (ii) substantially fails to fulfill
                            the terms of its agreement with the
                            State agency.
                      (C) Corrective action.--Procedures
                    established pursuant to subparagraph (A)--
                              (i) shall require an entity described
                            in subparagraph (B) to undertake
                            corrective action; and
                              (ii) may require the immediate
                            suspension of operation of the program
                            by an entity described in subparagraph
                            (B), without the opportunity for
                            corrective action, if the State agency
                            determines that there is imminent
                            threat to the health or safety of a
                            participant at the entity or the entity
                            engages in any activity that poses a
                            threat to public health or safety.
                      (D) Hearing.--
                              (i) In general.--Except as provided
                            in clause (ii), an institution or
                            family or group day care home shall be
                            provided a fair hearing in accordance
                            with subsection (e)(1) prior to any
                            determination to terminate
                            participation by the institution or
                            family or group day care home under the
                            program.
                              (ii) Exception for false or
                            fraudulent claims.--
                                      (I) In general.--If a State
                                    agency determines that an
                                    institution has knowingly
                                    submitted a false or fraudulent
                                    claim for reimbursement, the
                                    State agency may suspend the
                                    participation of the
                                    institution in the program in
                                    accordance with this clause.
                                      (II) Requirement for
                                    review.--Prior to any
                                    determination to suspend
                                    participation of an institution
                                    under subclause (I), the State
                                    agency shall provide for an
                                    independent review of the
                                    proposed suspension in
                                    accordance with subclause
                                    (III).
                                      (III) Review procedure.--The
                                    review shall--
                                              (aa) be conducted by
                                            an independent and
                                            impartial official
                                            other than, and not
                                            accountable to, any
                                            person involved in the
                                            determination to
                                            suspend the
                                            institution;
                                              (bb) provide the
                                            State agency and the
                                            institution the right
                                            to submit written
                                            documentation relating
                                            to the suspension,
                                            including State agency
                                            documentation of the
                                            alleged false or
                                            fraudulent claim for
                                            reimbursement and the
                                            response of the
                                            institution to the
                                            documentation;
                                              (cc) require the
                                            reviewing official to
                                            determine, based on the
                                            review, whether the
                                            State agency has
                                            established, based on a
                                            preponderance of the
                                            evidence, that the
                                            institution has
                                            knowingly submitted a
                                            false or fraudulent
                                            claim for
                                            reimbursement;
                                              (dd) require the
                                            suspension to be in
                                            effect for not more
                                            than 120 calendar days
                                            after the institution
                                            has received
                                            notification of a
                                            determination of
                                            suspension in
                                            accordance with this
                                            clause; and
                                              (ee) require the
                                            State agency during the
                                            suspension to ensure
                                            that payments continue
                                            to be made to sponsored
                                            centers and family and
                                            group day care homes
                                            meeting the
                                            requirements of the
                                            program.
                                      (IV) Hearing.--A State agency
                                    shall provide an institution
                                    that has been suspended from
                                    participation in the program
                                    under this clause an
                                    opportunity for a fair hearing
                                    on the suspension conducted in
                                    accordance with subsection
                                    (e)(1).
                      (E) List of disqualified institutions and
                    individuals.--
                              (i) In general.--The Secretary shall
                            maintain a list of institutions,
                            sponsored family or group day care
                            homes, and individuals that have been
                            terminated or otherwise disqualified
                            from participation in the program.
                              (ii) Availability.--The Secretary
                            shall make the list available to State
                            agencies for use in approving or
                            renewing applications by institutions,
                            sponsored family or group day care
                            homes, and individuals for
                            participation in the program.
                      (F) Serious deficiency process.--
                              (i) In general.--Not later than 1
                            year after the date of the enactment of
                            the Improving Child Nutrition and
                            Education Act of 2016, the Secretary
                            shall review the serious deficiency
                            process for the program under this
                            section.
                              (ii) Review.--In carrying out clause
                            (i), the Secretary shall review the
                            processes for, and those involved in--
                                      (I) a finding of serious
                                    deficiency, including--
                                              (aa) what measures
                                            automatically result in
                                            a finding of serious
                                            deficiency; and
                                              (bb) how
                                            differentiation is
                                            being made between--
                                                      (AA) a
                                                    reasonable
                                                    margin of human
                                                    error and
                                                    systematic or
                                                    intentional
                                                    noncompliance;
                                                    and
                                                      (BB) State-
                                                    specific
                                                    requirements
                                                    and Federal law
                                                    and
                                                    regulations, if
                                                    applicable;
                                      (II) appeals and mediation in
                                    any case in which there is a
                                    finding of serious deficiency;
                                      (III) determining the
                                    circumstances under which a
                                    corrective action plan is
                                    acceptable;
                                      (IV) information sharing
                                    between Departments of
                                    Agriculture and Health and
                                    Human Services; and
                                      (V) termination and
                                    disqualification, including
                                    maintenance of the list under
                                    subparagraph (E).
                              (iii) Guidance and regulations.--
                                      (I) In general.--After
                                    conducting the review under
                                    this subparagraph, the
                                    Secretary shall use findings
                                    from such review to assist
                                    sponsoring organizations, State
                                    agencies, and the Food and
                                    Nutrition Service in ensuring a
                                    fair, uniform, and effective
                                    administration of the serious
                                    deficiency process, while
                                    retaining program integrity, by
                                    issuing guidance, and, as
                                    appropriate, regulations, on
                                    the following:
                                              (aa) Clarity on the
                                            different measures for
                                            noncompliance.
                                              (bb) Parameters for
                                            an appeals process to
                                            review a finding of
                                            serious deficiency or a
                                            determination that a
                                            corrective action plan
                                            is inadequate.
                                              (cc) Adequate
                                            timeframes under a
                                            corrective action plan
                                            for compliance that are
                                            consistent for all
                                            types of institutions
                                            participating in the
                                            program, including
                                            family or group day
                                            care homes.
                                      (II) Information sharing.--
                                    Within such guidance or
                                    regulation, and as soon as
                                    practicable, the Secretary
                                    shall ensure information about
                                    findings are shared with the
                                    Secretary of Health and Human
                                    Services as to allow for
                                    maximum health, safety,
                                    oversight, and monitoring of
                                    participating child care and
                                    Head Start facilities.
      (e) Hearings.--
              (1) In general.--Except as provided in paragraph (4),
            each State agency shall provide, in accordance with
            regulations promulgated by the Secretary, an
            opportunity for a fair hearing and a prompt
            determination to any institution aggrieved by any
            action of the State agency that affects--
                      (A) the participation of the institution in
                    the program authorized by this section; or
                      (B) the claim of the institution for
                    reimbursement under this section.
              (2) Reimbursement.--In accordance with paragraph (3),
            a State agency that fails to meet timeframes for
            providing an opportunity for a fair hearing and a
            prompt determination to any institution under paragraph
            (1) in accordance with regulations promulgated by the
            Secretary, shall pay, from non-Federal sources, all
            valid claims for reimbursement to the institution and
            the facilities of the institution during the period
            beginning on the day after the end of any regulatory
            deadline for providing the opportunity and making the
            determination and ending on the date on which a hearing
            determination is made.
              (3) Notice to state agency.--The Secretary shall
            provide written notice to a State agency at least 30
            days prior to imposing any liability for reimbursement
            under paragraph (2).
              (4) Federal audit determination.--A State is not
            required to provide a hearing to an institution
            concerning a State action taken on the basis of a
            Federal audit determination.
              (5) Secretarial hearing.--If a State does not provide
            a hearing to an institution concerning a State action
            taken on the basis of a Federal audit determination,
            the Secretary, on request, shall afford a hearing to
            the institution concerning the action.
      (f) State Disbursements to Institutions.--
              (1) In general.--
                      (A) Requirement.--Funds paid to any State
                    under this section shall be disbursed to
                    eligible institutions by the State under
                    agreements approved by the Secretary.
                    Disbursements to any institution shall be made
                    only for the purpose of assisting in providing
                    meals to children attending institutions, or in
                    family or group day care homes. Disbursement to
                    any institution shall not be dependent upon the
                    collection of moneys from participating
                    children. All valid claims from such
                    institutions shall be paid within forty-five
                    days of receipt by the State. The State shall
                    notify the institution within fifteen days of
                    receipt of a claim if the claim as submitted is
                    not valid because it is incomplete or
                    incorrect.
                      (B) Fraud or abuse.--
                              (i) In general.--The State may
                            recover funds disbursed under
                            subparagraph (A) to an institution if
                            the State determines that the
                            institution has engaged in fraud or
                            abuse with respect to the program or
                            has submitted an invalid claim for
                            reimbursement.
                              (ii) Payment.--Amounts recovered
                            under clause (i)--
                                      (I) may be paid by the
                                    institution to the State over a
                                    period of one or more years;
                                    and
                                      (II) shall not be paid from
                                    funds used to provide meals and
                                    supplements.
                              (iii) Hearing.--An institution shall
                            be provided a fair hearing in
                            accordance with subsection (e)(1) prior
                            to any determination to recover funds
                            under this subparagraph.
      (2)(A) Subject to subparagraph (B) of this paragraph, the
    disbursement for any fiscal year to any State for disbursement
    to institutions, other than family or group day care home
    sponsoring organizations, for meals provided under this section
    shall be equal to the sum of the products obtained by
    multiplying the total number of each type of meal (breakfast,
    lunch, or supper, or supplement) served in such institution in
    that fiscal year by the applicable national average payment
    rate for each such type of meal, as determined under subsection
    (c).
      (B) No reimbursement may be made to any institution under
    this paragraph, or to family or group day care home sponsoring
    organizations under paragraph (3) of this subsection, for more
    than two meals and one supplement per day per child, or in the
    case of an institution (but not in the case of a family or
    group day care home sponsoring organization), 2 meals and 1
    supplement per day per child, for children that are maintained
    in a child care setting for eight or more hours per day.
              (C) Limitation on administrative expenses for certain
            sponsoring organizations.--
                      (i) In general.--Except as provided in clause
                    (ii), a sponsoring organization of a day care
                    center may reserve not more than 15 percent of
                    the funds provided under paragraph (1) for the
                    administrative expenses of the organization.
                      (ii) Waiver.--A State may waive the
                    requirement in clause (i) with respect to a
                    sponsoring organization if the organization
                    provides justification to the State that the
                    organization requires funds in excess of 15
                    percent of the funds provided under paragraph
                    (1) to pay the administrative expenses of the
                    organization.
                      (iii) Carryover funds.--Not more than 10
                    percent of the amount reserved by sponsoring
                    organizations under clause (i) for
                    administrative expenses for a fiscal year may
                    remain available for obligation or expenditure
                    in the succeeding fiscal year for
                    administrative purposes.
              (3) Reimbursement of family or group day care home
            sponsoring organizations.--
                      (A) Reimbursement factor.--
                              (i) In general.--An institution that
                            participates in the program under this
                            section as a family or group day care
                            home sponsoring organization shall be
                            provided, for payment to a home
                            sponsored by the organization,
                            reimbursement factors in accordance
                            with this subparagraph for the cost of
                            obtaining and preparing food and
                            prescribed labor costs involved in
                            providing meals under this section.
                              (ii) Tier i family or group day care
                            homes.--
                                      (I) Definition of tier i
                                    family or group day care
                                    home.--In this paragraph, the
                                    term ``tier I family or group
                                    day care home'' means--
                                              (aa) a family or
                                            group day care home
                                            that is located in a
                                            geographic area, as
                                            defined by the
                                            Secretary based on
                                            census data, in which
                                            at least 50 percent of
                                            the children residing
                                            in the area are members
                                            of households whose
                                            incomes meet the income
                                            eligibility guidelines
                                            for free or reduced
                                            price meals under
                                            section 9;
                                              (bb) a family or
                                            group day care home
                                            that is located in an
                                            area served by a school
                                            enrolling 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
                                            (42 U.S.C. 1771 et
                                            seq.); or
                                              (cc) a family or
                                            group day care home
                                            that is operated by a
                                            provider whose
                                            household meets the
                                            income eligibility
                                            guidelines for free or
                                            reduced price meals
                                            under section 9 and
                                            whose income is
                                            verified by the
                                            sponsoring organization
                                            of the home under
                                            regulations established
                                            by the Secretary.
                                      (II) Reimbursement.--Except
                                    as provided in subclause (III),
                                    a tier I family or group day
                                    care home shall be provided
                                    reimbursement factors under
                                    this clause without a
                                    requirement for documentation
                                    of the costs described in
                                    clause (i), except that
                                    reimbursement shall not be
                                    provided under this subclause
                                    for meals or supplements served
                                    to the children of a person
                                    acting as a family or group day
                                    care home provider unless the
                                    children meet the income
                                    eligibility guidelines for free
                                    or reduced price meals under
                                    section 9.
                                      (III) Factors.--Except as
                                    provided in subclause (IV), the
                                    reimbursement factors applied
                                    to a home referred to in
                                    subclause (II) shall be the
                                    factors in effect on July 1,
                                    1996.
                                      (IV) Adjustments.--The
                                    reimbursement factors under
                                    this subparagraph shall be
                                    adjusted on July 1, 1997, and
                                    each July 1 thereafter, to
                                    reflect changes in the Consumer
                                    Price Index for food at home
                                    for the most recent 12-month
                                    period for which the data are
                                    available. The reimbursement
                                    factors under this subparagraph
                                    shall be rounded to the nearest
                                    lower cent increment and based
                                    on the unrounded adjustment in
                                    effect on June 30 of the
                                    preceding school year.
                              (iii) Tier ii family or group day
                            care homes.--
                                      (I) In general.--
                                              (aa) Factors.--Except
                                            as provided in
                                            subclause (II), with
                                            respect to meals or
                                            supplements served
                                            under this clause by a
                                            family or group day
                                            care home that does not
                                            meet the criteria set
                                            forth in clause
                                            (ii)(I), the
                                            reimbursement factors
                                            shall be 95 cents for
                                            lunches and suppers, 27
                                            cents for breakfasts,
                                            and 13 cents for
                                            supplements.
                                              (bb) Adjustments.--
                                            The factors shall be
                                            adjusted on July 1,
                                            1997, and each July 1
                                            thereafter, to reflect
                                            changes in the Consumer
                                            Price Index for food at
                                            home for the most
                                            recent 12-month period
                                            for which the data are
                                            available. The
                                            reimbursement factors
                                            under this item shall
                                            be rounded down to the
                                            nearest lower cent
                                            increment and based on
                                            the unrounded
                                            adjustment for the
                                            preceding 12-month
                                            period.
                                              (cc) Reimbursement.--
                                            A family or group day
                                            care home shall be
                                            provided reimbursement
                                            factors under this
                                            subclause without a
                                            requirement for
                                            documentation of the
                                            costs described in
                                            clause (i), except that
                                            reimbursement shall not
                                            be provided under this
                                            subclause for meals or
                                            supplements served to
                                            the children of a
                                            person acting as a
                                            family or group day
                                            care home provider
                                            unless
                                            the children meet the
                                            income eligibility
                                            guidelines for free or
                                            reduced price meals
                                            under section 9.
                                      (II) Other factors.--A family
                                    or group day care home that
                                    does not meet the criteria set
                                    forth in clause (ii)(I) may
                                    elect to be provided
                                    reimbursement factors
                                    determined in accordance with
                                    the following requirements:
                                              (aa) Children
                                            eligible for free or
                                            reduced price meals.--
                                            In the case of meals or
                                            supplements served
                                            under this subsection
                                            to children who are
                                            members of households
                                            whose incomes meet the
                                            income eligibility
                                            guidelines for free or
                                            reduced price meals
                                            under section 9, the
                                            family or group day
                                            care home shall be
                                            provided reimbursement
                                            factors set by the
                                            Secretary in accordance
                                            with clause (ii)(III).
                                              (bb) Ineligible
                                            children.--In the case
                                            of meals or supplements
                                            served under this
                                            subsection to children
                                            who are members of
                                            households whose
                                            incomes do not meet the
                                            income eligibility
                                            guidelines, the family
                                            or group day care home
                                            shall be provided
                                            reimbursement factors
                                            in accordance with
                                            subclause (I).
                                      (III) Information and
                                    determinations.--
                                              (aa) In general.--If
                                            a family or group day
                                            care home elects to
                                            claim the factors
                                            described in subclause
                                            (II), the family or
                                            group day care home
                                            sponsoring organization
                                            serving the home shall
                                            collect the necessary
                                            income information, as
                                            determined by the
                                            Secretary, from any
                                            parent or other
                                            caretaker to make the
                                            determinations
                                            specified in subclause
                                            (II) and shall make the
                                            determinations in
                                            accordance with rules
                                            prescribed by the
                                            Secretary.
                                              (bb) Categorical
                                            eligibility.--In making
                                            a determination under
                                            item (aa), a family or
                                            group day care home
                                            sponsoring organization
                                            may consider a child
                                            participating in or
                                            subsidized under, or a
                                            child with a parent
                                            participating in or
                                            subsidized under, a
                                            federally or State
                                            supported child care or
                                            other benefit program
                                            with an income
                                            eligibility limit that
                                            does not exceed the
                                            eligibility standard
                                            for free or reduced
                                            price meals under
                                            section 9 to be a child
                                            who is a member of a
                                            household whose income
                                            meets the income
                                            eligibility guidelines
                                            under section 9.
                                              (cc) Factors for
                                            children only.--A
                                            family or group day
                                            care home may elect to
                                            receive the
                                            reimbursement factors
                                            prescribed under clause
                                            (ii)(III) solely for
                                            the children
                                            participating in a
                                            program referred to in
                                            item (bb) if the home
                                            elects not to have
                                            income statements
                                            collected from parents
                                            or other caretakers.
                                              (dd) Transmission of
                                            income information by
                                            sponsored family or
                                            group day care homes.--
                                            If a family or group
                                            day care home elects to
                                            be provided
                                            reimbursement factors
                                            described in subclause
                                            (II), the family or
                                            group day care home may
                                            assist in the
                                            transmission of
                                            necessary household
                                            income information to
                                            the family or group day
                                            care home sponsoring
                                            organization in
                                            accordance with the
                                            policy described in
                                            item (ee).
                                              (ee) Policy.--The
                                            Secretary shall develop
                                            a policy under which a
                                            sponsored family or
                                            group day care home
                                            described in item (dd)
                                            may, under terms and
                                            conditions specified by
                                            the Secretary and with
                                            the written consent of
                                            the parents or
                                            guardians of a child in
                                            a family or group day
                                            care home participating
                                            in the program, assist
                                            in the transmission of
                                            the income information
                                            of the family to the
                                            family or group day
                                            care home sponsoring
                                            organization.
                                      (IV) Simplified meal counting
                                    and reporting procedures.--The
                                    Secretary shall prescribe
                                    simplified meal counting and
                                    reporting procedures for use by
                                    a family or group day care home
                                    that elects to claim the
                                    factors under subclause (II)
                                    and by a family or group day
                                    care home sponsoring
                                    organization that sponsors the
                                    home. The procedures the
                                    Secretary prescribes may
                                    include 1 or more of the
                                    following:
                                              (aa) Setting an
                                            annual percentage for
                                            each home of the number
                                            of meals served that
                                            are to be reimbursed in
                                            accordance with the
                                            reimbursement factors
                                            prescribed under clause
                                            (ii)(III) and an annual
                                            percentage of the
                                            number of meals served
                                            that are to be
                                            reimbursed in
                                            accordance with the
                                            reimbursement factors
                                            prescribed under
                                            subclause (I), based on
                                            the family income of
                                            children enrolled in
                                            the home in a specified
                                            month or other period.
                                              (bb) Placing a home
                                            into 1 of 2 or more
                                            reimbursement
                                            categories annually
                                            based on the percentage
                                            of children in the home
                                            whose households have
                                            incomes that meet the
                                            income eligibility
                                            guidelines under
                                            section 9, with each
                                            such reimbursement
                                            category carrying a set
                                            of reimbursement
                                            factors such as the
                                            factors prescribed
                                            under clause (ii)(III)
                                            or subclause (I) or
                                            factors established
                                            within the range of
                                            factors prescribed
                                            under clause (ii)(III)
                                            and subclause (I).
                                              (cc) Such other
                                            simplified procedures
                                            as the Secretary may
                                            prescribe.
                                      (V) Minimum verification
                                    requirements.--The Secretary
                                    may establish any minimum
                                    verification requirements that
                                    are necessary to carry out this
                                    clause.
                      (B) Administrative funds.--
                              (i) In general.--In addition to
                            reimbursement factors described in
                            subparagraph (A), a family or group day
                            care home sponsoring organization shall
                            receive reimbursement for the
                            administrative expenses of the
                            sponsoring organization in an amount
                            that is not less than the product
                            obtained each month by multiplying--
                                      (I) the number of family and
                                    group day care homes of the
                                    sponsoring organization
                                    submitting a claim for
                                    reimbursement during the month;
                                    by
                                      (II) the appropriate
                                    administrative rate determined
                                    by the Secretary.
                              (ii) Annual adjustment.--The
                            administrative reimbursement levels
                            specified in clause (i) shall be
                            adjusted July 1 of each year to reflect
                            changes in the Consumer Price Index for
                            All Urban Consumers published by the
                            Bureau of Labor Statistics of the
                            Department of Labor for the most recent
                            12-month period for which such data are
                            available.
                              (iii) Carryover funds.--The Secretary
                            shall develop procedures under which
                            not more than 10 percent of the amount
                            made available to sponsoring
                            organizations under this section for
                            administrative expenses for a fiscal
                            year may remain available for
                            obligation or expenditure in the
                            succeeding fiscal year.
      [(C)(i) Reimbursement for administrative expenses shall also
    include start-up funds to finance the administrative expenses
    for such institutions to initiate successful operation under
    the program and expansion funds to finance the administrative
    expenses for such institutions to expand into low-income or
    rural areas. Institutions that have received start-up funds may
    also apply at a later date for expansion funds. Such start-up
    funds and expansion funds shall be in addition to other
    reimbursement to such institutions for administrative expenses.
    Start-up funds and expansion funds shall be payable to enable
    institutions satisfying the criteria of subsection (d) of this
    section, and any other standards prescribed by the Secretary,
    to develop an application for participation in the program as a
    family or group day care home sponsoring organization or to
    implement the program upon approval of the application. Such
    start-up funds and expansion funds shall be payable in
    accordance with the procedures prescribed by the Secretary. The
    amount of start-up funds and expansion funds payable to an
    institution shall be not less than the institution's
    anticipated reimbursement for administrative expenses under the
    program for one month and not more than the institution's
    anticipated reimbursement for administrative expenses under the
    program for two months.
      [(ii) Funds for administrative expenses may be used by family
    or group day care home sponsoring organizations assist
    unlicensed family or group day care homes in becoming
    licensed.]
                      [(D)] (C) Limitations on ability of family or
                    group day care homes to transfer sponsoring
                    organizations.--
                              (i) In general.--Subject to clause
                            (ii), a State agency shall limit the
                            ability of a family or group day care
                            home to transfer from a sponsoring
                            organization to another sponsoring
                            organization more frequently than once
                            a year.
                              (ii) Good cause.--The State agency
                            may permit or require a family or group
                            day care home to transfer from a
                            sponsoring organization to another
                            sponsoring organization more frequently
                            than once a year for good cause (as
                            determined by the State agency),
                            including circumstances in which the
                            sponsoring organization of the family
                            or group day care home ceases to
                            participate in the child and adult care
                            food program.
                      [(E)] (D) Provision of data to family or
                    group day care home sponsoring organizations.--
                              (i) Census data.--The Secretary shall
                            provide to each State agency
                            administering a child and adult care
                            food program under this section data
                            from the most recent decennial census
                            survey or other appropriate census
                            survey for which the data are available
                            showing which areas in the State meet
                            the requirements of subparagraph
                            (A)(ii)(I)(aa). The State agency shall
                            provide the data to family or group day
                            care home sponsoring organizations
                            located in the State.
                              (ii) School data.--
                                      (I) In general.--A State
                                    agency administering the school
                                    lunch program under this Act or
                                    the school breakfast program
                                    under the Child Nutrition Act
                                    of 1966 (42 U.S.C. 1771 et
                                    seq.) shall provide to approved
                                    family or group day care home
                                    sponsoring organizations a list
                                    of schools serving elementary
                                    school children in the State in
                                    which not less than \1/2\ of
                                    the children enrolled are
                                    certified to receive free or
                                    reduced price meals. The State
                                    agency shall collect the data
                                    necessary to create the list
                                    annually and provide the list
                                    on a timely basis to any
                                    approved family or group day
                                    care home sponsoring
                                    organization that requests the
                                    list.
                                      (II) Use of data from
                                    preceding school year.--In
                                    determining for a fiscal year
                                    or other annual period whether
                                    a home qualifies as a tier I
                                    family or group day care home
                                    under subparagraph (A)(ii)(I),
                                    the State agency administering
                                    the program under this section,
                                    and a family or group day care
                                    home sponsoring organization,
                                    shall use the most current
                                    available data at the time of
                                    the determination.
                              (iii) Duration of determination.--For
                            purposes of this section, a
                            determination that a family or group
                            day care home is located in an area
                            that qualifies the home as a tier I
                            family or group day care home (as the
                            term is defined in subparagraph
                            (A)(ii)(I)), shall be in effect for 5
                            years (unless the determination is made
                            on the basis of census data, in which
                            case the determination shall remain in
                            effect until more recent census data
                            are available) unless the State agency
                            determines that the area in which the
                            home is located no longer qualifies the
                            home as a tier I family or group day
                            care home.
      (4) By the first day of each month of operation, the State
    may provide advance payments for the month to each approved
    institution in an amount that reflects the full level of valid
    claims customarily received from such institution for one
    month's operation. In the case of a newly participating
    institution, the amount of the advance shall reflect the
    State's best estimate of the level of valid claims such
    institutions will submit. If the State has reason to believe
    that an institution will not be able to submit a valid claim
    covering the period for which such an advance has been made,
    the subsequent month's advance payment shall be withheld until
    the State receives a valid claim. Payments advanced to
    institutions that are not subsequently deducted from a valid
    claim for reimbursement shall be repaid upon demand by the
    State. Any prior payment that is under dispute may be
    subtracted from an advance payment.
      (g) Nutritional Requirements for Meals and Snacks Served in
    Institutions and Family or Group Day Care Homes.--
              (1) Definition of dietary guidelines.--In this
            subsection, the term ``Dietary Guidelines'' means the
            Dietary Guidelines for Americans published under
            section 301 of the National Nutrition Monitoring and
            Related Research Act of 1990 (7 U.S.C. 5341).
              (2) Nutritional requirements.--
                      (A) In general.--Except as provided in
                    subparagraph (C), reimbursable meals and snacks
                    served by institutions, family or group day
                    care homes, and sponsored centers participating
                    in the program under this section shall consist
                    of a combination of foods that meet minimum
                    nutritional requirements prescribed by the
                    Secretary on the basis of tested nutritional
                    research.
                      (B) Conformity with the dietary guidelines
                    and authoritative science.--
                              (i) In general.--Not less frequently
                            than once every 10 years, the Secretary
                            shall review and, as appropriate,
                            update requirements for meals served
                            under the program under this section to
                            ensure that the meals--
                                      (I) are consistent with the
                                    goals of the most recent
                                    Dietary Guidelines; and
                                      (II) promote the health of
                                    the population served by the
                                    program authorized under this
                                    section, as indicated by the
                                    most recent relevant nutrition
                                    science and appropriate
                                    authoritative scientific agency
                                    and organization
                                    recommendations.
                              (ii) Cost review.--The review
                            required under clause (i) shall include
                            a review of the cost to child care
                            centers and group or family day care
                            homes resulting from updated
                            requirements for meals and snacks
                            served under the program under this
                            section.
                              (iii) Regulations.--Not later than 18
                            months after the completion of the
                            review of the meal pattern under clause
                            (i), the Secretary shall promulgate
                            proposed regulations to update the meal
                            patterns for meals and snacks served
                            under the program under this section.
                      (C) Exceptions.--
                              (i) Special dietary needs.--The
                            minimum nutritional requirements
                            prescribed under subparagraph (A) shall
                            not prohibit institutions, family or
                            group day care homes, and sponsored
                            centers from substituting foods to
                            accommodate the medical or other
                            special dietary needs of individual
                            participants.
                              (ii) Exempt institutions.--The
                            Secretary may elect to waive all or
                            part of the requirements of this
                            subsection for emergency shelters
                            participating in the program under this
                            section.
              (3) Meal service.--Institutions, family or group day
            care homes, and sponsored centers shall ensure that
            reimbursable meal service contributes to the
            development and socialization of enrolled children by
            providing that food is not used as a punishment or
            reward.
              (4) Fluid milk.--
                      (A) In general.--If an institution, family or
                    group day care home, or sponsored center
                    provides fluid milk as part of a reimbursable
                    meal or supplement, the institution, family or
                    group day care home, or sponsored center shall
                    provide the milk in accordance with the most
                    recent version of the Dietary Guidelines.
                      (B) Milk substitutes.--In the case of
                    children who cannot consume fluid milk due to
                    medical or other special dietary needs other
                    than a disability, an institution, family or
                    group day care home, or sponsored center may
                    substitute for the fluid milk required in meals
                    served, a nondairy beverage that--
                              (i) is nutritionally equivalent to
                            fluid milk; and
                              (ii) meets nutritional standards
                            established by the Secretary,
                            including, among other requirements
                            established by the Secretary,
                            fortification of calcium, protein,
                            vitamin A, and vitamin D to levels
                            found in cow's milk.
                      (C) Approval.--
                              (i) In general.--A substitution
                            authorized under subparagraph (B) may
                            be made--
                                      (I) at the discretion of and
                                    on approval by the
                                    participating day care
                                    institution; and
                                      (II) if the substitution is
                                    requested by written statement
                                    of a medical authority, or by
                                    the parent or legal guardian of
                                    the child, that identifies the
                                    medical or other special
                                    dietary need that restricts the
                                    diet of the child.
                              (ii) Exception.--An institution,
                            family or group day care home, or
                            sponsored center that elects to make a
                            substitution authorized under this
                            paragraph shall not be required to
                            provide beverages other than beverages
                            the State has identified as acceptable
                            substitutes.
                      (D) Excess expenses borne by institution.--A
                    participating institution, family or group day
                    care home, or sponsored center shall be
                    responsible for any expenses that--
                              (i) are incurred by the institution,
                            family or group day care home, or
                            sponsored center to provide
                            substitutions under this paragraph; and
                              (ii) are in excess of expenses
                            covered under reimbursements under this
                            Act.
              (5) Nondiscrimination policy.--No physical
            segregation or other discrimination against any person
            shall be made because of the inability of the person to
            pay, nor shall there be any overt identification of any
            such person by special tokens or tickets, different
            meals or meal service, announced or published lists of
            names, or other means.
              [(6) Use of abundant and donated foods.--To the
            maximum extent practicable, each institution shall use
            in its food service foods that are--
                      [(A) designated from time to time by the
                    Secretary as being in abundance, either
                    nationally or in the food service area; or
                      [(B) donated by the Secretary.]
              (6) Use of donated foods.--To the maximum extent
            practicable, each institution shall use in its food
            service foods that are donated by the Secretary.
      (h)(1)(A) The Secretary shall donate agricultural commodities
    produced in the United States for use in institutions
    participating in the child care food program under this
    section.
      (B) The value of the commodities donated under subparagraph
    (A) (or cash in lieu of commodities) to each State for each
    school year shall be, at a minimum, the amount obtained by
    multiplying the number of lunches and suppers served in
    participating institutions in that State during the preceding
    school year by the rate for commodities or cash in lieu of
    commodities established under section 6(c) for the school year
    concerned.
      (C) After the end of each school year, the Secretary shall--
              (i) reconcile the number of lunches and suppers
            served in participating institutions in each State
            during such school year with the number of lunches and
            suppers served by participating institutions in each
            State during the preceding school year; and
              (ii) based on such reconciliation, increase or reduce
            subsequent commodity assistance or cash in lieu of
            commodities provided to each State.
      (D) Any State receiving assistance under this section for
    institutions participating in the child care food program may,
    upon application to the Secretary, receive cash in lieu of some
    or all of the commodities to which it would otherwise be
    entitled under this subsection. In determining whether to
    request cash in lieu of commodities, the State shall base its
    decision on the preferences of individual participating
    institutions within the State, unless this proves impracticable
    due to the small number of institutions preferring donated
    commodities.
                      (E) Engagement with state and local
                    agencies.--
                              (i) In general.--Subject to clause
                            (ii), institutions participating in the
                            program under this section may engage
                            with State agencies and local
                            educational agencies to use existing
                            infrastructure to enhance the use of,
                            and increase access to, donated
                            commodities.
                              (ii) Effect of subparagraph.--Nothing
                            in this subparagraph shall compel a
                            local educational agency unwillingly to
                            serve any institution participating in
                            the program under this section.
      (2) The Secretary is authorized to provide agricultural
    commodities obtained by the Secretary under the provisions of
    the Agricultural Act of 1949 (7 U.S.C. 1421 et seq.) and
    donated under the provisions of section 416 of such Act, to the
    Department of Defense for use by its institutions providing
    child care services, when such commodities are in excess of the
    quantities needed to meet the needs of all other child
    nutrition programs, domestic and foreign food assistance and
    export enhancement programs. The Secretary shall require
    reimbursement from the Department of Defense for the costs, or
    some portion thereof, of delivering such commodities to
    overseas locations, unless the Secretary determines that it is
    in the best interest of the program that the Department of
    Agriculture shall assume such costs.
      (i) Audits.--
              (1) Disregards.--
                      (A) In general.--Subject to subparagraph (B),
                    in conducting management evaluations, reviews,
                    or audits under this section, the Secretary or
                    a State agency may disregard any overpayment to
                    an institution for a fiscal year if the total
                    overpayment to the institution for the fiscal
                    year does not exceed an amount that is
                    consistent with the disregards allowed in other
                    programs under this Act and recognizes the cost
                    of collecting small claims, as determined by
                    the Secretary.
                      (B) Criminal or fraud violations.--In
                    carrying out this paragraph, the Secretary and
                    a State agency shall not disregard any
                    overpayment for which there is evidence of a
                    violation of a criminal law or civil fraud law.
              (2) Funding.--
                      (A) In general.--The Secretary shall make
                    available for each fiscal year to each State
                    agency administering the child and adult care
                    food program, for the purpose of conducting
                    audits of participating institutions, an amount
                    of up to 1.5 percent of the funds used by each
                    State in the program under this section, during
                    the second preceding fiscal year.
                      (B) Additional funding.--
                              (i) In general.--Subject to clause
                            (ii), for fiscal year 2016 and each
                            fiscal year thereafter, the Secretary
                            may increase the amount of funds made
                            available to any State agency under
                            subparagraph (A), [if the State agency
                            demonstrates that the State agency can
                            effectively use the funds to improve
                            program management under criteria
                            established by the Secretary.] if the
                            State agency demonstrates that the
                            State agency can use funds to improve
                            program management, oversight, and
                            integrity, including by working with
                            other State agencies involved with the
                            monitoring of institutions under this
                            section in order to streamline and
                            coordinate the efforts of such State
                            agencies.
                              (ii) Limitation.--The total amount of
                            funds made available to any State
                            agency under this paragraph shall not
                            exceed 2 percent of the funds used by
                            each State agency in the program under
                            this section, during the second
                            preceding fiscal year.
      (j) Agreements.--
              (1) In general.--The Secretary shall issue
            regulations directing States to develop and provide for
            the use of a standard form of agreement between each
            sponsoring organization and the family or group day
            care homes or sponsored day care centers participating
            in the program under such organization, for the purpose
            of specifying the rights and responsibilities of each
            party.
              (2) Duration.--An agreement under paragraph (1) shall
            remain in effect until terminated by either party to
            the agreement.
      (k) Training and Technical Assistance.--A State participating
    in the program established under this section shall provide
    sufficient training, technical assistance, and monitoring to
    facilitate effective operation of the program. The Secretary
    shall assist the State in developing plans to fulfill the
    requirements of this subsection.
      (l) Expenditures of funds from State and local sources for
    the maintenance of food programs for children shall not be
    diminished as a result of funds received under this section.
      (m) States and institutions participating in the program
    under this section shall keep such accounts and records as may
    be necessary to enable the Secretary to determine whether there
    has been compliance with the requirements of this section. Such
    accounts and records shall be available at any reasonable time
    for inspection and audit by representatives of the Secretary,
    the Comptroller General of the United States, and appropriate
    State representatives and shall be preserved for such period of
    time, not in excess of five years, as the Secretary determines
    necessary.
      (n) There are hereby authorized to be appropriated for each
    fiscal year such funds as are necessary to carry out the
    purposes of this section.
      (o)(1) For purposes of this section, adult day care centers
    shall be considered eligible institutions for reimbursement for
    meals or supplements served to persons 60 years of age or older
    or to chronically impaired disabled persons, including victims
    of Alzheimer's disease and related disorders with neurological
    and organic brain dysfunction. Reimbursement provided to such
    institutions for such purposes shall improve the quality of
    meals or level of services provided or increase participation
    in the program. Lunches served by each such institution for
    which reimbursement is claimed under this section shall
    provide, on the average, approximately \1/3\ of the daily
    recommended dietary allowance established by the Food and
    Nutrition Board of the National Research Council of the
    National Academy of Sciences. Such institutions shall make
    reasonable efforts to serve meals that meet the special dietary
    requirements of participants, including efforts to serve foods
    in forms palatable to participants.
      (2) For purposes of this subsection--
              (A) the term ``adult day care center'' means any
            public agency or private nonprofit organization, or any
            proprietary title XIX or title XX center, which--
                      (i) is licensed or approved by Federal,
                    State, or local authorities to provide adult
                    day care services to chronically impaired
                    disabled adults or persons 60 years of age or
                    older in a group setting outside their homes,
                    or a group living arrangement, on a less than
                    24-hour basis; and
                      (ii) provides for such care and services
                    directly or under arrangements made by the
                    agency or organization whereby the agency or
                    organization maintains professional management
                    responsibility for all such services; and
              (B) the term ``proprietary title XIX or title XX
            center'' means any private, for-profit center providing
            adult day care services for which it receives
            compensation from amounts granted to the States under
            title XIX or XX of the Social Security Act and which
            title XIX or title XX beneficiaries were not less than
            25 percent of enrolled eligible participants in a
            calendar month preceding initial application or annual
            reapplication for program participation.
      (3)(A) The Secretary, in consulation with the Assistant
    Secretary for Aging, shall establish, within 6 months of
    enactment, separate guidelines for reimbursement of
    institutions described in this subsection. Such reimbursement
    shall take into account the nutritional requirements of
    eligible persons, as determined by the Secretary on the basis
    of tested nutritional research, except that such reimbursement
    shall not be less than would otherwise be required under this
    section.
      (B) The guidelines shall contain provisions designed to
    assure that reimbursement under this subsection shall not
    duplicate reimbursement under part C of title III of the Older
    Americans Act of 1965, for the same meal served.
      (4) For the purpose of establishing eligibility for free or
    reduced price meals or supplements under this subsection,
    income shall include only the income of an eligible person and,
    if any, the spouse and dependents with whom the eligible person
    resides.
      (5) A person described in paragraph (1) shall be considered
    automatically eligible for free meals or supplements under this
    subsection, without further application or eligibility
    determination, if the person is--
              (A) a member of a household receiving assistance
            under the Food and Nutrition Act of 2008 (7 U.S.C. 2011
            et seq.); or
              (B) a recipient of assistance under title XVI or XIX
            of the Social Security Act (42 U.S.C. 1381 et seq.).
      (6) The Governor of any State may designate to administer the
    program under this subsection a State agency other than the
    agency that administers the child care food program under this
    section.
      (q) Management Support.--
              (1) Technical and training assistance.--In addition
            to the training and technical assistance that is
            provided to State agencies under other provisions of
            this Act and the Child Nutrition Act of 1966 (42 U.S.C.
            1771 et seq.), the Secretary shall provide training and
            technical assistance in order to assist the State
            agencies in improving their program management and
            oversight under this section.
              (2) Technical and training assistance for
            identification and prevention of fraud and abuse.--As
            part of training and technical assistance provided
            under paragraph (1), the Secretary shall provide
            training on a continuous basis to State agencies, and
            shall ensure that such training is provided to
            sponsoring organizations, for the identification and
            prevention of fraud and abuse under the program and to
            improve management of the program.
      (r) Program for At-Risk School Children.--
              (1) Definition of at-risk school child.--In this
            subsection, the term ``at-risk school child'' means a
            school child who--
                      (A) is not more than 18 years of age, except
                    that the age limitation provided by this
                    subparagraph shall not apply to a child
                    described in section 12(d)(1)(A); and
                      (B) participates in a program authorized
                    under this section operated at a site located
                    in a geographical area served by a school in
                    which at least 50 percent of the children
                    enrolled are certified as eligible to receive
                    free or reduced price school meals under this
                    Act or the Child Nutrition Act of 1966 (42
                    U.S.C. 1771 et seq.).
              (2) Participation in child and adult care food
            program.--An institution may participate in the program
            authorized under this section only if the institution
            provides meals or supplements under a program--
                      (A) organized primarily to provide care to
                    at-risk school children during after-school
                    hours, weekends, or holidays during the regular
                    school year; and
                      (B) with an educational or enrichment
                    purpose.
              (3) Administration.--Except as otherwise provided in
            this subsection, the other provisions of this section
            apply to an institution described in paragraph (2).
              (4) Meal and supplement reimbursement.--
                      (A) Limitations.--An institution may claim
                    reimbursement under this subsection only for
                    one meal per child per day and one supplement
                    per child per day served under a program
                    organized primarily to provide care to at-risk
                    school children during after-school hours,
                    weekends, or holidays during the regular school
                    year.
                      (B) Rates.--
                              (i) Meals.--A meal shall be
                            reimbursed under this subsection at the
                            rate established for free meals under
                            subsection (c).
                              (ii) Supplements.--A supplement shall
                            be reimbursed under this subsection at
                            the rate established for a free
                            supplement under subsection (c)(3).
                      (C) No charge.--A meal or supplement claimed
                    for reimbursement under this subsection shall
                    be served without charge.
              [(5) Limitation.--An institution participating in the
            program under this subsection may not claim
            reimbursement for meals and snacks that are served
            under section 18(h) on the same day.
              [(6) Handbook.--
                      [(A) In general.--Not later than 180 days
                    after the date of enactment of the Healthy,
                    Hunger-Free Kids Act of 2010, the Secretary
                    shall--
                              [(i) issue guidelines for afterschool
                            meals for at-risk school children; and
                              [(ii) publish a handbook reflecting
                            those guidelines.
                      [(B) Review.--Each year after the issuance of
                    guidelines under subparagraph (A), the
                    Secretary shall--
                              [(i) review the guidelines; and
                              [(ii) issue a revised handbook
                            reflecting changes made to the
                            guidelines.]
      (s) Information Concerning the Special Supplemental Nutrition
    Program for Women, Infants, and Children.--
              (1) In general.--The Secretary shall provide each
            State agency administering a child and adult care food
            program under this section with information concerning
            the special supplemental nutrition program for women,
            infants, and children authorized under section 17 of
            the Child Nutrition Act of 1966 (42 U.S.C. 1786).
              (2) Requirements for state agencies.--Each State
            agency shall ensure that each participating family and
            group day care home and child care center (other than
            an institution providing care to school children
            outside school hours)--
                      (A) receives materials that include--
                              (i) a basic explanation of the
                            importance and benefits of the special
                            supplemental nutrition program for
                            women, infants, and children;
                              (ii) the maximum State income
                            eligibility standards, according to
                            family size, for the program; and
                              (iii) information concerning how
                            benefits under the program may be
                            obtained;
                      (B) receives periodic updates of the
                    information described in subparagraph (A); and
                      (C) provides the information described in
                    subparagraph (A) to [parents of enrolled
                    children at enrollment] parents or legal
                    guardians of enrolled children in an easily
                    accessible manner.
      (t) Participation by Emergency Shelters.--
              (1) Definition of emergency shelter.--In this
            subsection, the term ``emergency shelter'' means--
                      (A) an emergency shelter (as defined in
                    section 321 of the Stewart B. McKinney Homeless
                    Assistance Act (42 U.S.C. 11351)); or
                      (B) a site operated by the shelter.
              (2) Administration.--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).
              (3) Licensing requirements.--The licensing
            requirements contained in subsection (a)(5) shall not
            apply to an emergency shelter.
              (4) Health and safety standards.--To be eligible to
            participate in the program authorized under this
            section, an emergency shelter shall comply with
            applicable State or local health and safety standards.
              (5) Meal or supplement reimbursement.--
                      (A) Limitations.--An emergency shelter may
                    claim reimbursement under this subsection--
                              (i) only for a meal or supplement
                            served to children residing at an
                            emergency shelter, if the children
                            are--
                                      (I) not more than 18 years of
                                    age; or
                                      (II) children with
                                    disabilities; and
                              (ii) for not more than 3 meals, or 2
                            meals and a supplement, per child per
                            day.
                      (B) 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).
                      (C) No charge.--A meal or supplement claimed
                    for reimbursement shall be served without
                    charge.
      (u) Promoting Health and Wellness in Child Care.--
              (1) Physical activity and electronic media use.--The
            Secretary shall encourage participating child care
            centers and family or group day care homes--
                      (A) to provide to all children under the
                    supervision of the participating child care
                    centers and family or group day care homes
                    daily opportunities for structured and
                    unstructured age-appropriate physical activity;
                    and
                      (B) to limit among children under the
                    supervision of the participating child care
                    centers and family or group day care homes the
                    use of electronic media to an appropriate
                    level.
              (2) Water consumption.--Participating child care
            centers and family or group day care homes shall make
            available to children, as nutritionally appropriate,
            potable water as an acceptable fluid for consumption
            throughout the day, including at meal times.
              (3) Technical assistance and guidance.--
                      (A) In general.--The Secretary shall provide
                    technical assistance to institutions
                    participating in the program under this section
                    to assist participating child care centers and
                    family or group day care homes in complying
                    with the nutritional requirements and wellness
                    recommendations prescribed by the Secretary in
                    accordance with this subsection and subsection
                    (g).
                      (B) Guidance.--Not later than January 1,
                    2012, the Secretary shall issue guidance to
                    States and institutions to encourage
                    participating child care centers and family or
                    group day care homes serving meals and snacks
                    under this section to--
                              (i) include foods that are
                            recommended for increased serving
                            consumption in amounts recommended by
                            the most recent Dietary Guidelines for
                            Americans published under section 301
                            of the National Nutrition Monitoring
                            and Related Research Act of 1990 (7
                            U.S.C. 5341), including fresh, canned,
                            dried, or frozen fruits and vegetables,
                            whole grain products, lean meat
                            products, and low-fat and non-fat dairy
                            products; and
                              (ii) reduce sedentary activities and
                            provide opportunities for regular
                            physical activity in quantities
                            recommended by the most recent Dietary
                            Guidelines for Americans described in
                            clause (i).
                      (C) Nutrition.--Technical assistance relating
                    to the nutritional requirements of this
                    subsection and subsection (g) shall include--
                              (i) nutrition education for
                            distribution to participants and
                            families of participants, including
                            education that emphasizes the
                            relationship between nutrition,
                            physical activity, and health;
                              (ii) menu planning;
                              (iii) interpretation of nutrition
                            labels; and
                              (iv) food preparation and purchasing
                            guidance to produce meals and snacks
                            that are--
                                      (I) consistent with the goals
                                    of the most recent Dietary
                                    Guidelines; and
                                      (II) promote the health of
                                    the population served by the
                                    program under this section, as
                                    recommended by authoritative
                                    scientific organizations.
                      (D) Physical activity.--Technical assistance
                    relating to the physical activity requirements
                    of this subsection shall include--
                              (i) education on the importance of
                            regular physical activity to overall
                            health and well being; and
                              (ii) sharing of best practices for
                            physical activity plans in child care
                            centers and homes as recommended by
                            authoritative scientific organizations.
                      (E) Electronic media use.--Technical
                    assistance relating to the electronic media use
                    requirements of this subsection shall include--
                              (i) education on the benefits of
                            limiting exposure to electronic media
                            by children; and
                              (ii) sharing of best practices for
                            the development of daily activity plans
                            that limit use of electronic media.
                      (F) Minimum assistance.--At a minimum, the
                    technical assistance required under this
                    paragraph shall include a handbook, developed
                    by the Secretary in coordination with the
                    Secretary for Health and Human Services, that
                    includes recommendations, guidelines, and best
                    practices for participating institutions and
                    family or group day care homes that are
                    consistent with the nutrition, physical
                    activity, and wellness requirements and
                    recommendations of this subsection.
                      (G) Additional assistance.--In addition to
                    the requirements of this paragraph, the
                    Secretary shall develop and provide such
                    appropriate training and education materials,
                    guidance, and technical assistance as the
                    Secretary considers to be necessary to comply
                    with the nutritional and wellness requirements
                    of this subsection and subsection (g).
                      (H) Funding.--
                              (i) In general.--On October 1, 2010,
                            out of any funds in the Treasury not
                            otherwise appropriated, the Secretary
                            of the Treasury shall transfer to the
                            Secretary to provide technical
                            assistance under this subsection
                            $10,000,000, to remain available until
                            expended.
                              (ii) Receipt and acceptance.--The
                            Secretary shall be entitled to receive,
                            shall accept, and shall use to carry
                            out this subsection the funds
                            transferred under clause (i), without
                            further appropriation.
                              (iii) Sunset.--The Secretary shall
                            return to the general fund of the
                            Treasury any funds that were--
                                      (I) made available under this
                                    subparagraph; and
                                      (II) not obligated as of the
                                    date of the enactment of the
                                    Improving Child Nutrition and
                                    Education Act of 2016.
      (v) Participation by Residential Child Care Institutions.--
              (1) Definition of residential child care
            institution.--In this subsection, the term
            ``residential child care institution'' means any public
            or nonprofit private residential child care
            institution, or distinct part of such an institution,
            that--
                      (A) operates principally for the care of
                    children; and
                      (B) if private, is licensed to provide
                    residential child care services under the
                    appropriate licensing code by the State or
                    local agency.
              (2) Administration.--Except as otherwise provided in
            this subsection, a residential child care institution
            shall be considered eligible for reimbursement for
            meals and supplements served to eligible children
            residing at the residential child care institution, so
            long as the institution does not simultaneously
            participate in the school lunch program under this Act
            or the school breakfast program under the Child
            Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).
              (3) Meal or supplement reimbursement.--
                      (A) Limitations.--A residential child care
                    institution may claim reimbursement under this
                    section--
                              (i) only for a meal or supplement
                            served to children residing at the
                            residential child care institution, who
                            are--
                                      (I) not more than 18 years of
                                    age; or
                                      (II) children with
                                    disabilities; and
                              (ii) for not more than--
                                      (I) 1 breakfast, 1 lunch, and
                                    1 supplement per child per day;
                                    or
                                      (II) 1 breakfast, 1 supper,
                                    and 1 supplement per child per
                                    day.
                      (B) Rate.--A meal or supplement eligible for
                    reimbursement under this subsection shall be
                    reimbursed at the rate at which free, reduced
                    price, and paid meals and supplements,
                    respectively, are reimbursed under subsection
                    (c).

               *       *       *       *       *       *       *

                                 PILOT PROJECTS

      Sec. 18.
      (b)(1) Upon request to the Secretary, any school district
    that on January 1, 1987, was receiving all cash payments or all
    commodity letters of credit in lieu of entitlement commodities
    for its school lunch program shall receive all cash payments or
    all commodity letters of credit in lieu of entitlement
    commodities for its school lunch program beginning July 1,
    1987. The Secretary, directly or through contract, shall
    administer the project under this subsection.
      (2) Any school district that elects under paragraph (1) to
    receive all cash payments or all commodity letters of credit in
    lieu of entitlement commodities for its school lunch program
    shall receive bonus commodities in the same manner as if such
    school district was receiving all entitlement commodities for
    its school lunch program.
      (c)(1) The Secretary may conduct pilot projects to test
    alternative counting and claiming procedures.
      (2) Each pilot program carried out under this subsection
    shall be evaluated by the Secretary after it has been in
    operation for 3 years.
      [(g) Access to Local Foods: Farm to School Program.--
              [(1) Definition of eligible school.--In this
            subsection, the term ``eligible school'' means a school
            or institution that participates in a program under
            this Act or the school breakfast program established
            under section 4 of the Child Nutrition Act of 1966 (42
            U.S.C. 1773).
              [(2) Program.--The Secretary shall carry out a
            program to assist eligible schools, State and local
            agencies, Indian tribal organizations, agricultural
            producers or groups of agricultural producers, and
            nonprofit entities through grants and technical
            assistance to implement farm to school programs that
            improve access to local foods in eligible schools.
              [(3) Grants.--
                      [(A) In general.--The Secretary shall award
                    competitive grants under this subsection to be
                    used for--
                              [(i) training;
                              [(ii) supporting operations;
                              [(iii) planning;
                              [(iv) purchasing equipment;
                              [(v) developing school gardens;
                              [(vi) developing partnerships; and
                              [(vii) implementing farm to school
                            programs.
                      [(B) Regional balance.--In making awards
                    under this subsection, the Secretary shall, to
                    the maximum extent practicable, ensure--
                              [(i) geographical diversity; and
                              [(ii) equitable treatment of urban,
                            rural, and tribal communities.
                      [(C) Maximum amount.--The total amount
                    provided to a grant recipient under this
                    subsection shall not exceed $100,000.
              [(4) Federal share.--
                      [(A) In general.--The Federal share of costs
                    for a project funded through a grant awarded
                    under this subsection shall not exceed 75
                    percent of the total cost of the project.
                      [(B) Federal matching.--As a condition of
                    receiving a grant under this subsection, a
                    grant recipient shall provide matching support
                    in the form of cash or in-kind contributions,
                    including facilities, equipment, or services
                    provided by State and local governments,
                    nonprofit organizations, and private sources.
              [(5) Criteria for selection.--To the maximum extent
            practicable, in providing assistance under this
            subsection, the Secretary shall give the highest
            priority to funding projects that, as determined by the
            Secretary--
                      [(A) make local food products available on
                    the menu of the eligible school;
                      [(B) serve a high proportion of children who
                    are eligible for free or reduced price lunches;
                      [(C) incorporate experiential nutrition
                    education activities in curriculum planning
                    that encourage the participation of school
                    children in farm and garden-based agricultural
                    education activities;
                      [(D) demonstrate collaboration between
                    eligible schools, nongovernmental and
                    community-based organizations, agricultural
                    producer groups, and other community partners;
                      [(E) include adequate and participatory
                    evaluation plans;
                      [(F) demonstrate the potential for long-term
                    program sustainability; and
                      [(G) meet any other criteria that the
                    Secretary determines appropriate.
              [(6) Evaluation.--As a condition of receiving a grant
            under this subsection, each grant recipient shall agree
            to cooperate in an evaluation by the Secretary of the
            program carried out using grant funds.
              [(7) Technical assistance.--The Secretary shall
            provide technical assistance and information to assist
            eligible schools, State and local agencies, Indian
            tribal organizations, and nonprofit entities--
                      [(A) to facilitate the coordination and
                    sharing of information and resources in the
                    Department that may be applicable to the farm
                    to school program;
                      [(B) to collect and share information on best
                    practices; and
                      [(C) to disseminate research and data on
                    existing farm to school programs and the
                    potential for programs in underserved areas.
              [(8) Funding.--
                      [(A) In general.--On October 1, 2012, and
                    each October 1 thereafter, out of any funds in
                    the Treasury not otherwise appropriated, the
                    Secretary of the Treasury shall transfer to the
                    Secretary to carry out this subsection
                    $5,000,000, to remain available until expended.
                      [(B) Receipt and acceptance.--The Secretary
                    shall be entitled to receive, shall accept, and
                    shall use to carry out this subsection the
                    funds transferred under subparagraph (A),
                    without further appropriation.
              [(9) Authorization of appropriations.--In addition to
            the amounts made available under paragraph (8), there
            are authorized to be appropriated to carry out this
            subsection such sums as are necessary for each of
            fiscal years 2011 through 2015.
      [(h) Pilot Program for High-Poverty Schools.--
              [(1) In general.--
                      [(A) Definitions.--In this paragraph:
                              [(i) Eligible program.--The term
                            ``eligible program'' means--
                                      [(I) a school-based program
                                    with hands-on vegetable
                                    gardening and nutrition
                                    education that is incorporated
                                    into the curriculum for 1 or
                                    more grades at 2 or more
                                    eligible schools; or
                                      [(II) a community-based
                                    summer program with hands-on
                                    vegetable gardening and
                                    nutrition education that is
                                    part of, or coordinated with, a
                                    summer enrichment program at 2
                                    or more eligible schools.
                              [(ii) Eligible school.--The term
                            ``eligible school'' means a public
                            school, at least 50 percent of the
                            students of which are eligible for free
                            or reduced price meals under this Act.
                      [(B) Establishment.--The Secretary shall
                    carry out a pilot program under which the
                    Secretary shall provide to nonprofit
                    organizations or public entities in not more
                    than 5 States grants to develop and run,
                    through eligible programs, community gardens at
                    eligible schools in the States that would--
                              [(i) be planted, cared for, and
                            harvested by students at the eligible
                            schools; and
                              [(ii) teach the students
                            participating in the community gardens
                            about agriculture production practices
                            and diet.
                      [(C) Priority states.--Of the States in which
                    grantees under this paragraph are located--
                              [(i) at least 1 State shall be among
                            the 15 largest States, as determined by
                            the Secretary;
                              [(ii) at least 1 State shall be among
                            the 16th to 30th largest States, as
                            determined by the Secretary; and
                              [(iii) at least 1 State shall be a
                            State that is not described in clause
                            (i) or (ii).
                      [(D) Use of produce.--Produce from a
                    community garden provided a grant under this
                    paragraph may be--
                              [(i) used to supplement food provided
                            at the eligible school;
                              [(ii) distributed to students to
                            bring home to the families of the
                            students; or
                              [(iii) donated to a local food bank
                            or senior center nutrition program.
                      [(E) No cost-sharing requirement.--A
                    nonprofit organization or public entity that
                    receives a grant under this paragraph shall not
                    be required to share the cost of carrying out
                    the activities assisted under this paragraph.
                      [(F) Evaluation.--A nonprofit organization or
                    public entity that receives a grant under this
                    paragraph shall be required to cooperate in an
                    evaluation carried out by the Secretary.
              [(2) Authorization of appropriations.--There are
            authorized to be appropriated such sums as are
            necessary to carry out this subsection for each of
            fiscal years 2004 through 2015.]
      (d) Access to Local Foods: Farm to School Program.--
              (1) Program.--The Secretary shall carry out a program
            to assist eligible schools, State and local agencies,
            Indian tribal organizations, agricultural producers or
            groups of agricultural producers, and nonprofit
            entities through grants, technical assistance, and
            research to implement farm to school programs that
            improve access to local foods and improve nutrition
            education in eligible schools.
              (2) Definitions.--In this subsection:
                      (A) Agricultural producer.--The term
                    ``agricultural producer'' means a farmer,
                    rancher, or fisher (including of farm-raised
                    fish).
                      (B) Eligible school.--The term ``eligible
                    school'' means a school or institution that
                    participates in--
                              (i) a program under this Act,
                            including the summer food service
                            program for children under section 13
                            and the early care and afterschool
                            portions of the child and adult care
                            food program under section 17; or
                              (ii) the school breakfast program
                            established under section 4 of the
                            Child Nutrition Act of 1966 (42 U.S.C.
                            1773).
              (3) Grants.--
                      (A) In general.--The Secretary shall award
                    competitive grants under this subsection to be
                    used for implementing farm to school programs
                    for the purposes of improving access to local
                    foods and improving nutrition education,
                    through--
                              (i) research, training, and technical
                            assistance;
                              (ii) supporting operations;
                              (iii) planning;
                              (iv) purchasing equipment;
                              (v) developing school gardens; and
                              (vi) developing partnerships to
                            facilitate nutrition education and
                            healthy eating.
                      (B) Regional balance.--In making awards under
                    this subsection, the Secretary shall, to the
                    maximum extent practicable, ensure--
                              (i) geographical diversity; and
                              (ii) equitable treatment of urban,
                            rural, and tribal communities.
                      (C) Improved procurement and distribution.--
                    Funds provided under this subsection may be
                    used to improve local food procurement and
                    distribution options between agricultural
                    producers and eligible schools, including
                    innovative approaches to aggregation,
                    processing, transportation, and distribution.
                      (D) Awards.--
                              (i) Maximum amount.--The total amount
                            provided to a grant recipient under
                            this subsection shall not exceed
                            $150,000.
                              (ii) Term.--The term of an award
                            shall not exceed 3 years.
                              (iii) Limitation.--The Secretary
                            shall not award any entity more than 1
                            grant at any given time.
                              (iv) Purpose and scope.--In carrying
                            out this subsection, the Secretary
                            shall make awards of diverse amounts
                            and duration so as to best match a
                            variety of purposes, scopes, and needs
                            of the project proposals.
                      (E) Limitation.--The Secretary shall not
                    award a grant under this subsection if the
                    majority of grant funds would be used solely
                    for the purpose of carrying out a conference.
              (4) Federal share.--
                      (A) In general.--The Federal share of costs
                    for a project funded through a grant awarded
                    under this subsection shall not exceed 75
                    percent of the total cost of the project.
                      (B) Federal matching.--As a condition of
                    receiving a grant under this subsection, a
                    grant recipient shall provide matching support
                    in the form of cash or in-kind contributions,
                    including facilities, equipment, or services
                    provided by State and local governments,
                    nonprofit organizations, and private sources.
              (5) Criteria for selection.--
                      (A) In general.--To the maximum extent
                    practicable, in providing assistance under this
                    subsection, the Secretary shall give priority
                    to proposals to--
                              (i) serve a high proportion of
                            children who are eligible for free or
                            reduced price meals;
                              (ii) incorporate nutrition education
                            activities that encourage the
                            participation of school children in
                            farm and garden-based agricultural
                            education activities;
                              (iii) provide families the
                            opportunity to participate in
                            educational programming, including
                            through materials and engagement
                            activities, to improve nutrition
                            outside the school environment;
                              (iv) demonstrate collaboration
                            between eligible schools,
                            nongovernmental and community-based
                            organizations, agricultural producer
                            groups, and other community partners;
                              (v) make local food products
                            available on the menu of reimbursable
                            meals under this Act at the eligible
                            school;
                              (vi) demonstrate the potential for
                            long-term program sustainability with
                            non-Federal funds; and
                              (vii) expand the selection of local
                            commodities available for eligible
                            schools.
                      (B) Tribal community projects.--In the case
                    of projects serving tribal communities, the
                    Secretary shall, to the maximum extent
                    practicable, give highest priority to projects
                    that propose to use products from tribal
                    agricultural producers, in addition to the
                    priorities under subparagraph (A).
              (6) Evaluation.--As a condition of receiving a grant
            under this subsection, each grant recipient shall agree
            to cooperate in an evaluation of the program by the
            Secretary.
              (7) Technical assistance and research.--
                      (A) In general.--The Secretary shall provide
                    technical assistance, research, and information
                    through amounts reserved under this subsection
                    for such purposes, to assist schools, State and
                    local agencies, Indian tribal organizations,
                    agricultural producers, and nonprofit
                    entities--
                              (i) to facilitate the coordination
                            and sharing of information and
                            resources that may be applicable to the
                            farm to school program;
                              (ii) to collect and share information
                            on best practices;
                              (iii) to disseminate research and
                            data on existing farm to school
                            programs and the potential for programs
                            to begin in underserved areas; and
                              (iv) to increase awareness of, and
                            participation in, farm to school
                            programs among agricultural and
                            aquiculture producers or agricultural
                            producer groups, including beginning,
                            veteran, and socially disadvantaged
                            farmers and ranchers.
                      (B) Review.--Not later than 1 year after the
                    date of the enactment of the Improving Child
                    Nutrition and Education Act of 2016 and every 3
                    years thereafter, the Secretary shall review
                    and submit to the Committee on Agriculture and
                    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 that describes the regulatory
                    and other barriers related to including locally
                    or regionally produced food products in school
                    food programs, including any progress that has
                    been made in identifying and eliminating such
                    barriers through examining--
                              (i) barriers to the development and
                            implementation of successful farm to
                            school programs;
                              (ii) the direct and indirect costs
                            affecting the production and marketing
                            of locally or regionally produced
                            agricultural food products for school
                            food programs;
                              (iii) the costs local school food
                            programs incur by acquiring such local
                            foods for school meal programs in
                            comparison to the costs for other foods
                            in such school meal programs; and
                              (iv) local and regional market access
                            for such food products, partnerships,
                            small-scale production, and any
                            barriers to and long-term feasibility
                            of such access.
              (8) Funding.--
                      (A) In general.--On October 1, 2016, and each
                    October 1 thereafter, out of any funds in the
                    Treasury not otherwise appropriated, the
                    Secretary of the Treasury shall transfer to the
                    Secretary to carry out this subsection
                    $10,000,000, to remain available until
                    expended.
                      (B) Receipt and acceptance.--The Secretary
                    shall be entitled to receive, shall accept, and
                    shall use to carry out this subsection the
                    funds transferred under subparagraph (A),
                    without further appropriation.
                      (C) Administration.--Of the funds made
                    available to the Secretary under subparagraph
                    (A), not more than 5 percent may be used to pay
                    administrative costs incurred by the Secretary
                    in carrying out this subsection and evaluating
                    the program in accordance with paragraph (6).
      (e) Summer Meal Service Through Business Partnership.--
              (1) In general.--From the funds made available under
            the summer food service program under section 13, the
            Secretary shall award grants on a competitive basis to
            not more than 4 State agencies to improve delivery of
            such summer food service program for low-income
            children in underserved areas during the summer through
            sustainable, scalable, business-driven solutions.
                      (A) Duration.--A grant awarded under this
                    subsection shall be for a period of not more
                    than 3 years.
                      (B) Priority.--In awarding grants under this
                    subsection, the Secretary shall give priority
                    to State agencies that have met the application
                    requirements under this subsection and which
                    demonstrate a severe unmet need for serving
                    children in additional eligible areas in the
                    State through the summer food service program
                    under section 13.
                      (C) Limitation.--Funds under this subsection
                    will--
                              (i) be awarded for the purpose of
                            reducing childhood hunger and allowing
                            parents to better participate in the
                            labor force or an education or
                            workforce development program; and
                              (ii) not preempt or prevent operation
                            of the summer food service program
                            under section 13.
              (2) State application.--A State seeking to improve
            delivery of the summer food service program in such
            State in accordance with this subsection shall submit
            an application at such time and in such manner as the
            Secretary may reasonably require. The application shall
            contain--
                      (A) State plans to implement and manage the
                    program in accordance with other applicable
                    Federal requirements under this Act;
                      (B) a determination of the eligible areas in
                    the State in which poor economic conditions
                    exist in accordance with the program, but where
                    an eligible service institution is not
                    currently in operation, where the State may
                    reimburse a vendor;
                      (C) identified eligible vendors which the
                    State has determined to be qualified to provide
                    meals in accordance with this subsection;
                      (D) a proposed timeline for entering into
                    contracts with eligible vendors and strategies
                    for effective communication; and
                      (E) an assurance that funds will be used to
                    provide meals to the most vulnerable,
                    underserved, and rural populations, as
                    determined by the State.
              (3) Eligible vendor.--For purposes of this
            subsection, an eligible vendor is a food vendor which
            the State determines has the administrative capacity
            and proven operating performance to provide eligible
            meals to children in underserved areas in accordance
            with this subsection and the summer food service
            program requirements on management responsibilities of
            sponsors and self-preparation sites, including
            requirements that the vendor--
                      (A) accepts final administrative and
                    financial responsibility for management of an
                    effective food service, including auditing and
                    reporting responsibilities, but will not
                    receive administrative funding from the State
                    to do so;
                      (B) has not been determined ineligible to
                    participate in any other program under this Act
                    or the Child Nutrition Act of 1966 by reason of
                    violation of the requirements of that program;
                      (C) will provide adequate supervisory and
                    operational personnel for monitoring and
                    management of a self-preparation site;
                      (D) contracts directly with the State as a
                    sponsor;
                      (E) ensures that meals are inspected
                    periodically as required under existing program
                    regulations;
                      (F) participates in applicable State and
                    Federal reporting and auditing requirements
                    under this Act as appropriate, including to
                    provide other information determined relevant
                    by the Secretary in accordance with paragraph
                    (5);
                      (G) has State or local health certification
                    for the facilities in which meals will be
                    prepared and distributed for use in the
                    program, and ensures that State and local
                    health and sanitation requirements are met at
                    all times; and
                      (H) has the organizational capacity to offer
                    meals in underserved communities, including
                    preparation and delivery logistics.
              (4) State disbursement.--A State shall use the grant
            awarded to the State under this subsection to reimburse
            an eligible vendor for meals served to eligible
            children in accordance with the summer food service
            program under section 13 and with this subsection, as
            follows:
                      (A) Reimbursements shall be available for an
                    eligible vendor operating in an eligible area
                    in which poor economic conditions exist where
                    no sponsor is currently operating the program
                    under section 13.
                      (B) To the extent practicable, a State shall
                    give priority to eligible vendors that--
                              (i) demonstrate partnerships with
                            entities providing summer enrichment
                            activities such as schools, local
                            government agencies, and nonprofit
                            agencies; and
                              (ii) provide meals at a congregate
                            site.
                      (C) A State shall follow established
                    procedures in entering into contracts with a
                    vendor, such as through a Request for Proposal,
                    Invitation for Sealed Bid, Small Purchase
                    Procedure, or other common method.
              (5) Auditing.--
                      (A) State reporting.--Not later than 1 year
                    after the end of the grant period for a grant
                    awarded to a State under this subsection, the
                    State shall submit to the Secretary a report
                    on--
                              (i) the activities carried out with
                            such grant; and
                              (ii) the impacts of such activities
                            on children, families, and eligible
                            service institutions during the summer.
                      (B) Report from secretary.--No later than 4
                    years after the first grant is awarded under
                    this subsection, the Secretary shall provide to
                    the Committee on Education and the Workforce of
                    the House of Representatives and the Committee
                    on Agriculture, Nutrition, and Forestry of the
                    Senate a report on the grant program under this
                    subsection, which shall include--
                              (i) a review of information submitted
                            by States under subparagraph (A); and
                              (ii) best practices on reducing
                            childhood hunger in the summer months.
              (6) Limitations.--The following rules shall apply
            with respect to this subsection:
                      (A) No commodities shall be provided to
                    businesses or vendors under this subsection.
                      (B) Vendors shall assume all administrative
                    costs under this subsection.
                      (C) Meals shall be provided to children
                    eligible for the summer food service program
                    under section 13.
                      (D) A vendor receiving reimbursements shall
                    not profit directly from such reimbursements
                    under this subsection.
                      (E) The Secretary shall include payments to
                    States under this subsection in its
                    calculations for administrative costs incurred
                    by States under subsection (k)(1) of section
                    13.
      (f) Summer Electronic Benefit Transfer for Children.--
              (1) Purpose.--The purposes of the provision of
            electronic benefits provided through this subsection
            are to assess the use of alternate methods of providing
            access to food for children during the summer months
            when school is not in regular session that are intended
            to--
                      (A) increase summer food service program
                    effectiveness and efficiency;
                      (B) reduce or eliminate the food insecurity
                    and hunger of children; and
                      (C) improve the nutritional status of
                    children.
              (2) Demonstration.--
                      (A) Election.--A State that, as of the date
                    of enactment of the Improving Child Nutrition
                    and Education Act of 2016, is operating, or has
                    operated, a summer electronic benefit transfer
                    for children demonstration may elect to
                    continue operating such demonstration in
                    accordance with the requirements of this
                    subsection as an alternative to other delivery
                    models of providing meals to children during
                    the summer months when school is not in regular
                    session.
                      (B) State requirements.--As a condition of
                    participating in the demonstration under this
                    subsection, a State shall--
                              (i) comply with the requirements
                            under this subsection; and
                              (ii) agree to provide such
                            information the Secretary may require
                            for the evaluation of the demonstration
                            as required under this subsection.
              (3) Definitions.--In this subsection:
                      (A) Eligible household.--The term ``eligible
                    household'' means a household that includes 1
                    or more school-aged child determined as
                    eligible to receive free or reduced price
                    school meals during the prior school year, but
                    such child is not participating in a program
                    that provides food during the summer through
                    the summer food service program under section
                    13.
                      (B) State.--The term ``State'' includes a
                    tribal entity.
                      (C) Summer electronic benefit transfer for
                    children demonstration.--The term ``summer
                    electronic benefit transfer for children
                    demonstration'' means an electronic benefit
                    transfer demonstration project under section
                    748(g)(1) of the Agriculture, Rural
                    Development, Food and Drug Administration, and
                    Related Appropriations Act, 2010 (Public Law
                    111-80; 123 Stat. 2132).
              (4) Benefit levels.--
                      (A) In general.--The Secretary shall approve
                    States seeking to make an election under
                    paragraph (2)(A) that will evaluate the impact
                    of providing a variety of differentiated
                    benefit levels to eligible children as a way to
                    reach such children to the greatest extent
                    practicable. The values of such benefits shall
                    be determined by the State, but shall be
                    between $15 and $30 per month for each school-
                    aged child in an eligible household.
                      (B) Rate determination.--In determining the
                    values under subparagraph (A), a State may
                    consider differentiating rates based on the
                    need for such benefits, which may be determined
                    through factors such as--
                              (i) the proportion of applicants that
                            are eligible for free price meals;
                              (ii) total number of households and
                            children seeking to participate;
                              (iii) food security in children
                            across communities in such State;
                              (iv) average redemption rates of
                            benefits;
                              (v) impact of such values at
                            improving food security in children;
                              (vi) availability of other community
                            programs that provide meals to children
                            during the summer months when school is
                            not in regular session where children
                            might otherwise receive nutrition
                            assistance; and
                              (vii) any other information a State
                            determines is useful for determining
                            such rates.
                      (C) Limitations.--
                              (i) Time.--No child may receive more
                            than 3 months of benefits under this
                            paragraph in any 12-month period.
                              (ii) Amount.--No child may receive
                            more than $30 of benefits under this
                            paragraph per month.
                      (D) Cost sharing.--Nothing in this paragraph
                    shall be construed to prohibit States or local
                    entities from providing additional non-Federal
                    resources for the purposes of this subsection.
              (5) Effective implementation.--
                      (A) In general.--In administering this
                    subsection and providing benefits to children
                    in accordance with this subsection, a State
                    shall consider previous State experiences and
                    best practices in implementing the summer
                    electronic benefit transfer for children
                    demonstration carried out before the date of
                    enactment of the Improving Child Nutrition and
                    Education Act of 2016, including information
                    evaluating findings of the demonstration
                    (including the 2013 final report published by
                    the Department of Agriculture).
                      (B) Technical assistance.--The Secretary
                    shall provide, and periodically update,
                    technical assistance to States for purposes of
                    this paragraph.
              (6) Use of benefits.--
                      (A) In general.--Benefits issued to families
                    through the election under paragraph (2)(A) may
                    be used only for the purchase of food for
                    consumption by school-aged children in such
                    family.
                      (B) Timing.--Benefits issued through the
                    election described in this subparagraph may be
                    redeemed only when school is out of session for
                    the summer period.
              (7) Administration.--In administering this
            subsection, the State shall--
                      (A) ensure that benefits are issued only to
                    eligible households that live--
                              (i) in areas with high rates of
                            poverty or long-term poverty that are
                            rural and have no congregate feeding
                            sites or access to meals otherwise
                            provided through the summer food
                            service program authorized under
                            section 13; or
                              (ii) outside an area in which poor
                            economic conditions exist but in an
                            area with no access to meals otherwise
                            provided through the summer food
                            service program authorized under
                            section 13;
                      (B) issue benefits to eligible households
                    only after such household has made an oral or
                    written request to receive electronic benefit
                    transfer benefits under this subsection; and
                      (C) document how the election will be
                    administered in the management and
                    administration plan described in subsection
                    (n), including the process for identifying
                    areas in which benefits will be issued.
              (8) Evaluation.--The Secretary shall provide for an
            ongoing, independent evaluation of the demonstration
            carried out under this subsection, including quasi-
            experimental or other methods that are capable of
            producing scientifically valid information to determine
            effectiveness in achieving the purposes described in
            paragraph (1), including examining or assessing--
                      (A) feasibility of, or barriers to,
                    successful implementation of this subsection;
                      (B) varied approaches in State implementation
                    of this subsection, including different
                    approaches, challenges, and lessons learned;
                      (C) specific levels of use and receipt of
                    benefits;
                      (D) impact on children's food security and
                    nutritional impacts, including by the different
                    impacts on children in a variety of
                    geographical areas such as rural, urban, and
                    suburban areas, localities, and States;
                      (E) total cost (including administrative
                    cost) of implementing and operating this
                    subsection, including in comparison to other
                    methods of providing summer meal service to
                    school-aged children;
                      (F) impacts and results of such evaluation in
                    comparison to evaluations of the summer
                    electronic benefits transfer for children
                    demonstration published by the Secretary of
                    Agriculture; and
                      (G) the potential for benefits provided under
                    this subsection to improve effectiveness and
                    efficiency of the summer food service program
                    in comparison to other methods of providing
                    summer meal service to school-aged children.
              (9) Report.--Not later than one year after amounts
            are first appropriated under paragraph (10), and each
            year thereafter, the Secretary shall submit to Congress
            a report that--
                      (A) includes the information resulting from
                    the most recent evaluation under paragraph (8);
                    and
                      (B) takes into consideration evaluations of
                    the summer electronic benefits transfer for
                    children demonstration published by the
                    Secretary of Agriculture.
              (10) Authorization of appropriations.--
                      (A) In general.--There is authorized to be
                    appropriated to carry out this subsection not
                    more than $10,000,000 for each of fiscal years
                    2018 through 2020, to remain available until
                    expended.
                      (B) Limitations.--Of such appropriations, for
                    each fiscal year--
                              (i) each State shall utilize a
                            portion for administrative funds that
                            shall be equal to the levels necessary
                            to effectively and efficiently
                            administer the State's demonstration
                            under this subsection, as determined by
                            the State;
                              (ii) not more than 1 percent may be
                            spent on administrative funds by the
                            Secretary; and
                              (iii) not more than $499,999 shall be
                            available for the Secretary to comply
                            with paragraph (8).
              (11) Guidance.--Not later than December 31, 2016, the
            Secretary shall provide guidance to States to implement
            this subsection, including recommendations for States
            to successfully continue to implement the summer
            electronic benefit transfer for children demonstration
            while complying with the new or additional requirements
            of this subsection.
      [(i)] (g) Year-Round Services for Eligible Entities.--
              (1) In general.--A service institution that is
            described in section 13(a)(6) (excluding a public
            school), or a private nonprofit organization described
            in section 13(a)(7), and that is located in the State
            of California may be reimbursed--
                      (A) for up to 2 meals during each day of
                    operation served--
                              (i) during the months of May through
                            September;
                              (ii) in the case of a service
                            institution that operates a food
                            service program for children on school
                            vacation, at anytime under a continuous
                            school calendar; and
                              (iii) in the case of a service
                            institution that provides meal service
                            at a nonschool site to children who are
                            not in school for a period during the
                            school year due to a natural disaster,
                            building repair, court order, or
                            similar case, at anytime during such a
                            period; and
                      (B) for a snack served during each day of
                    operation after school hours, weekends, and
                    school holidays during the regular school
                    calendar.
              (2) Payments.--The service institution shall be
            reimbursed consistent with section 13(b)(1).
              (3) Administration.--To receive reimbursement under
            this subsection, a service institution shall comply
            with section 13, other than subsections (b)(2) and
            (c)(1) of that section.
              (4) Evaluation.--Not later than September 30, 2007,
            the State agency shall submit to the Secretary a report
            on the effect of this subsection on participation in
            the summer food service program for children
            established under section 13.
              (5) Funding.--The Secretary shall provide to the
            State of California such sums as are necessary to carry
            out this subsection for each of fiscal years [2011
            through 2015] 2017 through 2021.
      [(j) Free Lunch and Breakfast Eligibility.--
              [(1) In general.--Subject to the availability of
            funds under paragraph (4), the Secretary shall expand
            the service of free lunches and breakfasts provided at
            schools 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)
            in all or part of 5 States selected by the Secretary
            (of which at least 1 shall be a largely rural State
            with a significant Native American population).
              [(2) Income eligibility.--The income guidelines for
            determining eligibility for free lunches or breakfasts
            under this subsection shall be 185 percent of the
            applicable family size income levels contained in the
            nonfarm income poverty guidelines prescribed by the
            Office of Management and Budget, as adjusted annually
            in accordance with section 9(b)(1)(B).
              [(3) Evaluation.--
                      [(A) In general.--Not later than 3 years
                    after the implementation of this subsection,
                    the Secretary shall conduct an evaluation to
                    assess the impact of the changed income
                    eligibility guidelines by comparing the school
                    food authorities operating under this
                    subsection to school food authorities not
                    operating under this subsection.
                      [(B) Impact assessment.--
                              [(i) Children.--The evaluation shall
                            assess the impact of this subsection
                            separately on--
                                      [(I) children in households
                                    with incomes less than 130
                                    percent of the applicable
                                    family income levels contained
                                    in the nonfarm poverty income
                                    guidelines prescribed by the
                                    Office of Management and
                                    Budget, as adjusted annually in
                                    accordance with section
                                    9(b)(1)(B); and
                                      [(II) children in households
                                    with incomes greater than 130
                                    percent and not greater than
                                    185 percent of the applicable
                                    family income levels contained
                                    in the nonfarm poverty income
                                    guidelines prescribed by the
                                    Office of Management and
                                    Budget, as adjusted annually in
                                    accordance with section
                                    9(b)(1)(B).
                              [(ii) Factors.--The evaluation shall
                            assess the impact of this subsection
                            on--
                                      [(I) certification and
                                    participation rates in the
                                    school lunch and breakfast
                                    programs;
                                      [(II) rates of lunch- and
                                    breakfast-skipping;
                                      [(III) academic achievement;
                                      [(IV) the allocation of funds
                                    authorized in title I of the
                                    Elementary and Secondary
                                    Education Act (20 U.S.C. 6301)
                                    to local educational agencies
                                    and public schools; and
                                      [(V) other factors determined
                                    by the Secretary.
                      [(C) Cost assessment.--The evaluation shall
                    assess the increased costs associated with
                    providing additional free, reduced price, or
                    paid meals in the school food authorities
                    operating under this subsection.
                      [(D) Report.--On completion of 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 describing the results of the
                    evaluation under this paragraph.
              [(4) Authorization of appropriations.--There are
            authorized to be appropriated such sums as are
            necessary to carry out this subsection, to remain
            available until expended.
      [(k) Organic Food Pilot Program.--
              [(1) Establishment.--The Secretary shall establish an
            organic food pilot program (referred to in this
            subsection as the ``pilot program'') under which the
            Secretary shall provide grants on a competitive basis
            to school food authorities selected under paragraph
            (3).
              [(2) Use of funds.--
                      [(A) In general.--The Secretary shall use
                    funds provided under this section--
                              [(i) to enter into competitively
                            awarded contracts or cooperative
                            agreements with school food authorities
                            selected under paragraph (3); or
                              [(ii) to make grants to school food
                            authority applicants selected under
                            paragraph (3).
                      [(B) School food authority uses of funds.--A
                    school food authority that receives a grant
                    under this section shall use the grant funds to
                    establish a pilot program that increases the
                    quantity of organic foods provided to
                    schoolchildren under the school lunch program
                    established under this Act.
              [(3) Application.--
                      [(A) In general.--A school food authority
                    seeking a contract, grant, or cooperative
                    agreement under this subsection shall submit to
                    the Secretary an application in such form,
                    containing such information, and at such time
                    as the Secretary shall prescribe.
                      [(B) Criteria.--In selecting contract, grant,
                    or cooperative agreement recipients, the
                    Secretary shall consider--
                              [(i) the poverty line (as defined in
                            section 673(2) of the Community
                            Services Block Grant Act (42 U.S.C.
                            9902(2), including any revision
                            required by that section)) applicable
                            to a family of the size involved of the
                            households in the district served by
                            the school food authority, giving
                            preference to school food authority
                            applicants in which not less than 50
                            percent of the households in the
                            district are at or below the Federal
                            poverty line;
                              [(ii) the commitment of each school
                            food authority applicant--
                                      [(I) to improve the
                                    nutritional value of school
                                    meals;
                                      [(II) to carry out innovative
                                    programs that improve the
                                    health and wellness of
                                    schoolchildren; and
                                      [(III) to evaluate the
                                    outcome of the pilot program;
                                    and
                              [(iii) any other criteria the
                            Secretary determines to be appropriate.
              [(4) Authorization of appropriations.--There are
            authorized to be appropriated to carry out this
            subsection $10,000,000 for fiscal years 2011 through
            2015.]
      (h) State Administration of Child Nutrition Programs.--
              (1) Purposes.--The purposes of this subsection are to
            provide States flexibility to develop programs and
            policies to best meet the nutritional needs of school-
            aged children in the State by providing flexibility
            over school meal programs under this Act and section 4
            of the Child Nutrition Act of 1966 (42 U.S.C. 1773) and
            other programs to address such needs more effectively
            and efficiently with less Federal involvement,
            including by--
                      (A) removing duplication, redundancies,
                    regulatory burden, and unnecessary requirements
                    resulting from the Federal administration of
                    the school meal programs;
                      (B) more efficiently using Federal, State,
                    local, and nongovernmental resources to
                    strengthen delivery of the school meal programs
                    and other programs; and
                      (C) supporting healthy meals through
                    involvement by parents, family members, and the
                    community, including nonprofit organizations,
                    health organizations, and school officials from
                    large and small urban, suburban, and rural
                    areas in the State.
              (2) Grants authorized.--
                      (A) In general.--The Secretary shall award
                    grants, on a competitive basis, to up to 3
                    States to enable the States to carry out the
                    activities described in this subsection.
                      (B) Considerations.--In awarding grants under
                    this subsection, the Secretary shall--
                              (i) in a case in which more than 3
                            States apply for a grant under this
                            subsection, give priority to States by
                            taking into consideration regional
                            diversity; and
                              (ii) ensure each State awarded a
                            grant under this subsection meets the
                            required assurances under paragraph
                            (3)(D), except that the Secretary shall
                            not approve or disapprove an
                            application on the basis of a State's
                            plan or proposed program.
                      (C) Duration of grants.--A grant to a State
                    under this subsection--
                              (i) shall be awarded to the State for
                            a 3-year period; and
                              (ii) may be renewed by the Secretary
                            for an additional 3-year period if the
                            State can demonstrate success in
                            meeting the nutritional needs of the
                            school-aged children in the State.
                      (D) Amount of grants.--The amount of a grant
                    awarded to a State under this subsection for
                    each year of the grant period shall be equal to
                    the amount described in paragraph (3)(C).
                      (E) Matching requirement.--Each State that
                    receives a grant under this subsection shall
                    provide funds from non-Federal sources (which
                    may be provided in cash, commodities, or in
                    kind) to support the activities under this
                    subsection.
                      (F) Limitations.--A State that receives a
                    grant under this subsection may not, during any
                    period during which the State receives such
                    grant, receive funds under any of the
                    following:
                              (i) The school lunch program under
                            this Act.
                              (ii) The school breakfast program
                            under section 4 of the Child Nutrition
                            Act of 1966 (42 U.S.C. 1773).
                              (iii) The special milk program under
                            section 3 of the Child Nutrition Act of
                            1966 (42 U.S.C. 1772).
                              (iv) The State administrative
                            expenses funding under section 7 of the
                            Child Nutrition Act of 1966 (42 U.S.C.
                            1776).
                              (v) The team nutrition network under
                            section 19 of the Child Nutrition Act
                            of 1966 (42 U.S.C. 1788).
              (3) Application.--To receive a grant under this
            subsection, a State shall submit an application at such
            time and in such manner as the Secretary may reasonably
            require. The application shall contain--
                      (A) an assurance that each school-aged child
                    in the State will have access to at least one
                    affordable meal service option during the
                    school day at the school in which the child is
                    enrolled, and a plan for how the State will
                    carry out such assurance, including--
                              (i) the income thresholds or other
                            needs-based determinations to be used
                            for determining--
                                      (I) which students are
                                    eligible for free meals;
                                      (II) which students are
                                    eligible for reduced price
                                    meals; and
                                      (III) which students are
                                    required to pay the full price
                                    for meals;
                              (ii) the estimated number of students
                            in the State eligible for the
                            thresholds for each meal category
                            described in clause (i);
                              (iii) the price to be charged to
                            students eligible for reduced price
                            meals and the price to be charged to
                            students required to pay the full price
                            for meals;
                              (iv) how the State will identify and
                            verify eligibility of such students,
                            such as through census data,
                            application processes, or any other
                            State-determined method;
                              (v) an identification of any non-
                            Federal sources, including State funds,
                            the State will utilize to meet the
                            needs of school-aged children in the
                            State if the grant received under this
                            subsection is not sufficient to cover
                            the cost of the meals to be served
                            during the period in which the State
                            receives such grant;
                              (vi) any other factors the State will
                            use to determine distribution of funds
                            received under the grant to each
                            elementary school and secondary school
                            in the State to reimburse the schools
                            for the cost of the meals served,
                            including how the State will ensure a
                            fair distribution of such funds to
                            address the need for such meals at each
                            such school; and
                              (vii) the monitoring plan the State
                            will use to ensure the funding
                            described in clause (v) will be used in
                            accordance with this subsection;
                      (B) a description of the requirements for
                    meals provided under this subsection that the
                    State will require, including requirements for
                    meal standards and pricing;
                      (C) a request for an amount of grant funds
                    for each year that the State will receive a
                    grant under this subsection, which may not, for
                    each such year exceed the amount the State
                    received for fiscal year 2016--
                              (i) for free and reduced price meal
                            reimbursements under the programs
                            described in clauses (i) and (ii) of
                            paragraph (2)(F), excluding any
                            additional reimbursements received
                            under section 4(b)(3) of this Act; and
                              (ii) under the programs described in
                            paragraphs (iii) through (v) of
                            paragraph (2)(F); and
                      (D) assurances that the State will--
                              (i) provide healthy meals to school-
                            aged children in the State to ensure
                            maximum participation of students in
                            the State;
                              (ii) provide technical assistance to
                            local educational agencies and schools
                            to ensure maximum participation of
                            students in the State;
                              (iii) provide an annual report to the
                            Secretary that outlines the activities
                            and progress made in providing healthy
                            meals to students in a more cost
                            efficient manner than such meals were
                            provided prior to the State receiving
                            such grant; and
                              (iv) work with school leaders, school
                            nutrition providers, and health
                            professionals to develop and implement
                            the plan under subparagraph (A) and to
                            ensure that meals provided in schools
                            in the State using the grant will be
                            healthy and provided in an efficient
                            and cost effective manner.
              (4) Use of funds.--
                      (A) In general.--A State that receives a
                    grant under this subsection shall use the grant
                    funds to--
                              (i) provide meals to school-aged
                            children in accordance with paragraph
                            (3);
                              (ii) carry out the activities
                            described in subparagraph (B) of this
                            paragraph; and
                              (iii) carry out any other activities
                            the State determines will support the
                            goals of this subsection.
                      (B) Additional state activities.--Each State
                    that receives a grant under this subsection
                    shall, in addition to the activities described
                    in clauses (i) and (ii) of subparagraph (A),
                    provide nutritional assistance to low-income
                    and vulnerable children, as determined by the
                    State, by--
                              (i) addressing specific State and
                            community nutritional needs;
                              (ii) engaging partners to deliver the
                            meal programs to spur innovation in
                            such delivery, including local
                            governments and school officials,
                            businesses, non-profit and faith-based
                            organizations, and other community
                            partners;
                              (iii) developing or strengthening
                            private sector partnerships to support
                            the community and nutritional needs of
                            school-aged children; and
                              (iv) achieving administrative and
                            other programmatic cost savings.
                      (C) Limitation.--A State may use not more
                    than 10 percent of the grant received under
                    this subsection for administrative and outreach
                    expenses.
              (5) State reporting.--Not later than 2 years after
            receiving a grant under this subsection, a State shall
            submit to the Secretary a report on how the State was
            better able to operate school meals and other programs
            to address needs more effectively compared to how the
            State addressed such needs before the grant was awarded
            to the State. The report shall include--
                      (A) a description of how the State used the
                    grant funds, the State costs of carrying out
                    the activities under this subsection (including
                    food, administrative, labor, oversight, and any
                    other costs), and any revenue the State
                    received by carrying out such activities
                    (including Federal, non-Federal, and family
                    contributions);
                      (B) the strategies and activities undertaken
                    at the State and, if applicable, local level to
                    meet the goals of this subsection;
                      (C) financial efficiencies the State has
                    identified through the grant, including the
                    extent to which activities under the grant have
                    led to the addition, blending, or braiding of
                    other Federal or private funding, and the
                    specific or estimated amount of cost-savings,
                    reduced burdens, and other efficiencies;
                      (D) the impacts the State has made in meeting
                    the goals of this subsection;
                      (E) any barriers the State has identified in
                    providing school meals, and ways in which to
                    overcome such barriers; and
                      (F) other State-determined and voluntarily
                    provided information intended to share best
                    practices for future implementation of this
                    subsection.
              (6) Limitations on federal interference.--Nothing in
            this subsection shall be construed to authorize the
            Secretary to establish, as a condition to receive a
            grant under this subsection or as requirement to
            operate such a grant, any criterion that specifies,
            defines, or prescribes--
                      (A) nutritional guidelines, standards, or
                    meal requirements, including the methods that a
                    State uses to develop, implement, or improve
                    such nutritional guidelines, standards, or meal
                    requirements;
                      (B) specific aspects, parameters, or measures
                    of programmatic quality, including measures of
                    compliance or evaluation;
                      (C) nutritional curriculum, programs of
                    instruction, or instructional content;
                      (D) any aspect of meal provision criteria,
                    including nutritional requirements, timing,
                    duration, type, price, amount, or any other
                    aspect of meals or meal program operation;
                      (E) any term under this subsection as such
                    term applies to activities carried out by a
                    State, including the terms healthy, affordable
                    meal, school day, and nutritional needs;
                      (F) the ways in which a State identifies and
                    verifies eligibility for benefits, including
                    child, family, and provider eligibility;
                      (G) differentiated payment rates a State may
                    use;
                      (H) the amount or sources of non-Federal
                    funds that a State must provide;
                      (I) the percentages or amounts of grant funds
                    to be used for specific activities within or
                    among programs;
                      (J) the scope or structure of programs,
                    including number of meals served, timing within
                    the day, and length or time of year a program
                    operates; and
                      (K) any aspect or parameter of programmatic
                    evaluation.
              (7) Federal reporting.--Not later than 4 years after
            the first grant is awarded under this subsection, the
            Secretary shall provide to the Committee on Education
            and the Workforce of the House of Representatives and
            the Committee on Agriculture, Nutrition, and Forestry
            of the Senate, and to States, a report on the
            feasibility of scaling the implementation of this
            subsection, including the efficiencies, cost savings,
            and other benefits identified by State implementation
            of the programs described in paragraph (2)(F) under
            this subsection. Such determination of feasibility
            shall be based on information including--
                      (A) State reports submitted under paragraph
                    (5);
                      (B) a determination of the level of Federal
                    cost-savings achieved and the amount of future
                    cost-saving implications;
                      (C) programmatic simplifications the Federal
                    Government could pursue; and
                      (D) other information provided by States or
                    private entities that would be useful in
                    recommendations to the public, States, and to
                    Congress.

    SEC. 19. [FRESH] FRUIT AND VEGETABLE PROGRAM.

      (a) In General.--For the school year beginning July 2008 and
    each subsequent school year, the Secretary shall provide grants
    to States to carry out a program to make free [fresh] fruits
    and vegetables available in elementary schools (referred to in
    this section as the ``program'').
      (b) Program.--A school participating in the program shall
    make free [fresh] fruits and vegetables available to students
    throughout the school day (or at such other times as are
    considered appropriate by the Secretary) in 1 or more areas
    designated by the school.
      (c) Funding to States.--
              (1) Minimum grant.--Except as provided in subsection
            (i)(2), the Secretary shall provide to each of the 50
            States and the District of Columbia an annual grant in
            an amount equal to 1 percent of the funds made
            available for a year to carry out the program.
              (2) Additional funding.--Of the funds remaining after
            grants are made under paragraph (1), the Secretary
            shall allocate additional funds to each State that is
            operating a school lunch program under section 4 based
            on the proportion that--
                      (A) the population of the State; bears to
                      (B) the population of the United States.
      (d) Selection of Schools.--
              (1) In general.--Except as provided in paragraph (2)
            of this subsection and section 4304(a)(2) of the Food,
            Conservation, and Energy Act of 2008, each year, in
            selecting schools to participate in the program, each
            State shall--
                      (A) ensure that each school chosen to
                    participate in the program is a school--
                              (i) in which not less than 50 percent
                            of the students are eligible for free
                            or reduced price meals under this Act;
                            and
                              (ii) that submits an application in
                            accordance with subparagraph (D);
                      (B) to the maximum extent practicable, give
                    the highest priority to schools with the
                    highest proportion of children who are eligible
                    for free or reduced price meals under this Act;
                      (C) ensure that each school selected is an
                    elementary school (as defined in section 9101
                    of the Elementary and Secondary Education Act
                    of 1965 (20 U.S.C. 7801));
                      (D) solicit applications from interested
                    schools that include--
                              (i) information pertaining to the
                            percentage of students enrolled in the
                            school submitting the application who
                            are eligible for free or reduced price
                            school lunches under this Act;
                              (ii) a certification of support for
                            participation in the program signed by
                            the school food manager, the school
                            principal, and the district
                            superintendent (or equivalent
                            positions, as determined by the
                            school);
                              (iii) a plan for implementation of
                            the program, including efforts to
                            integrate activities carried out under
                            this section with other efforts to
                            promote sound health and nutrition,
                            reduce overweight and obesity, or
                            promote physical activity; and
                              (iv) such other information as may be
                            requested by the Secretary; and
                      (E) encourage applicants to submit a plan for
                    implementation of the program that includes a
                    partnership with 1 or more entities that will
                    provide non-Federal resources (including
                    entities representing the fruit and vegetable
                    industry).
              (2) Exception.--Clause (i) of paragraph (1)(A) shall
            not apply to a State if all schools that meet the
            requirements of that clause have been selected and the
            State does not have a sufficient number of additional
            schools that meet the requirement of that clause.
              (3) Outreach to low-income schools.--
                      (A) In general.--Prior to making decisions
                    regarding school participation in the program,
                    a State agency shall inform the schools within
                    the State with the highest proportion of free
                    and reduced price meal eligibility, including
                    Native American schools, of the eligibility of
                    the schools for the program with respect to
                    priority granted to schools with the highest
                    proportion of free and reduced price
                    eligibility under paragraph (1)(B).
                      (B) Requirement.--In providing information to
                    schools in accordance with subparagraph (A), a
                    State agency shall inform the schools that
                    would likely be chosen to participate in the
                    program under paragraph (1)(B).
      (e) Notice of Availability.--If selected to participate in
    the program, a school shall widely publicize within the school
    the availability of free [fresh] fruits and vegetables under
    the program.
      (f) Per-Student Grant.--The per-student grant provided to a
    school under this section shall be--
              (1) determined by a State agency; and
              (2) not less than $50, nor more than $75.
      (g) Limitation.--To the maximum extent practicable, each
    State agency shall ensure that in making the fruits and
    vegetables provided under this section available to students,
    schools offer the fruits and vegetables separately from meals
    otherwise provided at the school under this Act or the Child
    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).
      (h) Evaluation and Reports.--
              (1) In general.--The Secretary shall conduct an
            evaluation of the program, including a determination as
            to whether children experienced, as a result of
            participating in the program--
                      (A) increased consumption of fruits and
                    vegetables;
                      (B) other dietary changes, such as decreased
                    consumption of less nutritious foods; and
                      (C) such other outcomes as are considered
                    appropriate by the Secretary.
              (2) Report.--Not later than September 30, 2011, the
            Secretary shall submit to the [Committee on Education
            and Labor] Committee on Education and the Workforce of
            the House of Representatives and the Committee on
            Agriculture, Nutrition, and Forestry of the Senate a
            report that describes the results of the evaluation
            under paragraph (1).
      (i) Funding.--
              (1) In general.--Out of the funds made available
            under subsection (b)(2)(A) of section 14222 of the
            Food, Conservation, and Energy Act of 2008, the
            Secretary shall use the following amounts to carry out
            this section:
                      (A) On October 1, 2008, $40,000,000.
                      (B) On July 1, 2009, $65,000,000.
                      (C) On July 1, 2010, $101,000,000.
                      (D) On July 1, 2011, $150,000,000.
                      (E) On July 1, 2012, and each July 1
                    thereafter, the amount made available for the
                    preceding fiscal year, as adjusted to reflect
                    changes for the 12-month period ending the
                    preceding April 30 in the Consumer Price Index
                    for All Urban Consumers published by the Bureau
                    of Labor Statistics of the Department of Labor,
                    for items other than food.
              (2) Maintenance of existing funding.--In allocating
            funding made available under paragraph (1) among the
            States in accordance with subsection (c), the Secretary
            shall ensure that each State that received funding
            under section 18(f) on the day before the date of
            enactment of the Food, Conservation, and Energy Act of
            2008 shall continue to receive sufficient funding under
            this section to maintain the caseload level of the
            State under that section as in effect on that date.
              (3) Evaluation funding.--On October 1, 2008, out of
            any funds made available under subsection (b)(2)(A) of
            section 14222 of the Food, Conservation, and Energy Act
            of 2008, the Secretary shall use to carry out the
            evaluation required under subsection (h), $3,000,000,
            to remain available for obligation until September 30,
            2010.
              (4) Receipt and acceptance.--The Secretary shall be
            entitled to receive, shall accept, and shall use to
            carry out this section any funds transferred for that
            purpose, without further appropriation.
              [(5) Authorization of appropriations.--In addition to
            any other amounts made available to carry out this
            section, there are authorized to be appropriated such
            sums as are necessary to expand the program established
            under this section.]
              [(6)] (5) Administrative costs.--
                      (A) In general.--Of funds made available to
                    carry out this section for a fiscal year, the
                    Secretary may use not more than $500,000 for
                    the administrative costs of carrying out the
                    program.
                      (B) Reservation of funds.--The Secretary
                    shall allow each State to reserve such funding
                    as the Secretary determines to be necessary to
                    administer the program in the State (with
                    adjustments for the size of the State and the
                    grant amount), but not to exceed the amount
                    required to pay the costs of 1 full-time
                    coordinator for the program in the State.
              [(7) Reallocation.--
                      [(A) Among states.--The Secretary may
                    reallocate any amounts made available to carry
                    out this section that are not obligated or
                    expended by a date determined by the Secretary.
                      [(B) Within states.--A State that receives a
                    grant under this section may reallocate any
                    amounts made available under the grant that are
                    not obligated or expended by a date determined
                    by the Secretary.]
              (6) Clarification.--
                      (A) Guidance.--The Secretary shall issue
                    guidance with respect to how funds under the
                    program may be used, which--
                              (i) clarifies to States that such
                            funds may be used on all forms of
                            fruits and vegetables, provided the
                            fruit or vegetable product meets the
                            requirements of section 210.11 of title
                            7, Code of Federal Regulations (as in
                            effect on the date of enactment of the
                            Improving Child Nutrition and Education
                            Act of 2016);
                              (ii) provides the appropriate
                            exemptions described in such section
                            210.11 of the Code of Federal
                            Regulations; and
                              (iii) encourages schools to introduce
                            fruits and vegetables to children in
                            new contexts, including by allowing
                            schools to offer combinations of fruits
                            and vegetables with tree nuts, which
                            provide a good source of protein per
                            serving and meet the nutrition
                            standards of such section 210.11 of the
                            Code of Federal Regulations, except
                            that the Secretary shall provide
                            exemptions from the total fat
                            requirements under such section 210.11
                            for tree nut products.
                      (B) Local decision.--Nothing in this section
                    shall be construed to require a school
                    participating in the program to select forms of
                    fruit or vegetables other than fresh.

               *       *       *       *       *       *       *

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

      (a) General Authority.--The Secretary--
              (1) subject to the availability of, and from, amounts
            appropriated pursuant to subsection (e)(1), shall
            conduct training activities and provide--
                      (A) training and technical assistance to
                    improve the skills of individuals employed in--
                              (i) food service programs carried out
                            with assistance under this Act and, to
                            the maximum extent practicable, using
                            individuals who administer exemplary
                            local food service programs in the
                            State;
                              (ii) school breakfast programs
                            carried out with assistance under
                            section 4 of the Child Nutrition Act of
                            1966 (42 U.S.C. 1773); and
                              (iii) as appropriate, other federally
                            assisted feeding programs; and
                      (B) assistance, on a competitive basis, to
                    State agencies for the purpose of aiding
                    schools and school food authorities with at
                    least 50 percent of enrolled children certified
                    to receive free or reduced price meals (and, if
                    there are any remaining funds, other schools
                    and school food authorities) in meeting the
                    cost of acquiring or upgrading technology and
                    information management systems for use in food
                    service programs carried out under this Act and
                    section 4 of the Child Nutrition Act of 1966
                    (42 U.S.C. 1773), if the school or school food
                    authority submits to the State agency an
                    infrastructure development plan that--
                              (i) addresses the cost savings and
                            improvements in program integrity and
                            operations that would result from the
                            use of new or upgraded technology;
                              (ii) ensures that there is not any
                            overt identification of any child by
                            special tokens or tickets, announced or
                            published list of names, or by any
                            other means;
                              (iii) provides for processing and
                            verifying applications for free and
                            reduced price school meals;
                              (iv) integrates menu planning,
                            production, and serving data to monitor
                            compliance with section 9(f)(1); and
                              (v) establishes compatibility with
                            statewide reporting systems;
                      (C) assistance, on a competitive basis, to
                    State agencies with low proportions of schools
                    or students that--
                              (i) participate in the school
                            breakfast program under section 4 of
                            the Child Nutrition Act of 1966 (42
                            U.S.C. 1773); and
                              (ii) demonstrate the greatest need,
                            for the purpose of aiding schools in
                            meeting costs associated with
                            initiating or expanding a school
                            breakfast program under section 4 of
                            the Child Nutrition Act of 1966 (42
                            U.S.C. 1773), including outreach and
                            informational activities; and
              (2) from amounts appropriated pursuant to subsection
            (e)(2), is authorized to provide financial and other
            assistance to the University of Mississippi, in
            cooperation with the University of Southern
            Mississippi, to establish and maintain a food service
            management institute.
      (b) Minimum Requirements.--The activities conducted and
    assistance provided as required by subsection (a)(1) shall at
    least include activities and assistance with respect to--
              (1) menu planning;
              (2) implementation of regulations and appropriate
            guidelines; and
              (3) compliance with program requirements and
            accountability for program operations.
      (c) Duties of Food Service Management Institute.--
              (1) In general.--Any food service management
            institute established as authorized by subsection
            (a)(2) shall carry out activities to improve the
            general operation and quality of--
                      (A) food service programs assisted under this
                    Act;
                      (B) school breakfast programs assisted under
                    section 4 of the Child Nutrition Act of 1966;
                    and
                      (C) as appropriate, other federally assisted
                    feeding programs.
              (2) Required activities.--Activities carried out
            under paragraph (1) shall include--
                      (A) conducting research necessary to assist
                    schools and other organizations that
                    participate in such programs in providing high
                    quality, nutritious, cost-effective meal
                    service to the children served;
                      (B) providing training and technical
                    assistance with respect to--
                              (i) efficient use of physical
                            resources;
                              (ii) financial management;
                              (iii) efficient use of computers;
                              (iv) procurement;
                              (v) sanitation;
                              (vi) safety, including food handling,
                            hazard analysis and critical control
                            point plan implementation, emergency
                            readiness, responding to a food recall,
                            and food biosecurity training;
                              (vii) meal planning and related
                            nutrition activities;
                              (viii) culinary skills; and
                              (ix) other appropriate activities;
                      (C) establishing a national network of
                    trained professionals to present training
                    programs and workshops for food service
                    personnel;
                      (D) developing training materials for use in
                    the programs and workshops described in
                    subparagraph (C);
                      (E) acting as a clearinghouse for research,
                    studies, and findings concerning all aspects of
                    the operation of food service programs;
                      (F) training food service personnel to comply
                    with the nutrition guidance and objectives
                    established by the Secretary through a national
                    network of instructors or other means;
                      (G) preparing informational materials, such
                    as video instruction tapes and menu planners,
                    to promote healthier food preparation; and
                      (H) assisting [State educational agencies]
                    State agencies in providing additional
                    nutrition and health instructions and
                    instructors, including training personnel to
                    comply with the nutrition guidance and
                    objectives established by the Secretary.
      (d) Coordination.--
              (1) In general.--The Secretary shall coordinate
            activities carried out and assistance provided as
            required by subsection (b) with activities carried out
            by any food service management institute established as
            authorized by subsection (a)(2).
              (2) Use of institute for dietary and nutrition
            activities.--The Secretary shall use any food service
            management institute established under subsection
            (a)(2) to assist in carrying out dietary and nutrition
            activities of the Secretary.
      (e) Food Service Management Institute.--
              (1) Funding.--
                      (A) In general.--In addition to any amounts
                    otherwise made available for fiscal year 2011,
                    on October 1, 2010, and each October 1
                    thereafter, out of any funds in the Treasury
                    not otherwise appropriated, the Secretary of
                    the Treasury shall transfer to the Secretary to
                    carry out subsection (a)(2) $5,000,000, to
                    remain available until expended.
                      (B) Receipt and acceptance.--The Secretary
                    shall be entitled to receive, shall accept, and
                    shall use to carry out subsection (a)(2) the
                    funds transferred under subparagraph (A),
                    without further appropriation.
              (2) Additional funding.--In addition to amounts made
            available under paragraph (1), there are authorized to
            be appropriated to carry out subsection (a)(2) such
            sums as are necessary for fiscal year 1995 and each
            subsequent fiscal year. The Secretary shall carry out
            activities under subsection (a)(2), in addition to the
            activities funded under paragraph (1), to the extent
            provided for, and in such amounts as are provided for,
            in advance in appropriations Acts.
              (3) Funding for education, training, or applied
            research or studies.--In addition to amounts made
            available under paragraphs (1) and (2), from amounts
            otherwise appropriated to the Secretary in
            discretionary appropriations, the Secretary may provide
            funds to any food service management institute
            established under subsection (a)(2) for projects
            specified by the Secretary that will contribute to
            implementing dietary or nutrition initiatives. Any
            additional funding under this subparagraph shall be
            provided noncompetitively in a separate cooperative
            agreement.
      (f) Administrative Training and Technical Assistance
    Material.--In collaboration with [State educational agencies]
    State agencies, local educational agencies, and school food
    authorities of varying sizes, the Secretary shall develop and
    distribute training and technical assistance material relating
    to the administration of school meals programs that are
    representative of the best management and administrative
    practices.
      (g) Federal Administrative Support.--
              (1) Funding.--
                      (A) In general.--Out of any funds in the
                    Treasury not otherwise appropriated, the
                    Secretary of the Treasury shall transfer to the
                    Secretary of Agriculture to carry out this
                    subsection--
                              (i) on October 1, 2004, and October
                            1, 2005, $3,000,000;
                              (ii) on October 1, 2006, October 1,
                            2007, October 1, 2008, and October 1,
                            2009, $2,000,000; and
                              (iii) on October 1, 2010, and every
                            October 1 thereafter, $4,000,000.
                      (B) Receipt and acceptance.--The Secretary
                    shall be entitled to receive, shall accept, and
                    shall use to carry out this subsection the
                    funds transferred under subparagraph (A),
                    without further appropriation.
                      (C) Availability of funds.--Funds transferred
                    under subparagraph (A) shall remain available
                    until expended.
              (2) Use of funds.--The Secretary may use funds
            provided under this subsection--
                      (A) to provide training and technical
                    assistance and material related to improving
                    program integrity and administrative accuracy
                    in school meals programs; and
                      (B) to assist [State educational agencies]
                    State agencies in reviewing the administrative
                    practices of local educational agencies, to the
                    extent determined by the Secretary.

    SEC. 22. COMPLIANCE AND ACCOUNTABILITY.

      (a) Unified Accountability System.--
              [(1) In general.--]There shall be a unified system
            prescribed and administered by the Secretary to ensure
            that local food service authorities participating in
            the school lunch program established under this Act and
            the school breakfast program established by section 4
            of the Child Nutrition Act of 1966 (42 U.S.C. 1773)
            comply with those Acts, including compliance with--
              [(A)] (1) the nutritional requirements of section
            9(f) of this Act for school lunches; and
              [(B)] (2) as applicable, the nutritional requirements
            for school breakfasts under section 4(e)(1) of the
            Child Nutrition Act of 1966 (42 U.S.C. 1773(e)(1)).
      (b) Functions of System.--
              (1) In general.--Under the system described in
            subsection (a), each [State educational agency] State
            agency shall--
                      (A) require that local food service
                    authorities comply with the nutritional
                    requirements described in subparagraphs (A) and
                    (B) of paragraph (1);
                      (B) to the maximum extent practicable, ensure
                    compliance through reasonable audits and
                    supervisory assistance reviews;
                      (C) in conducting audits and reviews for the
                    purpose of determining compliance with this
                    Act, including the nutritional requirements of
                    section 9(f)--
                              (i) conduct audits and reviews during
                            a [3-year cycle] 5-year cycle or other
                            period prescribed by the Secretary;
                              (ii) select schools for review in
                            each local educational agency using
                            criteria established by the Secretary;
                              (iii) report the final results of the
                            reviews to the public in the State in
                            an accessible, easily understood manner
                            in accordance with guidelines
                            promulgated by the Secretary; and
                              (iv) submit to the Secretary each
                            year a report containing the results of
                            the reviews in accordance with
                            procedures developed by the Secretary;
                            and
                      (D) when any local food service authority is
                    reviewed under this section, ensure that the
                    final results of the review by the [State
                    educational agency] State agency are posted and
                    otherwise made available to the public on
                    request in an accessible, easily understood
                    manner in accordance with guidelines
                    promulgated by the Secretary.
              (2) Minimization of additional duties.--Each [State
            educational agency] State agency shall coordinate the
            compliance and accountability activities described in
            paragraph (1) in a manner that minimizes the imposition
            of additional duties on local food service authorities.
              [(3) Additional review requirement for selected local
            educational agencies.--
                      [(A) Definition of selected local educational
                    agencies.--In this paragraph, the term
                    ``selected local educational agency'' means a
                    local educational agency that has a
                    demonstrated high level of, or a high risk for,
                    administrative error, as determined by the
                    Secretary.
                      [(B) Additional administrative review.--In
                    addition to any review required by subsection
                    (a) or paragraph (1), each State educational
                    agency shall conduct an administrative review
                    of each selected local educational agency
                    during the review cycle established under
                    subsection (a).
                      [(C) Scope of review.--In carrying out a
                    review under subparagraph (B), a State
                    educational agency shall only review the
                    administrative processes of a selected local
                    educational agency, including application,
                    certification, verification, meal counting, and
                    meal claiming procedures.
                      [(D) Results of review.--If the State
                    educational agency determines (on the basis of
                    a review conducted under subparagraph (B)) that
                    a selected local educational agency fails to
                    meet performance criteria established by the
                    Secretary, the State educational agency shall--
                              [(i) require the selected local
                            educational agency to develop and carry
                            out an approved plan of corrective
                            action;
                              [(ii) except to the extent technical
                            assistance is provided directly by the
                            Secretary, provide technical assistance
                            to assist the selected local
                            educational agency in carrying out the
                            corrective action plan; and
                              [(iii) conduct a followup review of
                            the selected local educational agency
                            under standards established by the
                            Secretary.]
              (3) Error reduction plans.--
                      (A) In general.--Each State agency shall work
                    with the local educational agencies that have
                    the highest rates of certification errors
                    according to the verification process under
                    section 9(a)(D) to develop an error reduction
                    plan and monitor implementation of the plan
                    over the remainder of the review cycle.
                      (B) Plan components.--Each error reduction
                    plan shall include--
                              (i) specific measures that the local
                            educational agency shall take to reduce
                            certification errors, including at a
                            minimum--
                                      (I) increasing the standard
                                    verification sample size,
                                    except such increase shall not
                                    result in a verification sample
                                    size of more than 15 percent;
                                      (II) improvements in the
                                    application;
                                      (III) the use of technology
                                    to minimize opportunities for
                                    error; and
                                      (IV) enhanced training and
                                    oversight of staff involved in
                                    the certification and
                                    verification process;
                              (ii) a timeline for the local
                            educational agency to implement those
                            measures within the review cycle;
                              (iii) annual goals for reductions in
                            certification errors;
                              (iv) technical assistance to be
                            provided by the State agency; and
                              (v) working with an educational
                            service agency to help conduct the
                            verification process and other aspects
                            of the program as necessary to help
                            reduce errors in the administration of
                            the program.
                      (C) State agency responsibilities.--Each
                    State agency shall--
                              (i) assist the local educational
                            agencies identified under subparagraph
                            (D) with developing an error reduction
                            plan that complies with subparagraph
                            (B);
                              (ii) provide technical assistance as
                            described in the error reduction plan
                            under subparagraph (B)(iv);
                              (iii) conduct annual reviews focused
                            on the direct certification,
                            application, certification,
                            verification, meal counting, and meal
                            claiming processes; and
                              (iv) report annually to the Secretary
                            on the progress of the State in
                            reducing errors.
                      (D) Selection of local educational
                    agencies.--
                              (i) In general.--Each State agency
                            shall select up to 10 percent of the
                            local educational agencies in the State
                            to develop an error reduction plan.
                              (ii) Limitation.--The percentage of
                            local educational agencies selected
                            under clause (i) shall not be comprised
                            of more than 50 percent of small local
                            educational agencies, as determined by
                            the Secretary.
                              (iii) Assessment of certification
                            error.--In selecting local educational
                            agencies under this paragraph,
                            certification error shall be assessed
                            based on a measure determined by the
                            Secretary that considers--
                                      (I) the results of the
                                    reviews conducted under
                                    paragraph (1) and
                                      (II) the percentage of
                                    household applications verified
                                    under section 9(b)(3)(D)(i)
                                    that had the level of benefits
                                    changed as a result of
                                    information obtained during the
                                    verification process, excluding
                                    benefit terminations resulting
                                    from not obtaining information
                                    during household verification
                                    conducted under section
                                    9(b)(3)(G).
              (4) High performance.--
                      (A) In general.--If a local educational
                    agency is determined to be in the top 20
                    percent of local educational agencies in the
                    State, as determined by the State under
                    subparagraph (B), the sample size under section
                    9(b)(3)(D)(i)(II) shall be a verification
                    sample size of 2.5 percent.
                      (B) Considerations.--The State shall
                    determine whether a local educational agency is
                    in the top 20 percent of local educational
                    agencies in the State by considering error
                    rates, confirmation rates, non-response rates,
                    response rates, and other factors as necessary
                    to make such determination.
              [(4)] (5) Retaining funds after administrative
            reviews.--
                      (A) In general.--Subject to subparagraphs (B)
                    and (C), if the local educational agency fails
                    to meet administrative performance criteria
                    established by the Secretary in both an initial
                    review and a followup review under paragraph
                    (1) or (3) or subsection (a), the Secretary may
                    require the [State educational agency] State
                    agency to retain funds that would otherwise be
                    paid to the local educational agency for school
                    meals programs under procedures prescribed by
                    the Secretary.
                      (B) Amount.--The amount of funds retained
                    under subparagraph (A) shall equal the value of
                    any overpayment made to the local educational
                    agency or school food authority as a result of
                    an erroneous claim during the time period
                    described in subparagraph (C).
                      (C) Time period.--The period for determining
                    the value of any overpayment under subparagraph
                    (B) shall be the period--
                              (i) beginning on the date the
                            erroneous claim was made; and
                              (ii) ending on the earlier of the
                            date the erroneous claim is corrected
                            or--
                                      (I) in the case of the first
                                    followup review conducted by
                                    the [State educational agency]
                                    State agency of the local
                                    educational agency under this
                                    section after July 1, 2005, the
                                    date that is 60 days after the
                                    beginning of the period under
                                    clause (i); or
                                      (II) in the case of any
                                    subsequent followup review
                                    conducted by the [State
                                    educational agency] State
                                    agency of the local educational
                                    agency under this section, the
                                    date that is 90 days after the
                                    beginning of the period under
                                    clause (i).
              [(5)] (6) Use of retained funds.--
                      (A) In general.--Subject to subparagraph (B),
                    funds retained under [paragraph (4)] paragraph
                    (5) shall--
                              (i) be returned to the Secretary, and
                            may be used--
                                      (I) to provide training and
                                    technical assistance related to
                                    administrative practices
                                    designed to improve program
                                    integrity and administrative
                                    accuracy in school meals
                                    programs to [State educational
                                    agencies] State agencies and,
                                    to the extent determined by the
                                    Secretary, to local educational
                                    agencies and school food
                                    authorities;
                                      (II) to assist [State
                                    educational agencies] State
                                    agencies in reviewing the
                                    administrative practices of
                                    local educational agencies in
                                    carrying out school meals
                                    programs; and
                                      (III) to carry out section
                                    21(f); or
                              (ii) be credited to the child
                            nutrition programs appropriation
                            account.
                      (B) State share.--A [State educational
                    agency] State agency may retain not more than
                    25 percent of an amount recovered under
                    [paragraph (4)] paragraph (5), to carry out
                    school meals program integrity initiatives to
                    assist local educational agencies and school
                    food authorities that have repeatedly failed,
                    as determined by the Secretary, to meet
                    administrative performance criteria.
                      (C) Requirement.--To be eligible to retain
                    funds under subparagraph (B), a [State
                    educational agency] State agency shall--
                              (i) submit to the Secretary a plan
                            describing how the [State educational
                            agency] State agency will use the funds
                            to improve school meals program
                            integrity, including measures to give
                            priority to local educational agencies
                            from which funds were retained under
                            [paragraph (4)] paragraph (5);
                              (ii) consider using individuals who
                            administer exemplary local food service
                            programs in the provision of training
                            and technical assistance; and
                              (iii) obtain the approval of the
                            Secretary for the plan.
              [(6)] (7) Eligibility determination review for
            selected local educational agencies.--
                      (A) In general.--A local educational agency
                    that has demonstrated a high level of, or a
                    high risk for, administrative error associated
                    with certification, verification, and other
                    administrative processes, as determined by the
                    Secretary, shall ensure that the initial
                    eligibility determination for each application
                    is reviewed for accuracy prior to notifying a
                    household of the eligibility or ineligibility
                    of the household for free or reduced price
                    meals.
                      (B) Timeliness.--The review of initial
                    eligibility determinations--
                              (i) shall be completed in a timely
                            manner; and
                              (ii) shall not result in the delay of
                            an eligibility determination for more
                            than 10 operating days after the date
                            on which the application is submitted.
                      (C) Acceptable types of review.--Subject to
                    standards established by the Secretary, the
                    system used to review eligibility
                    determinations for accuracy shall be conducted
                    by an individual or entity that did not make
                    the initial eligibility determination.
                      (D) Notification of household.--Once the
                    review of an eligibility determination has been
                    completed under this paragraph, the household
                    shall be notified immediately of the
                    determination of eligibility or ineligibility
                    for free or reduced price meals.
                      (E) Reporting.--
                              (i) Local educational agencies.--In
                            accordance with procedures established
                            by the Secretary, each local
                            educational agency required to review
                            initial eligibility determinations
                            shall submit to the relevant State
                            agency a report describing the results
                            of the reviews, including--
                                      (I) the number and percentage
                                    of reviewed applications for
                                    which the eligibility
                                    determination was changed and
                                    the type of change made; and
                                      (II) such other information
                                    as the Secretary determines to
                                    be necessary.
                              (ii) State agencies.--In accordance
                            with procedures established by the
                            Secretary, each State agency shall
                            submit to the Secretary a report
                            describing the results of the reviews
                            of initial eligibility determinations,
                            including--
                                      (I) the number and percentage
                                    of reviewed applications for
                                    which the eligibility
                                    determination was changed and
                                    the type of change made; and
                                      (II) such other information
                                    as the Secretary determines to
                                    be necessary.
                              (iii) Transparency.--The Secretary
                            shall publish annually the results of
                            the reviews of initial eligibility
                            determinations by State, number,
                            percentage, and type of error.
      (c) Role of Secretary.--In carrying out this section, the
    Secretary shall--
              (1) assist the [State educational agency] State
            agency in the monitoring of programs conducted by local
            food service authorities; and
              (2) through management evaluations, review the
            compliance of the [State educational agency] State
            agency and the local school food service authorities
            with regulations issued under this Act.
      (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)
    $10,000,000 for each of fiscal years [2011 through 2015] 2017
    through 2021.
      (e) Fines for Violating Program Requirements.--
              (1) School food authorities and schools.--
                      (A) In general.--The Secretary shall
                    establish criteria by which the Secretary or a
                    State agency may impose a fine against any
                    school food authority or school administering a
                    program authorized under this Act or the Child
                    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.)
                    if the Secretary or the State agency determines
                    that the school food authority or school has--
                              (i) failed to correct severe
                            mismanagement of the program;
                              (ii) disregarded a program
                            requirement of which the school food
                            authority or school had been informed;
                            or
                              (iii) failed to correct repeated
                            violations of program requirements.
                      (B) Limits.--
                              (i) In general.--In calculating the
                            fine for a school food authority or
                            school, the Secretary shall base the
                            amount of the fine on the reimbursement
                            earned by school food authority or
                            school for the program in which the
                            violation occurred.
                              (ii) Amount.--The amount under clause
                            (i) shall not exceed--
                                      (I) 1 percent of the amount
                                    of meal reimbursements earned
                                    for the fiscal year for the
                                    first finding of 1 or more
                                    program violations under
                                    subparagraph (A);
                                      (II) 5 percent of the amount
                                    of meal reimbursements earned
                                    for the fiscal year for the
                                    second finding of 1 or more
                                    program violations under
                                    subparagraph (A); and
                                      (III) 10 percent of the
                                    amount of meal reimbursements
                                    earned for the fiscal year for
                                    the third or subsequent finding
                                    of 1 or more program violations
                                    under subparagraph (A).
              (2) State agencies.--
                      (A) In general.--The Secretary shall
                    establish criteria by which the Secretary may
                    impose a fine against any State agency
                    administering a program authorized under this
                    Act or the Child Nutrition Act of 1966 (42
                    U.S.C. 1771 et seq.) if the Secretary
                    determines that the State agency has--
                              (i) failed to correct severe
                            mismanagement of the program;
                              (ii) disregarded a program
                            requirement of which the State had been
                            informed; or
                              (iii) failed to correct repeated
                            violations of program requirements.
                      (B) Limits.--In the case of a State agency,
                    the amount of a fine under subparagraph (A)
                    shall not exceed--
                              (i) 1 percent of funds made available
                            under section 7(a) of the Child
                            Nutrition Act of 1966 (42 U.S.C.
                            1776(a)) for State administrative
                            expenses during a fiscal year for the
                            first finding of 1 or more program
                            violations under subparagraph (A);
                              (ii) 5 percent of funds made
                            available under section 7(a) of the
                            Child Nutrition Act of 1966 (42 U.S.C.
                            1776(a)) for State administrative
                            expenses during a fiscal year for the
                            second finding of 1 or more program
                            violations under subparagraph (A); and
                              (iii) 10 percent of funds made
                            available under section 7(a) of the
                            Child Nutrition Act of 1966 (42 U.S.C.
                            1776(a)) for State administrative
                            expenses during a fiscal year for the
                            third or subsequent finding of 1 or
                            more program violations under
                            subparagraph (A).
              (3) Source of funding.--Funds to pay a fine imposed
            under paragraph (1) or (2) shall be derived from non-
            Federal sources.

    SEC. 23. CHILDHOOD HUNGER RESEARCH.

      (a) Research on Causes and Consequences of Childhood
    Hunger.--
              (1) In general.--The Secretary shall conduct research
            on--
                      (A) the causes of childhood hunger and food
                    insecurity;
                      (B) the characteristics of households with
                    childhood hunger and food insecurity; and
                      (C) the consequences of childhood hunger and
                    food insecurity.
              (2) Authority.--In carrying out research under
            paragraph (1), the Secretary may--
                      (A) enter into competitively awarded
                    contracts or cooperative agreements; or
                      (B) provide grants to States or public or
                    private agencies or organizations, as
                    determined by the Secretary.
              (3) Application.--To be eligible to enter into a
            contract or cooperative agreement or receive a grant
            under this subsection, a State or public or private
            agency or organization shall submit to the Secretary an
            application at such time, in such manner, and
            containing such information as the Secretary shall
            require.
              (4) Areas of inquiry.--The Secretary shall design the
            research program to advance knowledge and understanding
            of information on the issues described in paragraph
            (1), such as--
                      (A) economic, health, social, cultural,
                    demographic, and other factors that contribute
                    to childhood hunger or food insecurity;
                      (B) the geographic distribution of childhood
                    hunger and food insecurity;
                      (C) the extent to which--
                              (i) existing Federal assistance
                            programs, including the Internal
                            Revenue Code of 1986, reduce childhood
                            hunger and food insecurity; and
                              (ii) childhood hunger and food
                            insecurity persist due to--
                                      (I) gaps in program coverage;
                                      (II) the inability of
                                    potential participants to
                                    access programs; or
                                      (III) the insufficiency of
                                    program benefits or services;
                      (D) the public health and medical costs of
                    childhood hunger and food insecurity;
                      (E) an estimate of the degree to which the
                    Census Bureau measure of food insecurity
                    underestimates childhood hunger and food
                    insecurity because the Census Bureau excludes
                    certain households, such as homeless, or other
                    factors;
                      (F) the effects of childhood hunger on child
                    development, well-being, and educational
                    attainment; and
                      (G) such other critical outcomes as are
                    determined by the Secretary.
              (5) Funding.--
                      (A) In general.--On October 1, 2012, out of
                    any funds in the Treasury not otherwise
                    appropriated, the Secretary of the Treasury
                    shall transfer to the Secretary to carry out
                    this subsection $10,000,000, to remain
                    available until expended.
                      (B) Receipt and acceptance.--The Secretary
                    shall be entitled to receive, shall accept, and
                    shall use to carry out this subsection the
                    funds transferred under subparagraph (A),
                    without further appropriation.
      (b) Demonstration Projects To End Childhood Hunger.--
              (1) Definitions.--In this subsection:
                      (A) Child.--The term ``child'' means a person
                    under the age of 18.
                      (B) Supplemental nutrition assistance
                    program.--The term ``supplemental nutrition
                    assistance program'' means the supplemental
                    nutrition assistance program established under
                    the Food and Nutrition Act of 2008 (7 U.S.C.
                    2011 et seq.).
              (2) Purpose.--Under such terms and conditions as are
            established by the Secretary, the Secretary shall carry
            out demonstration projects that test innovative
            strategies to end childhood hunger, including
            alternative models for service delivery and benefit
            levels that promote the reduction or elimination of
            childhood hunger and food insecurity.
              (3) Projects.--Demonstration projects carried out
            under this subsection may include projects that--
                      (A) enhance benefits provided under the
                    supplemental nutrition assistance program for
                    eligible households with children;
                      (B) enhance benefits or provide for
                    innovative program delivery models in the
                    school meals, afterschool snack, and child and
                    adult care food programs under this Act and the
                    Child Nutrition Act of 1966 (42 U.S.C. 1771 et
                    seq.); and
                      (C) target Federal, State, or local
                    assistance, including emergency housing or
                    family preservation services, at households
                    with children who are experiencing hunger or
                    food insecurity, to the extent permitted by the
                    legal authority establishing those assistance
                    programs and services.
              (4) Grants.--
                      (A) Demonstration projects.--
                              (i) In general.--In carrying out this
                            subsection, the Secretary may enter
                            into competitively awarded contracts or
                            cooperative agreements with, or provide
                            grants to, public or private
                            organizations or agencies (as
                            determined by the Secretary), for use
                            in accordance with demonstration
                            projects that meet the purposes of this
                            subsection.
                              (ii) Requirement.--At least 1
                            demonstration project funded under this
                            subsection shall be carried out on an
                            Indian reservation in a rural area with
                            a service population with a prevalence
                            of diabetes that exceeds 15 percent, as
                            determined by the Director of the
                            Indian Health Service.
                      (B) Application.--To be eligible to receive a
                    contract, cooperative agreement, or grant under
                    this subsection, an organization or agency
                    shall submit to the Secretary an application at
                    such time, in such manner, and containing such
                    information as the Secretary may require.
                      (C) Selection criteria.--Demonstration
                    projects shall be selected based on publicly
                    disseminated criteria that may include--
                              (i) an identification of a low-income
                            target group that reflects individuals
                            experiencing hunger or food insecurity;
                              (ii) a commitment to a demonstration
                            project that allows for a rigorous
                            outcome evaluation as described in
                            paragraph (6);
                              (iii) a focus on innovative
                            strategies to reduce the risk of
                            childhood hunger or provide a
                            significant improvement to the food
                            security status of households with
                            children; and
                              (iv) such other criteria as are
                            determined by the Secretary.
              (5) Consultation.--In determining the range of
            projects and defining selection criteria under this
            subsection, the Secretary shall consult with--
                      (A) the Secretary of Health and Human
                    Services;
                      (B) the Secretary of Labor; and
                      (C) the Secretary of Housing and Urban
                    Development.
              (6) Evaluation and reporting.--
                      (A) Independent evaluation.--The Secretary
                    shall provide for an independent evaluation of
                    each demonstration project carried out under
                    this subsection that--
                              (i) measures the impact of each
                            demonstration project on appropriate
                            participation, food security,
                            nutrition, and associated behavioral
                            outcomes among participating
                            households; and
                              (ii) uses rigorous experimental
                            designs and methodologies, particularly
                            random assignment or other methods that
                            are capable of producing scientifically
                            valid information regarding which
                            activities are effective in reducing
                            the prevalence or preventing the
                            incidence of food insecurity and hunger
                            in the community, especially among
                            children.
                      (B) Reporting.--Not later than December 31,
                    2013 and each December 31 thereafter until the
                    date on which the last evaluation under
                    subparagraph (A) is completed, the Secretary
                    shall--
                              (i) submit to the Committee on
                            Agriculture and the [Committee on
                            Education and Labor] Committee on
                            Education and the Workforce of the
                            House of Representatives and the
                            Committee on Agriculture, Nutrition,
                            and Forestry of the Senate a report
                            that includes a description of--
                                      (I) the status of each
                                    demonstration project; and
                                      (II) the results of any
                                    evaluations of the
                                    demonstration projects
                                    completed during the previous
                                    fiscal year; and
                              (ii) ensure that the evaluation
                            results are shared broadly to inform
                            policy makers, service providers, other
                            partners, and the public in order to
                            promote the wide use of successful
                            strategies.
              (7) Funding.--
                      (A) In general.--On October 1, 2012, out of
                    any funds in the Treasury not otherwise
                    appropriated, the Secretary of the Treasury
                    shall transfer to the Secretary to carry out
                    this subsection $40,000,000, to remain
                    available until September 30, 2017.
                      (B) Receipt and acceptance.--The Secretary
                    shall be entitled to receive, shall accept, and
                    shall use to carry out this subsection the
                    funds transferred under subparagraph (A),
                    without further appropriation.
                      (C) Use of funds.--
                              (i) In general.--Funds made available
                            under subparagraph (A) may be used to
                            carry out this subsection, including to
                            pay Federal costs associated with
                            developing, soliciting, awarding,
                            monitoring, evaluating, and
                            disseminating the results of each
                            demonstration project under this
                            subsection.
                              (ii) Indian reservations.--Of amounts
                            made available under subparagraph (A),
                            the Secretary shall use a portion of
                            the amounts to carry out research
                            relating to hunger, obesity and type 2
                            diabetes on Indian reservations,
                            including research to determine the
                            manner in which Federal nutrition
                            programs can help to overcome those
                            problems.
                              (iii) Report.--Not later than 1 year
                            after the date of enactment of this
                            section, the Secretary shall submit to
                            the Committee on Agriculture of the
                            House of Representatives and the
                            Committee on Agriculture, Nutrition,
                            and Forestry of the Senate a report
                            that--
                                      (I) describes the manner in
                                    which Federal nutrition
                                    programs can help to overcome
                                    child hunger nutrition problems
                                    on Indian reservations; and
                                      (II) contains proposed
                                    administrative and legislative
                                    recommendations to strengthen
                                    and streamline all relevant
                                    Department of Agriculture
                                    nutrition programs to reduce
                                    childhood hunger, obesity, and
                                    type 2 diabetes on Indian
                                    reservations.
                      (D) Limitations.--
                              (i) Duration.--No project may be
                            funded under this subsection for more
                            than 5 years.
                              (ii) Project requirements.--No
                            project that makes use of, alters, or
                            coordinates with the supplemental
                            nutrition assistance program may be
                            funded under this subsection unless the
                            project is fully consistent with the
                            project requirements described in
                            section 17(b)(1)(B) of the Food and
                            Nutrition Act of 2008 (7 U.S.C.
                            2026(b)(1)(B)).
                              (iii) Hunger-free communities.--No
                            project may be funded under this
                            subsection that receives funding under
                            section 4405 of the Food, Conservation,
                            and Energy Act of 2008 (7 U.S.C. 7517).
                              (iv) Other benefits.--Funds made
                            available under this subsection may not
                            be used for any project in a manner
                            that is inconsistent with--
                                      (I) this Act;
                                      (II) the Child Nutrition Act
                                    of 1966 (42 U.S.C. 1771 et
                                    seq.);
                                      (III) the Food and Nutrition
                                    Act of 2008 (7 U.S.C. 2011 et
                                    seq.); or
                                      (IV) the Emergency Food
                                    Assistance Act of 1983 (7
                                    U.S.C. 7501 et seq.).

    [SEC. 24. STATE CHILDHOOD HUNGER CHALLENGE GRANTS.

      [(a) Definitions.--In this section:
              [(1) Child.--The term ``child'' means a person under
            the age of 18.
              [(2) Supplemental nutrition assistance program.--The
            term ``supplemental nutrition assistance program''
            means the supplemental nutrition assistance program
            established under the Food and Nutrition Act of 2008 (7
            U.S.C. 2011 et seq.).
      [(b) Purpose.--Under such terms and conditions as are
    established by the Secretary, funds made available under this
    section may be used to competitively award grants to or enter
    into cooperative agreements with Governors to carry out
    comprehensive and innovative strategies to end childhood
    hunger, including alternative models for service delivery and
    benefit levels that promote the reduction or elimination of
    childhood hunger by 2015.
      [(c) Projects.--State demonstration projects carried out
    under this section may include projects that--
              [(1) enhance benefits provided under the supplemental
            nutrition assistance program for eligible households
            with children;
              [(2) enhance benefits or provide for innovative
            program delivery models in the school meals,
            afterschool snack, and child and adult care food
            programs under this Act and the Child Nutrition Act of
            1966 (42 U.S.C. 1771 et seq.);
              [(3) target Federal, State, or local assistance,
            including emergency housing, family preservation
            services, child care, or temporary assistance at
            households with children who are experiencing hunger or
            food insecurity, to the extent permitted by the legal
            authority establishing those assistance programs and
            services;
              [(4) enhance outreach to increase access and
            participation in Federal nutrition assistance programs;
            and
              [(5) improve the coordination of Federal, State, and
            community resources and services aimed at preventing
            food insecurity and hunger, including through the
            establishment and expansion of State food policy
            councils.
      [(d) Grants.--
              [(1) In general.--In carrying out this section, the
            Secretary may competitively award grants or enter into
            competitively awarded cooperative agreements with
            Governors for use in accordance with demonstration
            projects that meet the purposes of this section.
              [(2) Application.--To be eligible to receive a grant
            or cooperative agreement under this section, a Governor
            shall submit to the Secretary an application at such
            time, in such manner, and containing such information
            as the Secretary may require.
              [(3) Selection criteria.--The Secretary shall
            evaluate proposals based on publicly disseminated
            criteria that may include--
                      [(A) an identification of a low-income target
                    group that reflects individuals experiencing
                    hunger or food insecurity;
                      [(B) a commitment to approaches that allow
                    for a rigorous outcome evaluation as described
                    in subsection (f);
                      [(C) a comprehensive and innovative strategy
                    to reduce the risk of childhood hunger or
                    provide a significant improvement to the food
                    security status of households with children;
                    and
                      [(D) such other criteria as are determined by
                    the Secretary.
              [(4) Requirements.--Any project funded under this
            section shall provide for--
                      [(A) a baseline assessment, and subsequent
                    annual assessments, of the prevalence and
                    severity of very low food security among
                    children in the State, based on a methodology
                    prescribed by the Secretary;
                      [(B) a collaborative planning process
                    including key stakeholders in the State that
                    results in a comprehensive agenda to eliminate
                    childhood hunger that is--
                              [(i) described in a detailed project
                            plan; and
                              [(ii) provided to the Secretary for
                            approval;
                      [(C) an annual budget;
                      [(D) specific performance goals, including
                    the goal to sharply reduce or eliminate food
                    insecurity among children in the State by 2015,
                    as determined through a methodology prescribed
                    by the Secretary and carried out by the
                    Governor; and
                      [(E) an independent outcome evaluation of not
                    less than 1 major strategy of the project that
                    measures--
                              [(i) the specific impact of the
                            strategy on food insecurity among
                            children in the State; and
                              [(ii) if applicable, the nutrition
                            assistance participation rate among
                            children in the State.
      [(e) Consultation.--In determining the range of projects and
    defining selection criteria under this section, the Secretary
    shall consult with--
              [(1) the Secretary of Health and Human Services;
              [(2) the Secretary of Labor;
              [(3) the Secretary of Education; and
              [(4) the Secretary of Housing and Urban Development.
      [(f) Evaluation and Reporting.--
              [(1) General performance assessment.--Each project
            authorized under this section shall require an
            independent assessment that--
                      [(A) measures the impact of any activities
                    carried out under the project on the level of
                    food insecurity in the State that--
                              [(i) focuses particularly on the
                            level of food insecurity among children
                            in the State; and
                              [(ii) includes a preimplementation
                            baseline and annual measurements taken
                            during the project of the level of food
                            insecurity in the State; and
                      [(B) is carried out using a methodology
                    prescribed by the Secretary.
              [(2) Independent evaluation.--Each project authorized
            under this section shall provide for an independent
            evaluation of not less than 1 major strategy that--
                      [(A) measures the impact of the strategy on
                    appropriate participation, food security,
                    nutrition, and associated behavioral outcomes
                    among participating households; and
                      [(B) uses rigorous experimental designs and
                    methodologies, particularly random assignment
                    or other methods that are capable of producing
                    scientifically valid information regarding
                    which activities are effective in reducing the
                    prevalence or preventing the incidence of food
                    insecurity and hunger in the community,
                    especially among children.
              [(3) Reporting.--Not later than December 31, 2011 and
            each December 31 thereafter until the date on which the
            last evaluation under paragraph (1) is completed, the
            Secretary shall--
                      [(A) submit to the Committee on Agriculture
                    and the Committee on Education and Labor of the
                    House of Representatives and the Committee on
                    Agriculture, Nutrition, and Forestry of the
                    Senate a report that includes a description
                    of--
                              [(i) the status of each State
                            demonstration project; and
                              [(ii) the results of any evaluations
                            of the demonstration projects completed
                            during the previous fiscal year; and
                      [(B) ensure that the evaluation results are
                    shared broadly to inform policy makers, service
                    providers, other partners, and the public in
                    order to promote the wide use of successful
                    strategies.
      [(g) Authorization of Appropriations.--
              [(1) In general.--There are authorized to be
            appropriated to carry out this section such sums as are
            necessary for each of fiscal years 2011 through 2014,
            to remain available until expended.
              [(2) Use of funds.--Funds made available under
            paragraph (1) may be used to carry out this section,
            including to pay Federal costs associated with
            developing, soliciting, awarding, monitoring,
            evaluating, and disseminating the results of each
            demonstration project under this section.
              [(3) Limitations.--
                      [(A) Duration.--No project may be funded
                    under this section for more than 5 years.
                      [(B) Performance basis.--Funds provided under
                    this section shall be made available to each
                    Governor on an annual basis, with the amount of
                    funds provided for each year contingent on the
                    satisfactory implementation of the project plan
                    and progress towards the performance goals
                    defined in the project year plan.
                      [(C) Altering nutrition assistance program
                    requirements.--No project that makes use of,
                    alters, or coordinates with the supplemental
                    nutrition assistance program may be funded
                    under this section unless the project is fully
                    consistent with the project requirements
                    described in section 17(b)(1)(B) of the Food
                    and Nutrition Act of 2008 (7 U.S.C.
                    2026(b)(1)(B)).
                      [(D) Other benefits.--Funds made available
                    under this section may not be used for any
                    project in a manner that is inconsistent with--
                              [(i) this Act;
                              [(ii) the Child Nutrition Act of 1966
                            (42 U.S.C. 1771 et seq.);
                              [(iii) the Food and Nutrition Act of
                            2008 (7 U.S.C. 2011 et seq.); or
                              [(iv) the Emergency Food Assistance
                            Act of 1983 (7 U.S.C. 7501 et seq.).]

    SEC. 25. DUTIES OF THE SECRETARY RELATING TO NONPROCUREMENT DEBARMENT.

      (a) Purposes.--The purposes of this section are to promote
    the prevention and deterrence of instances of fraud, bid
    rigging, and other anticompetitive activities encountered in
    the procurement of products for child nutrition programs by--
              (1) establishing guidelines and a timetable for the
            Secretary to initiate debarment proceedings, as well as
            establishing mandatory debarment periods; and
              (2) providing training, technical advice, and
            guidance in identifying and preventing the activities.
      (b) Definitions.--As used in this section:
              (1) Child nutrition program.--The term ``child
            nutrition program'' means--
                      (A) the school lunch program established
                    under this Act;
                      (B) the summer food service program for
                    children established under section 13;
                      (C) the child and adult care food program
                    established under section 17;
                      (D) the special milk program established
                    under section 3 of the Child Nutrition Act of
                    1966 (42 U.S.C. 1772);
                      (E) the school breakfast program established
                    under section 4 of such Act (42 U.S.C. 1773);
                    and
                      (F) the special supplemental nutrition
                    program for women, infants, and children
                    authorized under section 17 of such Act (42
                    U.S.C. 1786).
              (2) Contractor.--The term ``contractor'' means a
            person that contracts with a State, an agency of a
            State, or a local agency to provide goods or services
            in relation to the participation of a local agency in a
            child nutrition program.
              (3) Local agency.--The term ``local agency'' means a
            school, school food authority, child care center,
            sponsoring organization, or other entity authorized to
            operate a child nutrition program at the local level.
              (4) Nonprocurement debarment.--The term
            ``nonprocurement debarment'' means an action to bar a
            person from programs and activities involving Federal
            financial and nonfinancial assistance, but not
            including Federal procurement programs and activities.
              (5) Person.--The term ``person'' means any
            individual, corporation, partnership, association,
            cooperative, or other legal entity, however organized.
      (c) Assistance To Identify and Prevent Fraud and
    Anticompetitive Activities.--The Secretary shall--
              (1) in cooperation with any other appropriate
            individual, organization, or agency, provide advice,
            training, technical assistance, and guidance (which may
            include awareness training, training films, and
            troubleshooting advice) to representatives of States
            and local agencies regarding means of identifying and
            preventing fraud and anticompetitive activities
            relating to the provision of goods or services in
            conjunction with the participation of a local agency in
            a child nutrition program; and
              (2) provide information to, and fully cooperate with,
            the Attorney General and State attorneys general
            regarding investigations of fraud and anticompetitive
            activities relating to the provision of goods or
            services in conjunction with the participation of a
            local agency in a child nutrition program.
      (d) Nonprocurement Debarment.--
              (1) In general.--Except as provided in paragraph (3)
            and subsection (e), not later than 180 days after
            notification of the occurrence of a cause for debarment
            described in paragraph (2), the Secretary shall
            initiate nonprocurement debarment proceedings against
            the contractor who has committed the cause for
            debarment.
              (2) Causes for debarment.--Actions requiring
            initiation of nonprocurement debarment pursuant to
            paragraph (1) shall include a situation in which a
            contractor is found guilty in any criminal proceeding,
            or found liable in any civil or administrative
            proceeding, in connection with the supplying,
            providing, or selling of goods or services to any local
            agency in connection with a child nutrition program,
            of--
                      (A) an anticompetitive activity, including
                    bid-rigging, price-fixing, the allocation of
                    customers between competitors, or other
                    violation of Federal or State antitrust laws;
                      (B) fraud, bribery, theft, forgery, or
                    embezzlement;
                      (C) knowingly receiving stolen property;
                      (D) making a false claim or statement; or
                      (E) any other obstruction of justice.
              (3) Exception.--If the Secretary determines that a
            decision on initiating nonprocurement debarment
            proceedings cannot be made within 180 days after
            notification of the occurrence of a cause for debarment
            described in paragraph (2) because of the need to
            further investigate matters relating to the possible
            debarment, the Secretary may have such additional time
            as the Secretary considers necessary to make a
            decision, but not to exceed an additional 180 days.
              (4) Mandatory child nutrition program debarment
            periods.--
                      (A) In general.--Subject to the other
                    provisions of this paragraph and
                    notwithstanding any other provision of law
                    except subsection (e), if, after deciding to
                    initiate nonprocurement debarment proceedings
                    pursuant to paragraph (1), the Secretary
                    decides to debar a contractor, the debarment
                    shall be for a period of not less than 3 years.
                      (B) Previous debarment.--If the contractor
                    has been previously debarred pursuant to
                    nonprocurement debarment proceedings initiated
                    pursuant to paragraph (1), and the cause for
                    debarment is described in paragraph (2) based
                    on activities that occurred subsequent to the
                    initial debarment, the debarment shall be for a
                    period of not less than 5 years.
                      (C) Scope.--At a minimum, a debarment under
                    this subsection shall serve to bar the
                    contractor for the specified period from
                    contracting to provide goods or services in
                    conjunction with the participation of a local
                    agency in a child nutrition program.
                      (D) Reversal, reduction, or exception.--
                    Nothing in this section shall restrict the
                    ability of the Secretary to--
                              (i) reverse a debarment decision;
                              (ii) reduce the period or scope of a
                            debarment;
                              (iii) grant an exception permitting a
                            debarred contractor to participate in a
                            particular contract to provide goods or
                            services; or
                              (iv) otherwise settle a debarment
                            action at any time;
                    in conjunction with the participation of a
                    local agency in a child nutrition program, if
                    the Secretary determines there is good cause
                    for the action, after taking into account
                    factors set forth in paragraphs (1) through (6)
                    of subsection (e).
              (5) Information.--On request, the Secretary shall
            present to the [Committee on Education and Labor]
            Committee on Education and the Workforce, and the
            Committee on Agriculture, of the House of
            Representatives and the Committee on Agriculture,
            Nutrition, and Forestry of the Senate information
            regarding the decisions required by this subsection.
              (6) Relationship to other authorities.--A debarment
            imposed under this section shall not reduce or diminish
            the authority of a Federal, State, or local government
            agency or court to penalize, imprison, fine, suspend,
            debar, or take other adverse action against a person in
            a civil, criminal, or administrative proceeding.
              (7) Regulations.--The Secretary shall issue such
            regulations as are necessary to carry out this
            subsection.
      (e) Mandatory Debarment.--Notwithstanding any other provision
    of this section, the Secretary shall initiate nonprocurement
    debarment proceedings against the contractor (including any
    cooperative) who has committed the cause for debarment (as
    determined under subsection (d)(2)), unless the action--
              (1) is likely to have a significant adverse effect on
            competition or prices in the relevant market or
            nationally;
              (2) will interfere with the ability of a local agency
            to procure a needed product for a child nutrition
            program;
              (3) is unfair to a person, subsidiary corporation,
            affiliate, parent company, or local division of a
            corporation that is not involved in the improper
            activity that would otherwise result in the debarment;
              (4) is likely to have significant adverse economic
            impacts on the local economy in a manner that is unfair
            to innocent parties;
              (5) is not justified in light of the penalties
            already imposed on the contractor for violations
            relevant to the proposed debarment, including any
            suspension or debarment arising out of the same matter
            that is imposed by any Federal or State agency; or
              (6) is not in the public interest, or otherwise is
            not in the interests of justice, as determined by the
            Secretary.
      (f) Exhaustion of Administrative Remedies.--Prior to seeking
    judicial review in a court of competent jurisdiction, a
    contractor against whom a nonprocurement debarment proceeding
    has been initiated shall--
              (1) exhaust all administrative procedures prescribed
            by the Secretary; and
              (2) receive notice of the final determination of the
            Secretary.
      (g) Fines.--
              (1) In general.--In a situation in which a contractor
            is found guilty in any criminal proceeding or found
            liable in any civil or administrative proceeding, of
            the activities listed in paragraph (2), in connection
            with the supplying, providing, or selling of goods or
            services to any local agency in connection with a child
            nutrition program, the Secretary shall impose a civil
            penalty of not more than $100,000,000, as determined by
            the Secretary, to provide restitution to the program
            for harm done to the program.
              (2) Included activities.--Activities include, at a
            minimum--
                      (A) an anticompetitive activity, including
                    bid-rigging, price-fixing, the allocation of
                    customers between competitors, or other
                    violation of Federal or State antitrust laws;
                      (B) fraud, bribery, theft, forgery, or
                    embezzlement;
                      (C) knowingly receiving stolen property;
                      (D) making a false claim or statement; or
                      (E) any other obstruction of justice.
              (3) Use of funds.--Any funds collected under this
            subsection shall be credited to the child nutrition
            programs appropriations account.
      [(g)] (h) Information Relating to Prevention and Control of
    Anticompetitive Activities.--On request, the Secretary shall
    present to the [Committee on Education and Labor] Committee on
    Education and the Workforce, and the Committee on Agriculture,
    of the House of Representatives and the Committee on
    Agriculture, Nutrition, and Forestry of the Senate information
    regarding the activities of the Secretary relating to
    anticompetitive activities, fraud, nonprocurement debarment,
    and any waiver granted by the Secretary under this section.

               *       *       *       *       *       *       *

    SEC. 27. IMPROVEMENTS TO SCHOOL LUNCH FACILITIES.

      (a) Definitions.--In this section:
              (1) Durable equipment.--The term ``durable
            equipment'' means durable food preparation, handling,
            cooking, serving, and storage equipment greater than
            $500 in value.
              (2) Eligible entity.--The term ``eligible entity''
            means--
                      (A) a local educational agency or a school
                    food authority administering or operating a
                    school lunch program under this Act;
                      (B) a tribal organization; or
                      (C) a consortium that includes a local
                    educational agency or school food authority
                    described in subparagraph (A), a tribal
                    organization, or both.
              (3) Infrastructure.--The term ``infrastructure''
            means a food storage facility, kitchen, food service
            facility, cafeteria, dining room, or food preparation
            facility.
              (4) Local educational agency.--The term ``local
            educational agency'' has the meaning given the term in
            section 8101 of the Elementary and Secondary Education
            Act of 1965 (20 U.S.C. 7801).
              (5) School food authority.--The term ``school food
            authority'' has the meaning given the term in section
            210.2 of title 7, Code of Federal Regulations (or a
            successor regulation).
              (6) Tribal organization.--The term ``tribal
            organization'' has the meaning given the term in
            section 4 of the Indian Self-Determination and
            Education Assistance Act (25 U.S.C. 450b).
      (b) Loan Guarantees.--
              (1) Authority.--The Secretary shall issue a loan
            guarantee to an eligible lender for purposes of
            financing the construction, remodeling, or expansion of
            infrastructure or the purchase of durable equipment
            that will assist the eligible entity in providing
            healthy meals through the school lunch program
            authorized under this Act.
              (2) Preference.--In issuing a loan guarantee under
            this subsection, the Secretary shall give a preference
            to an eligible entity that, as compared with other
            eligible entities seeking a loan guarantee under this
            subsection, demonstrates substantial or
            disproportionate--
                      (A) need for infrastructure improvement or
                    durable equipment; or
                      (B) impairment in durable equipment.
              (3) Oversight.--The Secretary, acting through the
            Under Secretary for Rural Development, shall establish
            procedures to oversee any project or purchase for which
            a loan guarantee is issued under this subsection.
              (4) Guarantee amount.--A loan guarantee issued under
            this subsection may not guarantee more than 80 percent
            of the principal amount of the loan.
              (5) Fees and costs.--
                      (A) In general.--The Secretary shall
                    establish fees for loan guarantees under this
                    subsection that are, to the maximum extent
                    practicable, equal to all costs of the loan
                    guarantees as determined under the Federal
                    Credit Reform Act of 1990 (2 U.S.C. 661 et.
                    seq.), as determined by the Secretary.
                      (B) Fee shortfall.--To the extent that the
                    Secretary determines that fees described in
                    subparagraph (A) are not sufficient to pay for
                    all of the costs for the loan guarantees
                    pursuant to the Federal Credit Reform Act of
                    1990 (2 U.S.C. 661 et. seq.), the Secretary may
                    use funds described in paragraph (6) to pay for
                    the costs of loan guarantees not paid for by
                    the fees.
              (6) Funding.--Subject to the availability of
            appropriations provided in advance in an appropriations
            Act specifically for the purpose of carrying out this
            subsection, there is authorized to be appropriated
            $5,000,000 for fiscal year 2017 and each fiscal year
            thereafter.
      (c) Grants.--
              (1) Authority.--Beginning in fiscal year 2017 and
            subject to the availability of appropriations provided
            in advance in an appropriations Act specifically for
            the purpose of carrying out this subsection, the
            Secretary shall make grants, on a competitive basis, to
            eligible entities for the purchase of durable equipment
            and infrastructure needed to serve healthier meals and
            improve food safety.
              (2) Priority.--In awarding grants under this
            subsection, the Secretary shall give priority to
            eligible entities that--
                      (A) are located in States that have enacted
                    comparable statutory grant funding mechanisms
                    or that have otherwise appropriated funds for
                    the purpose described in paragraph (1); and
                      (B) have identified and are reasonably
                    expected to meet an unmet local or community
                    need--
                              (i) through a public-private
                            partnership or partnership with a food
                            pantry or other low-income assistance
                            agency; or
                              (ii) by allowing related community
                            organizations to use kitchen or
                            cafeteria space.
              (3) Federal share.--
                      (A) In general.--The Federal share of costs
                    for assistance funded through a grant awarded
                    under this subsection shall not exceed 80
                    percent of the total cost of the durable
                    equipment or infrastructure.
                      (B) Matching.--To receive a grant under this
                    subsection, an eligible entity shall provide
                    matching support in the form of cash or in-kind
                    contributions.
                      (C) Waiver.--The Secretary may waive or vary
                    the requirements of subparagraphs (A) and (B)
                    if the Secretary determines that undue hardship
                    or effective exclusion from participation would
                    otherwise result.
              (4) Authorization of appropriations.--
                      (A) In general.--There is authorized to be
                    appropriated $25,000,000 to carry out this
                    subsection for fiscal year 2017 through fiscal
                    year 2019.
                      (B) Limit.--The Secretary may use not more
                    than 5 percent of the funds made available
                    under subparagraph (A) to provide technical
                    assistance.
      (d) Salad Bars.--Not later than 180 days after the date of
    the enactment of the Improving Child Nutrition and Education
    Act of 2016, the Secretary shall review or revise any guidance
    in existence on that date of enactment so as to ensure that
    school food authorities have flexibility in the establishment
    and implementation of salad bars.

    SEC. 28. PROGRAM EVALUATION.

      (a) Performance Assessments.--
              (1) In general.--Subject to the availability of funds
            made available under paragraph (3), the Secretary,
            acting through the Administrator of the Food and
            Nutrition Service, may conduct annual national
            performance assessments of the meal programs under this
            Act and the Child Nutrition Act of 1966 (42 U.S.C. 1771
            et seq.).
              (2) Components.--In conducting an assessment, the
            Secretary may assess--
                      (A) the cost of producing meals and meal
                    supplements under the programs described in
                    paragraph (1); and
                      (B) the nutrient profile of meals, and status
                    of menu planning practices, under the programs.
              (3) Authorization of appropriations.--There is
            authorized to be appropriated to carry out this
            subsection $5,000,000 for fiscal year 2004 and each
            subsequent fiscal year.
      (b) Certification Improvements.--
              (1) In general.--Subject to the availability of funds
            made available under paragraph (5), the Secretary,
            acting through the Administrator of the Food and
            Nutrition Service, shall conduct a study of the
            feasibility of improving the certification process used
            for the school lunch program established under this
            Act.
              (2) Pilot projects.--In carrying out this subsection,
            the Secretary may conduct pilot projects to improve the
            certification process used for the school lunch
            program.
              (3) Components.--In carrying out this subsection, the
            Secretary shall examine the use of--
                      (A) other income reporting systems;
                      (B) an integrated benefit eligibility
                    determination process managed by a single
                    agency;
                      (C) income or program participation data
                    gathered by State or local agencies; and
                      (D) other options determined by the
                    Secretary.
              (4) Waivers.--
                      (A) In general.--Subject to subparagraph (B),
                    the Secretary may waive such provisions of this
                    Act and the Child Nutrition Act of 1966 (42
                    U.S.C. 1771 et seq.) as are necessary to carry
                    out this subsection.
                      (B) Provisions.--The protections of section
                    9(b)(6) shall apply to any study or pilot
                    project carried out under this subsection.
              (5) Authorization of appropriations.--There is
            authorized to be appropriated to carry out this
            subsection such sums as are necessary.
      (c) Cooperation With Program Research and Evaluation.--
    States, [State educational agencies] State agencies, local
    educational agencies, schools, institutions, facilities, and
    contractors participating in programs authorized under this Act
    and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.)
    shall cooperate with officials and contractors acting on behalf
    of the Secretary, in the conduct of evaluations and studies
    under those Acts.

               *       *       *       *       *       *       *

    SEC. 30. PROHIBITIONS.

      Nothing in this Act, the Child Nutrition Act of 1966 (42
    U.S.C. 1771 et seq.), the Healthy, Hunger-Free Kids Act of
    2010, or the Improving Child Nutrition and Education Act of
    2016 shall--
              (1) authorize the Secretary to issue or establish any
            regulations or requirements not explicitly authorized
            under any such Act; or
              (2) authorize the Secretary to require, as a
            condition of participation in any program under any
            such Act--
                      (A) any curriculum or education requirements
                    for participating schools or child care
                    providers; or
                      (B) the adoption of any specific education
                    standards for nutrition education.
                                  ----------

                          CHILD NUTRITION ACT OF 1966

       Be it enacted by the Senate and House of Representatives of
    the United States of America in Congress assembled, That this
    Act may be cited as the ``Child Nutrition Act of 1966''.

               *       *       *       *       *       *       *

                       SPECIAL MILK PROGRAM AUTHORIZATION

      Sec. 3. (a)(1) There is hereby authorized to be appropriated
    for the fiscal year ending June 30, 1970, and for each
    succeeding fiscal year such sums as may be necessary to enable
    the Secretary of Agriculture, under such rules and regulations
    as the Secretary may deem in the public interest, to encourage
    consumption of fluid milk by children in the United States in
    (A) nonprofit schools of high school grade and under, except as
    provided in paragraph (2), which do not participate in a meal
    service program authorized under this Act or the Richard B.
    Russell National School Lunch Act, and (B) nonprofit nursery
    schools, child-care centers, settlement houses, summer camps,
    and similar nonprofit institutions devoted to the care and
    training of children, which do not participate in a meal
    service program authorized under this Act or the Richard B.
    Russell National School Lunch Act.
      (2) The limitation imposed under paragraph (1)(A) for
    participation of nonprofit schools in the special milk program
    shall not apply to split-session kindergarten programs
    conducted in schools in which children do not have access to
    the meal service program operating in schools the children
    attend as authorized under this Act or the Richard B. Russell
    National School Lunch Act.
      (3) For the purposes of this section ``United States'' means
    the fifty States, Guam, the Commonwealth of Puerto Rico, the
    Virgin Islands, American Samoa, the Commonwealth of the
    Northern Mariana Islands, and the District of Columbia.
      (4) The Secretary shall administer the special milk program
    provided for by this section to the maximum extent practicable
    in the same manner as the Secretary administered the special
    milk program provided for by Public Law 89-642, as amended,
    during the fiscal year ending June 30, 1969.
      (5) Any school or nonprofit child care institution which does
    not participate in a meal service program authorized under this
    Act or the Richard B. Russell National School Lunch Act shall
    receive the special milk program upon its request.
      (6) Children who qualify for free lunches under guidelines
    established by the Secretary shall, at the option of the school
    involved (or of the local educational agency involved in the
    case of a public school) be eligible for free milk upon their
    request.
      (7) For the fiscal year ending June 30, 1975, and for
    subsequent school years, the minimum rate of reimbursement for
    a half-pint of milk served in schools and other eligible
    institutions shall not be less than 5 cents per half-pint
    served to eligible children, and such minimum rate of
    reimbursement shall be adjusted [on an annual basis each]
    annually by February 15 for the upcoming school year to reflect
    changes in the Producer Price Index for Fresh Processed Milk
    published by the Bureau of Labor Statistics of the Department
    of Labor.
      (8) Such adjustment shall be computed to the nearest one-
    fourth cent.
      (9) Notwithstanding any other provision of this section, in
    no event shall the minimum rate of reimbursement exceed the
    cost to the school or institution of milk served to children.
      (10) The [State educational agency] State agency shall
    disburse funds paid to the State during any fiscal year for
    purposes of carrying out the program under this section in
    accordance with such agreements approved by the Secretary as
    may be entered into by such State agency and the schools in the
    State. The agreements described in the preceding sentence shall
    be permanent agreements that may be amended as necessary.
    Nothing in the preceding sentence shall be construed to limit
    the ability of the [State educational agency] State agency to
    suspend or terminate any such agreement in accordance with
    regulations prescribed by the Secretary.
      (b) Commodity only schools shall not be eligible to
    participate in the special milk program under this section. For
    the purposes of the preceding sentence, the term ``commodity
    only schools'' means schools that do not participate in the
    school lunch program under the Richard B. Russell National
    School Lunch Act, but which receive commodities made available
    by the Secretary for use by such schools in nonprofit lunch
    programs.

                     SCHOOL BREAKFAST PROGRAM AUTHORIZATION

      Sec. 4. (a) There is hereby authorized to be appropriated
    such sums as are necessary to enable the Secretary to carry out
    a program to assist the States and the Department of Defense
    through grants-in-aid and other means to initiate, maintain, or
    expand nonprofit breakfast programs in all schools which make
    application for assistance and agree to carry out a nonprofit
    breakfast program in accordance with this Act. Appropriations
    and expenditures for this Act shall be considered Health and
    Human Services functions for budget purposes rather than
    functions of Agriculture.

                            APPORTIONMENT TO STATES

      (b)(1)(A)(i) The Secretary shall make breakfast assistance
    payments to each [State educational agency] State agency each
    fiscal year, at such times as the Secretary may determine, from
    the sums appropriated for such purpose, in an amount equal to
    the product obtained by multiplying--
              (I) the number of breakfasts served during such
            fiscal year to children in schools in such States which
            participate in the school breakfast program under
            agreements with such [State educational agency] State
            agency; by
              (II) the national average breakfast payment for free
            breakfasts, for reduced price breakfasts, or for
            breakfasts served to children not eligible for free or
            reduced price meals, as appropriate, as prescribed in
            clause (B) of this paragraph.
      (ii) The agreements described in clause (i)(I) shall be
    permanent agreements that may be amended as necessary. Nothing
    in the preceding sentence shall be construed to limit the
    ability of the [State educational agency] State agency to
    suspend or terminate any such agreement in accordance with
    regulations prescribed by the Secretary.
      (B) The national average payment for each free breakfast
    shall be 57 cents (as adjusted pursuant to section 11(a) of the
    Richard B. Russell National School Lunch Act. The national
    average payment for each reduced price breakfast shall be one-
    half of the national average payment for each free breakfast,
    except that in no case shall the difference between the amount
    of the national average payment for a free breakfast and the
    national average payment for a reduced price breakfast exceed
    30 cents. The national average payment for each breakfast
    served to a child not eligible for free or reduced price meals
    shall be 8.25 cents (as adjusted pursuant to section 11(a) of
    the Richard B. Russell National School Lunch Act).
      (C) No school which receives breakfast assistance payments
    under this section may charge a price of more than 30 cents for
    a reduced price breakfast.
      (D) No breakfast assistance payment may be made under this
    subsection for any breakfast served by a school unless such
    breakfast consists of a combination of foods which meet the
    minimum nutritional requirements prescribed by the Secretary
    under subsection (e) of this section.
                      (E) Free and reduced price policy
                    statement.--After the initial submission, a
                    local educational agency shall not be required
                    to submit a free and reduced price policy
                    statement to a [State educational agency] State
                    agency under this Act unless there is a
                    substantive change in the free and reduced
                    price policy of the local educational agency. A
                    routine change in the policy of a local
                    educational agency, such as an annual
                    adjustment of the income eligibility guidelines
                    for free and reduced price meals, shall not be
                    sufficient cause for requiring the local
                    educational agency to submit a policy
                    statement.
                      (F) Increased reimbursement.--(i) For school
                    year 2018-2019, the Secretary shall increase by
                    2 cents the annually adjusted payment for each
                    breakfast (free, reduced price, and paid)
                    described in subparagraph (B).
                      (ii) For school year 2019-2020, the national
                    average payment for each breakfast referred to
                    in clause (i) of this subparagraph shall equal
                    the result obtained under such clause (i)
                    applicable to such breakfast, as annually
                    adjusted for the school year in accordance with
                    subparagraph (B).
                      (iii) For school year 2020-2021, the national
                    average payment for each breakfast referred to
                    in clause (i) of this subparagraph shall equal
                    the annually adjusted payment for such
                    breakfast, as determined under clause (ii) of
                    this subparagraph, plus 1 cent.
                      (iv) For school year 2021-2022, and each
                    succeeding school year, the national average
                    payment for each breakfast referred to in
                    clause (i) of this subparagraph shall equal the
                    result obtained under clause (iii) of this
                    subparagraph applicable to such breakfast, as
                    annually adjusted for the school year in
                    accordance with subparagraph (B).
      (2)(A) The Secretary shall make additional payments for
    breakfasts served to children qualifying for a free or reduced
    price meal at schools that are in severe need.
      (B) The maximum payment for each such free breakfast shall be
    the higher of--
              (i) the national average payment established by the
            Secretary for free breakfasts plus 10 cents, or
              (ii) 45 cents (as adjusted pursuant to section
            11(a)(3)(B) of the Richard B. Russell National School
            Lunch Act (42 U.S.C 1759a(a)(3)(B))).
      (C) The maximum payment for each such reduced price breakfast
    shall be thirty cents less than the maximum payment for each
    free breakfast as determined under clause (B) of this
    paragraph.
      (3) The Secretary shall increase by 6 cents the annually
    adjusted payment for each breakfast served under this Act and
    section 17 of the Richard B. Russell National School Lunch Act.
    These funds shall be used to assist States, to the extent
    feasible, in improving the nutritional quality of the
    breakfasts.
      (4) Notwithstanding any other provision of law, whenever
    stocks of agricultural commodities are acquired by the
    Secretary or the Commodity Credit Corporation and are not
    likely to be sold by the Secretary or the Commodity Credit
    Corporation or otherwise used in programs of commodity sale or
    distribution, the Secretary shall make such commodities
    available to school food authorities and eligible institutions
    serving breakfasts under this Act in a quantity equal in value
    to not less than 3 cents for each breakfast served under this
    Act and section 17 of the Richard B. Russell National School
    Lunch Act.
      (5) Expenditures of funds from State and local sources for
    the maintenance of the breakfast program shall not be
    diminished as a result of funds or commodities received under
    paragraph (3) or (4).

                         STATE DISBURSEMENT TO SCHOOLS

      (c) Funds apportioned and paid to any State for the purpose
    of this section shall be disbursed by the [State educational
    agency] State agency to schools selected by the [State
    educational agency] State agency to assist such schools in
    operating a breakfast program and for the purpose of subsection
    (d). Disbursement to schools shall be made at such rates per
    meal or on such other basis as the Secretary shall prescribe.
    In selecting schools for participation, the [State educational
    agency] State agency shall, to the extent practicable, give
    first consideration to those schools drawing attendance from
    areas in which poor economic conditions exist, to those schools
    in which a substantial proportion of the children enrolled must
    travel long distances daily, and to those schools in which
    there is a special need for improving the nutrition and dietary
    practices of children of working mothers and children from low-
    income families. Breakfast assistance disbursements to schools
    under this section may be made in advance or by way of
    reimbursement in accordance with procedures prescribed by the
    Secretary.
      (d) Severe Need Assistance.--
              (1) In general.--Each [State educational agency]
            State agency shall provide additional assistance to
            schools in severe need, which shall include only those
            schools (having a breakfast program or desiring to
            initiate a breakfast program) in which--
                      (A) during the most recent second preceding
                    school year for which lunches were served, 40
                    percent or more of the lunches served to
                    students at the school were served free or at a
                    reduced price; or
                      (B) in the case of a school in which lunches
                    were not served during the most recent second
                    preceding school year, the Secretary otherwise
                    determines that the requirements of
                    subparagraph (A) would have been met.
              (2) Additional assistance.--A school, on the
            submission of appropriate documentation about the need
            circumstances in that school and the eligibility of the
            school for additional assistance, shall be entitled to
            receive the meal reimbursement rate specified in
            subsection (b)(2).

                   NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS

      (e)(1)(A) Breakfasts served by schools participating in the
    school breakfast program under this section shall consist of a
    combination of foods and shall meet minimum nutritional
    requirements prescribed by the Secretary on the basis of tested
    nutritional research, except that the minimum nutritional
    requirements shall be measured by not less than the weekly
    average of the nutrient content of school breakfasts. Such
    breakfasts shall be served free or at a reduced price to
    children in school under the same terms and conditions as are
    set forth with respect to the service of lunches free or at a
    reduced price in section 9 of the Richard B. Russell National
    School Lunch Act.
      (B) The Secretary shall provide through [State educational
    agencies] State agencies technical assistance and training[,
    including technical assistance and training in the preparation
    of foods high in complex carbohydrates and lower-fat versions
    of foods commonly used in the school breakfast program
    established under this section,] to schools participating in
    the school breakfast program to assist the schools in complying
    with the nutritional requirements prescribed by the Secretary
    pursuant to subparagraph (A) and in providing appropriate meals
    to children with medically certified special dietary needs.
      (2) At the option of a local school food authority, a student
    in a school under the authority that participates in the school
    breakfast program under this Act may be allowed to refuse not
    more than one item of a breakfast that the student does not
    intend to consume. A refusal of an offered food item shall not
    affect the full charge to the student for a breakfast meeting
    the requirements of this section or the amount of payments made
    under this Act to a school for the breakfast.

                    DISBURSEMENT TO SCHOOLS BY THE SECRETARY

      Sec. 5. (a) The Secretary shall withhold funds payable to a
    State under this Act and disburse the funds directly to schools
    or institutions within the State for the purposes authorized by
    this Act to the extent that the Secretary has so withheld and
    disbursed such funds continuously since October 1, 1980, but
    only to such extent (except as otherwise required by subsection
    (b)). Any funds so withheld and disbursed by the Secretary
    shall be used for the same purposes, and shall be subject to
    the same conditions, as applicable to a State disbursing funds
    made available under this Act. If the Secretary is
    administering (in whole or in part) any program authorized
    under this Act, the State in which the Secretary is
    administering the program may, upon request to the Secretary,
    assume administration of that program.
      (b) If a [State educational agency] State agency is not
    permitted by law to disburse the funds paid to it under this
    Act to any of the nonpublic schools in the State, the Secretary
    shall disburse the funds directly to such schools within the
    State for the same purposes and subject to the same conditions
    as are authorized or required with respect to the disbursements
    to public schools within the State by the [State educational
    agency] State agency.

               *       *       *       *       *       *       *

    SEC. 7. STATE ADMINISTRATIVE EXPENSES.

      (a) Amount and Allocation of Funds.--
              (1) Amount available.--
                      (A) In general.--Each fiscal year, the
                    Secretary shall make available to the States
                    for their administrative costs an amount equal
                    to not less than 1\1/2\ percent of the Federal
                    funds expended under sections 4, 11, and 17 of
                    the Richard B. Russell National School Lunch
                    Act and sections 3 and 4 of this Act during the
                    second preceding fiscal year.
                      (B) Allocation.--The Secretary shall allocate
                    the funds so provided in accordance with
                    paragraphs (2), (3), and (4) of this
                    subsection.
              (2) Expense grants.--
                      (A) In general.--Subject to subparagraph (B),
                    the Secretary shall allocate to each State for
                    administrative costs incurred in any fiscal
                    year in connection with the programs authorized
                    under the Richard B. Russell National School
                    Lunch Act or under this Act, except for the
                    programs authorized under section 13 or 17 of
                    the Richard B. Russell National School Lunch
                    Act or under section 17 of this Act, an amount
                    equal to not less than 1 percent and not more
                    than 1\1/2\ percent of the funds expended by
                    each State under sections 4 and 11 of the
                    Richard B. Russell National School Lunch Act
                    and sections 3 and 4 of this Act during the
                    second preceding fiscal year.
                      (B) Minimum amount.--
                              (i) In general.--In no case shall the
                            grant available to any State under this
                            paragraph be less than the amount such
                            State was allocated in the fiscal year
                            ending September 30, 1981, or $200,000
                            (as adjusted under [clause (ii)] clause
                            (ii)), whichever is larger.
                              (ii) Adjustment.--On October 1, 2008,
                            and each October 1 thereafter, the
                            minimum dollar amount for a fiscal year
                            specified in clause (i) shall be
                            adjusted to reflect the percentage
                            change between--
                                      (I) the value of the index
                                    for State and local government
                                    purchases, as published by the
                                    Bureau of Economic Analysis of
                                    the Department of Commerce, for
                                    the 12-month period ending June
                                    30 of the second preceding
                                    fiscal year; and
                                      (II) the value of that index
                                    for the 12-month period ending
                                    June 30 of the preceding fiscal
                                    year.
      (3) The Secretary shall allocate to each State for its
    administrative costs incurred under the program authorized by
    section 17 of the Richard B. Russell National School Lunch Act
    in any fiscal year an amount, based upon funds expended under
    that program in the second preceding fiscal year, equal to (A)
    20 percent of the first $50,000, (B) 10 percent of the next
    $100,000, (C) 5 percent of the next $250,000, and (D) 2\1/2\
    percent of any remaining funds. If an agency in the State other
    than the [State educational agency] State agency administers
    such program, the State shall ensure that an amount equal to no
    less than the funds due the State under this paragraph is
    provided to such agency for costs incurred by such agency in
    administering the program[, except as provided in paragraph
    (5)]. The Secretary may adjust any State's allocation to
    reflect changes in the size of its program.
      (4) The remaining funds appropriated under this section shall
    be allocated among the States by the Secretary in amounts the
    Secretary determines necessary for the improvement in the
    States of the administration of the programs authorized under
    the Richard B. Russell National School Lunch Act and this Act,
    except for section 17 of this Act, including, but not limited
    to, improved program integrity and the quality of meals served
    to children.
      [(5)(A) Not more than 25 percent of the amounts made
    available to each State under this section for the fiscal year
    1991 and 20 percent of the amounts made available to each State
    under this section for the fiscal year 1992 and for each
    succeeding fiscal year may remain available for obligation or
    expenditure in the fiscal year succeeding the fiscal year for
    which such amounts were appropriated.
              [(B) Reallocation of funds.--
                      [(i) Return to secretary.--For each fiscal
                    year, any amounts appropriated that are not
                    obligated or expended during the fiscal year
                    and are not carried over for the succeeding
                    fiscal year under subparagraph (A) shall be
                    returned to the Secretary.
                      [(ii) Reallocation by secretary.--The
                    Secretary shall allocate, for purposes of
                    administrative costs, any remaining amounts
                    among States that demonstrate a need for the
                    amounts.]
              [(6)] (5) Use of administrative funds.--Funds
            available to a State under this subsection and under
            section 13(k)(1) of the Richard B. Russell National
            School Lunch Act (42 U.S.C. 1761(k)(1)) may be used by
            the State for the costs of administration of the
            programs authorized under this Act (except for the
            programs authorized under sections 17 and 21) and the
            Richard B. Russell National School Lunch Act (42 U.S.C.
            1751 et seq.) without regard to the basis on which the
            funds were earned and allocated.
      [(7)] (6) Where the Secretary is responsible for the
    administration of programs under this Act or the Richard B.
    Russell National School Lunch Act, the amount of funds that
    would be allocated to the State agency under this section and
    under section 13(k)(1) of the Richard B. Russell National
    School Lunch Act shall be retained by the Secretary for the
    Secretary's use in the administration of such programs.
      [(8)] (7) In the fiscal year 1991 and each succeeding fiscal
    year, in accordance with regulations issued by the Secretary,
    each State shall ensure that the State agency administering the
    distribution of commodities under programs authorized under
    this Act and under the Richard B. Russell National School Lunch
    Act is provided, from funds made available to the State under
    this subsection, an appropriate amount of funds for
    administrative costs incurred in distributing such commodities.
    In developing such regulations, the Secretary may consider the
    value of commodities provided to the State under this Act and
    under the Richard B. Russell National School Lunch Act.
      [(9)] (8)(A) If the Secretary determines that the
    administration of any program by a State under this Act (other
    than section 17) or under the Richard B. Russell National
    School Lunch Act (42 U.S.C. 1751 et seq.) (including any
    requirement to provide sufficient training, technical
    assistance, and monitoring of the child and adult care food
    program under section 17 of that Act (42 U.S.C. 1766)), or
    compliance with a regulation issued pursuant to either of such
    Acts, is seriously deficient, and the State fails to correct
    the deficiency within a specified period of time, the Secretary
    may withhold from the State some or all of the funds allocated
    to the State under this section or under section 13(k)(1) or 17
    of the Richard B. Russell National School Lunch Act (42 U.S.C.
    1761(k)(1) or 1766).
      (B) On a subsequent determination by the Secretary that the
    administration of any program referred to in subparagraph (A),
    or compliance with the regulations issued to carry out the
    program, is no longer seriously deficient and is operated in an
    acceptable manner, the Secretary may allocate some or all of
    the funds withheld under such subparagraph.
      (b) Funds paid to a State under subsection (a) of this
    section may be used to pay salaries, including employee
    benefits and travel [expenses, for administrative] expenses
    for--
              (1) administrative and supervisory personnel; [for
            support services; for office equipment; and for staff]
              (2) support services;
              (3) office equipment;
              (4) State-operated purchasing programs; and
              (5) staff development.
      (c) If any State agency agrees to assume responsibility for
    the administration of food service programs in nonprofit
    private schools or child care institutions that were previously
    administered by the Secretary, an appropriate adjustment shall
    be made in the administrative funds paid under this section to
    the State not later than the succeeding fiscal year.
      (d) Notwithstanding any other provision of law, funds made
    available to each State under this section shall remain
    available for obligation and expenditure by that State during
    the fiscal year immediately following the fiscal year for which
    such funds were made available. For each fiscal year the
    Secretary shall establish a date by which each State shall
    submit to the Secretary a plan for the disbursement of funds
    provided under this section for each such year, and the
    Secretary shall reallocate any unused funds, as evidenced by
    such plans, to other States as the Secretary considers
    appropriate.
      (e) Plans for Use of Administrative Expense Funds.--
              (1) In general.--Each State shall submit to the
            Secretary for approval by October 1 of the initial
            fiscal year a plan for the use of State administrative
            expense funds, including a staff formula for State
            personnel, system level supervisory and operating
            personnel, and school level personnel.
              (2) Updates and information management systems.--
                      (A) In general.--After submitting the initial
                    plan, a State shall be required to submit to
                    the Secretary for approval only a substantive
                    change in the plan.
                      (B) Plan contents.--Each State plan shall, at
                    a minimum, include a description of how
                    technology and information management systems
                    will be used to improve program integrity by--
                              (i) monitoring the nutrient content
                            of meals served;
                              (ii) training local educational
                            agencies, school food authorities, and
                            schools in how to use technology and
                            information management systems
                            (including verifying eligibility for
                            free or reduced price meals using
                            program participation or income data
                            gathered by State or local agencies);
                            and
                              (iii) using electronic data to
                            establish benchmarks to compare and
                            monitor program integrity, program
                            participation, and financial data.
              (3) Training and technical assistance.--Each State
            shall submit to the Secretary for approval a plan
            describing the manner in which the State intends to
            implement subsection (g) and section 22(b)(3) of the
            Richard B. Russell National School Lunch Act.
      (f) Payments of funds under this section shall be made only
    to States that agree to maintain a level of funding out of
    State revenues, for administrative costs in connection with
    programs under this Act (except section 17 of this Act) and the
    Richard B. Russell National School Lunch Act (except section 13
    of that Act ), not less than the amount expended or obligated
    in fiscal year 1977, and that agree to participate fully in any
    studies authorized by the Secretary.
      (g) Professional Standards for School Food Service.--
              (1) Criteria for school food service and state agency
            directors.--
                      (A) School food service directors.--
                              (i) In general.--The Secretary shall
                            establish a program of required
                            education, training, and certification
                            for all school food service directors
                            responsible for the management of a
                            school food authority.
                              (ii) Requirements.--The program shall
                            include--
                                      (I) minimum educational
                                    requirements necessary to
                                    successfully manage the school
                                    lunch program established under
                                    the Richard B. Russell National
                                    School Lunch Act (42 U.S.C.
                                    1751 et seq.) and the school
                                    breakfast program established
                                    by section 4 of this Act;
                                      (II) minimum program training
                                    and certification criteria for
                                    school food service directors;
                                    and
                                      (III) minimum periodic
                                    training criteria to maintain
                                    school food service director
                                    certification.
                      (B) School nutrition state agency
                    directors.--The Secretary shall establish
                    criteria and standards for States to use in the
                    selection of State agency directors with
                    responsibility for the school lunch program
                    established under the Richard B. Russell
                    National School Lunch Act (42 U.S.C. 1751 et
                    seq.) and the school breakfast program
                    established by section 4 of this Act.
                      (C) Training program partnership.--The
                    Secretary may provide financial and other
                    assistance to 1 or more professional food
                    service management organizations--
                              (i) to establish and manage the
                            program under this paragraph; and
                              (ii) to develop voluntary training
                            and certification programs for other
                            school food service workers.
                      (D) Required date of compliance.--
                              (i) School food service directors.--
                            The Secretary shall establish a date by
                            which all school food service directors
                            whose local educational agencies are
                            participating in the school lunch
                            program established under the Richard
                            B. Russell National School Lunch Act
                            (42 U.S.C. 1751 et seq.) and the school
                            breakfast program established by
                            section 4 of this Act shall be required
                            to comply with the education, training,
                            and certification criteria established
                            in accordance with subparagraph (A).
                              (ii) School nutrition state agency
                            directors.--The Secretary shall
                            establish a date by which all State
                            agencies shall be required to comply
                            with criteria and standards established
                            in accordance with subparagraph (B) for
                            the selection of State agency directors
                            with responsibility for the school
                            lunch program established under the
                            Richard B. Russell National School
                            Lunch Act (42 U.S.C. 1751 et seq.) and
                            the school breakfast program
                            established by section 4 of this Act.
              (2) Training and certification of food service
            personnel.--
                      (A) Training for individuals conducting or
                    overseeing administrative procedures.--
                              (i) In general.--At least annually,
                            each State shall provide training in
                            administrative practices (including
                            training in application, certification,
                            verification, meal counting, and meal
                            claiming procedures) to local
                            educational agency and school food
                            authority personnel and other
                            appropriate personnel.
                              (ii) Federal role.--The Secretary
                            shall--
                                      (I) provide training and
                                    technical assistance described
                                    in clause (i) to the State; or
                                      (II) at the option of the
                                    Secretary, directly provide
                                    training and technical
                                    assistance described in clause
                                    (i).
                              (iii) Required participation.--In
                            accordance with procedures established
                            by the Secretary, each local
                            educational agency or school food
                            authority shall ensure that an
                            individual conducting or overseeing
                            administrative procedures described in
                            clause (i) receives training at least
                            annually, unless determined otherwise
                            by the Secretary.
                      (B) Training and certification of all local
                    food service personnel.--
                              (i) In general.--The Secretary shall
                            provide training designed to improve--
                                      (I) the accuracy of approvals
                                    for free and reduced price
                                    meals; and
                                      (II) the identification of
                                    reimbursable meals at the point
                                    of service.
                              (ii) Certification of local
                            personnel.--In accordance with criteria
                            established by the Secretary, local
                            food service personnel shall complete
                            annual training and receive annual
                            certification--
                                      (I) to ensure program
                                    compliance and integrity; and
                                      (II) to demonstrate
                                    competence in the training
                                    provided under clause (i).
                              [(iii) Training modules.--In addition
                            to the topics described in clause (i),
                            a training program carried out under
                            this subparagraph shall include
                            training modules on--
                                      [(I) nutrition;
                                      [(II) health and food safety
                                    standards and methodologies;
                                    and
                                      [(III) any other appropriate
                                    topics, as determined by the
                                    Secretary.]
                              (iii) Minimizing disruptions.--The
                            Secretary shall encourage school food
                            authorities to consider--
                                      (I) providing the training
                                    required under this
                                    subparagraph to local food
                                    service personnel during paid,
                                    regular hours; and
                                      (II) that to the extent that
                                    training must occur during
                                    nonwork hours, it is minimally
                                    disruptive to employees' other
                                    work obligations if employees
                                    are provided with sufficient
                                    notice of training.
              (3) Funding.--
                      (A) In general.--Out of any funds in the
                    Treasury not otherwise appropriated, the
                    Secretary of the Treasury shall transfer to the
                    Secretary to carry out this subsection, to
                    remain available until expended--
                              (i) on October 1, 2010, $5,000,000;
                            and
                              (ii) on each October 1 thereafter,
                            $1,000,000.
                      (B) Receipt and acceptance.--The Secretary
                    shall be entitled to receive, shall accept, and
                    shall use to carry out this subsection the
                    funds transferred under subparagraph (A),
                    without further appropriation.
      (h) Funding for Training and Administrative Reviews.--
              (1) Funding.--
                      (A) In general.--On October 1, 2004, and on
                    each October 1 thereafter, out of any funds in
                    the Treasury not otherwise appropriated, the
                    Secretary of the Treasury shall transfer to the
                    Secretary of Agriculture to carry out this
                    subsection $4,000,000, to remain available
                    until expended.
                      (B) Receipt and acceptance.--The Secretary
                    shall be entitled to receive, shall accept, and
                    shall use to carry out this subsection the
                    funds transferred under subparagraph (A),
                    without further appropriation.
              (2) Use of funds.--
                      (A) In general.--Except as provided in
                    subparagraph (B), the Secretary shall use funds
                    provided under this subsection to assist States
                    in carrying out subsection (g) and
                    administrative reviews of selected local
                    educational agencies carried out under section
                    22 of the Richard B. Russell National School
                    Lunch Act (42 U.S.C. 1769c).
                      (B) Exception.--The Secretary may retain a
                    portion of the amount provided to cover costs
                    of activities carried out by the Secretary in
                    lieu of the State.
              (3) Allocation.--The Secretary shall allocate funds
            provided under this subsection to States based on the
            number of local educational agencies that have
            demonstrated a high level of, or a high risk for,
            administrative error, as determined by the Secretary,
            taking into account the requirements established by the
            Child Nutrition and WIC Reauthorization Act of 2004 and
            the amendments made by that Act.
              (4) Reallocation.--The Secretary may reallocate, to
            carry out this section, any amounts made available to
            carry out this subsection that are not obligated or
            expended, as determined by the Secretary.
      (i) Technology Infrastructure Improvement.--
              (1) In general.--Each State shall submit to the
            Secretary, for approval by the Secretary, an amendment
            to the plan required by subsection (e) that describes
            the manner in which funds provided under this section
            will be used for technology and information management
            systems.
              (2) Requirements.--The amendment shall, at a minimum,
            describe the manner in which the State will improve
            program integrity by--
                      (A) monitoring the nutrient content of meals
                    served;
                      (B) providing training to local educational
                    agencies, school food authorities, and schools
                    on the use of technology and information
                    management systems for activities including--
                              (i) menu planning;
                              (ii) collection of point-of-sale
                            data; and
                              (iii) the processing of applications
                            for free and reduced price meals; and
                      (C) using electronic data to establish
                    benchmarks to compare and monitor program
                    integrity, program participation, and financial
                    data across schools and school food
                    authorities.
              (3) Technology infrastructure grants.--
                      (A) In general.--Subject to the availability
                    of funds made available under paragraph (4) to
                    carry out this paragraph, the Secretary shall,
                    on a competitive basis, provide funds to States
                    to be used to provide grants to local
                    educational agencies, school food authorities,
                    and schools to defray the cost of purchasing or
                    upgrading technology and information management
                    systems for use in programs authorized by this
                    Act (other than section 17) and the Richard B.
                    Russell National School Lunch Act (42 U.S.C.
                    1751 et seq.) and for the purposes described in
                    section 749(h) of the Agriculture, Rural
                    Development, Food and Drug Administration, and
                    Related Agencies Appropriations Act, 2010
                    (Public Law 111-80; 123 Stat. 2133).
                      (B) Infrastructure development plan.--To be
                    eligible to receive a grant under this
                    paragraph, a school or school food authority
                    shall submit to the State a plan to purchase or
                    upgrade technology and information management
                    systems that addresses potential cost savings
                    and methods to improve program integrity,
                    including--
                              (i) processing and verification of
                            applications for free and reduced price
                            meals;
                              (ii) integration of menu planning,
                            production, and serving data to monitor
                            compliance with section 9(f)(1) of the
                            Richard B. Russell National School
                            Lunch Act (42 U.S.C. 1758(f)(1)); and
                              (iii) compatibility with statewide
                            reporting systems.
                      (C) Priority.--In awarding funds to States
                    under this paragraph, the Secretary shall give
                    priority to States in which local educational
                    agencies, school food authorities, or schools
                    submit a plan under subparagraph (B) that
                    includes the use of technology or information
                    management systems to provide assistance to
                    tribal organizations administering the food
                    distribution program on Indian reservations
                    established under section 4(b) of the Food and
                    Nutrition Act of 2008 (7 U.S.C. 2013(b)) for
                    purposes of improving the rate of direct
                    certification of children in households
                    participating in that program.
              (4) Authorization of appropriations.--There are
            authorized to be appropriated to carry out this
            subsection such sums as are necessary for each of
            fiscal years 2010 through [2015] 2021, to remain
            available until expended.
      (j) Centralized Exchange Network.--
              (1) Establishment.--The Secretary shall establish a
            centralized exchange network to facilitate State
            exchange of information and best practices, for
            programs authorized under this Act or the Richard B.
            Russell National School Lunch Act (42 U.S.C. 1751 et
            seq.).
              (2) Network topics.--State exchanges of information
            and best practices described in paragraph (1) may
            include, at a minimum, research methods and data
            related to--
                      (A) improved efficiency in the delivery of
                    benefits;
                      (B) improved compliance in the programs; and
                      (C) reduction of fraud, waste, and abuse in
                    the programs.
              (3) Administrative funds.--The Secretary shall not
            use more than $450,000 for such network.
      [(j)] (k) For the fiscal year beginning October 1, 1977, and
    each succeeding fiscal year ending before October 1, [2015]
    2021, there are hereby authorized to be appropriated such sums
    as may be necessary for the purposes of this section.

               *       *       *       *       *       *       *

    SEC. 10. REGULATIONS.

      (a) In General.--The Secretary shall prescribe such
    regulations as the Secretary may deem necessary to carry out
    this Act and the Richard B. Russell National School Lunch Act,
    including regulations relating to the service of food in
    participating schools and service institutions in competition
    with the programs authorized under this Act and the Richard B.
    Russell National School Lunch Act.
      (b) National School Nutrition Standards.--
              (1) Proposed regulations.--
                      (A) In general.--The Secretary shall--
                              (i) establish science-based nutrition
                            standards for foods sold in schools
                            other than foods provided under this
                            Act and the Richard B. Russell National
                            School Lunch Act (42 U.S.C. 1751 et
                            seq.); and
                              (ii) not later than 1 year after the
                            date of enactment of this paragraph,
                            promulgate proposed regulations to
                            carry out clause (i).
                      (B) Application.--The nutrition standards
                    shall apply to all foods sold--
                              (i) outside the school meal programs;
                              (ii) on the school campus; and
                              (iii) at any time during the school
                            day.
                      (C) Requirements.--In establishing nutrition
                    standards under this paragraph, the Secretary
                    shall--
                              (i) establish standards that are
                            consistent with the most recent Dietary
                            Guidelines for Americans published
                            under section 301 of the National
                            Nutrition Monitoring and Related
                            Research Act of 1990 (7 U.S.C. 5341),
                            including the food groups to encourage
                            and nutrients of concern identified in
                            the Dietary Guidelines; [and]
                              (ii) consider--
                                      (I) authoritative scientific
                                    recommendations for nutrition
                                    standards;
                                      (II) existing school
                                    nutrition standards, including
                                    voluntary standards for
                                    beverages and snack foods and
                                    State and local standards;
                                      (III) the practical
                                    application of the nutrition
                                    standards; and
                                      (IV) special exemptions for
                                    school-sponsored fundraisers
                                    (other than fundraising through
                                    vending machines, school
                                    stores, snack bars, a la carte
                                    sales, and any other exclusions
                                    determined by the Secretary),
                                    if the fundraisers are approved
                                    by the school and are
                                    infrequent within the
                                    school[.];
                              (iii) ensure that the nutrition
                            standards under this paragraph do not
                            apply to fundraisers held by student
                            groups or organizations, and that the
                            school and applicable State agency are
                            not prohibited from determining which
                            such fundraisers may be held; and
                              (iv) ensure that the nutrition
                            standards under this paragraph allow
                            any foods that may be served as part of
                            a reimbursable meal served under the
                            school meal programs to be sold in
                            schools as described in subparagraph
                            (B).
                      (D) Updating standards.--As soon as
                    practicable after the date of publication by
                    the Department of Agriculture and the
                    Department of Health and Human Services of a
                    new edition of the Dietary Guidelines for
                    Americans under section 301 of the National
                    Nutrition Monitoring and Related Research Act
                    of 1990 (7 U.S.C. 5341), the Secretary shall
                    review and update as necessary the school
                    nutrition standards and requirements
                    established under this subsection.
              (2) Implementation.--
                      (A) Effective date.--The interim or final
                    regulations under this subsection shall take
                    effect at the beginning of the school year that
                    is not earlier than 1 year and not later than 2
                    years following the date on which the
                    regulations are finalized.
                      (B) Reporting.--The Secretary shall submit to
                    the Committee on Agriculture, Nutrition, and
                    Forestry of the Senate and the [Committee on
                    Education and Labor] Committee on Education and
                    the Workforce of the House of Representatives a
                    quarterly report that describes progress made
                    toward promulgating final regulations under
                    this subsection.
      (c) In such regulations the Secretary may provide for the
    transfer of funds by any State between the programs authorized
    under this Act and the Richard B. Russell National School Lunch
    Act on the basis of an approved State plan of operation for the
    use of the funds and may provide for the reserve of up to 1 per
    centum of the funds available for apportionment to any State to
    carry out special developmental projects.

               *       *       *       *       *       *       *

                    MISCELLANEOUS PROVISIONS AND DEFINITIONS

      Sec. 15. For the purposes of this Act--
              (1) ``State'' means any of the fifty States, the
            District of Columbia, the Commonwealth of Puerto Rico,
            the Virgin Islands, Guam, American Samoa, or the
            Commonwealth of the Northern Mariana Islands.
              [(2) `` State educational agency'' means, as the
            State legislature may determine, (A) the chief State
            school officer (such as the State superintendent of
            public instruction, commissioner of education, or
            similar officer), or (B) a board of education
            controlling the State department of education.]
              (2) State agency.--The term ``State agency'' means--
                      (A) the chief State school officer (such as
                    the State superintendent of public instruction,
                    commissioner of education, or similar officer);
                      (B) a board of education controlling the
                    State department of education;
                      (C) the State Commissioner or individual who
                    administers agricultural programs in the State;
                    or
                      (D) a State official the State legislature
                    designates to administer the programs under
                    this Act.
              (3) ``School'' means (A) any public or nonprofit
            private school of high school grade or under, including
            kindergarten and preschool programs operated by such
            school, and (B) any public or licensed nonprofit
            private residential child care institution (including,
            but not limited to, orphanages and homes for the
            mentally retarded, but excluding Job Corps Centers
            funded by the Department of Labor). For purposes of
            clauses (A) and (B) of this paragraph, the term
            ``nonprofit'', when applied to any such private school
            or institution, means any such school or institution
            which is exempt from tax under section 501(c)(3) of the
            Internal Revenue Code of 1986.
              (4) ``Secretary'' means the Secretary of Agriculture.
              (5) ``School year'' means the annual period from July
            1 through June 30.
              (6) Except as used in section 17 of this Act, the
            terms ``child'' and ``children'' as used in this Act,
            shall be deemed to include persons regardless of age
            who are determined by the [State educational agency]
            State agency, in accordance with regulations prescribed
            by the Secretary, to have 1 or more disabilities and
            who are attending any nonresidential public or
            nonprofit private school of high school grade or under
            for the purpose of participating in a school program
            established for individuals with disabilities.
              (7) Disability.--The term ``disability'' has the
            meaning given the term in the Rehabilitation Act of
            1973 for purposes of title II of that Act (29 U.S.C 760
            et seq.).

                              ACCOUNTS AND RECORDS

      Sec. 16. (a) States, [State educational agencies] State
    agencies, schools, and nonprofit institutions participating in
    programs under this Act shall keep such accounts and records as
    may be necessary to enable the Secretary to determine whether
    there has been compliance with this Act and the regulations
    hereunder. Such accounts and records shall be available at any
    reasonable time for inspection and audit by representatives of
    the Secretary and shall be preserved for such period of time,
    not in excess of three years, as the Secretary determines is
    necessary.
      (b) With regard to any claim arising under this Act or under
    the Richard B. Russell National School Lunch Act, the Secretary
    shall have the authority to determine the amount of, to settle
    and to adjust any such claim, and to compromise or deny such
    claim or any part thereof. The Secretary shall also have the
    authority to waive such claims if the Secretary determines that
    to do so would serve the purposes of either such Act. Nothing
    contained in this subsection shall be construed to diminish the
    authority of the Attorney General of the United States under
    section 516 of title 28, United States Code, to conduct
    litigation on behalf of the United States.

    SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN

      Sec. 17. (a) Congress finds that substantial numbers of
    pregnant, postpartum, and breastfeeding women, infants, and
    young children from families with inadequate income are at
    special risk with respect to their physical and mental health
    by reason of inadequate nutrition or health care, or both. It
    is, therefore, the purpose of the program authorized by this
    section to provide, up to the authorization levels set forth in
    subsection (g) of this section, supplemental foods and
    nutrition education, including breastfeeding [promotion]
    counseling, promotion, and support, through any eligible local
    agency that applies for participation in the program. The
    program shall serve as an adjunct to good health care, during
    critical times of growth and development, to prevent the
    occurrence of health problems, including drug abuse, and
    improve the health status of these persons.
      (b) As used in this section--
              (1) ``Breastfeeding women'' means women up to one
            year postpartum who are breastfeeding their infants.
              (2) ``Children'' means persons who have had their
            first birthday but have not yet attained their fifth
            birthday.
              (3) ``Competent professional authority'' means
            physicians, nutritionists, registered nurses,
            dietitians, or State or local medically trained health
            officials, or persons designated by physicians or State
            or local medically trained health officials, in
            accordance with standards prescribed by the Secretary,
            as being competent professionally to evaluate
            nutritional risk.
              (4) ``Costs of nutrition services and
            administration'' or ``nutrition services and
            administration'' means costs that shall include, but
            not be limited to, costs for certification of
            eligibility of persons for participation in the program
            (including centrifuges, measuring boards,
            spectrophotometers, and scales used for the
            certification), food delivery, monitoring, nutrition
            education, breastfeeding support and promotion,
            outreach, startup costs, and general administration
            applicable to implementation of the program under this
            section, such as the cost of staff, transportation,
            insurance, developing and printing food instruments,
            and administration of State and local agency offices.
              (5) ``Infants'' means persons under one year of age.
              (6) ``Local agency'' means a public health or welfare
            agency or a private nonprofit health or welfare agency,
            which, directly or through an agency or physician with
            which it has contracted, provides health services. The
            term shall include an Indian tribe, band, or group
            recognized by the Department of the Interior, the
            Indian Health Service of the Department of Health and
            Human Services, or an intertribal council or group that
            is an authorized representative of Indian tribes,
            bands, or groups recognized by the Department of the
            Interior.
              (7) Nutrition education.--The term ``nutrition
            education'' means individual and group sessions and the
            provision of material that are designed to improve
            health status and achieve positive change in dietary
            and physical activity habits, and that emphasize the
            relationship between nutrition, physical activity, and
            health, all in keeping with the personal and cultural
            preferences of the individual.
              (8) ``Nutritional risk'' means (A) detrimental or
            abnormal nutritional conditions detectable by
            biochemical or anthropometric measurements, (B) other
            documented nutritionally related medical conditions,
            (C) dietary deficiencies that impair or endanger
            health, (D) conditions that directly affect the
            nutritional health of a person, such as alcoholism or
            drug abuse, or (E) conditions that predispose persons
            to inadequate nutritional patterns or nutritionally
            related medical conditions, including, but not limited
            to, homelessness and migrancy.
              (9) ``Plan of operation and administration'' means a
            document that describes the manner in which the State
            agency intends to implement and operate the program.
              (10) ``Postpartum women'' means women up to six
            months after termination of pregnancy.
              (11) ``Pregnant women'' means women determined to
            have one or more fetuses in utero.
              (12) ``Secretary'' means the Secretary of
            Agriculture.
              (13) ``State agency'' means the health department or
            comparable agency of each State; an Indian tribe, band,
            or group recognized by the Department of the Interior;
            an intertribal council or group that is the authorized
            representative of Indian tribes, bands, or groups
            recognized by the Department of the Interior; or the
            Indian Health Service of the Department of Health and
            Human Services.
              (14)  Supplemental food._  [``Supplemental foods''
            means those foods] The term ``supplemental food'' means
            any food containing nutrients determined by nutritional
            research to be lacking in the diets of pregnant,
            breastfeeding, and postpartum women, infants, and
            children and foods that promote the health of the
            population served by the program authorized by this
            section, as indicated by relevant nutrition science,
            public health concerns, and cultural eating patterns,
            as prescribed by the Secretary. State agencies may,
            with the approval of the Secretary, substitute
            different foods providing the nutritional equivalent of
            foods prescribed by the Secretary, to allow for
            different cultural eating patterns.
              (15) ``Homeless individual'' means--
                      (A) an individual who lacks a fixed and
                    regular nighttime residence; or
                      (B) an individual whose primary nighttime
                    residence is--
                              (i) a supervised publicly or
                            privately operated shelter (including a
                            welfare hotel or congregate shelter)
                            designed to provide temporary living
                            accommodations;
                              (ii) an institution that provides a
                            temporary residence for individuals
                            intended to be institutionalized;
                              (iii) a temporary accommodation of
                            not more than 365 days in the residence
                            of another individual; or
                              (iv) a public or private place not
                            designed for, or ordinarily used as, a
                            regular sleeping accommodation for
                            human beings.
              (16) ``Drug abuse education'' means--
                      (A) the provision of information concerning
                    the dangers of drug abuse; and
                      (B) the referral of participants who are
                    suspected drug abusers to drug abuse clinics,
                    treatment programs, counselors, or other drug
                    abuse professionals.
              (17) ``Competitive bidding'' means a procurement
            process under which the Secretary or a State agency
            selects a single source (a single infant formula
            manufacturer) offering the lowest price, as determined
            by the submission of sealed bids, for a product for
            which bids are sought for use in the program authorized
            by this section.
              (18) ``Rebate'' means the amount of money refunded
            under cost containment procedures to any State agency
            from the manufacturer or other supplier of the
            particular food product as the result of the purchase
            of the supplemental food with a voucher or other
            purchase instrument by a participant in each such
            agency's program established under this section.
              (19) ``Discount'' means, with respect to a State
            agency that provides program foods to participants
            without the use of retail grocery stores (such as a
            State that provides for the home delivery or direct
            distribution of supplemental food), the amount of the
            price reduction or other price concession provided to
            any State agency by the manufacturer or other supplier
            of the particular food product as the result of the
            purchase of program food by each such State agency, or
            its representative, from the supplier.
              (20) ``Net price'' means the difference between the
            manufacturer's wholesale price for infant formula and
            the rebate level or the discount offered or provided by
            the manufacturer under a cost containment contract
            entered into with the pertinent State agency.
              (21) Remote indian or native village.--The term
            ``remote Indian or Native village'' means an Indian or
            Native village that--
                      (A) is located in a rural area;
                      (B) has a population of less than 5,000
                    inhabitants; and
                      (C) is not accessible year-around by means of
                    a public road (as defined in section 101 of
                    title 23, United States Code).''.
              (22) Primary contract infant formula.--The term
            ``primary contract infant formula'' means the specific
            infant formula for which manufacturers submit a bid to
            a State agency in response to a rebate solicitation
            under this section and for which a contract is awarded
            by the State agency as a result of that bid.
              (23) State alliance.--The term ``State alliance''
            means 2 or more State agencies that join together for
            the purpose of procuring infant formula under the
            program by soliciting competitive bids for infant
            formula.
      (c)(1) The Secretary may carry out a special supplemental
    nutrition program to assist State agencies through grants-in-
    aid and other means to provide, through local agencies, at no
    cost, supplemental foods, nutrition education, and
    breastfeeding support and promotion to low-income pregnant,
    postpartum, and breastfeeding women, infants, and children who
    satisfy the eligibility requirements specified in subsection
    (d) of this section. The program shall be supplementary to--
              (A) the supplemental nutrition assistance program;
              (B) any program under which foods are distributed to
            needy families in lieu of supplemental nutrition
            assistance program benefits; and
              (C) receipt of food or meals from soup kitchens, or
            shelters, or other forms of emergency food assistance.
      (2) Subject to amounts appropriated to carry out this section
    under subsection (g)--
              (A) the Secretary shall make cash grants to State
            agencies for the purpose of administering the program,
            and
              (B) any State agency approved eligible local agency
            that applies to participate in or expand the program
            under this section shall immediately be provided with
            the necessary funds to carry out the program.
      (3) Nothing in this subsection shall be construed to permit
    the Secretary to reduce ratably the amount of foods that an
    eligible local agency shall distribute under the program to
    participants. The Secretary shall take affirmative action to
    ensure that the program is instituted in areas most in need of
    supplemental foods. The existence of a commodity supplemental
    food program under section 4 of the Agriculture and Consumer
    Protection Act of 1973 shall not preclude the approval of an
    application from an eligible local agency to participate in the
    program under this section nor the operation of such program
    within the same geographic area as that of the commodity
    supplemental food program, but the Secretary shall issue such
    regulations as are necessary to prevent dual receipt of
    benefits under the commodity supplemental food program and the
    program under this section.
      (4) A State shall be ineligible to participate in programs
    authorized under this section if the Secretary determines that
    State or local sales taxes are collected within the State on
    purchases of food made to carry out this section.
      (d)(1) Participation in the program under this section shall
    be limited to pregnant, postpartum, and breastfeeding women,
    infants, and children from low-income families who are
    determined by a competent professional authority to be at
    nutritional risk.
      (2)(A) The Secretary shall establish income eligibility
    standards to be used in conjunction with the nutritional risk
    criteria in determining eligibility of individuals for
    participation in the program. Any individual at nutritional
    risk shall be eligible for the program under this section only
    if such individual--
              (i) is a member of a family with an income that is
            less than the maximum income limit prescribed under
            section 9(b) of the Richard B. Russell National School
            Lunch Act for free and reduced price meals;
              (ii)(I) receives supplemental nutrition assistance
            program benefits under the Food and Nutrition Act of
            2008; or
              (II) is a member of a family that receives assistance
            under the State program funded established under part A
            of title IV of the Social Security Act that the
            Secretary determines complies with standards
            established by the Secretary that ensure that the
            standards under the State program are comparable to or
            more restrictive than those in effect on June 1, 1995;
            or
              (iii)(I) receives medical assistance under title XIX
            of the Social Security Act; or
              (II) is a member of a family in which a pregnant
            woman or an infant receives such assistance.
      (B) For the purpose of determining income eligibility under
    this section, any State agency [may choose to] shall exclude
    from income--
              (i) any basic allowance--
                      (I) for housing received by military service
                    personnel residing off military installations;
                    or
                      (II) provided under section 403 of title 37,
                    United States Code, for housing that is
                    acquired or constructed under subchapter IV of
                    chapter 169 of title 10, United States Code, or
                    any related provision of law; [and]
              (ii) any cost-of-living allowance provided under
            section 405 of title 37, United States Code, to a
            member of a uniformed service who is on duty outside
            the contiguous States of the United States[.]; and
              (iii) any basic allowance for subsistence provided
            under section 402 of title 37, United States Code, to a
            member of a uniformed service.
              (C) Combat pay.--For the purpose of determining
            income eligibility under this section, a State agency
            shall exclude from income any additional payment under
            chapter 5 of title 37, United States Code, or otherwise
            designated by the Secretary to be appropriate for
            exclusion under this subparagraph, that is received by
            or from a member of the United States Armed Forces
            deployed to a designated combat zone, if the additional
            pay--
                      (i) is the result of deployment to or service
                    in a combat zone; and
                      (ii) was not received immediately prior to
                    serving in a combat zone.
      (D) In the case of a pregnant woman who is otherwise
    ineligible for participation in the program because the family
    of the woman is of insufficient size to meet the income
    eligibility standards of the program, the pregnant woman shall
    be considered to have satisfied the income eligibility
    standards if, by increasing the number of individuals in the
    family of the woman by 1 individual, the income eligibility
    standards would be met.
              (E) Child support payments.--For the purpose of
            determining income eligibility under this section, a
            State agency shall exclude from income any child
            support payment for an applicant who is legally
            obligated to pay child support for any noncustodial
            child.
              (3) Certification.--
                      (A) Procedures.--
                              (i) In general.--Subject to clause
                            (ii), a person shall be certified for
                            participation in accordance with
                            general procedures prescribed by the
                            Secretary.
                              (ii) Breastfeeding women.--A State
                            may elect to certify a breastfeeding
                            woman for a period of 1 year postpartum
                            or until a woman discontinues
                            breastfeeding, whichever is earlier.
                              (iii) Children.--A State may elect to
                            certify participant children for a
                            period of up to 1 year, if the State
                            electing the option provided under this
                            clause ensures that participant
                            children receive required health and
                            nutrition assessments.
      (B) A State may consider pregnant women who meet the income
    eligibility standards to be presumptively eligible to
    participate in the program and may certify the women for
    participation immediately, without delaying certification until
    an evaluation is made concerning nutritional risk. A
    nutritional risk evaluation of such a woman shall be completed
    not later than 60 days after the woman is certified for
    participation. If it is subsequently determined that the woman
    does not meet nutritional risk criteria, the certification of
    the woman shall terminate on the date of the determination.
                      (C) Physical presence.--
                              (i) In general.--Except as provided
                            in clause (ii) and subject to the
                            requirements of the Americans with
                            Disabilities Act of 1990 (42 U.S.C.
                            12101 et seq.) and section 504 of the
                            Rehabilitation Act of 1973 (29 U.S.C.
                            794), each individual seeking
                            certification or recertification for
                            participation in the program shall be
                            physically present at each
                            certification or recertification
                            determination in order to determine
                            eligibility under the program.
                              (ii) Waivers.--If the agency
                            determines that the requirement of
                            clause (i) would present an
                            unreasonable barrier to participation,
                            a local agency may waive the
                            requirement of clause (i) with respect
                            to--
                                      (I) an infant or child who--
                                              (aa) was present at
                                            the initial
                                            certification visit;
                                            and
                                              (bb) is receiving
                                            ongoing health care;
                                      (II) an infant or child who--
                                              (aa) was present at
                                            the initial
                                            certification visit;
                                              (bb) was present at a
                                            certification or
                                            recertification
                                            determination within
                                            the 1-year period
                                            ending on the date of
                                            the certification or
                                            recertification
                                            determination described
                                            in clause (i); and
                                              (cc) has one or more
                                            parents who work; and
                                      (III) an infant under 8 weeks
                                    of age--
                                              (aa) who cannot be
                                            present at
                                            certification for a
                                            reason determined
                                            appropriate by the
                                            local agency; and
                                              (bb) for whom all
                                            necessary certification
                                            information is
                                            provided.
                      (D) Income documentation.--
                              (i) In general.--Except as provided
                            in clause (ii), in order to participate
                            in the program pursuant to clause (i)
                            of paragraph (2)(A), an individual
                            seeking certification or
                            recertification for participation in
                            the program shall provide documentation
                            of family income.
                              (ii) Waivers.--A State agency may
                            waive the documentation requirement of
                            clause (i), in accordance with criteria
                            established by the Secretary, with
                            respect to--
                                      (I) an individual for whom
                                    the necessary documentation is
                                    not available; or
                                      (II) an individual, such as a
                                    homeless woman or child, for
                                    whom the agency determines the
                                    requirement of clause (i) would
                                    present an unreasonable barrier
                                    to participation.
                      (E) Adjunct documentation.--In order to
                    participate in the program pursuant to clause
                    (ii) or (iii) of paragraph (2)(A), an
                    individual seeking certification or
                    recertification for participation in the
                    program shall provide documentation of receipt
                    of assistance described in that clause.
                      (F) Proof of residency.--An individual
                    residing in a remote Indian or Native village
                    or an individual served by an Indian tribal
                    organization and residing on a reservation or
                    pueblo may, under standards established by the
                    Secretary, establish proof of residency under
                    this section by providing to the State agency
                    the mailing address of the individual and the
                    name of the remote Indian or Native village.
                      (G) Data exchange standards for improved
                    interoperability.--
                              (i) Designation.--The Secretary, in
                            consultation with an interagency work
                            group established by the Office of
                            Management and Budget, and taking into
                            consideration State government
                            perspectives, shall designate data
                            exchange standards to govern, under
                            this section--
                                      (I) necessary categories of
                                    information that State agencies
                                    operating related programs are
                                    required under applicable law
                                    to electronically exchange with
                                    another State agency; and
                                      (II) Federal reporting and
                                    data exchange required under
                                    applicable law.
                              (ii) Requirements.--The data exchange
                            standards required by clause (i) shall,
                            to the maximum extent practicable--
                                      (I) incorporate a widely
                                    accepted, nonproprietary,
                                    searchable, computer-readable
                                    format;
                                      (II) contain interoperable
                                    standards developed and
                                    maintained by intergovernmental
                                    partnerships, such as the
                                    National Information Exchange
                                    Model;
                                      (III) incorporate
                                    interoperable standards
                                    developed and maintained by
                                    Federal entities with authority
                                    regarding contracting and
                                    financial assistance;
                                      (IV) be consistent with, and
                                    implement, applicable
                                    accounting principles;
                                      (V) be implemented in a
                                    manner that--
                                              (aa) is cost
                                            effective; and
                                              (bb) improves program
                                            efficiency and
                                            effectiveness;
                                      (VI) be capable of being
                                    upgraded as necessary; and
                                      (VII) protects the privacy of
                                    any personally identifiable
                                    information from being accessed
                                    by individuals who do not need
                                    access to such information.
                              (iii) Effect of subparagraph.--
                            Nothing in this subparagraph requires
                            any change to an existing data exchange
                            standard for Federal reporting that is
                            determined to be effective and
                            efficient.
                              (iv) Implementation.--
                                      (I) In general.--Not later
                                    than 2 years after the date of
                                    the enactment of the Improving
                                    Child Nutrition and Education
                                    Act of 2016, the Secretary
                                    shall issue a proposed rule to
                                    implement this subparagraph.
                                      (II) Requirements.--The
                                    proposed rule under this clause
                                    shall--
                                              (aa) identify all
                                            federally required data
                                            exchanges;
                                              (bb) include
                                            specification and
                                            timing for the
                                            exchanges to be
                                            standardized;
                                              (cc) address the
                                            factors used in
                                            determining whether and
                                            when to standardize
                                            data exchanges;
                                              (dd) specify State
                                            implementation options;
                                            and
                                              (ee) describe future
                                            milestones.
      [(e)(1) The State agency shall] (e)  Nutrition and Drug Abuse
    Education._
              (1) Education._
                      (A) In general._A 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.
                      (B) Disposal of certain infant formula.--
                              (i) In general.--The State agency
                            shall ensure that all pregnant,
                            postpartum, and breastfeeding
                            participants in the program, and
                            parents or caretakers of infant and
                            child participants in the program, are
                            provided education regarding proper
                            disposal of unused or excess infant
                            formula obtained with food instruments
                            issued under the program under this
                            section.
                              (ii) Inclusions.--The education under
                            this subparagraph shall include
                            information regarding--
                                      (I) the safety hazards of
                                    purchasing infant formula from
                                    an unauthorized vendor; and
                                      (II) the penalties associated
                                    with the gifting, trading,
                                    sale, or resale of infant
                                    formula or other supplemental
                                    foods obtained with food
                                    instruments issued under the
                                    program under this section, in
                                    accordance with subsection (o).
      (2) The Secretary shall prescribe standards to ensure that
    adequate nutrition education services and breastfeeding
    promotion and support are provided. The State agency shall
    provide training to persons providing nutrition education,
    including breastfeeding support and education, under this
    section.
              [(3) Nutrition education materials.--
                      [(A) In general.--The Secretary shall, after
                    submitting proposed nutrition education
                    materials to the Secretary of Health and Human
                    Services for comment, issue such materials for
                    use in the program under this section.
                      [(B) Sharing of materials with other
                    programs.--
                              [(i) Commodity supplemental food
                            program.--The Secretary may provide, in
                            bulk quantity, nutrition education
                            materials (including materials
                            promoting breastfeeding) developed with
                            funds made available for the program
                            authorized under this section to State
                            agencies administering the commodity
                            supplemental food program established
                            under section 5 of the Agriculture and
                            Consumer Protection Act of 1973 (7
                            U.S.C. 612c note; Public Law 93-86) at
                            no cost to that program.
                              [(ii) Child and adult care food
                            program.--A State agency may allow the
                            local agencies or clinics under the
                            State agency to share nutrition
                            educational materials with institutions
                            participating in the child and adult
                            care food program established under
                            section 17 of the Richard B. Russell
                            National School Lunch Act (42 U.S.C.
                            1766) at no cost to that program, if a
                            written materials sharing agreement
                            exists between the relevant agencies.]
              (3) Nutrition education materials.--
                      (A) In general.--The Secretary, after
                    submitting proposed nutrition education
                    materials to the Secretary of Health and Human
                    Services for comment, shall issue the materials
                    for use in the program under this section.
                      (B) Sharing of materials with child and adult
                    care food program.--A State agency may allow
                    the local agencies or clinics operating under
                    the State agency to share nutrition educational
                    materials with institutions participating in
                    the Child and Adult Care Food Program
                    established under section 17 of the Richard B.
                    Russell National School Lunch Act (42 U.S.C.
                    1766) at no cost to that program, if a written
                    materials-sharing agreement exists between the
                    relevant agencies.
      (4) The State agency--
              (A) shall provide each local agency with materials
            showing the maximum income limits, according to family
            size, applicable to pregnant women, infants, and
            children up to age 5 under the medical assistance
            program established under title XIX of the Social
            Security Act (in this section referred to as the
            ``medicaid program'');
              (B) shall provide to individuals applying for the
            program under this section, or reapplying at the end of
            their certification period, written information about
            the medicaid program and referral to such program or to
            agencies authorized to determine presumptive
            eligibility for such program, if such individuals are
            not participating in such program and appear to have
            family income below the applicable maximum income
            limits for such program; and
              (C) may provide a local agency with materials
            describing other programs for which a participant in
            the program may be eligible.
      (5) Each local agency shall maintain and make available for
    distribution a list of local resources for substance abuse
    counseling and treatment.
      [(f)(1)(A) Each State agency shall submit to the Secretary,
    by a date specified by the Secretary, an initial date specified
    by the Secretary, a plan of operation and administration for a
    fiscal year. After submitting the initial plan, a State shall
    be required to submit to the Secretary for approval only a
    substantive change in the plan.]
      (f) Plan of Operation and Administration by State Agency.--
              (1) Requirements.--
                      (A) Submission.--
                              (i) In general.--Each State agency
                            shall submit to the Secretary a plan of
                            operation and administration of the
                            program authorized under this section.
                              (ii) Deadlines.--Each State agency
                            shall submit--
                                      (I) an initial plan not later
                                    than such date as is specified
                                    by the Secretary; and
                                      (II) an update to the plan
                                    every 3 years thereafter or, if
                                    the requirements of this
                                    section continue to be met by
                                    current plan, an assurance that
                                    the current plan continues to
                                    meet such requirements.
      (B) To be eligible to receive funds under this section for a
    fiscal year, a State agency must receive the approval of the
    Secretary for the plan [submitted for] submitted covering the
    fiscal year.
      (C) The plan shall include--
              (i) a description of the food delivery system of the
            State agency and the method of enabling participants to
            receive supplemental foods under the program at any of
            the authorized retail stores under the program, to be
            administered in accordance with standards developed by
            the Secretary, including a description of the State
            agency's vendor peer group system, competitive price
            criteria, and allowable reimbursement levels that
            demonstrate that the State is in compliance with the
            cost-containment provisions in subsection (h)(11);
              (ii) procedures for accepting and processing vendor
            applications outside of the established timeframes if
            the State agency determines there will be inadequate
            access to the program, including in a case in which a
            previously authorized vendor sells a store under
            circumstances that do not permit timely notification to
            the State agency of the change in ownership;
              (iii) a description of the financial management
            system of the State agency;
              (iv) a plan to coordinate operations under the
            program with other services or programs that may
            benefit participants in, and applicants for, the
            program;
              (v) a plan to provide program benefits under this
            section to, and to meet the special nutrition education
            needs of, eligible migrants, homeless individuals, and
            Indians;
              (vi) a plan to expend funds to carry out the program
            during the relevant fiscal year;
              (vii) a plan to provide program benefits under this
            section to unserved and underserved areas in the State
            (including a plan to improve access to the program for
            participants and prospective applicants who are
            employed, or who reside in rural areas), if sufficient
            funds are available to carry out this clause;
              (viii) a plan for reaching and enrolling eligible
            women in the early months of pregnancy, including
            provisions to reach and enroll eligible migrants;
              (ix) a plan to provide program benefits under this
            section to unserved infants and children under the care
            of foster parents, protective services, or child
            welfare authorities, including infants exposed to drugs
            perinatally;
              (x) a plan to provide nutrition education and promote
            breastfeeding; [and]
              (xi) a plan to allow, during an emergency or disaster
            period, for different foods to be obtained with program
            benefits in lieu of, or in addition to, the
            supplemental foods available to be obtained with such
            benefits;
              (xii) a plan detailing the methods to be used by all
            local agencies to ensure compliance with subsection
            (d)(2); and
              [(xi)] (xiii) such other information as the Secretary
            may reasonably require.
      (D) The Secretary may not approve any plan that permits a
    person to participate simultaneously in both the program
    authorized under this section and the commodity supplemental
    food program authorized under sections 4 and 5 of the
    Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c
    note).
      (2) A State agency shall establish a procedure under which
    members of the general public are provided an opportunity to
    comment on the development of the State agency plan.
      (3) The Secretary shall establish procedures under which
    eligible migrants may, to the maximum extent feasible, continue
    to participate in the program under this section when they are
    present in States other than the State in which they were
    originally certified for participation in the program and shall
    ensure that local programs provide priority consideration to
    serving migrant participants who are residing in the State for
    a limited period of time. Each State agency shall be
    responsible for administering the program for migrant
    populations within its jurisdiction.
      (4) State agencies shall submit monthly financial reports and
    participation data to the Secretary.
      [(5) State and local]
      (5) Accounts, records, and review._
              (A) In general._State and local agencies operating
            under the program shall keep such accounts and records,
            including medical records, as may be necessary to
            enable the Secretary to determine whether there has
            been compliance with this section and to determine and
            evaluate the benefits of the nutritional assistance
            provided under this section. Such accounts and records
            shall be available at any reasonable time for
            inspection and audit by representatives of the
            Secretary and shall be preserved for such period of
            time, not in excess of five years, as the Secretary
            determines necessary.
              (B) Review.--The Secretary shall periodically review
            State and local agency compliance with the approved
            plan of operation and administration of the applicable
            State.
      (6)(A) Local agencies participating in the program under this
    section shall notify persons of their eligibility or
    ineligibility for the program within twenty days of the date
    that the household, during office hours of a local agency,
    personally makes an oral or written request to participate in
    the program. The Secretary shall establish a shorter
    notification period for categories of persons who, due to
    special nutritional risk conditions, must receive benefits more
    expeditiously.
      (B) State agencies may provide for the delivery of vouchers
    to any participant who is not scheduled for nutrition education
    and breastfeeding counseling or a recertification interview
    through means, such as mailing, that do not require the
    participant to travel to the local agency to obtain vouchers.
    The State agency shall describe any plans for issuance of
    vouchers by mail in its plan submitted under paragraph (1). The
    Secretary may disapprove a State plan with respect to the
    issuance of vouchers by mail in any specified jurisdiction or
    part of a jurisdiction within a State only if the Secretary
    finds that such issuance would pose a significant threat to the
    integrity of the program under this section in such
    jurisdiction or part of a jurisdiction.
      (7)(A) The State agency shall, in cooperation with
    participating local agencies, publicly announce and distribute
    information on the availability of program benefits (including
    the eligibility criteria for participation and the location of
    local agencies operating the program) to offices and
    organizations that deal with significant numbers of potentially
    eligible individuals (including health and medical
    organizations, hospitals and clinics, welfare and unemployment
    offices, social service agencies, farmworker organizations,
    Indian tribal organizations, organizations and agencies serving
    homeless individuals and shelters for victims of domestic
    violence, and religious and community organizations in low
    income areas).
      (B) The information shall be publicly announced by the State
    agency and by local agencies at least annually.
      (C) The State agency and local agencies shall distribute the
    information in a manner designed to provide the information to
    potentially eligible individuals who are most in need of the
    benefits, including pregnant women in the early months of
    pregnancy.
      (D) Each local agency operating the program within a hospital
    and each local agency operating the program that has a
    cooperative arrangement with a hospital shall--
              (i) advise potentially eligible individuals that
            receive inpatient or outpatient prenatal, maternity, or
            postpartum services, or accompany a child under the age
            of 5 who receives well-child services, of the
            availability of program benefits; and
              (ii) to the extent feasible, provide an opportunity
            for individuals who may be eligible to be certified
            within the hospital for participation in such program.
      (8)(A) The State agency shall grant a fair hearing, and a
    prompt determination thereafter, in accordance with regulations
    issued by the Secretary, to any applicant, participant, or
    local agency aggrieved by the action of a State or local agency
    as it affects participation.
      (B) Any State agency that must suspend or terminate benefits
    to any participant during the participant's certification
    period due to a shortage of funds for the program shall first
    issue a notice to such participant.
      (9) If an individual certified as eligible for participation
    in the program under this section in one area moves to another
    area in which the program is operating, that individual's
    certification of eligibility shall remain valid for the period
    for which the individual was originally certified.
      [(10) The Secretary]
              (10) Standards for administration._
                      (A) In general._The Secretary shall establish
                    standards for the proper, efficient, and
                    effective administration of the program. If the
                    Secretary determines that a State agency has
                    failed without good cause to administer the
                    program in a manner consistent with this
                    section or to implement the approved plan of
                    operation and administration under this
                    subsection, the Secretary may withhold such
                    amounts of the State agency's funds for
                    nutrition services and administration as the
                    Secretary deems appropriate. Upon correction of
                    such failure during a fiscal year by a State
                    agency, any funds so withheld for such fiscal
                    year shall be provided the State agency.
                      (B) Notification to state authority.--If, on
                    reviewing the administration by a State of the
                    program, the Secretary determines there is a
                    need to temporarily halt the State from
                    approving new vendors to address deficiencies
                    in proper administration, the Secretary may
                    issue a moratorium on the authority of the
                    State to approve new vendors, subject to the
                    condition that the Secretary shall provide the
                    State with reasoning behind such determination
                    and shall establish--
                              (i) a timeframe under which the
                            moratorium will be issued, including
                            any renewal or lifting of the
                            moratorium;
                              (ii) a process to approve vendors for
                            the State in a manner that does not
                            impede--
                                      (I) the sale of a business;
                                    or
                                      (II) the establishment of any
                                    new business; and
                              (iii) a review process to be
                            conducted by the Secretary to ensure
                            that participants, nonparticipants, and
                            vendors are not adversely impacted by
                            the implementation of the moratorium.
              (11) Supplemental foods.--
                      (A) In general.--The Secretary shall
                    prescribe by regulation the supplemental foods
                    to be made available in the program under this
                    section.
                      (B) Appropriate content.--To the degree
                    possible, the Secretary shall assure that the
                    fat, sugar, and salt content of the prescribed
                    foods is appropriate.
                      (C) Review of available supplemental foods.--
                    As frequently as determined by the Secretary to
                    be necessary to reflect the most recent
                    scientific knowledge, but not less than every
                    10 years, the Secretary shall--
                              (i) conduct a scientific review of
                            the supplemental foods available under
                            the program which, beginning not later
                            than 60 days after the date of
                            enactment of the Improving Child
                            Nutrition and Education Act of 2016,
                            shall include an examination of
                            criteria relating to fluid milk (in
                            consideration of the most recent
                            Dietary Guidelines for Americans
                            published under section 301 of the
                            National Nutrition Monitoring and
                            Related Research Act of 1990 (7 U.S.C.
                            5341)), and an examination of the
                            consumption and redemption rates of
                            milk beginning on May 5, 2014; [and]
                              (ii) amend the supplemental foods
                            available, as necessary, to reflect
                            nutrition science, public health
                            concerns, [and cultural eating
                            patterns.] cultural eating patterns,
                            commercial availability, and
                            participant demand, except that any
                            changes made under this clause shall
                            not limit the overall fruit intake of
                            children; and
                              (iii) consider accommodations for
                            medical, including food allergies, or
                            other special dietary needs of
                            individuals, including religious
                            dietary restrictions.
                      (D) Product package sizes.--In promulgating
                    or revising regulations under this paragraph,
                    the Secretary shall allow a range of product
                    package sizes to be selected by participants.
                      (E) Cash value vouchers.--In adjusting
                    annually for food cost inflation in the food
                    package under this paragraph, the Secretary
                    shall round to the nearest dollar increment.
                      (F) Participant choice options.--The
                    Secretary shall maximize opportunities for
                    State agency flexibility to ensure adequate and
                    appropriate participant choice to meet
                    participant needs and cultural preferences in
                    supplemental foods made available under this
                    section.
      (12) A competent professional authority shall be responsible
    for prescribing the appropriate supplemental foods, taking into
    account medical and nutritional conditions and cultural eating
    patterns, and, in the case of homeless individuals, the special
    needs and problems of such individuals.
      (13) The State agency may (A) provide nutrition education,
    breastfeeding promotion, and drug abuse education materials and
    instruction in languages other than English and (B) use
    appropriate foreign language materials in the administration of
    the program, in areas in which a substantial number of low-
    income households speak a language other than English.
      (14) If a State agency determines that a member of a family
    has received an overissuance of food benefits under the program
    authorized by this section as the result of such member
    intentionally making a false or misleading statement or
    intentionally misrepresenting, concealing, or withholding
    facts, the State agency shall recover, in cash, from such
    member an amount that the State agency determines is equal to
    the value of the overissued food benefits, unless the State
    agency determines that the recovery of the benefits would not
    be cost effective.
      (15) To be eligible to participate in the program authorized
    by this section, a manufacturer of infant formula that supplies
    formula for the program shall--
              (A) register with the Secretary of Health and Human
            Services under the Federal Food, Drug, and Cosmetic Act
            (21 U.S.C. 321 et seq.); and
              (B) before bidding for a State contract to supply
            infant formula for the program, certify with the State
            health department that the formula complies with such
            Act and regulations issued pursuant to such Act.
      (16) The State agency may adopt methods of delivering
    benefits to accommodate the special needs and problems of
    homeless individuals.
      (17) Notwithstanding subsection (d)(2)(A)(i), not later than
    July 1 of each year, a State agency may implement income
    eligibility guidelines under this section concurrently with the
    implementation of income eligibility guidelines under the
    medicaid program established under title XIX of the Social
    Security Act (42 U.S.C. 1396 et seq.).
      (18) Each local agency participating in the program under
    this section may provide information about other potential
    sources of food assistance in the local area to individuals who
    apply in person to participate in the program under this
    section, but who cannot be served because the program is
    operating at capacity in the local area.
      (19) The State agency shall adopt policies that--
              (A) require each local agency to attempt to contact
            each pregnant woman who misses an appointment to apply
            for participation in the program under this section, in
            order to reschedule the appointment, unless the phone
            number and the address of the woman are unavailable to
            such local agency; and
              (B) in the case of local agencies that do not
            routinely schedule appointments for individuals seeking
            to apply or be recertified for participation in the
            program under this section, require each such local
            agency to schedule appointments for each employed
            individual seeking to apply or be recertified for
            participation in such program so as to minimize the
            time each such individual is absent from the workplace
            due to such application or request for recertification.
      (20) Each State agency shall conduct monitoring reviews of
    each local agency at least biennially.
              (21) Use of claims from local agencies, vendors, and
            participants.--A State agency may use funds recovered
            from local agencies, vendors, and participants, as a
            result of a claim arising under the program, to carry
            out the program during--
                      (A) the fiscal year in which the claim
                    arises;
                      (B) the fiscal year in which the funds are
                    collected; and
                      (C) the fiscal year following the fiscal year
                    in which the funds are collected.
      (22) The Secretary and the Secretary of Health and Human
    Services shall carry out an initiative to assure that, in a
    case in which a State medicaid program uses coordinated care
    providers under a contract entered into under section 1903(m),
    or a waiver granted under section 1915(b), of the Social
    Security Act (42 U.S.C. 1396b(m) or 1396n(b)), coordination
    between the program authorized by this section and the medicaid
    program is continued, including--
              (A) the referral of potentially eligible women,
            infants, and children between the 2 programs; and
              (B) the timely provision of medical information
            related to the program authorized by this section to
            agencies carrying out the program.
              (23) Individuals participating at more than one
            site.--Each State agency shall implement a system
            designed by the State agency to identify individuals
            who are participating at more than one site under the
            program.
              (24) High risk vendors.--Each State agency shall--
                      (A) identify vendors that have a high
                    probability of program abuse; and
                      (B) conduct compliance investigations of the
                    vendors.
              (25) Infant formula benefits.--A State agency may
            round up to the next whole can of infant formula to
            allow all participants under the program to receive the
            full-authorized nutritional benefit specified by
            regulation.
              (26) Notification of violations.--If a State agency
            finds that a vendor has committed a violation that
            requires a pattern of occurrences in order to impose a
            penalty or sanction, the State agency shall notify the
            vendor of the initial violation in writing prior to
            documentation of another violation, unless the State
            agency determines that notifying the vendor would
            compromise an investigation.
      (g) Authorization of Appropriations.--
              (1) In general.--
                      [(A) Authorization.--There are authorized to
                    be appropriated to carry out this section such
                    sums as are necessary for each of fiscal years
                    2010 through 2015.]
                      (A) Authorization.--There are authorized to
                    be appropriated to carry out this section
                    $6,350,000,000 for each of fiscal years 2017
                    through 2021.
                      (B) Advance appropriations; availability.--As
                    authorized by section 3 of the Richard B.
                    Russell 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 for
                    disbursement to the States, and shall remain
                    available for the purposes for which
                    appropriated until expended.
      (2)(A) Notwithstanding any other provision of law, unless
    enacted in express limitation of this subparagraph, the
    Secretary--
              (i) in the case of legislation providing funds
            through the end of a fiscal year, shall issue--
                      (I) an initial allocation of funds provided
                    by the enactment of such legislation not later
                    than the expiration of the 15-day period
                    beginning on the date of the enactment of such
                    legislation; and
                      (II) subsequent allocations of funds provided
                    by the enactment of such legislation not later
                    than the beginning of each of the second,
                    third, and fourth quarters of the fiscal year;
                    and
              (ii) in the case of legislation providing funds for a
            period that ends prior to the end of a fiscal year,
            shall issue an initial allocation of funds provided by
            the enactment of such legislation not later than the
            expiration of the 10-day period beginning on the date
            of the enactment of such legislation.
      (B) In any fiscal year--
              (i) unused amounts from a prior fiscal year that are
            identified by the end of the first quarter of the
            fiscal year shall be recovered and reallocated not
            later than the beginning of the second quarter of the
            fiscal year; and
              (ii) unused amounts from a prior fiscal year that are
            identified after the end of the first quarter of the
            fiscal year shall be recovered and reallocated on a
            timely basis.
      (3) Notwithstanding any other provision of law, unless
    enacted in express limitation of this paragraph--
              (A) the allocation of funds required by paragraph
            (2)(A)(i)(I) shall include not less than \1/3\ of the
            amounts appropriated by the legislation described in
            such paragraph;
              (B) the allocations of funds required by paragraph
            (2)(A)(i)(II) to be made not later than the beginning
            of the second and third quarters of the fiscal year
            shall each include not less than \1/4\ of the amounts
            appropriated by the legislation described in such
            paragraph; and
              (C) in the case of the enactment of legislation
            providing appropriations for a period of not more than
            4 months, the allocation of funds required by paragraph
            (2)(A)(ii) shall include all amounts appropriated by
            such legislation except amounts reserved by the
            Secretary for purposes of carrying out paragraph (5).
      (4) Of the sums appropriated for any fiscal year for programs
    authorized under this section, not less than nine-tenths of 1
    percent shall be available first for services to eligible
    members of migrant populations. The migrant services shall be
    provided in a manner consistent with the priority system of a
    State for program participation.
      (5) Of the sums appropriated for any fiscal year for the
    program under this section, one-half of 1 percent, not to
    exceed $15,000,000, shall be available to the Secretary for the
    purpose of evaluating program performance, evaluating health
    benefits, preparing reports on program participant
    characteristics, providing technical assistance to improve
    State agency administrative systems, administration of pilot
    projects, including projects designed to meet the special needs
    of migrants, Indians, and rural populations, and carrying out
    technical assistance and research evaluation projects of the
    programs under this section.
      (h)(1)(A) Each fiscal year, the Secretary shall make
    available, from amounts appropriated for such fiscal year under
    subsection (g)(1) and amounts remaining from amounts
    appropriated under such subsection for the preceding fiscal
    year, an amount sufficient to guarantee a national average per
    participant grant to be allocated among State agencies for
    costs of nutrition services and administration incurred by
    State and local agencies for such year.
      (B)(i) The amount of the national average per participant
    grant for nutrition services and administration for any fiscal
    year shall be an amount equal to the amount of the national
    average per participant grant for nutrition services and
    administration issued the preceding fiscal year, as adjusted.
      (ii) Such adjustment, for any fiscal year, shall be made by
    revising the national average per participant grant for
    nutrition services and administration for the preceding fiscal
    year to reflect the percentage change between--
              (I) the value of the index for State and local
            government purchases, as published by the Bureau of
            Economic Analysis of the Department of Commerce, for
            the 12-month period ending June 30 of the second
            preceding fiscal year; and
              (II) the best estimate that is available as of the
            start of the fiscal year of the value of such index for
            the 12-month period ending June 30 of the previous
            fiscal year.
                      (C) Remaining amounts.--
                              (i) In general.--Except as provided
                            in clause (ii), 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) Breast pumps.--A State agency
                            may use amounts made available under
                            clause (i) for the purchase of breast
                            pumps.
      (2)(A) 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) shall be designed to take into account--
                      (I) the varying needs of each State;
                      (II) the number of individuals participating
                    in each State; and
                      (III) other factors which serve to promote
                    the proper, efficient, and effective
                    administration of the program under this
                    section;
              (ii) shall provide for each State agency--
                      (I) an estimate of the number of participants
                    for the fiscal year involved; and
                      (II) a per participant grant for nutrition
                    services and administration for such year;
              (iii) shall provide for a minimum grant amount for
            State agencies; and
              (iv) may provide funds to help defray reasonable
            anticipated expenses associated with innovations in
            cost containment or associated with procedures that
            tend to enhance competition.
      (B)(i) Except as provided in clause (ii) and subparagraph
    (C), in any fiscal year, the total amount allocated to a State
    agency for costs of nutrition services and administration under
    the formula prescribed by the Secretary under subparagraph (A)
    shall constitute the State agency's operational level for such
    costs for such year even if the number of participants in the
    program at such agency is lower than the estimate provided
    under subparagraph (A)(ii)(I).
      (ii) If a State agency's per participant expenditure for
    nutrition services and administration is more than 10 percent
    (except that the Secretary may establish a higher percentage
    for State agencies that are small) 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.
      (C) In any fiscal year, the Secretary may reallocate amounts
    provided to State agencies under subparagraph (A) for such
    fiscal year. When reallocating amounts under the preceding
    sentence, the Secretary may provide additional amounts to, or
    recover amounts from, any State agency.
      (3)(A) Except as provided in subparagraphs (B) and (C), in
    each fiscal year, each State agency shall expend--
              (i) for nutrition education activities and
            breastfeeding promotion and support activities, an
            aggregate amount that is not less than the sum of--
                      (I) \1/6\ of the amounts expended by the
                    State for costs of nutrition services and
                    administration; and
                      (II) except as otherwise provided in
                    subparagraphs (F) and (G), an amount equal to a
                    proportionate share of the national minimum
                    breastfeeding promotion expenditure, as
                    described in subparagraph (E), with each
                    State's share determined on the basis of the
                    number of pregnant women and breastfeeding
                    women in the program in the State as a
                    percentage of the number of pregnant women and
                    breastfeeding women in the program in all
                    States; and
              (ii) for breastfeeding promotion and support
            activities an amount that is not less than the amount
            determined for such State under clause (i)(II).
      (B) The Secretary may authorize a State agency to expend an
    amount less than the amount described in subparagraph (A)(ii)
    for purposes of breastfeeding promotion and support activities
    if--
              (i) the State agency so requests; and
              (ii) the request is accompanied by documentation that
            other funds will be used to conduct nutrition education
            activities at a level commensurate with the level at
            which such activities would be conducted if the amount
            described in subparagraph (A)(ii) were expended for
            such activities.
      (C) The Secretary may authorize a State agency to expend for
    purposes of nutrition education an amount that is less than the
    difference between the aggregate amount described in
    subparagraph (A) and the amount expended by the State for
    breastfeeding promotion and support programs if--
              (i) the State agency so requests; and
              (ii) the request is accompanied by documentation that
            other funds will be used to conduct such activities.
      (D) The Secretary shall limit to a minimal level any
    documentation required under this paragraph.
      (E) For each fiscal year, the national minimum breastfeeding
    promotion expenditure means an amount that is--
              (i) equal to $21 multiplied by the number of pregnant
            women and breastfeeding women participating in the
            program nationwide, based on the average number of
            pregnant women and breastfeeding women so participating
            during the last 3 months for which the Secretary has
            final data; and
              (ii) adjusted for inflation on October 1, 1996, and
            each October 1 thereafter, in accordance with paragraph
            (1)(B)(ii).
              (4) Requirements.--
                      (A) In general.--The Secretary shall--
                              (i) in consultation with the
                            Secretary of Health and Human Services,
                            develop a definition of breastfeeding
                            for the purposes of the program under
                            this section;
                              (ii) authorize the purchase of
                            breastfeeding aids by State and local
                            agencies as an allowable expense under
                            nutrition services and administration;
                              (iii) require each State agency to
                            designate an agency staff member to
                            coordinate breastfeeding promotion
                            efforts identified in the State plan of
                            operation and administration;
                              (iv) require the State agency to
                            provide training on the promotion and
                            management of breastfeeding to staff
                            members of local agencies who are
                            responsible for counseling participants
                            in the program under this section
                            concerning breastfeeding;
                              (v) not later than 1 year after the
                            date of enactment of this subparagraph,
                            develop uniform requirements for the
                            collection of data regarding the
                            incidence and duration of breastfeeding
                            among participants in the program;
                              (vi) partner with communities, State
                            and local agencies, employers, health
                            care professionals, and other entities
                            in the private sector to build a
                            supportive breastfeeding environment
                            for women participating in the program
                            under this section to support the
                            breastfeeding goals of the Healthy
                            People initiative; [and]
                              (vii) annually compile and publish
                            breastfeeding performance measurements
                            based on program participant data on
                            the number of partially and fully
                            breast-fed infants, including
                            breastfeeding performance measurements
                            for--
                                      (I) each State agency; and
                                      (II) each local agency;
                              (viii) in accordance with
                            subparagraph (B), implement a program
                            to recognize exemplary breastfeeding
                            support practices at local agencies or
                            clinics participating in the special
                            supplemental nutrition program
                            established under this section; and
                              (ix) in accordance with subparagraph
                            (C), implement a program to provide
                            performance bonuses to State agencies.
                      (B) Exemplary breastfeeding support
                    practices.--
                              (i) In general.--In evaluating
                            exemplary practices under subparagraph
                            (A)(viii), the Secretary shall
                            consider--
                                      (I) performance measurements
                                    of breastfeeding;
                                      (II) the effectiveness of a
                                    peer counselor program;
                                      (III) the extent to which the
                                    agency or clinic has partnered
                                    with other entities to build a
                                    supportive breastfeeding
                                    environment for women
                                    participating in the program;
                                    and
                                      (IV) such other criteria as
                                    the Secretary considers
                                    appropriate after consultation
                                    with State and local program
                                    agencies.
                              (ii) Authorization of
                            appropriations.--There is authorized to
                            be appropriated to carry out the
                            activities described in clause (viii)
                            of subparagraph (A) such sums as are
                            necessary.
                      (C) Performance bonuses.--
                              (i) In general.--Following the
                            publication of breastfeeding
                            performance measurements under
                            subparagraph (A)(vii), the Secretary
                            shall provide performance bonus
                            payments to not more than 15 State
                            agencies that demonstrate, as compared
                            to other State agencies participating
                            in the program--
                                      (I) the highest proportion of
                                    breast-fed infants; or
                                      (II) the greatest improvement
                                    in proportion of breast-fed
                                    infants.
                              (ii) Consideration.--In providing
                            performance bonus payments to State
                            agencies under this subparagraph, the
                            Secretary shall consider the proportion
                            of fully breast-fed infants in the
                            States.
                              (iii) Use of funds.--A State agency
                            that receives a performance bonus under
                            clause (i)--
                                      (I) shall treat the funds as
                                    program income; and
                                      (II) may transfer the funds
                                    to local agencies for use in
                                    carrying out the program.
                              (iv) Implementation.--The Secretary
                            shall provide the first performance
                            bonuses not later than 1 year after the
                            date of enactment of this clause and
                            may subsequently revise the criteria
                            for awarding performance bonuses[;
                            and].
      (5)(A) Subject to subparagraph (B), in any fiscal year that a
    State agency submits a plan to reduce average food costs per
    participant and to increase participation above the level
    estimated for the State agency, the 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) to cover allowable expenditures in such fiscal
            year; and
              (ii) to ensure that the State agency maintains the
            level established for the per participant grant for
            nutrition services and administration for such fiscal
            year.
      (B) If a State agency increases its participation level
    through measures that are not in the nutritional interests of
    participants or not otherwise allowable (such as reducing the
    quantities of foods provided for reasons not related to
    nutritional need), the Secretary may refuse to allow the State
    agency to convert amounts allocated for food benefits to defray
    costs of nutrition services and administration.
      (C) For the purposes of this paragraph, the term ``acceptable
    measures'' includes use of cost containment measures,
    curtailment of vendor abuse, and breastfeeding promotion
    activities.
              (D) Remote indian or native villages.--For
            noncontiguous States containing a significant number of
            remote Indian or Native villages, a State agency may
            convert amounts allocated for food benefits for a
            fiscal year to the costs of nutrition services and
            administration to the extent that the conversion is
            necessary to cover expenditures incurred in providing
            services (including the full cost of air transportation
            and other transportation) to remote Indian or Native
            villages and to provide breastfeeding support in remote
            Indian or Native villages.
      (6) In each fiscal year, each State agency shall provide,
    from the amounts allocated to such agency for such year for
    costs of nutrition services and administration, an amount to
    each local agency for its costs of nutrition services and
    administration. The amount to be provided to each local agency
    under the preceding sentence shall be determined under
    allocation standards developed by the State agency in
    cooperation with the several local agencies, taking into
    account factors deemed appropriate to further proper,
    efficient, and effective administration of the program, such
    as--
              (A) local agency staffing needs;
              (B) density of population;
              (C) number of individuals served; and
              (D) availability of administrative support from other
            sources.
      (7) The State agency may provide in advance to any local
    agency any amounts for nutrition services and administration
    deemed necessary for successful commencement or significant
    expansion of program operations during a reasonable period
    following approval of--
              (A) a new local agency;
              (B) a new cost containment measure; or
              (C) a significant change in an existing cost
            containment measure.
      (8)(A)(i) Except as provided in subparagraphs (B) and
    (C)(iii), any State that provides for the purchase of foods
    under the program at retail grocery stores shall, with respect
    to the procurement of infant formula, use--
              (I) a competitive bidding system; or
              (II) any other cost containment measure that yields
            savings equal to or greater than savings generated by a
            competitive bidding system when such savings are
            determined by comparing the amounts of savings that
            would be provided over the full term of contracts
            offered in response to a single invitation to submit
            both competitive bids and bids for other cost
            containment systems for the sale of infant formula.
      (ii) In determining whether a cost containment measure other
    than competitive bidding yields equal or greater savings, the
    State, in accordance with regulations issued by the Secretary,
    may take into account other cost factors (in addition to rebate
    levels and procedures for adjusting rebate levels when
    wholesale price levels change), such as--
              (I) the number of infants who would not be expected
            to receive the primary contract infant formula under a
            competitive bidding system;
              (II) the number of cans of infant formula for which
            no rebate would be provided under another rebate
            system; and
              (III) differences in administrative costs relating to
            the implementation of the various cost containment
            systems (such as costs of converting a computer system
            for the purpose of operating a cost containment system
            and costs of preparing participants for conversion to a
            new or alternate cost containment system).
                      (iii) Competitive bidding system.--A State
                    agency using a competitive bidding system for
                    infant formula shall award contracts to bidders
                    offering the lowest net price for a specific
                    infant formula for which manufacturers submit a
                    bid unless the State agency demonstrates to the
                    satisfaction of the Secretary that the weighted
                    average retail price for different brands of
                    infant formula in the State does not vary by
                    more than 5 percent.
                      (iv) Size of state alliances.--
                              (I) In general.--Except as provided
                            in subclauses (II) through (IV), no
                            State alliance may exist among States
                            if the total number of infants served
                            by States participating in the alliance
                            as of October 1, 2003, or such
                            subsequent date determined by the
                            Secretary for which data is available,
                            would exceed 100,000.
                              (II) Addition of infant
                            participants.--In the case of a State
                            alliance that exists on the date of
                            enactment of this clause, the alliance
                            may continue and may expand to serve
                            more than 100,000 infants but, except
                            as provided in subclause (III), may not
                            expand to include any additional State
                            agency.
                              (III) Addition of small state
                            agencies and indian state agencies.--
                            Except as provided in paragraph
                            (9)(B)(i)(II), any State alliance may
                            expand to include any State agency that
                            served less than 5,000 infant
                            participants as of October 1, 2003, or
                            such subsequent date determined by the
                            Secretary for which data is available,
                            or any Indian State agency, if the
                            State agency or Indian State agency
                            requests to join the State alliance.
                              (IV) Secretarial waiver.--The
                            Secretary may waive the requirements of
                            this clause not earlier than 30 days
                            after submitting 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 written
                            report that describes the cost-
                            containment and competitive benefits of
                            the proposed waiver.
                      (v) First choice of issuance.--The State
                    agency shall use the primary contract infant
                    formula as the first choice of issuance (by
                    formula type), with all other infant formulas
                    issued as an alternative to the primary
                    contract infant formula.
                      (vi) Rebate invoices.-- [Effective beginning]
                              (I) In general._Effective beginning
                            October 1, 2004, each State agency
                            shall have a system to ensure that
                            infant formula rebate invoices, under
                            competitive bidding, provide a
                            reasonable estimate or an actual count
                            of the number of units sold to
                            participants in the program under this
                            section.
                              (II) Infant formula.--Effective
                            beginning on the date of the enactment
                            of the Improving Child Nutrition and
                            Education Act of 2016, a State agency
                            that has fully implemented electronic
                            benefits transfer systems throughout
                            the State shall have in effect a system
                            to ensure that infant formula rebate
                            invoices, under competitive bidding,
                            provide an actual count of the number
                            of units sold to participants in the
                            program under this section.
                      (vii) Separate solicitations.--In soliciting
                    bids for infant formula under a competitive
                    bidding system, any State agency, or State
                    alliance, that served under the program a
                    monthly average of more than 100,000 infants
                    during the preceding 12-month period shall
                    solicit bids from infant formula manufacturers
                    under procedures that require that bids for
                    rebates or discounts are solicited for milk-
                    based and soy-based infant formula separately.
                      (viii) Cent-for-cent adjustments.--A bid
                    solicitation for infant formula under the
                    program shall require the manufacturer to
                    adjust for price changes subsequent to the
                    opening of the bidding process in a manner that
                    requires--
                              (I) a cent-for-cent increase in the
                            rebate amounts if there is an increase
                            in the lowest national wholesale price
                            for a full truckload of the particular
                            infant formula; and
                              (II) a cent-for-cent decrease in the
                            rebate amounts if there is a decrease
                            in the lowest national wholesale price
                            for a full truckload of the particular
                            infant formula.
                      (ix) List of infant formula wholesalers,
                    distributors, retailers, and manufacturers.--
                    The State agency shall maintain a list of--
                              (I) infant formula wholesalers,
                            distributors, and retailers licensed in
                            the State in accordance with State law
                            (including regulations); and
                              (II) infant formula manufacturers
                            registered with the Food and Drug
                            Administration that provide infant
                            formula.
                      (x) Purchase requirement.--A vendor
                    authorized to participate in the program under
                    this section shall only purchase infant formula
                    from the list described in clause (ix).
                      (xi) Contract duration.--The contracts
                    awarded under clause (iii) shall specify that--
                              (I) if the income eligibility limit
                            under title XIX of the Social Security
                            Act (42 U.S.C. 1396 et seq.) for
                            pregnant women or infants is
                            substantially increased, the contractor
                            may terminate the existing contract
                            effective on the later of--
                                      (aa) the date that is 1 year
                                    after the date on which the
                                    State decision to increase the
                                    eligibility limit by amending
                                    the State plan is made by--
                                              (AA) adopting State
                                            legislation;
                                              (BB) issuing a State
                                            executive order or
                                            administrative rule; or
                                              (CC) any other
                                            applicable State
                                            process, as determined
                                            by the Secretary; and
                                      (bb) the first day of the
                                    month during which the increase
                                    takes effect; and
                              (II) if a contractor elects to
                            terminate a contract pursuant to
                            subclause (I), the contractor shall
                            notify the State agency by not later
                            than the date that is 1 year before the
                            proposed date of termination.
      (B)(i) The Secretary shall waive the requirement of
    subparagraph (A) in the case of any State that demonstrates to
    the Secretary that--
              (I) compliance with subparagraph (A) would be
            inconsistent with efficient or effective operation of
            the program operated by such State under this section;
            or
              (II) the amount by which the savings yielded by an
            alternative cost containment system would be less than
            the savings yielded by a competitive bidding system is
            sufficiently minimal that the difference is not
            significant.
      (ii) The Secretary shall prescribe criteria under which a
    waiver may be granted pursuant to clause (i).
      (iii) The Secretary shall provide information on a timely
    basis to the [Committee on Education and Labor] Committee on
    Education and the Workforce of the House of Representatives and
    the Committee on Agriculture, Nutrition, and Forestry of the
    Senate on waivers that have been granted under clause (i).
      (C)(i) The Secretary shall provide technical assistance to
    small Indian State agencies carrying out this paragraph in
    order to assist such agencies to achieve the maximum cost
    containment savings feasible.
      (ii) The Secretary shall also provide technical assistance,
    on request, to State agencies that desire to consider a cost
    containment system that covers more than 1 State agency.
      (iii) The Secretary may waive the requirement of subparagraph
    (A) in the case of any Indian State agency that has not more
    than 1,000 participants.
      (D) No State may enter into a cost containment contract (in
    this subparagraph referred to as the original contract'') that
    prescribes conditions that would void, reduce the savings
    under, or otherwise limit the original contract if the State
    solicited or secured bids for, or entered into, a subsequent
    cost containment contract to take effect after the expiration
    of the original contract.
      (E) The Secretary shall offer to solicit bids on behalf of
    State agencies regarding cost-containment contracts to be
    entered into by infant formula manufacturers and State
    agencies. The Secretary shall make the offer to State agencies
    once every 12 months. Each such bid solicitation shall only
    take place if two or more State agencies request the Secretary
    to perform the solicitation. For such State agencies, the
    Secretary shall solicit bids and select the winning bidder for
    a cost containment contract to be entered into by State
    agencies and infant formula manufacturers or suppliers.
      (F) In soliciting bids for contracts for infant formula for
    the program authorized by this section, the Secretary shall
    solicit bids from infant formula manufacturers under procedures
    in which bids for rebates or discounts are solicited for milk-
    based and soy-based infant formula, separately, except where
    the Secretary determines that such solicitation procedures are
    not in the best interest of the program.
      (G) To reduce the costs of any supplemental foods, the
    Secretary may make available additional funds to State agencies
    out of the funds otherwise available under paragraph (1)(A) for
    nutrition services and administration in an amount not
    exceeding one half of 1 percent of the amounts to help defray
    reasonable anticipated expenses associated with innovations in
    cost containment or associated with procedures that tend to
    enhance competition.
      (H)(i) Any person, company, corporation, or other legal
    entity that submits a bid to supply infant formula to carry out
    the program authorized by this section and announces or
    otherwise discloses the amount of the bid, or the rebate or
    discount practices of such entities, in advance of the time the
    bids are opened by the Secretary or the State agency, or any
    person, company, corporation, or other legal entity that makes
    a statement (prior to the opening of bids) relating to levels
    of rebates or discounts, for the purpose of influencing a bid
    submitted by any other person, shall be ineligible to submit
    bids to supply infant formula to the program for the bidding in
    progress for up to 2 years from the date the bids are opened
    and shall be subject to a civil penalty of up to $100,000,000,
    as determined by the Secretary to provide restitution to the
    program for harm done to the program. The Secretary shall issue
    regulations providing such person, company, corporation, or
    other legal entity appropriate notice, and an opportunity to be
    heard and to respond to charges.
      (ii) The Secretary shall determine the length of the
    disqualification, and the amount of the civil penalty referred
    to in clause (i) based on such factors as the Secretary by
    regulation determines appropriate.
      (iii) Any person, company, corporation, or other legal entity
    disqualified under clause (i) shall remain obligated to perform
    any requirements under any contract to supply infant formula
    existing at the time of the disqualification and until each
    such contract expires by its terms.
      (I) Not later than the expiration of the 180-day period
    beginning on the date of enactment of this subparagraph, the
    Secretary shall prescribe regulations to carry out this
    paragraph.
      (J) A State shall not incur any interest liability to the
    Federal Government on rebate funds for infant formula and other
    foods if all interest earned by the State on the funds is used
    for program purposes.
              (K) Reporting.--Effective beginning October 1, 2011,
            each State agency shall report rebate payments received
            from manufacturers in the month in which the payments
            are received, rather than in the month in which the
            payments were earned.
              (9) Cost containment measure.--
                      (A) Definition of cost containment measure.--
                    In this subsection, the term ``cost containment
                    measure'' means a competitive bidding, rebate,
                    direct distribution, or home delivery system
                    implemented by a State agency as described in
                    the approved State plan of operation and
                    administration of the State agency.
                      (B) Solicitation and rebate billing
                    requirements.--Any State agency instituting a
                    cost containment measure for any authorized
                    food, including infant formula, shall--
                              (i) in the bid solicitation--
                                      (I) identify the composition
                                    of State alliances for the
                                    purposes of a cost containment
                                    measure; [and]
                                      (II) verify that no
                                    additional States shall be
                                    added to the State alliance
                                    between the date of the bid
                                    solicitation and the end of the
                                    contract;
                                      (III) limit the term of any
                                    contract (including any
                                    extension or renewal period) to
                                    a maximum of 5 years, subject
                                    to the condition that any such
                                    extension or renewal shall be
                                    approved only on mutual consent
                                    of the contractor and the State
                                    agency;
                                      (IV) agree to provide, by not
                                    later than 180 days before
                                    exercising any termination for
                                    convenience clause, a written
                                    notice to each affected
                                    contractor;
                                      (V) agree--
                                              (aa) to receive an
                                            annual audit of infant
                                            formula rebate invoices
                                            by a contractor; and
                                              (bb) to provide to
                                            each contractor
                                            accurate monthly
                                            redemption files; and
                                      (VI) agree not to provide any
                                    State preference to any bidder
                                    in evaluating bids;
                              (ii) have a system to ensure that
                            rebate invoices under competitive
                            bidding provide a reasonable estimate
                            or an actual count of the number of
                            units sold to participants in the
                            program under this section;
                              (iii) for any State agency that has
                            fully implemented electronic benefits
                            transfer systems throughout the State,
                            have a system to ensure that rebate
                            invoices under competitive bidding
                            provide an actual count of the number
                            of units lawfully sold to participants
                            in the program under this section;
                              [(iii)] (iv) open and read aloud all
                            bids at a public proceeding on the day
                            on which the bids are due; [and]
                              [(iv)] (v) unless otherwise exempted
                            by the Secretary, provide a minimum of
                            [30] 45 days between the publication of
                            the solicitation and the date on which
                            the bids are due[.];
                              (vi) provide a process to negotiate
                            the amount of funds to be returned to
                            the bidder by the State agency, and the
                            method of return, on determining and
                            verifying that rebates were paid on any
                            food, including infant formula, sold
                            under fraudulent means;
                              (vii) open bids and enter into a
                            contract under paragraph (8)(A)(iii)
                            only after making a reasonable effort
                            to confirm in writing, via email or
                            other means, that the manufacturers on
                            the list the State agency maintains
                            under paragraph (8)(A)(ix) received the
                            initial request for proposals or other
                            bid solicitation document by not later
                            than the date that is 45 days before
                            the date on which the bids are due;
                              (viii) agree to provide to
                            contractors supporting documentation
                            for monthly invoices, subject to the
                            participant and vendor confidentiality
                            protections under program rules; and
                              (ix) not later than the date that is
                            90 days after the date for opening
                            bids, submit to the Secretary a copy of
                            the bid solicitation and any other
                            contract documents.
                      (C) State alliances for authorized foods
                    other than infant formula.--Program
                    requirements relating to the size of State
                    alliances under paragraph (8)(A)(iv) shall
                    apply to cost containment measures established
                    for any authorized food under this section.
                      (D) Certain food for infants.--Before any
                    State agency solicits bids for a contract for
                    infant fruits, vegetables, cereal, or meat
                    under a competitive bidding system, the State
                    agency shall--
                              (i) consider--
                                      (I) the impact of the
                                    contract on--
                                              (aa) participation or
                                            redemption rates;
                                              (bb) costs to the
                                            State agency for infant
                                            fruits, vegetables,
                                            cereal, or meat,
                                            including product,
                                            administrative, and
                                            procurement costs; and
                                              (cc) the ability of
                                            the State agency--
                                                      (AA) to
                                                    achieve the
                                                    purpose
                                                    described in
                                                    subsection (a);
                                                      (BB) to
                                                    provide infants
                                                    with a variety
                                                    of
                                                    developmentally
                                                    appropriate
                                                    infant fruits,
                                                    vegetables,
                                                    cereal, or
                                                    meat; and
                                                      (CC) to serve
                                                    the nutritional
                                                    needs of
                                                    program
                                                    participants;
                                                    and
                                              (dd) consumers who
                                            are not participants,
                                            including the
                                            availability of
                                            alternate brands and
                                            potential effects on
                                            retail pricing of
                                            infant fruits,
                                            vegetables, cereal, or
                                            meat; and
                                      (II) whether the contract is
                                    compatible with--
                                              (aa) the management
                                            information and food
                                            instrument system of
                                            the State agency;
                                              (bb) eligible
                                            vendors; and
                                              (cc) the capacity of
                                            the manufacturer to
                                            meet technical
                                            specifications; and
                              (ii) provide to the Secretary--
                                      (I) a written explanation of
                                    how the considerations
                                    described in clause (i)
                                    affected the decision of the
                                    State agency to solicit bids
                                    for a contract; and
                                      (II) not later than 15 months
                                    after the start of such
                                    contract, a report that shall
                                    include--
                                              (aa) the net savings
                                            to date from the
                                            contract;
                                              (bb) an assessment of
                                            the impact on eligible
                                            stores, non-
                                            participants, and
                                            retail prices for
                                            infant fruits,
                                            vegetables, cereal, and
                                            meat; and
                                              (cc) an analysis of
                                            the costs and benefits
                                            of the contract,
                                            including an
                                            examination of retail
                                            prices of infant
                                            fruits, vegetables,
                                            cereal, and meat.
              (10) Funds for infrastructure, management information
            systems, and special nutrition education.--
                      (A) In general.--For each of fiscal years
                    2010 through 2015, the Secretary shall use for
                    the purposes specified in subparagraph (B)
                    $139,000,000 (as adjusted annually for
                    inflation by the same factor used to determine
                    the national average per participant grant for
                    nutrition services and administration for the
                    fiscal year under paragraph (1)(B)).
                      (B) Purposes.--Subject to subparagraph (C),
                    of the amount made available under subparagraph
                    (A) for a fiscal year--
                              (i) $14,000,000 shall be used for--
                                      (I) infrastructure for the
                                    program under this section;
                                      (II) special projects to
                                    promote breastfeeding,
                                    including projects to assess
                                    the effectiveness of particular
                                    breastfeeding promotion
                                    strategies; and
                                      (III) special State projects
                                    of regional or national
                                    significance to improve the
                                    services of the program;
                              (ii) $35,000,000 shall be used to
                            establish, improve, or administer
                            management information systems for the
                            program, including changes necessary to
                            meet new legislative or regulatory
                            requirements of the program, of which
                            up to $5,000,000 may be used for
                            Federal administrative costs; and
                              (iii) $90,000,000 shall be used for
                            special nutrition education (such as
                            breastfeeding peer counselors and other
                            related activities), of which not more
                            than $10,000,000 of any funding
                            provided in excess of $50,000,000 shall
                            be used to make performance bonus
                            payments under paragraph (4)(C).
                      (C) Adjustment.--Each of the amounts referred
                    to in clauses (i), (ii), and (iii) of
                    subparagraph (B) shall be adjusted annually for
                    inflation by the same factor used to determine
                    the national average per participant grant for
                    nutrition services and administration for the
                    fiscal year under paragraph (1)(B).
                      (D) Proportional distribution.--The Secretary
                    shall distribute funds made available under
                    subparagraph (A) in accordance with the
                    proportional distribution described in
                    subparagraphs (B) and (C).
              (11) Vendor cost containment.--
                      (A) Peer groups.--
                              (i) In general.--The State agency
                            shall--
                                      (I) establish a vendor peer
                                    group system;
                                      (II) in accordance with
                                    subparagraphs (B) and (C),
                                    establish competitive price
                                    criteria and allowable
                                    reimbursement levels for each
                                    vendor peer group; and
                                      (III) if the State agency
                                    elects to authorize any types
                                    of vendors described in
                                    subparagraph (D)(ii)(I)--
                                              (aa) distinguish
                                            between vendors
                                            described in
                                            subparagraph (D)(ii)(I)
                                            and other vendors by
                                            establishing--
                                                      (AA) separate
                                                    peer groups for
                                                    vendors
                                                    described in
                                                    subparagraph
                                                    (D)(ii)(I);or
                                                      (BB) distinct
                                                    competitive
                                                    price criteria
                                                    and allowable
                                                    reimbursement
                                                    levels for
                                                    vendors
                                                    described in
                                                    subparagraph
                                                    (D)(ii)(I)
                                                    within a peer
                                                    group that
                                                    contains both
                                                    vendors
                                                    described in
                                                    subparagraph
                                                    (D)(ii)(I) and
                                                    other vendors;
                                                    and
                                              (bb) establish
                                            competitive price
                                            criteria and allowable
                                            reimbursement levels
                                            that comply with
                                            subparagraphs (B) and
                                            (C), respectively, and
                                            that do not result in
                                            higher food costs if
                                            program participants
                                            redeem supplemental
                                            food vouchers at
                                            vendors described in
                                            subparagraph (D)(ii)(I)
                                            rather than at vendors
                                            other than vendors
                                            described in
                                            subparagraph
                                            (D)(ii)(I).
            Nothing in this paragraph shall be construed to compel
            a State agency to achieve lower food costs if program
            participants redeem supplemental food vouchers at
            vendors described in subparagraph (D)(ii)(I) rather
            than at vendors other than vendors described in
            subparagraph (D)(ii)(I).
                              (ii) Exemptions.--The Secretary may
                            exempt from the requirements of clause
                            (i)--
                                      (I) a State agency that
                                    elects not to authorize any
                                    types of vendors described in
                                    subparagraph (D)(ii)(I) and
                                    that demonstrates to the
                                    Secretary that--
                                              (aa) compliance with
                                            clause (i) would be
                                            inconsistent with
                                            efficient and effective
                                            operation of the
                                            program administered by
                                            the State under this
                                            section; or
                                              (bb) an alternative
                                            cost-containment system
                                            would be as effective
                                            as a vendor peer group
                                            system; or
                                      (II) a State agency--
                                              (aa) in which the
                                            sale of supplemental
                                            foods that are obtained
                                            with food instruments
                                            from vendors described
                                            in subparagraph
                                            (D)(ii)(I) constituted
                                            less than 5 percent of
                                            total sales of
                                            supplemental foods that
                                            were obtained with food
                                            instruments in the
                                            State in the year
                                            preceding a year in
                                            which the exemption is
                                            effective; and
                                              (bb) that
                                            demonstrates to the
                                            Secretary that an
                                            alternative cost-
                                            containment system
                                            would be as effective
                                            as the vendor peer
                                            group system and would
                                            not result in higher
                                            food costs if program
                                            participants redeem
                                            supplemental food
                                            vouchers at vendors
                                            described in
                                            subparagraph (D)(ii)(I)
                                            rather than at vendors
                                            other than vendors
                                            described in
                                            subparagraph
                                            (D)(ii)(I).
                      (B) Competitive pricing.--
                              (i) In general.--The State agency
                            shall establish competitive price
                            criteria for each peer group for the
                            selection of vendors for participation
                            in the program that--
                                      (I) ensure that the retail
                                    prices charged by vendor
                                    applicants for the program are
                                    competitive with the prices
                                    charged by other vendors; and
                                      (II) consider--
                                              (aa) the shelf prices
                                            of the vendor for all
                                            buyers; or
                                              (bb) the prices that
                                            the vendor bid for
                                            supplemental foods,
                                            which shall not exceed
                                            the shelf prices of the
                                            vendor for all buyers.
                              (ii) Participant access.--In
                            establishing competitive price
                            criteria, the State agency shall
                            consider participant access by
                            geographic area.
                              (iii) Subsequent price increases.--
                            The State agency shall establish
                            procedures to ensure that a retail
                            store selected for participation in the
                            program does not, subsequent to
                            selection, increase prices to levels
                            that would make the store ineligible
                            for selection to participate in the
                            program.
                      (C) Allowable reimbursement levels.--
                              (i) In general.--The State agency
                            shall establish allowable reimbursement
                            levels for supplemental foods for each
                            vendor peer group that ensure--
                                      (I) that payments to vendors
                                    in the vendor peer group
                                    reflect competitive retail
                                    prices; and
                                      (II) that the State agency
                                    does not reimburse a vendor for
                                    supplemental foods at a level
                                    that would make the vendor
                                    ineligible for authorization
                                    under the criteria established
                                    under subparagraph (B).
                              (ii) Price fluctuations.--The
                            allowable reimbursement levels may
                            include a factor to reflect
                            fluctuations in wholesale prices.
                              (iii) Participant access.--In
                            establishing allowable reimbursement
                            levels, the State agency shall consider
                            participant access in a geographic
                            area.
                      (D) Exemptions.--The State agency may exempt
                    from competitive price criteria and allowable
                    reimbursement levels established under this
                    paragraph--
                              (i) pharmacy vendors that supply only
                            exempt infant formula or medical foods
                            that are eligible under the program;
                            and
                              (ii) vendors--
                                      (I)(aa) for which more than
                                    50 percent of the annual
                                    revenue of the vendor from the
                                    sale of food items consists of
                                    revenue from the sale of
                                    supplemental foods that are
                                    obtained with food instruments;
                                    or
                                      (bb) who are new applicants
                                    likely to meet the criteria of
                                    item (aa) under criteria
                                    approved by the Secretary; and
                                      (II) that are nonprofit.
                      (E) Cost containment.--[If a State]
                              (i) In general._If a State agency
                            elects to authorize any types of
                            vendors described in subparagraph
                            (D)(ii)(I), the State agency shall
                            demonstrate to the Secretary, and the
                            Secretary shall certify, that the
                            competitive price criteria and
                            allowable reimbursement levels
                            established under this paragraph for
                            vendors described in subparagraph
                            (D)(ii)(I) do not result in average
                            payments per voucher to vendors
                            described in subparagraph (D)(ii)(I)
                            that are higher than average payments
                            per voucher to comparable vendors other
                            than vendors described in subparagraph
                            (D)(ii)(I).
                              (ii) Requirement.--Effective not
                            later than 120 days after the date of
                            the enactment the Improving Child
                            Nutrition and Education Act of 2016, in
                            calculating average payments per
                            voucher under clause (i), a State
                            agency shall exclude food instruments
                            not fully redeemed, based on an actual
                            count or a reasonable estimate.
                      (F) Limitation on private rights of action.--
                    Nothing in this paragraph may be construed as
                    creating a private right of action.
                      (G) Implementation.--A State agency shall
                    comply with this paragraph not later than 18
                    months after the date of enactment of this
                    paragraph.
              (12) Electronic benefit transfer.--
                      (A) Definitions.--In this paragraph:
                              (i) Electronic benefit transfer.--The
                            term ``electronic benefit transfer''
                            means a [food delivery system that
                            provides] method to deliver benefits
                            using a card or other access device
                            approved by the Secretary that permits
                            electronic access to program benefits.
                              (ii) Program.--The term ``program''
                            means the special supplemental
                            nutrition program established by this
                            section.
                      (B) Requirements.--
                              (i) In general.--Not later than
                            October 1, 2020, each State agency
                            shall be required to implement
                            electronic benefit transfer systems
                            throughout the State, unless the
                            Secretary grants an exemption under
                            subparagraph (C) for a State agency
                            that is facing unusual barriers to
                            implement an electronic benefit
                            transfer system.
                              (ii) Responsibility.--The State
                            agency shall be responsible for the
                            coordination and management of the
                            electronic benefit transfer system of
                            the agency.
                      (C) Exemptions.--
                              (i) In general.--To be eligible for
                            an exemption from the statewide
                            implementation requirements of
                            subparagraph (B)(i), a State agency
                            shall demonstrate to the satisfaction
                            of the Secretary 1 or more of the
                            following:
                                      (I) There are unusual
                                    technological barriers to
                                    implementation.
                                      (II) Operational costs are
                                    not affordable within the
                                    nutrition services and
                                    administration grant of the
                                    State agency.
                                      (III) It is in the best
                                    interest of the program to
                                    grant the exemption.
                              (ii) Specific date.--A State agency
                            requesting an exemption under clause
                            (i) shall specify a date by which the
                            State agency anticipates statewide
                            implementation described in
                            subparagraph (B)(i).
                      (D) Reporting.--
                              (i) In general.--Each State agency
                            shall submit to the Secretary
                            electronic benefit transfer project
                            status reports to demonstrate the
                            progress of the State toward statewide
                            implementation.
                              (ii) Consultation.--If a State agency
                            plans to incorporate additional
                            programs in the electronic benefit
                            transfer system of the State, the State
                            agency shall consult with the State
                            agency officials responsible for
                            administering the programs prior to
                            submitting the planning documents to
                            the Secretary for approval.
                              (iii) Requirements.--At a minimum, a
                            status report submitted under clause
                            (i) shall contain--
                                      (I) an annual outline of the
                                    electronic benefit transfer
                                    implementation goals and
                                    objectives of the State;
                                      (II) appropriate updates in
                                    accordance with approval
                                    requirements for active
                                    electronic benefit transfer
                                    State agencies; and
                                      (III) such other information
                                    as the Secretary may require.
                      (E) Imposition of costs on vendors.--
                              (i) Cost prohibition.--Except as
                            otherwise provided in this paragraph,
                            the Secretary may not impose, or allow
                            a State agency to impose, the costs of
                            any equipment or system required for
                            electronic benefit transfers on any
                            authorized vendor in order to transact
                            electronic benefit transfers if the
                            vendor equipment or system is used
                            solely to support the program.
                              (ii) Cost-sharing.--The Secretary
                            shall establish criteria for cost-
                            sharing by State agencies and vendors
                            of costs associated with any equipment
                            or system that is not solely dedicated
                            to transacting electronic benefit
                            transfers for the program.
                              (iii) Fees.--
                                      (I) In general.--A vendor
                                    that elects to accept
                                    electronic benefit transfers
                                    using multifunction equipment
                                    shall pay commercial
                                    transaction processing costs
                                    and fees imposed by a third-
                                    party processor that the vendor
                                    elects to use to connect to the
                                    electronic benefit transfer
                                    system of the State.
                                      (II) Interchange fees.--No
                                    interchange fees shall apply to
                                    electronic benefit transfer
                                    transactions under this
                                    paragraph.
                              (iv) Statewide operations.--After
                            completion of statewide expansion of a
                            system for transaction of electronic
                            benefit transfers--
                                      (I) a State agency may not be
                                    required to incur ongoing
                                    maintenance costs for vendors
                                    using multifunction systems and
                                    equipment to support electronic
                                    benefit transfers; and
                                      (II) any retail store in the
                                    State that applies for
                                    authorization to become a
                                    program vendor shall be
                                    required to demonstrate the
                                    capability to accept program
                                    benefits electronically prior
                                    to authorization, unless the
                                    State agency determines that
                                    the vendor is necessary for
                                    participant access.
                      (F) Minimum lane coverage.--
                              (i) In general.--The Secretary shall
                            establish minimum lane coverage
                            guidelines for vendor equipment and
                            systems used to support electronic
                            benefit transfers.
                              (ii) Provision of equipment.--If a
                            vendor does not elect to accept
                            electronic benefit transfers using its
                            own multifunction equipment, the State
                            agency shall provide such equipment as
                            is necessary to solely support the
                            program to meet the established minimum
                            lane coverage guidelines.
                      (G) Technical standards.--The Secretary
                    shall--
                              (i) establish technical standards and
                            operating rules for electronic benefit
                            transfer systems; and
                              (ii) require each State agency,
                            contractor, and authorized vendor
                            participating in the program to
                            demonstrate compliance with the
                            technical standards and operating
                            rules.
                      (H) Regulations.--As State agencies
                    transition to electronic benefit transfer for
                    the program, the Secretary shall update
                    regulations to account for the fact that State
                    agencies--
                              (i) are receiving transaction pricing
                            more frequently than twice a year from
                            vendors; and
                              (ii) should adjust vendor
                            reimbursement levels more frequently to
                            reflect program food price changes in
                            the marketplace.
                      (I) Authorization of appropriations.--
                              (i) In general.--There is authorized
                            to be appropriated to carry out this
                            paragraph $25,000,000 for each of
                            fiscal years 2017 through 2019.
                              (ii) Use.--The Secretary shall
                            allocate the funds made available under
                            this subparagraph to States for
                            purposes of enhancing and accelerating
                            the implementation of electronic
                            benefit transfer systems.
                      (J) Penalty for noncompliance.--For any State
                    agency that fails to comply with subparagraph
                    (B), including a State agency receiving an
                    exemption under subparagraph (C), the Secretary
                    shall--
                              (i) withhold such amounts otherwise
                            required to be allocated to the State
                            agency for nutrition services and
                            administration as the Secretary
                            determines to be appropriate; and
                              (ii) direct the amounts withheld for
                            use by the State agency solely for
                            achieving compliance with subparagraph
                            (B).
              (13) Universal product codes database.--
                      (A) In general.--Not later than 2 years after
                    the date of enactment of the Healthy, Hunger-
                    Free Kids Act of 2010, the Secretary shall
                    establish a national universal product code
                    database to be used by all State agencies in
                    carrying out the requirements of paragraph
                    (12).
                      (B) Funding.--
                              (i) In general.--On October 1, 2010,
                            and on each October 1 thereafter, out
                            of any funds in the Treasury not
                            otherwise appropriated, the Secretary
                            of the Treasury shall transfer to the
                            Secretary to carry out this paragraph
                            $1,000,000, to remain available until
                            expended.
                              (ii) Receipt and acceptance.--The
                            Secretary shall be entitled to receive,
                            shall accept, and shall use to carry
                            out this paragraph the funds
                            transferred under clause (i), without
                            further appropriation.
                              (iii) Use of funds.--The Secretary
                            shall use the funds provided under
                            clause (i) for development, hosting,
                            hardware and software configuration,
                            and support of the database required
                            under subparagraph (A).
                      (C) Access.--The Secretary shall make
                    available upon request the national universal
                    product code database to vendors approved for
                    participation in the special supplemental food
                    program established under this section.
              (14) Incentive items.--A State agency shall not
            authorize or make payments to a vendor described in
            paragraph (11)(D)(ii)(I) that provides incentive items
            or other free merchandise, except food or merchandise
            of nominal value (as determined by the Secretary), to
            program participants unless the vendor provides to the
            State agency proof that the vendor obtained the
            incentive items or merchandise at no cost.
      (i)(1) By the beginning of each fiscal year, the Secretary
    shall divide, among the State agencies, the amounts made
    available for food benefits under subsection (h)(1)(C) on the
    basis of a formula determined by the Secretary.
      (2) Each State agency's allocation, as so determined, shall
    constitute the State agency's authorized operational level for
    that year, except that the Secretary shall reallocate funds
    periodically if the Secretary determines that a State agency is
    unable to spend its allocation.
      (3)(A) Notwithstanding paragraph (2) and subject to
    subparagraph (B)--
              (i)(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 may be expended by the State agency
            for allowable 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 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 during
            the preceding fiscal year; and
              (ii)(I) for each fiscal year, of the amounts
            allocated to a State agency for nutrition services and
            administration, an amount equal to not more than 3
            percent of the amount allocated to the State agency
            under this section for the fiscal year may be expended
            by the State agency for allowable expenses incurred
            under this section for nutrition services and
            administration during the subsequent fiscal year; and
              (II) for each fiscal year, of the amounts allocated
            to a State agency for nutrition services and
            administration, an amount equal to not more than \1/2\
            of 1 percent of the amount allocated to the State
            agency under this section for the fiscal year may be
            expended by the State agency, with the prior approval
            of the Secretary, for the development of a management
            information system, including an electronic benefit
            transfer system, during the subsequent fiscal year.
      (B) Any funds made available to a State agency in accordance
    with subparagraph (A)(ii) for a fiscal year shall not affect
    the amount of funds allocated to the State agency for such
    year.
      (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.
      (4) For purposes of the formula, if Indians are served by the
    health department of a State, the formula shall be based on the
    State population inclusive of the Indians within the State
    boundaries.
      (5) If Indians residing in the State are served by a State
    agency other than the health department of the State, the
    population of the tribes within the jurisdiction of the State
    being so served shall not be included in the formula for such
    State, and shall instead be included in the formula for the
    State agency serving the Indians.
      (6) Notwithstanding any other provision of this section, the
    Secretary may use a portion of a State agency's allocation to
    purchase supplemental foods for donation to the State agency
    under this section.
      (7) In addition to any amounts expended under paragraph
    (3)(A)(i), any State agency using cost containment measures as
    defined in subsection (h)(9) may temporarily use amounts made
    available to such agency for the first quarter of a fiscal year
    to defray expenses for costs incurred during the final quarter
    of the preceding fiscal year. In any fiscal year, any State
    agency that uses amounts made available for a succeeding fiscal
    year under the authority of the preceding sentence shall
    restore or reimburse such amounts when such agency receives
    payment as a result of its cost containment measures for such
    expenses.
              (8) Temporary spending authority.--During each of
            fiscal years 2012 and 2013, the Secretary may authorize
            a State agency to expend more than the amount otherwise
            authorized under paragraph (3)(C) for expenses incurred
            under this section for supplemental foods during the
            preceding fiscal year, if the Secretary determines
            that--
                      (A) there has been a significant reduction in
                    reported infant formula cost containment
                    savings for the preceding fiscal year due to
                    the implementation of subsection (h)(8)(K); and
                      (B) the reduction would affect the ability of
                    the State agency to serve all eligible
                    participants.
      (j)(1) The Secretary and the Secretary of Health and Human
    Services (referred to in this subsection as the
    ``Secretaries'') shall jointly establish and carry out an
    initiative for the purpose of providing both supplemental
    foods, nutrition education, and breastfeeding support and
    promotion under the special supplemental nutrition program and
    health care services to low-income pregnant, postpartum, and
    breastfeeding women, infants, and children at substantially
    more community health centers and migrant health centers.
      (2) The initiative shall also include--
              (A) activities to improve the coordination of the
            provision of supplemental foods, nutrition education,
            and breastfeeding support and promotion under the
            special supplemental nutrition program and health care
            services at facilities funded by the Indian Health
            Service; and
              (B) the development and implementation of strategies
            to ensure that, to the maximum extent feasible, new
            community health centers, migrant health centers, and
            other federally supported health care facilities
            established in medically underserved areas provide
            supplemental foods, nutrition education, and
            breastfeeding support and promotion under the special
            supplemental nutrition program.
      (3) The initiative may include--
              (A) outreach and technical assistance for State and
            local agencies and the facilities described in
            paragraph (2)(A) and the health centers and facilities
            described in paragraph (2)(B);
              (B) demonstration projects in selected State or local
            areas; and
              (C) such other activities as the Secretaries find are
            appropriate.
      (4) As used in this subsection:
              (A) The term ``community health center'' has the
            meaning given the term in section 330(a) of the Public
            Health Service Act (42 U.S.C. 254c(a)).
              (B) The term ``migrant health center'' has the
            meaning given the term in section 329(a)(1) of such Act
            (42 U.S.C. 254b(a)(1)).
      [(k)(1) There is hereby established a National Advisory
    Council on Maternal, Infant, and Fetal Nutrition (referred to
    in this subsection as the ``Council'') composed of 24 members
    appointed by the Secretary. One member shall be a State
    director of a program under this section; one member shall be a
    State official responsible for a commodity supplemental food
    program under section 1304 of the Food and Agriculture Act of
    1977; one member shall be a State fiscal officer of a program
    under this section (or the equivalent thereof); one member
    shall be a State health officer (or the equivalent thereof);
    one member shall be a local agency director of a program under
    this section in an urban area; one member shall be a local
    agency director of a program under this section in a rural
    area; one member shall be a project director of a commodity
    supplemental food program; one member shall be a State public
    health nutrition director (or the equivalent thereof); one
    member shall be a representative of an organization serving
    migrants; one member shall be an official from a State agency
    predominantly serving Indians; three members shall be parent
    participants of a program under this section or of a commodity
    supplemental food program; one member shall be a pediatrician;
    one member shall be an obstetrician; one member shall be a
    representative of a nonprofit public interest organization that
    has experience with and knowledge of the special supplemental
    nutrition program; one member shall be a person involved at the
    retail sales level of food in the special supplemental
    nutrition program; two members shall be officials of the
    Department of Health and Human Services appointed by the
    Secretary of Health and Human Services; two members shall be
    officials of the Department of Agriculture appointed by the
    Secretary; 1 member shall be an expert in the promotion of
    breast feeding; one member shall be an expert in drug abuse
    education and prevention; and one member shall be an expert in
    alcohol abuse education and prevention.
      [(2) Members of the Council appointed from outside the
    Department of Agriculture and the Department of Health and
    Human Services shall be appointed for terms not exceeding three
    years. State and local officials shall serve only during their
    official tenure, and the tenure of parent participants shall
    not exceed two years. Persons appointed to complete an
    unexpired term shall serve only for the remainder of such term.
      [(3) The Council shall elect a Chairman and a Vice Chairman.
    The Council shall meet at the call of the Chairman, but shall
    meet at least once a year. Eleven members shall constitute a
    quorum.
      [(4) The Secretary shall provide the Council with such
    technical and other assistance, including secretarial and
    clerical assistance, as may be required to carry out its
    functions.
      [(5) Members of the Council shall serve without compensation
    but shall be reimbursed for necessary travel and subsistence
    expenses incurred by them in the performance of the duties of
    the Council. Parent participant members of the Council, in
    addition to reimbursement for necessary travel and subsistence,
    shall, at the discretion of the Secretary, be compensated in
    advance for other personal expenses related to participation on
    the Council, such as child care expenses and lost wages during
    scheduled Council meetings.]
      [(l)] (k) Foods available under section 416 of the
    Agriculture Act of 1949, including, but not limited to, dry
    milk, or purchased under section 32 of the Act of August 24,
    1935 may be donated by the Secretary, at the request of a State
    agency, for distribution to programs conducted under this
    section. The Secretary may purchase and distribute, at the
    request of a State agency, supplemental foods for donation to
    programs conducted under this section, with appropriated funds,
    including funds appropriated under this section.
      [(m)] (l)(1) Subject to the availability of funds
    appropriated for the purposes of this subsection, and as
    specified in this subsection, the Secretary shall award grants
    to States that submit State plans that are approved for the
    establishment or maintenance of programs designed to provide
    recipients of assistance under subsection (c), or those who are
    on the waiting list to receive the assistance, with coupons
    that may be exchanged for fresh, nutritious, unprepared foods
    at farmers' markets and (at the option of a State) roadside
    stands, as defined in the State plans submitted under this
    subsection.
      (2) A grant provided to any State under this subsection shall
    be provided to the chief executive officer of the State, who
    shall--
              (A) designate the appropriate State agency or
            agencies to administer the program in conjunction with
            the appropriate nonprofit organizations; and
              (B) ensure coordination of the program among the
            appropriate agencies and organizations.
      (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 administrative cost of
    the program, which may be satisfied from program income or
    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
    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.
      (4) Subject to paragraph (6), the Secretary shall establish a
    formula for determining the amount of the grant to be awarded
    under this subsection to each State for which a State plan is
    approved under paragraph (6), according to the number of
    recipients proposed to participate as specified in the State
    plan. In determining the amount to be awarded to new States,
    the Secretary shall rank order the State plans according to the
    criteria of operation set forth in this subsection, and award
    grants accordingly. The Secretary shall take into consideration
    the minimum amount needed to fund each approved State plan, and
    need not award grants to each State that submits a State plan.
      (5) Each State that receives a grant under this subsection
    shall ensure that the program for which the grant is received
    complies with the following requirements:
              (A) Individuals who are eligible to receive Federal
            benefits under the program shall only be individuals
            who are receiving assistance under subsection (c), or
            who are on the waiting list to receive the assistance.
              (B) Construction or operation of a farmers' market
            may not be carried out using funds--
                      (i) provided under the grant; or
                      (ii) required to be provided by the State
                    under paragraph (3).
              (C) The value of the Federal share of the benefits
            received by any recipient under the program may not
            be--
                      (i) less than $10 per year; or
                      (ii) more than $30 per year.
              (D) The coupon issuance process under the program
            shall be designed to ensure that coupons are targeted
            to areas with--
                      (i) the highest concentration of eligible
                    individuals;
                      (ii) the greatest access to farmers' markets;
                    and
                      (iii) certain characteristics, in addition to
                    those described in clauses (i) and (ii), that
                    are determined to be relevant by the Secretary
                    and that maximize the availability of benefits
                    to eligible individuals.
              (E) The coupon redemption process under the program
            shall be designed to ensure that the coupons may be--
                      (i) redeemed only by producers authorized by
                    the State to participate in the program; and
                      (ii) redeemed only to purchase fresh
                    nutritious unprepared food for human
                    consumption.
              (F)(i) Except as provided in clauses (ii) and (iii),
            the State may use for administration of the program in
            any fiscal year not more than 17 percent of the total
            amount of program funds.
              (ii) During any fiscal year for which a State
            receives assistance under this subsection, the
            Secretary shall permit the State to use not more than 2
            percent of total program funds for market development
            or technical assistance to farmers' markets if the
            Secretary determines that the State intends to promote
            the development of farmers' markets in socially or
            economically disadvantaged areas, or remote rural
            areas, where individuals eligible for participation in
            the program have limited access to locally grown fruits
            and vegetables.
              (iii) The provisions of clauses (i) and (ii) with
            respect to the use of program funds shall not apply to
            any funds that a State may contribute in excess of the
            funds used by the State to meet the requirements of
            paragraph (3).
              (G) The State shall ensure that no State or local
            taxes are collected within the State on purchases of
            food with coupons distributed under the program.
      (6)(A) The Secretary shall give the same preference for
    funding under this subsection to eligible States that
    participated in the program under this subsection in a prior
    fiscal year as to States that participated in the program in
    the most recent fiscal year. The Secretary shall inform each
    State of the award of funds as prescribed by subparagraph (G)
    by February 15 of each year.
      (B)(i) Subject to the availability of appropriations, if a
    State provides the amount of matching funds required under
    paragraph (3), the State shall receive assistance under this
    subsection in an amount that is not less than the amount of
    such assistance that the State received in the most recent
    fiscal year in which it received such assistance.
      (ii) If amounts appropriated for any fiscal year pursuant to
    the authorization contained in paragraph (10) for grants under
    this subsection are not sufficient to pay to each State for
    which a State plan is approved under paragraph (6) the amount
    that the Secretary determines each such State is entitled to
    under this subsection, each State's grant shall be ratably
    reduced, except that (if sufficient funds are available) each
    State shall receive at least $75,000 or the amount that the
    State received for the prior fiscal year if that amount is less
    than $75,000.
      (C) In providing funds to a State that received assistance
    under this subsection in the previous fiscal year, the
    Secretary shall consider--
              (i) the availability of any such assistance not spent
            by the State during the program year for which the
            assistance was received;
              (ii) documentation that demonstrates that--
                      (I) there is a need for an increase in funds;
                    and
                      (II) the use of the increased funding will be
                    consistent with serving nutritionally at-risk
                    persons and expanding the awareness and use of
                    farmers' markets;
              (iii) demonstrated ability to satisfactorily operate
            the existing program; and
              (iv) whether, in the case of a State that intends to
            use any funding provided under subparagraph [(G)(i)]
            (F)(i) to increase the value of the Federal share of
            the benefits received by a recipient, the funding
            provided under subparagraph [(G)(i)] (F)(i) will
            increase the rate of coupon redemption.
      (D)(i) A State that desires to receive a grant under this
    subsection shall submit, for each fiscal year, a State plan to
    the Secretary by November 15 of each year.
      (ii) Each State plan submitted under this paragraph shall
    contain--
              (I) the estimated cost of the program and the
            estimated number of individuals to be served by the
            program;
              (II) a description of the State plan for complying
            with the requirements established in paragraph (5); and
              (III) criteria developed by the State with respect to
            authorization of producers to participate in the
            program.
      (iii) The criteria developed by the State as required by
    clause (ii)(III) shall require any authorized producer to sell
    fresh nutritious unprepared foods (such as fruits and
    vegetables) to recipients, in exchange for coupons distributed
    under the program.
      (E) The Secretary shall establish objective criteria for the
    approval and ranking of State plans submitted under this
    paragraph.
      (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 whose
    State plan is approved by the Secretary. If this amount is
    greater than that necessary to satisfy the approved State
    plans, 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.
      (ii) An amount equal to 25 percent of the funds available
    after satisfying the requirements of subparagraph (B) shall be
    made available to States that have not participated in the
    program in the prior fiscal year, and whose State plans have
    been approved by the Secretary. If this amount is greater than
    that necessary to satisfy the approved State plans for new
    States, the unallocated amount shall be applied toward
    satisfying any unmet need of States whose State plans have been
    approved.
      (iii) In any fiscal year, any funds that remain unallocated
    after satisfying the requirements of clauses (i) and (ii) shall
    be reallocated in the following fiscal year according to
    procedures established pursuant to paragraph (10)(B)(ii).
      (7)(A) The value of the benefit received by any recipient
    under any program for which a grant is received under this
    subsection may not affect the eligibility or benefit levels for
    assistance under other Federal or State programs.
      (B) Any programs for which a grant is received under this
    subsection shall be supplementary to the supplemental nutrition
    assistance program carried out under the Food and Nutrition Act
    of 2008 (7 U.S.C. 2011 et seq.) and to any other Federal or
    State program under which foods are distributed to needy
    families in lieu of supplemental nutrition assistance program
    benefits.
      (8) For each fiscal year, the Secretary shall collect from
    each State that receives a grant under this subsection
    information relating to--
              (A) the number and type of recipients served by both
            Federal and non-Federal benefits under the program for
            which the grant is received;
              (B) the rate of redemption of coupons distributed
            under the program;
              (C) the average amount distributed in coupons to each
            recipient;
              (D) the change in consumption of fresh fruits and
            vegetables by recipients, if the information is
            available;
              (E) the effects of the program on farmers' markets,
            if the information is available; and
              (F) any other information determined to be necessary
            by the Secretary.
              (9) Funding.--
                      [(A) Authorization of appropriations.--There
                    are authorized to be appropriated to carry out
                    this subsection such sums as are necessary for
                    each of fiscal years 2010 through 2015.]
                      (A) Authorization of appropriations.--There
                    are authorized to be appropriated to carry out
                    this subsection $18,548,000 for each of fiscal
                    years 2017 through 2021.
      (B)(i)(I) Each State shall return to the Secretary any funds
    made available to the State that are unobligated at the end of
    the fiscal year for which the funds were originally allocated.
    The unexpended funds shall be returned to the Secretary by
    February 1st of the following fiscal year.
      (II) Notwithstanding any other provision of this subsection,
    a total of not more than 5 percent of funds made available to a
    State for any fiscal year may be expended by the State to
    reimburse expenses incurred for a program assisted under this
    subsection during the preceding fiscal year.
      (ii) The Secretary shall establish procedures to reallocate
    funds that are returned under clause (i).
      (10) For purposes of this subsection:
              (A) The term ``coupon'' means a coupon, voucher, or
            other negotiable financial instrument by which benefits
            under this section are transferred.
              (B) The term ``program'' means--
                      (i) the State farmers' market coupon
                    nutrition program authorized by this subsection
                    (as it existed on September 30, 1991); or
                      (ii) the farmers' market nutrition program
                    authorized by this subsection.
              (C) The term ``recipient'' means a person or
            household, as determined by the State, who is chosen by
            a State to receive benefits under this subsection, or
            who is on a waiting list to receive such benefits.
              (D) The term ``State agency'' has the meaning
            provided in subsection (b)(13), except that the term
            also includes the agriculture department of each State
            and any other agency approved by the chief executive
            officer of the State.
      [(n)] (m) Disqualification of Vendors Who Are Disqualified
    Under the Supplemental Nutrition Assistance Program.--
              (1) In general.--The Secretary shall issue
            regulations providing criteria for the disqualification
            under this section of an approved vendor that is
            disqualified from accepting benefits under the
            supplemental nutrition assistance program established
            under the Food and Nutrition Act of 2008 (7 U.S.C. 2011
            et seq.).
              (2) Terms.--A disqualification under paragraph (1)--
                      (A) shall be for the same period as the
                    disqualification from the program referred to
                    in paragraph (1);
                      (B) may begin at a later date than the
                    disqualification from the program referred to
                    in paragraph (1); and
                      (C) shall not be subject to judicial or
                    administrative review.
      [(o)] (n) Disqualification of Vendors Convicted of
    Trafficking or Illegal Sales.--
              (1) In general.--Except as provided in paragraph (4),
            a State agency shall permanently disqualify from
            participation in the program authorized under this
            section a vendor convicted of--
                      (A) 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
                    under this section); or
                      (B) selling firearms, ammunition, explosives,
                    or controlled substances (as defined in section
                    102 of the Controlled Substances Act (21 U.S.C.
                    802)) in exchange for food instruments
                    (including any item described in subparagraph
                    (A) issued in lieu of a food instrument under
                    this section).
              (2) Notice of disqualification.--The State agency
            shall--
                      (A) provide the vendor with notification of
                    the disqualification; and
                      (B) make the disqualification effective on
                    the date of receipt of the notice of
                    disqualification.
              (3) Prohibition of receipt of lost revenues.--A
            vendor shall not be entitled to receive any
            compensation for revenues lost as a result of
            disqualification under this subsection.
              (4) Exceptions in lieu of disqualification.--
                      (A) In general.--A State agency may permit a
                    vendor that, but for this paragraph, would be
                    disqualified under paragraph (1), to continue
                    to participate in the program if the State
                    agency determines, in its sole discretion
                    according to criteria established by the
                    Secretary, that--
                              (i) disqualification of the vendor
                            would cause hardship to participants in
                            the program authorized under this
                            section; or
                              (ii)(I) the vendor had, at the time
                            of the violation under paragraph (1),
                            an effective policy and program in
                            effect to prevent violations described
                            in paragraph (1); and
                              (II) the ownership of the vendor was
                            not aware of, did not approve of, and
                            was not involved in the conduct of the
                            violation.
                      (B) Civil penalty.--If a State agency under
                    subparagraph (A) permits a vendor to continue
                    to participate in the program in lieu of
                    disqualification, the State agency shall assess
                    the vendor a civil penalty in an amount
                    determined by the State agency, in accordance
                    with criteria established by the Secretary,
                    except that--
                              (i) the amount of the civil penalty
                            shall not exceed $10,000 for each
                            violation; and
                              (ii) the amount of civil penalties
                            imposed for violations investigated as
                            part of a single investigation may not
                            exceed $40,000.
      [(p)] (o) Criminal Forfeiture.--
              (1) In general.--Notwithstanding any provision of
            State law and in addition to any other penalty
            authorized by law, a court may order a person that is
            convicted of a violation of a provision of law
            described in paragraph (2), with respect to food
            instruments (including any item described in
            [subsection (o)(1)(A)] subsection (n)(1)(A) issued in
            lieu of a food instrument under this section), funds,
            assets, or property that have a value of $100 or more
            and that are the subject of a grant or other form of
            assistance under this section, to forfeit to the United
            States all property described in paragraph (3).
              (2) Applicable laws.--A provision of law described in
            this paragraph is--
                      (A) section 12(g) of the Richard B. Russell
                    National School Lunch Act (42 U.S.C. 1760(g));
                    and
                      (B) any other Federal law imposing a penalty
                    for embezzlement, willful misapplication,
                    stealing, obtaining by fraud, or trafficking in
                    food instruments (including any item described
                    in [subsection (o)(1)(A)] subsection (n)(1)(A)
                    issued in lieu of a food instrument under this
                    section), funds, assets, or property.
              (3) Property subject to forfeiture.--The following
            property shall be subject to forfeiture under paragraph
            (1):
                      (A) All property, real and personal, used in
                    a transaction or attempted transaction, to
                    commit, or to facilitate the commission of, a
                    violation described in paragraph (1).
                      (B) All property, real and personal,
                    constituting, derived from, or traceable to any
                    proceeds a person obtained directly or
                    indirectly as a result of a violation described
                    in paragraph (1).
              (4) Procedures; interest of owner.--Except as
            provided in paragraph (5), all property subject to
            forfeiture under this subsection, any seizure or
            disposition of the property, and any proceeding
            relating to the forfeiture, seizure, or disposition
            shall be subject to section 413 of the Comprehensive
            Drug Abuse Prevention and Control Act of 1970 (21
            U.S.C. 853), other than subsection (d) of that section.
              (5) Proceeds.--The proceeds from any sale of
            forfeited property and any amounts forfeited under this
            subsection shall be used--
                      (A) first, to reimburse the Department of
                    Justice, the Department of the Treasury, and
                    the United States Postal Service for the costs
                    incurred by the Departments or Service to
                    initiate and complete the forfeiture
                    proceeding;
                      (B) second, to reimburse the Office of
                    Inspector General of the Department of
                    Agriculture for any costs incurred by the
                    Office in the law enforcement effort resulting
                    in the forfeiture;
                      (C) third, to reimburse any Federal, State,
                    or local 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
                    approval, reauthorization, and compliance
                    investigations of vendors[.]; and
                      (E) fifth, to reimburse any WIC infant
                    formula manufacturer for any rebate provided to
                    the State agency on WIC infant formula
                    unlawfully trafficked under a provision of law
                    described in paragraph (2).
              (6) Notice of investigation.--
                      (A) In general.--For any investigation into
                    the trafficking of WIC infant formula pursuant
                    to this subsection, the Secretary shall provide
                    notice of resolution of the disposition of an
                    unlawful action resulting from the
                    investigation to all contracted manufacturers
                    of the trafficked infant formula.
                      (B) Estimates.--Not later than 60 days after
                    the date on which notice is provided under
                    subparagraph (A), the State shall submit to the
                    contracted manufacturer an estimate of--
                              (i) the number of units, if any, for
                            which rebates may have been issued as a
                            result of the violation; and
                              (ii) the total dollar amount of the
                            rebates.
      [(q)] (p) The Secretary of Agriculture shall provide
    technical assistance to the Secretary of Defense, if so
    requested by the Secretary of Defense, for the purpose of
    carrying out the overseas special supplemental food program
    established under section 1060a(a) of title 10, United States
    Code.
      (q) Fraud and Safety Review.--
              (1) In general.--Not later than 180 days after the
            date of the enactment of the Improving Child Nutrition
            and Education Act of 2016, the Secretary shall review
            current guidance, regulations, and practices regarding
            fraud and safety for purposes of this section.
              (2) Inclusions.--The review under paragraph (1) shall
            include a review of issues relating to--
                      (A) excess and unused infant formula;
                      (B) invoices pertaining to products subject
                    to rebate;
                      (C) the sale of infant formula by
                    unauthorized entities; and
                      (D) the purchase of infant formula from
                    unauthorized entities.
              (3) Updates.--Based on the findings of the review
            under paragraph (1), the Secretary shall update current
            regulations and guidance and issue additional
            regulations and guidance, as necessary--
                      (A) to minimize fraud; and
                      (B) to ensure the safety of participants.
      (r) Cooperation With Law Enforcement Agencies.--
    Notwithstanding any other provision of law, State agencies and
    law enforcement agencies shall share WIC vendor information
    relating to investigations or prosecutions under the program
    under this section, as determined by the Secretary.
      (s) Pilot Projects.--
              (1) In general.--Subject to paragraph (2), the
            Secretary may conduct pilot projects to test
            alternative certification and food delivery procedures
            under this section.
              (2) Prohibition.--In conducting pilot projects under
            paragraph (1), the Secretary may not waive or modify
            the application of program eligibility, supplemental
            foods, or cost containment requirements.
              (3) Evaluation.--The Secretary shall evaluate each
            pilot project carried out under this subsection after
            the pilot project has been in operation for 3 years.

    SEC. 19. TEAM NUTRITION NETWORK.

      (a) Purposes.--The purposes of the team nutrition network
    are--
              (1) to establish State systems to promote the
            nutritional health of school children of the United
            States through nutrition education and the use of
            evidence-based team nutrition messages and material
            [developed by the Secretary], and to encourage regular
            physical activity and other activities that support
            healthy lifestyles for children, including those based
            on the most recent Dietary Guidelines for Americans
            published under section 301 of the National Nutrition
            Monitoring and Related Research Act of 1990 (7 U.S.C.
            5341);
              (2) to provide assistance to States for the
            development of comprehensive and integrated nutrition
            education and active living programs in schools and
            facilities that participate in child nutrition programs
            under this Act and the Richard B. Russell National
            School Lunch Act (42 U.S.C. 1751 et seq.);
              (3) to provide training and technical assistance and
            disseminate team nutrition messages to States, school
            and community nutrition programs, and child nutrition
            food service professionals;
              (4) to coordinate and collaborate with other
            nutrition education and active living programs that
            share similar goals and [purposes; and] purposes,
            including if appropriate--
                      (A) State and local nutrition education
                    programs, health and wellness policies,
                    nutrition and health education resources, and
                    other State resources; and
                      (B) Federal nutrition education efforts,
                    including those programs under this Act and the
                    Richard B. Russell National School Lunch Act
                    (42 U.S.C. 1751 et seq.);
              (5) to identify and share innovative programs with
            demonstrated effectiveness in [helping children to
            maintain a healthy weight by] enhancing student
            understanding of healthful eating patterns and the
            importance of regular physical activity in and out of
            school.
      [(b) Definition of Team Nutrition Network.--In this section,
    the term] (b)  Definitions._In this section:
              (1) Nutrition education._The term ``nutrition
            education'' means the provision of individual or group
            learning opportunities and materials for children and
            families that--
                      (A) emphasize the relationship between
                    nutrition, physical activity, and health with a
                    goal of improving long-term dietary and
                    physical health and increasing food security;
                    and
                      (B) include learning about food preparation.
              (2) Team nutrition network._The term ``team nutrition
            network'' means a statewide multidisciplinary program
            for children to promote healthy eating and physical
            activity based on scientifically valid information and
            sound educational, social, and marketing principles.
      (c)  [Grants] State Network Grants.--
              (1) In general.--Subject to the availability of funds
            for use in carrying out this section, in addition to
            any other funds made available to the Secretary for
            team nutrition purposes, the Secretary, in consultation
            with the Secretary of Education, may make grants to
            State agencies for each fiscal year, in accordance with
            this section, to establish team nutrition networks to
            promote nutrition education through--
                      (A) the use of team nutrition network
                    messages and other scientifically based
                    information; and
                      (B) the promotion of active lifestyles.
              (2) Form.--A portion of the grants provided under
            this subsection may be in the form of competitive
            grants.
              (3) Funds from nongovernmental sources.--In carrying
            out this subsection, the Secretary may accept cash
            contributions from nongovernmental organizations made
            expressly to further the purposes of this section, to
            be managed by the Food and Nutrition Service, for use
            by the Secretary and the States in carrying out this
            section.
              (4) Allocation.--Subject to the availability of funds
            for use in carrying out this subsection, the total
            amount of funds made available for a fiscal year for
            grants under this subsection shall equal not more than
            the sum of--
                      (A) the product obtained by multiplying \1/2\
                    cent by the number of lunches reimbursed
                    through food service programs under the Richard
                    B. Russell National School Lunch Act (42 U.S.C.
                    1751 et seq.) during the second preceding
                    fiscal year in schools, institutions, and
                    service institutions that participate in the
                    food service programs; and
                      (B) the total value of funds received by the
                    Secretary in support of this subsection from
                    nongovernmental sources.
              (5) Requirements for state participation.--To be
            eligible to receive a grant under this subsection, a
            State agency shall submit to the Secretary a plan, at
            such time and in such manner as the Secretary may
            require, including--
                      (A) a description of the goals and proposed
                    State plan for addressing the nutrition of
                    children;
                      (B) a description of the means by which the
                    State agency will use and disseminate the team
                    nutrition messages and material to children
                    and, if appropriate, families of such children;
                      (C) an explanation of the ways in which the
                    State agency will use the funds from the grant
                    to work toward the goals required under clause
                    (i), and to promote healthy eating in schools
                    throughout the State;
                      (D) a description of the ways in which the
                    State team nutrition network messages and
                    activities will be coordinated at the State and
                    local level with other community health
                    promotion and education activities;
                      (E) an annual summary of the team nutrition
                    network activities and their effectiveness;
                      (F) a description of the ways in which school
                    environments might support healthy eating and
                    physical activity; and
                      (G) a description of how all communications
                    to parents and legal guardians of students who
                    are members of a household receiving
                    information under the program shall be in an
                    understandable and uniform format and, to the
                    maximum extent practicable, in a language that
                    parents and legal guardians can understand.
              (6) State coordinator.--Each State that receives a
            grant under this subsection may appoint a team
            nutrition network coordinator. Such coordinator shall
            implement comprehensive, coordinated nutrition
            education programming through the team nutrition
            network, including to assist schools, school food
            authorities, and other child nutrition program
            providers in the State to administer and coordinate the
            team nutrition network activities.
              (7) Authorized activities.--A State agency that
            receives a grant under this section may use funds from
            the grant to--
                      (A) identify the programs and services
                    available to meet the health and nutritional
                    needs of children and families in the State;
                      (B) disseminate team nutrition network
                    messages and material that provide
                    comprehensive, coordinated nutrition and
                    physical fitness awareness and obesity
                    prevention education;
                      (C) implement demonstration projects in
                    schools to promote physical activity and to
                    enhance the nutrition education provided to
                    students;
                      (D) improve access to local foods through
                    coordinating with farm-to-school grant
                    activities that include the provision of
                    nutrition education;
                      (E) encourage schools to develop healthy
                    eating and lifestyle policies;
                      (F) provide training and technical assistance
                    to teachers and school food service
                    professionals consistent with the purposes of
                    this subsection; and
                      (G) collaborate with public and private and
                    faith-based organizations, including community-
                    based organizations, State medical
                    associations, and public health groups, to
                    provide nutrition and physical education
                    targeting lower income children, ethnic
                    minorities, and youth at a greater risk for
                    obesity or malnourishment.
      [(d) Allocation.--Subject to the availability of funds for
    use in carrying out this section, the total amount of funds
    made available for a fiscal year for grants under this section
    shall equal not more than the sum of--
              [(1) the product obtained by multiplying \1/2\ cent
            by the number of lunches reimbursed through food
            service programs under the Richard B. Russell National
            School Lunch Act (42 U.S.C. 1751 et seq.) during the
            second preceding fiscal year in schools, institutions,
            and service institutions that participate in the food
            service programs; and
              [(2) the total value of funds received by the
            Secretary in support of this section from
            nongovernmental sources.
      [(e) Requirements for State Participation.--To be eligible to
    receive a grant under this section, a State agency shall submit
    to the Secretary a plan that--
              [(1) is subject to approval by the Secretary; and
              [(2) is submitted at such time and in such manner,
            and that contains such information, as the Secretary
            may require, including--
                      [(A) a description of the goals and proposed
                    State plan for addressing the health and other
                    consequences of children who are at risk of
                    becoming overweight or obese;
                      [(B) an analysis of the means by which the
                    State agency will use and disseminate the team
                    nutrition messages and material developed by
                    the Secretary;
                      [(C) an explanation of the ways in which the
                    State agency will use the funds from the grant
                    to work toward the goals required under
                    subparagraph (A), and to promote healthy eating
                    and physical activity and fitness in schools
                    throughout the State;
                      [(D) a description of the ways in which the
                    State team nutrition network messages and
                    activities will be coordinated at the State
                    level with other health promotion and education
                    activities;
                      [(E) a description of the consultative
                    process that the State agency employed in the
                    development of the model nutrition and physical
                    activity programs, including consultations with
                    individuals and organizations with expertise in
                    promoting public health, nutrition, or physical
                    activity;
                      [(F) a description of how the State agency
                    will evaluate the effectiveness of each program
                    developed by the State agency;
                      [(G) an annual summary of the team nutrition
                    network activities;
                      [(H) a description of the ways in which the
                    total school environment will support healthy
                    eating and physical activity; and
                      [(I) a description of how all communications
                    to parents and legal guardians of students who
                    are members of a household receiving or
                    applying for assistance under the program shall
                    be in an understandable and uniform format and,
                    to the maximum extent practicable, in a
                    language that parents and legal guardians can
                    understand.
      [(f) State Coordinator.--Each State that receives a grant
    under this section shall appoint a team nutrition network
    coordinator who shall--
              [(1) administer and coordinate the team nutrition
            network within and across schools, school food
            authorities, and other child nutrition program
            providers in the State; and
              [(2) coordinate activities of the Secretary, acting
            through the Food and Nutrition Service, and State
            agencies responsible for other children's health,
            education, and wellness programs to implement a
            comprehensive, coordinated team nutrition network
            program.
      [(g) Authorized Activities.--A State agency that receives a
    grant under this section may use funds from the grant--
              [(1)(A) to collect, analyze, and disseminate data
            regarding the extent to which children and youths in
            the State are overweight, physically inactive, or
            otherwise suffering from nutrition-related deficiencies
            or disease conditions; and
              [(B) to identify the programs and services available
            to meet those needs;
              [(2) to implement model elementary and secondary
            education curricula using team nutrition network
            messages and material developed by the Secretary to
            create a comprehensive, coordinated nutrition and
            physical fitness awareness and obesity prevention
            program;
              [(3) to implement pilot projects in schools to
            promote physical activity and to enhance the
            nutritional status of students;
              [(4) to improve access to local foods through farm-
            to-cafeteria activities that may include the
            acquisition of food and the provision of training and
            education;
              [(5) to implement State guidelines in health
            (including nutrition education and physical education
            guidelines) and to emphasize regular physical activity
            during school hours;
              [(6) to establish healthy eating and lifestyle
            policies in schools;
              [(7) to provide training and technical assistance to
            teachers and school food service professionals
            consistent with the purposes of this section;
              [(8) to collaborate with public and private
            organizations, including community-based organizations,
            State medical associations, and public health groups,
            to develop and implement nutrition and physical
            education programs targeting lower income children,
            ethnic minorities, and youth at a greater risk for
            obesity.]
      [(h)] (d) Local Nutrition Education and Physical Activity
    Grants.--
              (1) In general.--Subject to the availability of funds
            to carry out this subsection, the Secretary, in
            consultation with the Secretary of Education, shall
            provide assistance to selected local educational
            agencies to create healthy school nutrition
            environments, promote healthy eating habits, and
            increase physical activity, consistent with the Dietary
            Guidelines for Americans published under section 301 of
            the National Nutrition Monitoring and Related Research
            Act of 1990 (7 U.S.C. 5341), among elementary and
            secondary education students.
              (2) Selection of schools.--In selecting local
            educational agencies for grants under this subsection,
            the Secretary shall--
                      (A) provide for the equitable distribution of
                    grants among--
                              (i) urban, suburban, and rural
                            schools; and
                              (ii) schools with varying family
                            income levels;
                      (B) consider factors that affect need,
                    including local educational agencies with
                    significant minority or low-income student
                    populations; and
                      (C) establish a process that allows the
                    Secretary to conduct an evaluation of how funds
                    were used.
              (3) Requirement for participation.--To be eligible to
            receive assistance under this subsection, a local
            educational agency shall, in consultation with
            individuals who possess education or experience
            appropriate for representing the general field of
            public health, including nutrition and fitness
            professionals, submit to the Secretary an application
            that shall include--
                      (A) a description of the need of the local
                    educational agency for a nutrition and physical
                    activity program, including an assessment of
                    the nutritional environment of the school;
                      (B) a description of how the proposed project
                    will improve health and nutrition through
                    education and increased access to physical
                    activity;
                      (C) a description of how the proposed project
                    will be aligned with the local wellness policy
                    required under section 204 of the Child
                    Nutrition and WIC Reauthorization Act of 2004;
                      (D) a description of how funds under this
                    subsection will be coordinated with other
                    programs under this Act, the Richard B. Russell
                    National School Lunch Act (42 U.S.C. 1751 et
                    seq.), or other Acts, as appropriate, to
                    improve student health and nutrition;
                      (E) a statement of the measurable goals of
                    the local educational agency for nutrition and
                    physical education programs and promotion;
                      (F) a description of the procedures the
                    agency will use to assess and publicly report
                    progress toward meeting those goals; and
                      (G) a description of how communications to
                    parents and guardians of participating students
                    regarding the activities under this subsection
                    shall be in an understandable and uniform
                    format, and, to the extent maximum practicable,
                    in a language that parents can understand.
              (4) Duration.--Subject to the availability of funds
            made available to carry out this subsection, a local
            educational agency receiving assistance under this
            subsection shall conduct the project during a period of
            3 successive school years beginning with the initial
            fiscal year for which the local educational agency
            receives funds.
              (5) Authorized activities.--An eligible applicant
            that receives assistance under this subsection--
                      (A) shall use funds provided to--
                              (i) promote healthy eating through
                            the development and implementation of
                            nutrition education programs and
                            curricula based on the Dietary
                            Guidelines for Americans published
                            under section 301 of the National
                            Nutrition Monitoring and Related
                            Research Act of 1990 (7 U.S.C. 5341);
                            [and]
                              (ii) increase opportunities for
                            physical activity through after school
                            programs, athletics, intramural
                            activities, and recess; and
                              (iii) incorporate nutrition education
                            into physical and health education,
                            and, if appropriate, afterschool
                            programs, including athletics; and
                      (B) may use funds provided to--
                              (i) educate parents and students
                            about the relationship of a poor diet
                            and inactivity to obesity and other
                            health problems;
                              (ii) develop and implement physical
                            education programs that promote fitness
                            and lifelong activity;
                              (iii) provide training and technical
                            assistance to food service
                            professionals to develop more
                            appealing, nutritious menus and
                            recipes;
                              [(iv) incorporate nutrition education
                            into physical education, health
                            education, and after school programs,
                            including athletics;]
                              [(v)] (iv) involve parents, nutrition
                            professionals, food service staff,
                            educators, community leaders, and other
                            interested parties in assessing the
                            food options in the school environment
                            and developing and implementing an
                            action plan to promote a balanced and
                            healthy diet;
                              [(vi)] (v) provide nutrient content
                            or nutrition information on meals
                            served through the school lunch program
                            established under the Richard B.
                            Russell National School Lunch Act (42
                            U.S.C. 1751 et seq.) and the school
                            breakfast program established by
                            section 4 of this Act and items sold a
                            la carte during meal times;
                              [(vii)] (vi) encourage the increased
                            consumption of [a variety of healthy
                            foods, including fruits, vegetables,
                            whole grains, and low-fat dairy
                            products, through new initiatives to
                            creatively market healthful foods, such
                            as salad bars and fruit bars] a variety
                            of healthy foods, including through
                            initiatives to creatively market such
                            foods;
                              [(viii)] (vii) offer healthy food
                            choices outside program meals,
                            including by making [low-fat and
                            nutrient dense] healthy options
                            available in vending machines, school
                            stores, and other venues; and
                              [(ix)] (viii) provide nutrition
                            education, including sports nutrition
                            education, for teachers, coaches, food
                            service staff, athletic trainers, and
                            school nurses.
              (6) Report.--Not later than 18 months after
            completion of the projects and evaluations under this
            subsection, the Secretary shall--
                      (A) submit to the Committee on Education and
                    the Workforce of the House of Representatives
                    and the Committee on Health, Education, Labor,
                    and Pensions and the Committee on Agriculture,
                    Nutrition and Forestry of the Senate a report
                    describing the results of the evaluation under
                    this subsection; and
                      (B) make the report available to the public,
                    including through the Internet.
      [(i)] (e) Nutrition Education Support.--In carrying out the
    purpose of this section to support nutrition education, the
    Secretary [may provide for technical assistance and grants]
    shall provide for technical assistance to improve the quality
    of school meals and access to local foods in schools and
    institutions.
      [(j)] (f) Limitation.--Material prepared under this section
    regarding agricultural commodities, food, or beverages, must be
    factual and without bias.
      [(k) Team Nutrition Network Independent Evaluation.--
              [(1) In general.--Subject to the availability of
            funds to carry out this subsection, the Secretary shall
            offer to enter into an agreement with an independent,
            nonpartisan, science-based research organization--
                      [(A) to conduct a comprehensive independent
                    evaluation of the effectiveness of the team
                    nutrition initiative and the team nutrition
                    network under this section; and
                      [(B) to identify best practices by schools
                    in--
                              [(i) improving student understanding
                            of healthful eating patterns;
                              [(ii) engaging students in regular
                            physical activity and improving
                            physical fitness;
                              [(iii) reducing diabetes and obesity
                            rates in school children;
                              [(iv) improving student nutrition
                            behaviors on the school campus,
                            including by increasing healthier meal
                            choices by students, as evidenced by
                            greater inclusion of fruits,
                            vegetables, whole grains, and lean
                            dairy and protein in meal and snack
                            selections;
                              [(v) providing training and technical
                            assistance for food service
                            professionals resulting in the
                            availability of healthy meals that
                            appeal to ethnic and cultural taste
                            preferences;
                              [(vi) linking meals programs to
                            nutrition education activities;
                              [(vii) successfully involving
                            parents, school administrators, the
                            private sector, public health agencies,
                            nonprofit organizations, and other
                            community partners;
                              [(viii) ensuring the adequacy of time
                            to eat during school meal periods; and
                              [(ix) successfully generating revenue
                            through the sale of food items, while
                            providing healthy options to students
                            through vending, student stores, and
                            other venues.
              [(2) Report.--Not later than 3 years after funds are
            made available to carry out this subsection, the
            Secretary shall submit to the Committee on Education
            and the Workforce of the House of Representatives, the
            Committee on Health, Education, Labor, and Pensions and
            the Committee on Agriculture, Nutrition, and Forestry
            of the Senate a report describing the findings of the
            independent evaluation.]
      [(l)] (g) Authorization of Appropriations.--There are
    authorized to be appropriated [such sums as are necessary to
    carry out this section.] to carry out this section $17,000,000
    for each fiscal year.

               *       *       *       *       *       *       *

    SEC. 23. GRANTS FOR EXPANSION OF SCHOOL BREAKFAST PROGRAMS.

      (a) Definition of Qualifying School.--In this section, the
    term ``qualifying school'' means a school in severe need, as
    described in section 4(d)(1).
      (b) Establishment.--Subject to the availability of
    appropriations provided in advance in an appropriations Act
    specifically for the purpose of carrying out this section, the
    Secretary shall establish a program under which the Secretary
    shall provide grants, on a competitive basis, to [State
    educational agencies] State agencies for the purpose of
    providing subgrants to local educational agencies for
    qualifying schools to establish, maintain, or expand the school
    breakfast program in accordance with this section.
      (c) Grants to [State Educational Agencies] State Agencies.--
              (1) Application.--To be eligible to receive a grant
            under this section, a [State educational agency] State
            agency shall submit to the Secretary an application at
            such time, in such manner, and containing such
            information as the Secretary may require.
              (2) Administration.--In carrying out this section,
            the Secretary shall--
                      (A) develop an appropriate competitive
                    application process; and
                      (B) make information available to [State
                    educational agencies] State agencies concerning
                    the availability of funds under this section.
              (3) Allocation.--The amount of grants provided by the
            Secretary to [State educational agencies] State
            agencies for a fiscal year under this section shall not
            exceed the lesser of--
                      (A) the product obtained by multiplying--
                              (i) the number of qualifying schools
                            receiving subgrants or other benefits
                            under subsection (d) for the fiscal
                            year; and
                              (ii) the maximum amount of a subgrant
                            provided to a qualifying school under
                            subsection (d)(4)(B); or
                      (B) $2,000,000.
      (d) Subgrants to Qualifying Schools.--
              (1) In general.--A [State educational agency] State
            agency receiving a grant under this section shall use
            funds made available under the grant to award subgrants
            to local educational agencies for a qualifying school
            or groups of qualifying schools to carry out activities
            in accordance with this section.
              (2) Priority.--In awarding subgrants under this
            subsection, a [State educational agency] State agency
            shall give priority to local educational agencies with
            qualifying schools in which at least 75 percent of the
            students are eligible for free or reduced price school
            lunches under the school lunch program established
            under the Richard B. Russell National School Lunch Act
            (42 U.S.C. 1751 et seq.).
              (3) State and district training and technical
            support.--A local educational agency or [State
            educational agency] State agency may allocate a portion
            of each subgrant to provide training and technical
            assistance to the staff of qualifying schools to carry
            out the purposes of this section.
              (4) Amount; term.--
                      (A) In general.--Except as otherwise provided
                    in this paragraph, a subgrant provided by a
                    [State educational agency] State agency to a
                    local educational agency or qualifying school
                    under this section shall be in such amount, and
                    shall be provided for such term, as the [State
                    educational agency] State agency determines
                    appropriate.
                      (B) Maximum amount.--The amount of a subgrant
                    provided by a [State educational agency] State
                    agency to a local educational agency for a
                    qualifying school or a group of qualifying
                    schools under this subsection shall not exceed
                    $10,000 for each school year.
                      (C) Maximum grant term.--A local educational
                    agency or [State educational agency] State
                    agency shall not provide subgrants to a
                    qualifying school under this subsection for
                    more than 2 fiscal years.
      (e) Best Practices.--
              (1) In general.--Prior to awarding grants under this
            section, the Secretary shall make available to [State
            educational agencies] State agencies information
            regarding the most effective mechanisms by which to
            increase school breakfast participation among eligible
            children at qualifying schools.
              (2) Preference.--In awarding subgrants under this
            section, a [State educational agency] State agency
            shall give preference to local educational agencies for
            qualifying schools or groups of qualifying schools that
            have adopted, or provide assurances that the subgrant
            funds will be used to adopt, the most effective
            mechanisms identified by the Secretary under paragraph
            (1).
      (f) Use of Funds.--
              (1) In general.--A qualifying school may use a grant
            provided under this section--
                      (A) to establish, promote, or expand a school
                    breakfast program of the qualifying school
                    under this section, which shall include a
                    nutritional education component;
                      (B) to extend the period during which school
                    breakfast is available at the qualifying
                    school;
                      (C) to provide school breakfast to students
                    of the qualifying school during the school day;
                    or
                      (D) for other appropriate purposes, as
                    determined by the Secretary.
              (2) Requirement.--Each activity of a qualifying
            school under this subsection shall be carried out in
            accordance with applicable nutritional guidelines and
            regulations issued by the Secretary.
      (g) Maintenance of Effort.--Grants made available under this
    section shall not diminish or otherwise affect the expenditure
    of funds from State and local sources for the maintenance of
    the school breakfast program.
      (h) Reports.--Not later than 18 months following the end of a
    school year during which subgrants are awarded under this
    section, the Secretary shall submit to Congress a report
    describing the activities of the qualifying schools awarded
    subgrants.
      (i) Evaluation.--Not later than 180 days before the end of a
    grant term under this section, a local educational agency that
    receives a subgrant under this section shall--
              (1) evaluate whether electing to provide universal
            free breakfasts under the school breakfast program in
            accordance with Provision 2 as established under
            subsections (b) through (k) of section 245.9 of title
            7, Code of Federal Regulations (or successor
            regulations), would be cost-effective for the qualified
            schools based on estimated administrative savings and
            economies of scale; and
              (2) submit the results of the evaluation to the
            [State educational agency] State agency.
      (j) Authorization of Appropriations.--There are authorized to
    be appropriated to carry out this section such sums as are
    necessary for each of fiscal years 2010 through 2015.

                                 MINORITY VIEWS

                                  INTRODUCTION

        Committee Democrats strongly oppose H.R. 5003, the
    Improving Child Nutrition and Education Act of 2016. During its
    consideration by the Full Committee on May 18, 2016, all
    Democratic Members in attendance voted in opposition to
    reporting the legislation. Committee Democrats strongly feel
    that efforts to reauthorize child nutrition programs present a
    valuable opportunity to continue to improve the eating habits
    of children, expand their access to nutritious meals, and
    alleviate the child hunger crisis in our country. A responsible
    reauthorization would make progress toward these goals and
    improve the school meals programs for the benefit of those they
    are intended to serve.
        A child nutrition reauthorization that makes progress
    toward eliminating childhood hunger and food insecurity is not
    and should not be an impossible nor partisan goal. Rather than
    moving us forward, H.R. 5003 would roll back access to and
    availability of nutritious meals, putting at risk the current
    and future health of millions of schoolchildren. The partisan
    legislation introduced by Committee Republicans charts a path
    that ignores scientific research and uses rhetoric of reduced
    federal involvement to justify broad, irresponsible changes to
    programs with demonstrated efficacy. The Republican
    reauthorization means increased burden on schools and families
    who participate in school meals programs, the ability for
    states to restrict who is eligible for school meals through a
    pilot block grant program, and weakened nutrition standards for
    the foods that fuel our nation's children and students.

               THE IMPORTANCE OF FEDERAL CHILD NUTRITION PROGRAMS

        The passage of the Richard B. Russell National School Lunch
    Act, signed by President Harry S. Truman in 1946, created the
    National School Lunch Program (NSLP) to bolster national
    security threatened by rampant malnutrition among prospective
    military recruits. Over the last seventy years, this
    established federal role has expanded to include nutritional
    support for eligible children during breakfast and after
    school, over the summer, and in child care centers or provider
    homes, as well as nutritional support for mothers, infants, and
    young children through the Special Supplemental Nutrition
    Program for Women, Infants, and Children (WIC).
        The national security purpose for which the National School
    Lunch Program was first created remains as important today as
    it was seventy years ago. In the twenty-first century,
    malnutrition and food insecurity remain a threat to our
    nation's youth. According to the Department of Agriculture's
    Economic Research Service, 7.8 percent of U.S. households with
    children (3 million households) experienced food insecurity in
    2015. These households were at times unable to provide
    adequate, nutritious food for their children during the
    year.\1\ School meal programs serve as a major component of the
    nutrition safety net for our nation's students and families,
    providing them with nutritious foods and protecting them from
    falling further into poverty. In fact, the Census Bureau's
    Supplemental Poverty Measure demonstrates that nutrition
    programs, such as the school lunch program and the WIC program,
    have a tangible and measurable impact in alleviating
    poverty.\2\
    ---------------------------------------------------------------------------
        \1\USDA ERS, Household Food Security in the United States in 2015,
    Economic Research Report No. (ERR-215), (September 2016) available at:
    https://www.ers.usda.gov/webdocs/publications/err215/err-215.pdf.
        \2\United States Census Bureau. The Supplemental Poverty Measure:
    2015, (September 13, 2016) available at: http://www.census.gov/content/
    dam/Census/library/publications/2016/demo/p60-258.pdf.
    ---------------------------------------------------------------------------
        There is a federal role in ensuring every child has access
    to healthy and nutritious food and is able to learn without the
    burden of hunger. Child nutrition programs provide not only a
    health benefit to children, but these programs also help ensure
    students are able to grow, both physically and intellectually.
    Studies from peer-reviewed journals on cognitive function and
    pediatrics describe how nutritional deficiencies and increases
    in the intake of nutrients can affect various brain functions,
    including cognition, concentration, perception, intuition, and
    reasoning. These studies also find that healthier students are
    likely to have fewer absences and disciplinary issues. Research
    published in the Journal of School Health and American Journal
    of Diseases of Children found that programs focused on
    improving students' health are associated with increased test
    scores.\3\
    ---------------------------------------------------------------------------
        \3\M.D. Florence, M. Asbridge, & P.J. Veugelers. ``Diet Quality and
    Academic Performance,'' Journal of School Health, (April 2008)
    available at: https://www.ncbi.nlm.nih.gov/pubmed/18336680.
    ---------------------------------------------------------------------------
        The benefits of a healthy diet at a young age extend beyond
    childhood. There is a large body of research demonstrating the
    importance of consistent access to nutritious food to support
    the health and wellbeing of children from early childhood
    through adulthood, which could result in substantial long-term
    savings in health care and education.\4\
    ---------------------------------------------------------------------------
        \4\J.T. Cook & A. Poblacion. Estimating the Health-Related Costs of
    Food Insecurity and Hunger. Appendix of The Nourishing Effect: Ending
    Hunger, Improving Health, Reducing Inequality, (2015) available at:
    http://www.childrenshealthwatch.org/wp-content/uploads/
    JohnCook_cost_of_hunger_study.pdf.
    ---------------------------------------------------------------------------

               H.R. 5003 ERODES SCIENCE-BASED NUTRITION STANDARDS

        The previous bipartisan reauthorization of child nutrition
    programs, the Healthy, Hunger-Free Kids Act of 2010, introduced
    strong meal nutrition standards for foods served at schools,
    both during and outside the traditional meal service. The
    improvements in nutrition standards ensure that children are
    exposed to healthy foods and can begin forming healthy eating
    habits while in school. The new standards are based on
    scientific evidence--the Dietary Guidelines for Americans as
    well as the recommendations from nutrition experts at the
    Institute of Medicine. The standards are tailored to age groups
    and maintain flexibility for schools in their meal planning
    process. In short, the standards reflect the best available
    evidence about how to design and offer healthy and nutritious
    meals, snacks, and beverages for students, while still allowing
    for flexibility for schools on how to achieve compliance.
        The standards enacted in the wake of the 2010
    reauthorization have resulted in healthier school environments
    across the country. According to researchers at the Harvard
    School of Public Health, the new federal standards have led to
    increased fruit and vegetable consumption.\5\ Further,
    according to a three year study conducted by the Center for
    Public Health Nutrition at the University of Washington's
    School of Public Health, after the healthier standards were in
    place, the overall nutritional quality of the foods chosen by
    students increased by 29 percent and the calorie content per
    gram decreased by 13 percent. In spite of claims to the
    contrary, this study also found that there was no impact on
    participation rates.\6\
    ---------------------------------------------------------------------------
        \5\J. F.W. Cohen, S. Richardson, E. Parker, P.J. Catalano, & E.B.
    Rimm. ``Impact of the New U.S. Department of Agriculture School Meal
    Standards on Food Selection, Consumption, and Waste,'' American Journal
    of Preventive Medicine (March 4, 2014).
        \6\Donna Johnson, Mary Podrabsky, Anita Rocha, JJ. Otten, ``Effect
    of the Healthy Hunger-Free Kids Act on the Nutritional Quality of Meals
    Selected by Students and School Lunch Participation Rates,'' JAMA
    Pediatrics (January 4, 2016) available at: http://jamanetwork.com/
    journals/jamapediatrics/article-abstract/2478057.
    ---------------------------------------------------------------------------
        Through the hard work of many actors at the local, state,
    and federal levels, the improved nutrition standards are in
    place at over 98 percent of NSLP-participating schools.\7\ The
    standards are not only widely adopted by schools, but are also
    widely supported by families; 90 percent of Americans support
    the current national school nutrition standards, with similar
    levels of support for maintaining or strengthening the
    nutrition standards.\8\
    ---------------------------------------------------------------------------
        \7\USDA. School Meal Certification Data, (October 19, 2016)
    available at: http://www.fns.usda.gov/sites/default/files/cn/
    SFAcert_FY16Q3.pdf.
        \8\W.K. Kellogg Foundation. Food for Thought 2015, available at:
    http://ww2.wkkf.org/2015schoolfoodpoll/.
    ---------------------------------------------------------------------------
        Ignoring the widespread success and adoption of the new
    nutrition standards, H.R. 5003 contains provisions that
    threaten these federal standards. The legislation proposes a
    three-year review of the nutrition standards by the United
    States Department of Agriculture, with the first review to be
    conducted almost immediately. The reviews would require the
    Department to certify that the regulations meet specific
    criteria. For example, certification must prove that nutrition
    standards are not responsible for either increased costs or
    decreased program participation. This shortsighted approach
    allows other factors--that could be entirely unrelated to the
    nutrition programs themselves, such as population changes,
    inflation, or demographic shifts--to negate the fundamental
    importance of science-based standards. The nutrition of
    students' meals could therefore be compromised by a regulatory
    process devoid of science. Ranking Member Scott offered an
    amendment to strike the three-year review, keeping the current
    apolitical, science-based review system in place, but this
    amendment was defeated by a partisan vote.
        H.R. 5003 also makes changes to current law and regulations
    regarding the service of ``a la carte'' items. H.R. 5003 would
    allow any entree that was part of a reimbursable meal to be
    served as an a la carte item any day of the week. This
    allowance undermines the structure of the current nutrition
    standards, where average weekly meal targets for fat, calories,
    and sodium must be met. This provision has the effect of
    allowing high-fat, high-calorie, and/or high-sodium food items
    that might be an appropriate part of a weekly average--but not
    a daily meal component--to be served at any point, eroding the
    intent of the nutrition standards that students be served
    nutritionally balanced meals each day. Ms. Bonamici offered an
    amendment striking the a la carte change, but it was defeated
    by a partisan vote.
        Committee Democrats recognize that legislators are not, in
    general, nutrition experts or medical professionals and that
    any changes to federal nutrition standards should be grounded
    in scientific data. Congress is not the appropriate venue for
    the current science-based process for determining nutrition
    standards. The above-mentioned changes to nutrition standards
    proposed in H.R. 5003, among others, represent a challenge to
    the standards as a whole, allowing less healthy foods in
    schools. Subcommittee Ranking Member Fudge also offered an
    amendment that would prohibit the bill from taking effect if it
    would: (1) lead to less healthy foods being available in
    schools; or, (2) make it more difficult for schools to serve
    free meals to all students. Committee Democrats unanimously
    supported this amendment, but it was also defeated.

                  H.R. 5003 THREATENS ACCESS TO SCHOOLS MEALS

    Community eligibility provision

        H.R. 5003 proposes drastic changes to a successful
    provision in the 2010 reauthorization that provides access to
    free, nutritious meals to millions of students from low-income
    families. In the 2015-2016 school year, the Community
    Eligibility Provision (CEP) allowed more than 18,000 schools
    across the country to serve free, universal, healthy school
    meals to 8.5 million children without the stigma or burden of
    paperwork.\9\ Now in just its third year of nationwide
    availability, CEP has proven to be a powerful tool that allows
    school districts to provide easier access to nutritious meals
    for children in high-poverty schools and high-poverty areas. It
    simplifies the meal program eligibility for schools and
    administrators by allowing schools to offer breakfast and lunch
    at no charge to all students while eliminating applications and
    tracking eligibility in the lunch line. Additionally, CEP
    simplifies the process for students and families by alleviating
    the burden of filling out a school meals application that is
    often redundant for families who are receiving benefits from a
    similar income-based program.
    ---------------------------------------------------------------------------
        \9\Food Research Action Council & Center on Budget and Policy
    Priorities. Community Eligibility Adoption Rises for the 2015-2016
    School Year, Increasing Access to School Meals, (May 13, 2016)
    available at: http://frac.org/pdf/take-up-of-cep-report.pdf.
    ---------------------------------------------------------------------------
        Under federal law, certain students are automatically
    enrolled for free meals without an application because they are
    at special risk for food insecurity and other consequences of
    living in poverty, such as children living in households
    receiving SNAP benefits or children who are homeless. These
    especially vulnerable students are referred to as ``identified
    students'' because they have been identified by other programs
    as especially vulnerable. Schools in which 40 percent or more
    of the students are identified students can adopt community
    eligibility. But identified students are only a subset of those
    who would qualify for free or reduced-price meals if the school
    collected school meal applications. Schools in which 40 to 60
    percent of students are identified as automatically eligible
    for free meals typically have 64 to 96 percent of their
    students approved for free or reduced-price meals.\10\ This
    difference occurs because some children, for example, do not
    participate in one of the programs that confer automatic
    eligibility. H.R. 5003 would increase this threshold to 60
    percent, potentially affecting the eligibility of thousands of
    schools and taking away free, healthy meals from millions of
    children.\11\
    ---------------------------------------------------------------------------
        \10\Center on Budget and Policy Priorities. House Bill Restricting
    Free School Meals Option Could Increase Food Insecurity in High-poverty
    Neighborhoods, (May 20, 2016) available at: http://www.cbpp.org/
    research/food-assistance/house-bill-restricting-free-school-meals-
    option-could-increase-food.
        \11\Id.
    ---------------------------------------------------------------------------
        Committee Republicans argued that the CEP threshold change
    in the bill is needed to better target resources to those
    students most in need. However, this belief is misguided.
    Committee Democrats recognize that the program, as designed,
    already targets vulnerable students and schools most in need.
    CEP has become a vital part of the nutrition safety net in the
    fight to reduce food insecurity and improve access to healthy
    meals. The change proposed in the legislation would severely
    damage the progress made in reducing stigma, paperwork burden,
    and other obstacles to school meal access. Children's
    HealthWatch asserts that raising the threshold for the
    Community Eligibility Provision would likely increase--rather
    than decrease--the risk of food insecurity among these students
    and their families.\12\ The nonpartisan Congressional Budget
    Office confirmed that the CEP change in the bill would threaten
    participation in the school meals program for many students
    currently receiving free school meals.\13\
    ---------------------------------------------------------------------------
        \12\Children's HealthWatch. Treatment Plan for Hunger, (September
    2016) available at: http://childrenshealthwatch.org/wp-content/uploads/
    FINA-Treatment-Plan-for-Hunger-for-web.pdf.
        \13\Congressional Budget Office. Cost Estimate H.R. 5003: Improving
    Child Nutrition and Education Act of 2016, (June 30, 2016) available
    at: https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/
    costestimate/hr5003.pdf.
    ---------------------------------------------------------------------------
        Committee Democrats offered a series of amendments that
    sought to preserve access to healthy meals for low-income
    families and school districts through CEP. Subcommittee Ranking
    Member Fudge offered an amendment to strike the CEP threshold
    change and offered an amendment to prohibit the implementation
    of the legislation should it make it more difficult for schools
    to provide free meals. Ranking Member Scott offered an
    amendment that called for a study on the efficacy of providing
    universal free meals to all students nationwide.
        Unfortunately, each of these amendments offered to protect
    current access to school meals programs through CEP was
    defeated.

    Outreach restrictions and increased verification

        Committee Democrats strongly believe that the integrity of
    federal child nutrition programs is critically important and
    must be protected. The Republican proposal to increase the
    verification requirements in school meal programs as a response
    to reports of error rates in the program however is misguided.
    In addition to restricting community eligibility, the bill
    dramatically increases verification requirements for school
    meal applications in ways that could cause eligible students to
    lose access to the free or reduced-price school meals to which
    they are eligible. Under the proposal, many school districts
    would be required to verify significantly more applications,
    creating burdens for schools and families. The most troublesome
    element of the increased verification requirement is that,
    coupled with the loss of community eligibility, the two
    provisions would work in concert to impact a disproportionate
    number of the most vulnerable families, such as those who are
    homeless, migrant, immigrant or have limited English
    proficiency. Children in these families are the most likely to
    fall through the cracks and lose access to these school meals
    even though they are eligible. To mitigate the harm caused by
    this proposal. Mr. Polis offered an amendment to protect free
    and reduced-price eligibility in households where the language
    accessibility requirement was not met. That amendment was not
    adopted. Further, Mr. Takano offered an amendment to maintain
    the current verification procedures, which was also defeated.
        H.R. 5003 also interferes with school districts' ability to
    conduct effective outreach to enroll families eligible for free
    and reduced-price meals. The bill prohibits school districts
    from including the eligibility requirements for school meals on
    the school meal applications and places an arbitrary cap on the
    number of times that schools can ask families to fill out
    applications. This proposal would reduce the number of eligible
    children applying for school meals and particularly impact the
    many working poor families who become eligible during the
    school year due to fluctuations in income. Ms. Davis offered an
    amendment to remove the senseless cap on outreach that school
    districts can conduct. That amendment was not adopted.

       H.R. 5003 ERODES THE FEDERAL ROLE IN ENSURING ACCESS TO HEALTHY,
                                NUTRITIOUS MEALS

        H.R. 5003 takes direct aim at the federal role in child
    nutrition programs by weakening federal nutrition standards,
    limiting Secretarial authority to administer the programs, and
    introducing a three-state pilot block grant program that is
    devoid of any meaningful federal oversight.
        Section 115 of the legislation would prohibit the Secretary
    of the Department of Agriculture from issuing or establishing,
    ``any regulations or requirements not explicitly authorized''
    by the Act. This policy would not only challenge the
    authorities granted to the Executive Branch under Article II of
    the Constitution but also prevent a necessary response by the
    federal government, even in an emergency situation. For
    example, should food contamination or a public health crisis in
    a school or schools occur, the Secretary could not issue
    guidance to assist states and school districts in their
    response to such crisis. Ranking Member Scott offered an
    amendment to strike this limitation on the Secretary's
    authority. This amendment was supported unanimously by
    Committee Democrats, but was still defeated.
        The three-state block grant proposal in the bill represents
    an even more egregious challenge to the federal role in school
    meals programs. This proposal coincides with the broader
    Republican effort to give states blank checks of federal
    taxpayer money under the guise of flexibility. The block grant
    would allow three states nearly unfettered access to federal
    money for the purpose of implementing child nutrition programs.
    Under this pilot program, states would only be required to
    provide an ``assurance'' that they provide access to at least
    one affordable and healthy meal paid for out of one general
    fund provided to the state, rather than reimbursed on a per
    meal basis. The terms ``healthy'' and ``affordable'' are not
    defined, so there are virtually no guarantees that children
    would actually receive affordable and healthy meals.
        Block grants are capped funding streams that cannot respond
    to either increases or decreases in demand. Therefore, during a
    recession the block grant would be unable to absorb the
    increased demand and serve more needy children. The current
    structure ensures that every eligible child gets a meal
    reimbursed in full or in part by the USDA. Further, block
    grants tend to dramatically lose value over time because they
    are not adjusted for inflation. As a result, the vast majority
    of major block grant programs have actually shrunk in
    inflation-adjusted terms since their inception. For example,
    inflation-adjusted funding for the Temporary Assistance for
    Needy Families (TANF) program has decreased 32 percent and the
    Maternal and Child Health Block Grant has decreased 29
    percent.\14\ Therefore, it is deeply concerning that capping
    the school meals funding could result in fewer children having
    access to school meals through the loss of funding alone.
    Coupled with the fact that the pilot program would only require
    a loose assurance that children are actually fed healthy meals,
    the block grant pilot erodes the very intention of school-based
    feeding programs.
    ---------------------------------------------------------------------------
        \14\Center on Budget and Policy Priorities. Funding for Housing,
    Health, and Social Services Block Grants Has Fallen Markedly Over Time,
    (March 24, 2016) available at: http://www.cbpp.org/research/federal-
    budget/funding-for-housing-health-and-social-services-block-grants-has-
    fallen.
    ---------------------------------------------------------------------------
        The inclusion of the three state block grant pilot in the
    bill serves as the first step in moving to block grant school
    meal programs across all fifty states, as evidenced by a
    Republican amendment offered to do just that, earning the
    support of nearly half of Committee Republicans. The intent of
    the block grant pilot is clear--to limit the number of children
    served by federal nutrition programs and limit the federal
    investment in these programs. Committee Democrats are steadfast
    in unanimous rejection of any efforts to turn child nutrition
    programs into a block grant. The amendment offered by Ranking
    Member Scott to strike the block grant pilot was rejected on a
    party line vote.

     H.R. 5003 FAILS TO ADEQUATELY IMPROVE FOODS SERVED OUTSIDE OF SCHOOL
                                     MEALS

        The summer months bring with them reduced access to school
    meal programs provided during the school year for millions of
    children; they are periods of increased risk for food
    insecurity and consumption of excessive unhealthy foods.
    Millions of children lose access to school breakfast, lunch,
    and afterschool meals that are available during the regular
    school year. The Summer Food Service Program (SFSP) fills this
    gap by providing free and nutritious meals and snacks to low-
    income children when school is not in session.
        H.R. 5003 made various changes to SFSP. The legislation
    included certain provisions to streamline provider eligibility,
    a concept widely supported by both Democrats and Republicans.
    However, the legislation failed to make investments necessary
    for successful implementation of this provision. In order to
    build on the underlying provisions in H.R. 5003, Democrats
    offered amendments to expand the range of the SFSP allowing
    more low-income children to be served. Specifically, Ms. Adams
    offered an amendment to modernize the area eligibility test to
    allow community-based organizations to participate if 40
    percent of the children in the area are eligible for free or
    reduced-price meals. Currently, the 50 percent area
    qualification is inconsistent with other federally funded
    programs that support services for low-income children and
    require 40 percent, such as the 21st Century Community Learning
    Center program and Title I-A of the ESEA, which require at
    least 40 percent. The amendment offered by Ms. Adams to use a
    40 percent standard was not adopted.
        The Summer Electronic Benefit Transfer for Children (Summer
    EBT) program is also an important tool in combatting summer
    hunger and enjoys widespread bipartisan support. The Summer EBT
    program began as a demonstration program and studies have shown
    success in reducing the most severe forms of food insecurity
    and enabling participating families to procure and eat more
    fruits, vegetables, dairy, and whole grains.\15\ In fact, a
    Summer EBT benefit of $60 per month per child has been shown to
    reduce the most severe category of food insecurity among
    children during the summer by one-third.\16\ In April, the
    program received nearly $27 million in grants to expand these
    benefits to new rural areas, Tribal Nations, and areas of
    extreme need, including Flint, Michigan. While H.R. 5003
    continues the authorization of this important program, the
    annual investment in the Summer EBT program is reduced by over
    fifty percent from the FY 2016 appropriated amount, therefore
    limiting the reach and the success of the Summer EBT program.
    An amendment, introduced by Ms. Davis and co-sponsored by Ms.
    Bonamici, sought to go beyond maintenance of current funding
    levels and increase funding to expand the program nationwide.
    Despite the successes of the program, the amendment was voted
    down along partisan lines.
    ---------------------------------------------------------------------------
        \15\USDA. Summer Electronic Benefit Transfer for Children (SEBTC)
    Demonstration: Summary Report, (May 2016) available at:  http://
    www.fns.usda.gov/sites/default/files/ops/sebtcfinalreport.pdf.
        \16\Id.
    ---------------------------------------------------------------------------
        Outside of SFSP, the Child and Adult Care Food Program
    (CACFP) also provides healthy foods outside the school day by
    providing nutritious meals and snacks to children in day care
    or afterschool. But many sites participating in either the SFSP
    or the CACFP program also provide full-day educational and
    enrichment activities. These programs provide a dual benefit,
    providing both healthy foods and educational support to
    children when not in school. For example, summer education
    programs are valuable in addressing the academic slide that can
    occur over the summer. As effective as these programs can be,
    most are unable to provide a third meal to all-day
    participants, despite the need for this additional meal among
    many in the communities these sites serve.
        Recognizing the essential role of SFSP and CACFP sites that
    provide all-day enrichment activities to participants,
    Committee Democrats sought to expand these providers' ability
    to nourish those participants throughout the day. Amendments
    proposed by Ranking Member Scott and Ms. Bonamici would allow
    the provision of a third meal in the Summer Food Service
    Program and the Child and Adult Care Food Program,
    respectively. These amendments, despite their merits, unanimous
    Democratic support, and even bipartisan support for similar
    legislation introduced in this Congress, failed to gain more
    than a handful of Committee Republican votes.

       H.R. 5003 IGNORES THE PUBLIC HEALTH NEEDS OF THE NATION'S CHILDREN

        No amount of lead is a safe amount of lead. Yet children in
    Flint, Michigan were exposed to astronomical levels of lead in
    their drinking water. The seepage of lead into the drinking
    water in Flint generated a public health crisis and prompted
    President Obama to declare a federal state of emergency. The
    research is clear on the impact of exposure to lead on young
    children. The adverse effects of lead exposure range from
    decreased academic attainment, damage to the brain and nervous
    system, slowed growth and development, learning and behavior
    problems, such as juvenile delinquency and criminal behavior,
    and hearing and speech problems.\17\ These effects can result
    in a significant decline in earnings for those impacted, loss
    of tax revenues, additional burdens to the criminal justice
    system and special education system, and increased stress on
    the health care system.
    ---------------------------------------------------------------------------
        \17\Centers for Disease Control. Childhood Lead Poisoning Data,
    Statistics, and Surveillance, (September 1, 2016) available at: http://
    www.cdc.gov/nceh/lead/data/index.htm.
    ---------------------------------------------------------------------------
        The tragedy in Flint resulted from irresponsible local and
    state decisions made in an effort to cut costs, sacrificing the
    health of a community in the process. The poisoning of Flint
    residents, especially all of its 29,000 children, should serve
    as catalyst for legislators to take action to both respond to
    the families and children affected in Flint, and to also take
    steps to prevent other children from lead exposure.
    Unfortunately, Flint is not the only community suffering from
    lead contamination in its water; other communities across the
    country are also facing extremely elevated lead levels in
    drinking water.
        Federal nutrition programs are a powerful tool in
    responding to the crisis in Flint, since the programs provide
    the healthy foods with the vitamins and nutrients necessary to
    help mitigate the effects of lead poisoning, such as vitamin C,
    iron, and calcium.\18\ In its federal response to Flint, the
    USDA provided: summertime nutrition assistance through the
    Summer EBT program to the more than 39,000 children who live or
    attend schools in the area affected by lead-contaminated water,
    an additional $62,700 for the Fresh Fruit and Vegetable Program
    to help schools purchase fruit and vegetable snacks, and
    leveraged the WIC program to provide blood lead testing at
    clinics for WIC participants and allowed WIC benefits to
    include ready-to-feed infant formula.\19\ The approximately
    7,600 Flint residents participating in the WIC program
    (including around 1,500 women, 1,800 infants, and 4,300
    children) were also offered supportive services as well as
    nutrition education on mitigating lead absorption through
    dietary changes.\20\
    ---------------------------------------------------------------------------
        \18\Academy of Nutrition and Dietetics. How to Fight Lead Exposure
    with Nutrition, (February 12, 2016) available at:  http://
    www.eatright.org/resource/health/wellness/preventing-illness/how-to-
    fight-lead-exposure-with-nutrition.
        \19\USDA. Fact Sheet: USDA Assistance to Residents Affected by the
    Water Emergency in Flint, Michigan, (August 16, 2016) available at:
    http://www.usda.gov/wps/portal/usda/
    usdahome?contentidonly=true&contentid=2016/02/0038.xml.
        \20\Id.
    ---------------------------------------------------------------------------
        Committee Democrats recognize the importance of federal
    nutrition programs in responding to a crisis, such as the one
    residents of Flint experienced, as well as responding to the
    everyday needs of our nation's mothers and children. Therefore,
    in the wake of Flint, it is even more important that Congress
    does not cut corners in federal nutrition programs. These
    programs are relied upon every day, but even more so when a
    situation like the water contamination in Flint emerges.
        To prevent similar disasters, Democrats believe that any
    reauthorization must address the immediate risk to mental and
    physical health from contaminated water by ensuring that all
    schools and CACFP providers have potable drinking water, as
    required by current law. To that end, Democrats offered two
    amendments related to water testing and safety. An amendment
    offered by Ranking Member Scott provided funding for nationwide
    water testing in schools and child care settings. Committee
    Democrats recognize that addressing the prevalence of lead in
    drinking water will require an upfront investment, but firmly
    believe that this investment is both cost-effective and a moral
    imperative. Research has shown that for every dollar spent on
    controlling lead hazards, $17 to $221 would be returned on that
    investment through health benefits, increased IQ, higher
    lifetime earnings, tax revenue, reduced spending on special
    education, and reduced criminal activity.\21\ Mr. DeSaulnier
    also offered a water safety amendment requiring the USDA to set
    up a process to ensure state compliance with potable water
    requirements. This no-cost, commonsense amendment would have
    been the first step in ensuring kids across the country are not
    exposed to unsafe drinking water. Unfortunately, these
    amendments failed to garner the support of Committee
    Republicans and neither of these amendments was adopted by the
    Committee.
    ---------------------------------------------------------------------------
        \21\E. Gould. Childhood Lead Poisoning: Conservative Estimates of
    the Social and Economic Benefits of Lead Hazard Control, (March 31,
    2009) available at: https://www.ncbi.nlm.nih.gov/pmc/articles/
    PMC2717145/.
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               STAKEHOLDERS AND ADVOCACY GROUPS OPPOSE H.R. 5003

        A broad coalition of hundreds of nutrition, medical,
    hunger, child welfare, education, and religious organizations
    joined in opposition to H.R. 5003. The organizations opposed to
    H.R. 5003 include, but are not limited to: 9to5, National
    Association of Working Women, Academy of Nutrition and
    Dietetics, Action for Healthy Kids, Afterschool Alliance,
    Alliance for Strong Families and Communities, American Cancer
    Society Cancer Action Network, American College of Preventive
    Medicine, American Diabetes Association; American Public Health
    Association, Bread for the World, Center for Law and Social
    Policy (CLASP), Center for Science in the Public Interest,
    Child Welfare League of America, Children's Defense Fund,
    Children's HealthWatch, Children's Law Center, Coalition on
    Human Needs, Consumer Federation of America, Evangelical
    Lutheran Church in America, First Focus Campaign for Children,
    Food Policy Action, Hunger Free America, Islamic Relief USA,
    MAZON: A Jewish Response to Hunger, Migrant Legal Action
    Program, MomsRising, National Advocacy Center of the Sisters of
    the Good, National Association of School Nurses, National
    Association of Secondary School Principals, National
    Association of Social Workers, National Black Nurses
    Association, National Council of La Raza (NCLR), National Farm
    to School Network, National Farmers, National Immigration Law
    Center, National Urban League, National WIC Association,
    National Women's Law Center, NETWORK, A National Catholic
    Social Justice Lobby, Presbyterian Church (U.S.A.), RESULTS,
    School Social Work Association of America, Service Employees
    International Union (SEIU), The Jewish Federations of North
    America, The National CACFP Forum, The Pew Charitable Trusts,
    The Salvation Army, Trust for America's Health, Union of
    Concerned Scientists, United Fresh Produce Association,
    Witnesses to Hunger Philadelphia, National Education
    Association (NEA), National PTA, American Federation of State,
    County, and Municipal Employees (AFSCME), American Academy of
    Pediatrics (AAP), American Diabetes Association, Common Sense
    Kids Action, Feeding America, The National Association for
    Family Child Care (NAFCC), and Food Research & Action Center
    (FRAC).

                       ROLL CALL VOTE TO REPORT H.R. 5003

        H.R. 5003 was reported by a vote of 20 yeas and 14 nays. No
    Democratic Committee Members voted in favor of the bill.

                                   CONCLUSION

        Regrettably, H.R. 5003 represents a missed opportunity to
    make continued improvements in the health and wellbeing of our
    country. H.R. 5003 threatens the long-established federal role
    in school meals programs, weakens nutrition standards, and
    makes it more difficult for schools to provide students with
    access to free, healthy meals. These policies put at risk the
    progress made by the last reauthorization in improving both the
    nutritional quality of, and access to meals served, in federal
    nutrition programs for millions of students and their families.
        Rather than proposing policies that would introduce
    unhealthy foods in schools, burdensome paperwork requirements,
    and troubling limits on federal oversight, the Education and
    the Workforce Committee should bolster and expand programs and
    policies supported by stakeholders and advocacy groups that
    provide needed support for the populations they serve. We, as a
    nation, have the resources to ensure all children, especially
    those in need, are able to access regular and healthy meals.
    But we, as a Committee, must find the will to come together to
    achieve that goal.
        Despite opposition to the majority of amendments offered by
    Democrats during mark-up, Committee Democrats will continue to
    push for a comprehensive reauthorization that makes it easier
    for schools to provide meals without unnecessary burden or
    stigma, strengthens the nutrition safety net both inside and
    outside of schools, and puts first the future health of our
    country.
        For these reasons, among others, Committee Democrats stand
    in strong opposition to H.R. 5003, and respectfully ask the
    full House of Representatives to oppose this bill.

                                       Robert C. ``Bobby'' Scott,
                                               Ranking Member.
                                       Susan A. Davis.
                                       Joe Courtney.
                                       Jared Polis.
                                       Frederica S. Wilson.
                                       Mark Pocan.
                                       Hakeem S. Jeffries.
                                       Alma S. Adams.
                                       Ruben Hinojosa.
                                       Raul M. Grijalva.
                                       Marcia L. Fudge.
                                       Gregorio Kilili Camacho Sablan.
                                       Suzanne Bonamici.
                                       Mark Takano.
                                       Katherine M. Clark.
                                       Mark DeSaulnier.

                                      [all]