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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-445

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



 
             CHILD NUTRITION IMPROVEMENT AND INTEGRITY ACT

                                _______
                                

 March 23, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 3873]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 3873) to amend the Richard B. Russell 
National School Lunch Act and the Child Nutrition Act of 1966 
to provide children with access to food and nutrition 
assistance, to simplify program operations, to improve 
children's nutritional health, and to restore the integrity of 
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.

This Act may be cited as the ``Child Nutrition Improvement and 
Integrity Act''.

SEC. 2. TABLE OF CONTENTS.

  The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

          TITLE I--ENSURING ACCESS TO CHILD NUTRITION PROGRAMS

Sec. 101. Exclusion of military housing allowances.
Sec. 102. Homeless children and runaway youth eligibility.
Sec. 103. Eligibility for severe need assistance.
Sec. 104. Reauthorization of summer food programs.
Sec. 105. Child and adult care food program.
Sec. 106. Review of best practices in the breakfast program.
Sec. 107. Area eligibility demonstration.
Sec. 108. Seamless Summer administration.
Sec. 109. Year round community child nutrition program pilot.

           TITLE II--IMPROVING PROGRAM QUALITY AND INTEGRITY

Sec. 201. Eligibility and certification for free and reduced price 
lunches.
Sec. 202. Duration of eligibility for free and reduced price lunches.
Sec. 203. Certification by local educational agencies.
Sec. 204. Compliance and accountability.
Sec. 205. Technology Improvement.
Sec. 206. Minimum State administrative expense grants.
Sec. 207. District-wide eligibility for special assistance.
Sec. 208. Administrative error reduction.

TITLE III--PROMOTING NUTRITION QUALITY AND PREVENTING CHILDHOOD OBESITY

Sec. 301. Local school wellness policy.
Sec. 302. Supporting nutrition education, improving meal quality, and 
access to local foods.
Sec. 303. Fruits and vegetable commodities.
Sec. 304. Fluid milk.
Sec. 305. Waiver of requirements for weighted averages for nutrient 
analysis.
Sec. 306. Whole grains.

      TITLE IV--IMPROVING THE WOMEN, INFANTS, AND CHILDREN PROGRAM

Sec. 401. Definition of nutrition education.
Sec. 402. Definition of supplemental foods.
Sec. 403. Improving certification.
Sec. 404. Reviews of available supplemental foods.
Sec. 405. Notification of violations and infant formula benefits.
Sec. 406. Healthy People 2010 initiative.
Sec. 407. Competitive bidding.
Sec. 408. Fruit and vegetable projects.
Sec. 409. Price levels of retail stores.
Sec. 410. Management information systems.
Sec. 411. Infant formula fraud prevention.
Sec. 412. State alliances.
Sec. 413. Limits on expenditures.
Sec. 414. Migrant and community health centers initiative.
Sec. 415. Demonstration projects.
Sec. 416. Authorization of appropriations.

 TITLE V--REAUTHORIZATION, MISCELLANEOUS PROVISIONS, AND EFFECTIVE DATE

Sec. 501. Training, technical, and other assistance.
Sec. 502. Notice of irradiated food.
Sec. 503. Sense of Congress.
Sec. 504. Reauthorization of programs.
Sec. 505. Effective dates.

          TITLE I--ENSURING ACCESS TO CHILD NUTRITION PROGRAMS

SEC. 101. EXCLUSION OF MILITARY HOUSING ALLOWANCES.

  Section 9(b)(7) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1758(b)) is amended by striking ``For each of fiscal years 
2002'' and all that follows through ``the amount'' and inserting ``The 
amount''.

SEC. 102. HOMELESS CHILDREN, RUNAWAY YOUTH, AND MIGRATORY CHILD 
                    ELIGIBILITY.

  (a) In General.--Section 9(b)(6)(A) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1758(b)(6)(A)) is amended--
          (1) in clause (ii), by striking ``or'';
          (2) in clause (iii), by striking the period and inserting a 
        semicolon; and
          (3) by inserting after clause (iii) the following:
          ``(iv) a homeless child or youth (as defined in section 
        725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
        11434a));
          ``(v) a youth served by programs under the Runaway and 
        Homeless Youth Act (42 U.S.C. 5701 et seq.); or
          ``(vi) a migratory child, as such term is defined in section 
        1309(2) of the Elementary and Secondary Education Act of 1965 
        (20 U.S.C. 6399(2)).''.
  (b) Documentation.--Section 9(d)(2) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1758(d)(2)) is amended--
          (1) in subparagraph (B), by striking ``or'';
          (2) in sub paragraph (C), by striking the period at the end 
        and inserting a semicolon; and
          (3) by inserting after subparagraph (C) the following:
          ``(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)(6); 
        or
          ``(E) documentation has been provided to the appropriate 
        local educational agency showing the child's status as a 
        migratory child, as such term is defined in section 1309(2) of 
        the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        6399(2)).''.

SEC. 103. ELIGIBILITY FOR SEVERE NEED ASSISTANCE.

  Section 4(d) of the Child Nutrition Act of 1966 (42 U.S.C. 1773(d)) 
is amended--
          (1) by striking the heading and all that follows through 
        paragraph (1), and inserting:
  ``(d) Severe Need Assistance.--
          ``(1) In general.--Each State educational 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, 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 those new 
        schools drawing their attendance from schools receiving severe 
        need assistance).''; and
          (2) in paragraph (2)--
                  (A) by striking ``100 percent'' and all that follows 
                through ``food, or''; and
                  (B) by striking ``, whichever is less''.

SEC. 104. REAUTHORIZATION OF SUMMER FOOD PROGRAMS.

  (a) Summer Food Pilot Projects.--Section 18(f) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1769(f)) is amended--
          (1) by redesignating paragraphs (2) through (6) as paragraphs 
        (3) through (7), respectively;
          (2) by inserting after paragraph (1) the following:
          ``(2) Additional states eligible.--In addition to the States 
        meeting the criteria set forth in paragraph (1), the 3 States 
        with the highest percentage of households that are determined 
        to be food insecure with hunger, as determined annually by the 
        Secretary, shall be `eligible States' for purposes of this 
        subsection.'';
          (3) in paragraph (3) (as so redesignated), by striking 
        ``March 31, 2004'' and inserting ``September 30, 2008''; and
          (4) in paragraph (4) (as so redesignated), by striking 
        ``(other than a service institution described in section 
        13(a)(7))'' both places it appears.
  (b) Summer Food Service Program for Children.--Section 13(q) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1761(q)) is 
amended by striking ``March 31, 2004'' and inserting ``September 30, 
2008''.

SEC. 105. CHILD AND ADULT CARE FOOD PROGRAM.

  (a) Eligibility of Private Child Care Centers.--Section 17 of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1766) is 
amended--
          (1) in subsection (a)(2)(B)(i), by striking ``during the 
        period'' and all that follows through ``March 31, 2004''; and
          (2) by striking subsection (p).
  (b) Duration of Determination as Tier 1 Family or Group Day Care 
Home.--Section 17(f)(3)(E)(iii) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1766(f)(3)(E)(iii)) is amended by striking 
``3 years'' and inserting ``5 years''.
  (c) Duration of Agreements.--Section 17(j) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1766(j)) is amended to read as 
follows:
  ``(j) Agreements.--
          ``(1) In general.--The Secretary may issue regulations 
        directing States to develop and provide for the use of a 
        standard form of agreement between each family or group day 
        care sponsoring organization and the family or group day care 
        homes 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.''.
  (d) Management Improvement Initiative.--Section 17(q)(3) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1766(q)(3)) is 
amended by striking ``1999 through 2003'' and inserting ``2005 and 
2006''.
  (e) Audits.--Section 17(i) of the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1766(i)) is amended to read as follows:
  ``(i) Audits.--
          ``(1) Funds for audits.--The Secretary shall make available 
        for each fiscal year to a State administering the child and 
        adult care food program, for the purpose of conducting audits 
        of participating institutions, an amount up to 1.5 percent 
        (except in the case of fiscal years 2005 through 2007, 1 
        percent) of the funds used by the State in the program under 
        this section during the second preceding fiscal year.
          ``(2) Audit procedures.--
                  ``(A) In general.--Subject to subparagraph (B), in 
                conducting management evaluations, reviews, or audits 
                of the program under this subsection, the Secretary or 
                a State agency may disregard any overpayment to an 
                institution if the total overpayment for any fiscal 
                year does not exceed an amount, consistent with the 
                disregards allowed in other programs under this Act, 
                which recognizes the cost of collecting small claims.
                  ``(B) Criminal or fraud violations.--In carrying out 
                this subsection, 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.''.
  (f) Emergency Shelters.--Section 17(t)(5)(A)(i) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1766(t)(5)(A)(i) is 
amended--
          (1) in subclause (I)--
                  (A) by striking ``12'' and inserting ``18''; and
                  (B) by inserting ``or'' after the semicolon; and
          (2) by striking subclause (II) and redesignating subclause 
        (III) as subclause (II).
  (g) Paperwork Reduction.--The Secretary of Agriculture, in 
conjunction with States and participating institutions, shall examine 
the feasibility of reducing paper work resulting from regulations and 
record-keeping requirements for State agencies, family child care 
homes, child care centers, and sponsoring organizations 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).

SEC. 106. REVIEW OF BEST PRACTICES IN THE BREAKFAST PROGRAM.

  (a) Review.--Subject to the availability of funds, the Secretary of 
Agriculture shall enter into an agreement with a research organization 
to collect and disseminate a review of best practices to assist schools 
in addressing existing impediments at the State and local level that 
hinder the growth of the school breakfast program under section 4 of 
the Child Nutrition Act of 1966 (42 U.S.C. 1773). The review shall 
describe model breakfast programs and offer recommendations for schools 
to overcome obstacles, such as:
          (1) the length of the school day;
          (2) bus schedules; and
          (3) potential increases in costs at the State and local 
        level.
  (b) Dissemination.--Not later than 12 months after the date of 
enactment of this Act, the Secretary shall make the review required 
under subsection (a) available to local educational agencies via the 
Internet, including recommendations to improve participation in the 
school breakfast program. Not later than 12 months after the date of 
enactment of this Act, the review shall also be transmitted to the 
Committee on Education of the House of Representatives and the 
Committee on Agriculture of the Senate.

SEC. 107. AREA ELIGIBILITY DEMONSTRATION.

  Section 13 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1761) is amended by adding at the end the following:
  ``(r) Demonstration Program.--The Secretary shall support a 
demonstration program in rural areas of the State of Pennsylvania under 
the same terms and conditions as contained in this section, except that 
the threshold for determining `areas in which poor economic conditions 
exist' under subsection (a)(1)(C) for such program shall be 40 percent 
of children enrolled are eligible for free or reduced price school 
meals and the State agency shall report to the Secretary on the effect 
of the demonstration on program participation in rural areas.''.

SEC. 108. SEAMLESS SUMMER ADMINISTRATION.

  (a) Seamless Summer Waiver.--Section 13(a) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1761(a)) is amended by inserting 
after paragraph (7) the following:
          ``(8) Service institutions that are public or private 
        nonprofit school food authorities may administer summer or 
        school vacation food service under the provisions of the school 
        lunch program established under this Act and the school 
        breakfast program established under the Child Nutrition Act of 
        1966 (42 U.S.C. 1771 et seq.), except as determined by the 
        Secretary.''.
  (b) Payments.--Section 13(b)(1) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1761(b)(1)) is amended by inserting after 
subparagraph (C) the following:
                  ``(D) Service institutions described in paragraph 
                (a)(8) of this section shall be reimbursed for meals 
                and meal supplements in accordance with the applicable 
                provisions under this Act (other than subparagraphs 
                (A), (B), and (C) of this paragraph) and the Child 
                Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), as 
                determined by the Secretary.''.

SEC. 109. YEAR ROUND COMMUNITY CHILD NUTRITION PROGRAM PILOT.

  Section 13(a) of the Richard B. Russell National School Lunch Act is 
further amended by adding at the end the following:
          ``(9) Year round community child nutrition program pilot.--
                  ``(A) In general.--A service institution as defined 
                in paragraph (7) may be reimbursed for up to 3 meals 
                and 2 supplements for any day for which services are 
                being offered at such institution. Such service 
                institution shall be reimbursed for costs consistent 
                with section 13(b).
                  ``(B) Maximum reimbursement.--No reimbursement may be 
                made to any institution under this paragraph for more 
                than 3 meals and 2 supplements per child per day.
                  ``(C) Limitation.--The Secretary shall limit 
                reimbursement under this paragraph for meals and 
                supplements served under a program to service 
                institutions defined paragraph (7) located in 
                California.''.

           TITLE II--IMPROVING PROGRAM QUALITY AND INTEGRITY

SEC. 201. ELIGIBILITY AND CERTIFICATION FOR FREE AND REDUCED PRICE 
                    LUNCHES.

  (a) In General.--Section 9(b) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1758) is amended by striking ``(b)(1)(A) 
Not later'' and all that follows through paragraph (2) and inserting 
the following:
  ``(b) Eligibility for Free and Reduced Price Lunches.--
          ``(1) Income guidelines.--
                  ``(A) In general.--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 
                issued by the Secretary of Health and Human Services, 
                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 
                issued by the Secretary of Health and Human Services, 
                as adjusted annually in accordance with subparagraph 
                (B). Such guidelines shall be revised at annual 
                intervals, or at any shorter interval deemed feasible 
                and desirable.
                  ``(B) Formula for revision.--The revision required by 
                subparagraph (A) of this paragraph shall be made by 
                multiplying--
                          ``(i) the official poverty line (as defined 
                        by the Secretary of Health and Human Services); 
                        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) Certification of eligibility.--
                  ``(A) Announcement by state educational agency.--
                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 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 
                educational agencies shall, each year, publicly 
                announce the income eligibility guidelines for free and 
                reduced price lunches on or before the opening of 
                school.
                  ``(B) Applications.--
                          ``(i) In general.--Applications for free and 
                        reduced price lunches, in such form as the 
                        Secretary may prescribe or approve, and any 
                        descriptive material, in an understandable and 
                        uniform format, and to the extent practicable, 
                        in a language that parents can understand, 
                        shall be distributed at least annually to the 
                        parents or guardians of children in attendance 
                        at the school.
                          ``(ii) Income levels.--Applications and 
                        descriptive material shall contain only the 
                        family size income eligibility guidelines 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. Such 
                        applications and descriptive material may not 
                        contain the income eligibility guidelines for 
                        free lunches.
                          ``(iii) Notification.--Descriptive materials 
                        shall contain a notification that participants 
                        in 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. 1771 et seq.), the food stamp 
                        program established under the Food Stamp Act of 
                        1977 (7 U.S.C. 2011 et seq.), the Food 
                        Distribution Program on Indian Reservations 
                        (FDPIR) authorized under section 4(b) of the 
                        Food Stamp Act of 1977 (7 U.S.C. 2013(b)), or a 
                        State program funded under part A of title IV 
                        of the Social Security Act (if the Secretary 
                        determines the State program 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) are 
                        eligible for free or reduced price lunches. 
                        Such descriptive materials shall also contain a 
                        notice to parents that documentation may be 
                        requested for verification.
                          ``(iv) Electronic availability.--In addition 
                        to the distribution of such applications and 
                        descriptive material in paper form as provided 
                        for in this paragraph, such applications and 
                        material may be made available electronically 
                        via the Internet.
                  ``(C) Eligibility.--
                          ``(i) Household applications.--
                                  ``(I) In general.--If an eligibility 
                                determination for a child is not made 
                                under clause (ii) or (iii), 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 
                                other guidance issued by the Secretary.
                                  ``(II) Additional bases.--Eligibility 
                                may be determined by the local 
                                educational agency on the basis of a 
                                complete application executed by an 
                                adult member of the household, or in 
                                accordance with other guidance issued 
                                by the Secretary, including an 
                                electronic signature when the 
                                application is submitted 
                                electronically, and if the application 
                                filing system meets confidentiality 
                                standards established by the Secretary.
                                  ``(III) Children in household.--
                                          ``(aa) In general.--The 
                                        application shall identify the 
                                        names of each child in the 
                                        household for whom meal 
                                        benefits are requested.
                                          ``(bb) Separate 
                                        applications.--A State 
                                        educational agency or local 
                                        educational agency may not 
                                        request a separate application 
                                        for each child in the 
                                        household.
                                  ``(IV) Verification.--The Secretary, 
                                State, or local educational agency may 
                                verify any data contained in such 
                                application. In accordance with 
                                guidance issued by the Secretary, each 
                                local educational agency shall verify a 
                                sample of approved free and reduced 
                                price applications and shall make 
                                appropriate changes in the eligibility 
                                determination with respect to such 
                                applications on the basis of such 
                                verification. The sample selected for 
                                verification shall be as follows:
                                          ``(aa) For local educational 
                                        agencies able to obtain 
                                        verification information for at 
                                        least 75 percent of all 
                                        applications selected for 
                                        verification in the prior year, 
                                        or local educational agencies 
                                        receiving more than 20,000 
                                        applications and that in the 
                                        prior year had a verification 
                                        non-response rate that was 10 
                                        percent below the verification 
                                        non-response rate of the second 
                                        prior year, the sample selected 
                                        shall be either--
                                                  ``(AA) the lesser of 
                                                3,000 or 3 percent of 
                                                approved applications 
                                                selected at random by 
                                                the local educational 
                                                agencies from all 
                                                approved applications; 
                                                or
                                                  ``(BB) the lesser of 
                                                1,000 or 1 percent of 
                                                all approved 
                                                applications selected 
                                                from applications that 
                                                indicate monthly income 
                                                that is within $100, or 
                                                annual income that is 
                                                within $1,200, of the 
                                                income eligibility 
                                                limits for free or 
                                                reduced price meals, 
                                                plus the lesser of 500 
                                                or \1/2\ of 1 percent 
                                                of approved 
                                                applications that 
                                                provided a case number 
                                                in lieu of income 
                                                information showing 
                                                participation in the 
                                                food stamp program or 
                                                Temporary Assistance 
                                                for Needy Families 
                                                program selected from 
                                                those approved 
                                                applications that 
                                                provided a case number 
                                                in lieu of income 
                                                information verifying 
                                                such participation.
                                          ``(bb) For all other local 
                                        educational agencies, the 
                                        sample selected shall be the 
                                        lesser of 3,000 or 3 percent of 
                                        all approved applications 
                                        selected from applications that 
                                        indicate monthly income that is 
                                        within $100, or annual income 
                                        that is within $1,200, of the 
                                        income eligibility limits for 
                                        free or reduced price meals. 
                                        If, for any local educational 
                                        agency, the total number of 
                                        such applications is less than 
                                        3,000 or 3 percent of all 
                                        approved applications, the 
                                        local educational agency shall 
                                        select additional applications 
                                        at random from all approved 
                                        applications in order to obtain 
                                        a total sample for verification 
                                        of 3,000 or 3 percent of all 
                                        approved applications.
                                  ``(V) Substitutions.--
                                          ``(aa) In general.--In 
                                        accordance with the regulations 
                                        prescribed by the Secretary, 
                                        the local educational agency 
                                        may, upon individual review, 
                                        decline to verify any 
                                        application selected under 
                                        subclause (IV) and replace it 
                                        with another application to be 
                                        verified. Such agency may 
                                        decline to verify no more than 
                                        2 percent of the applications 
                                        selected for verification under 
                                        this subclause.
                                          ``(bb) Substitute criteria in 
                                        cases of emergencies.--The 
                                        Secretary may substitute 
                                        alternative criteria for the 
                                        sample size and sample 
                                        selection criteria in subclause 
                                        (IV) to address a natural 
                                        disaster, civil disorder, 
                                        strike, or other local 
                                        condition.
                                  ``(VI) Direct verification.--
                                          ``(aa) In general.--In 
                                        accordance with regulations 
                                        promulgated by the Secretary, 
                                        in verifying the sample 
                                        selected in accordance with 
                                        subclause (IV), the local 
                                        educational agency may first 
                                        obtain from certain public 
                                        agencies administering the 
                                        programs identified in item 
                                        (bb) of this subclause, and 
                                        similar income-tested programs, 
                                        information to verify 
                                        eligibility for free or reduced 
                                        price meals.
                                          ``(bb) Public agency 
                                        records.--Public agency records 
                                        that may be used to verify 
                                        eligibility for free meals 
                                        shall include income 
                                        information relied upon within 
                                        12 months prior to verification 
                                        under subclause (IV) in the 
                                        administration of the following 
                                        programs: the food stamp 
                                        program established under the 
                                        Food Stamp Act of 1977 (7 
                                        U.S.C. 2011 et seq.); the State 
                                        program funded under part A of 
                                        title IV of the Social Security 
                                        Act; the Food Distribution 
                                        Program on Indian Reservations 
                                        (FDPIR) authorized under 
                                        section 4(b) of the Food Stamp 
                                        Act of 1977 (7 U.S.C. 2013(b)); 
                                        and the State Medicaid program 
                                        under title XIX of the Social 
                                        Security Act (42 U.S.C. 1396 et 
                                        seq.) in a State in which the 
                                        income eligibility limit 
                                        described in section 
                                        1902(l)(2)(C) of the Social 
                                        Security Act is no higher than 
                                        133 percent of the income 
                                        official poverty line as 
                                        specified in section 
                                        1902(l)(2)(A) of such Act, in 
                                        the case of eligibility for 
                                        free meals, and 185 percent of 
                                        the income official poverty 
                                        line as specified in such 
                                        section in the case of reduced 
                                        price meals.
                                  ``(VII) Plain, understandable 
                                language.--Any and all communications 
                                to parents regarding verification under 
                                subclause (IV) shall be in an 
                                understandable and uniform format, and, 
                                to the extent practicable, in a 
                                language that parents can understand.
                          ``(ii) Direct certification for children in 
                        food stamp households.--
                                  ``(I) In general.--Each State agency 
                                shall, to the extent practicable, enter 
                                into an agreement with the State agency 
                                conducting eligibility determinations 
                                for the food stamp program established 
                                under the Food Stamp Act of 1977 (7 
                                U.S.C. 2011 et seq.).
                                  ``(II) Procedures.--Subject to clause 
                                (iv), the agreement shall establish 
                                procedures under which a child who is a 
                                member of a household receiving 
                                assistance under the program referred 
                                to in subclause (I) shall be certified 
                                as eligible for free meals under this 
                                Act, without further application.
                                  ``(III) Direct certification.--
                                Subject to clause (iv), under the 
                                agreement, the local educational agency 
                                conducting eligibility determinations 
                                for a school meal program conducted 
                                under this Act shall certify a child 
                                who is a member of a household 
                                receiving assistance under the program 
                                referred to in subclause (I) as 
                                eligible for free meals under this Act 
                                without further application.
                                  ``(IV) Notice.--The appropriate local 
                                educational agency shall provide 
                                annually to the parents or guardians of 
                                all students who are members of a 
                                household receiving assistance under 
                                the program referred to in subclause 
                                (I), notification, in an understandable 
                                and uniform format, and, to the extent 
                                practicable, in a language that parents 
                                can understand, that any school-aged 
                                child in that household is eligible for 
                                free lunches or breakfasts.
                          ``(iii) Direct certification of children in 
                        other households.--Subject to clause (iv), 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 such 
                        child's status as a migratory child, as such 
                        term is defined in section 1309(2) of the 
                        Elementary and Secondary Education Act of 1965 
                        (20 U.S.C. 6399(2)), or a member of a family 
                        that is receiving assistance under a State 
                        program funded under part A of title IV of the 
                        Social Security Act if the Secretary determines 
                        the State program 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) Disclosure of information.--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 
                        clauses (ii) and (iii), 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.), or a 
                                regulation issued pursuant to either 
                                Act;
                                  ``(II) a person directly connected 
                                with the administration or enforcement 
                                of--
                                          ``(aa) a Federal education 
                                        program;
                                          ``(bb) a State health or 
                                        education program administered 
                                        by the State or local 
                                        educational agency (other than 
                                        a program carried out under 
                                        title XIX of the Social 
                                        Security Act (42 U.S.C. 1396 et 
                                        seq.); or
                                          ``(cc) a Federal, State, or 
                                        local means-tested nutrition 
                                        program with eligibility 
                                        standards comparable to the 
                                        program under this section;
                                  ``(III)(aa) the Comptroller General 
                                of the United States for audit and 
                                examination authorized by any other 
                                provision of law; and
                                  ``(bb) 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 requirements 
                                under paragraph (1) or this paragraph; 
                                and
                                  ``(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 purpose of identifying 
                                children eligible for benefits under, 
                                and enrolling children in, such 
                                programs, except that this subclause 
                                shall apply only to the extent that the 
                                State and the local educational agency 
                                so elect.
                          ``(v) Limitation.--Information provided under 
                        clause (iv)(II) shall be limited to the income 
                        eligibility status of the child for whom 
                        application for free or reduced price meal 
                        benefits was made or for whom eligibility 
                        information was provided under clause (ii) or 
                        (iii), unless the consent of the parent or 
                        guardian of the child for whom application for 
                        benefits was made is obtained.
                          ``(vi) Penalty for unauthorized disclosure.--
                        A person described in clause (iv) 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.
                          ``(vii) Requirements for waiver of 
                        confidentiality.--A State that elects to 
                        exercise the option described in clause 
                        (iv)(IV) shall ensure that any local 
                        educational agency acting in accordance with 
                        that option--
                                  ``(I) has a written agreement with 
                                the State or local agency or agencies 
                                administering health insurance 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 clause (iv) 
                                to seek to enroll children in those 
                                health insurance programs; and
                                  ``(II)(aa) notifies each household, 
                                the information of which shall be 
                                disclosed under clause (iv), that the 
                                information disclosed will be used only 
                                to enroll children in health programs 
                                referred to in clause (iv)(IV); and
                                  ``(bb) provides each parent or 
                                guardian of a child in the household 
                                with an opportunity to elect not to 
                                have the information disclosed.
                          ``(viii) Use of disclosed information.--A 
                        person to which information is disclosed under 
                        clause (iv)(IV) shall use or disclose the 
                        information only as necessary for the purpose 
                        of enrolling children in health programs 
                        referred to in clause (iv)(IV).
                  ``(D) 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 
                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.''.
  (b) Conforming Amendment.--Section 9(b)(6)(B) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1758(b)(6)(B) is amended 
by inserting ``, or documentation showing the child's status as a 
migratory child, as such term is defined in section 1309(2) of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6399(2))'' 
after ``subparagraph (A)(iii)''.

SEC. 202. DURATION OF ELIGIBILITY FOR FREE AND REDUCED PRICE LUNCHES.

  Section 9(b)(3) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1758(b)(3)) is amended to read as follows:
          ``(3) 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 
                section 11(a) or section 9(b)(2)(C)(i)(IV), 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 the date of the beginning of 
                        school in the subsequent school year or as 
                        otherwise specified by the Secretary.''.

SEC. 203. CERTIFICATION BY LOCAL EDUCATIONAL AGENCIES.

  (a) Certification by Local Educational Agency.--Section 9 of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1758) is 
further amended--
          (1) in subsection (b)(5), by striking ``Local school 
        authorities'' and inserting ``Local educational agencies''; and
          (2) in subsection (d)(2)--
                  (A) by striking ``local school food authority'' each 
                place it appears and inserting ``local educational 
                agency''; and
                  (B) in subparagraph (A), by striking ``such 
                authority'' and inserting ``the local educational 
                agency''.
  (b) Definition of Local Educational Agency.--Section 12(d) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1760(d)) is 
amended--
          (1) by redesignating paragraphs (3) through (8) as paragraphs 
        (4) through (9), respectively; and
          (2) by inserting after paragraph (2) the following:
          ``(3) Local educational agency.--
                  ``(A) In general.--The term `local educational 
                agency' has the meaning given the term in section 9101 
                of the Elementary and Secondary Education Act of 1965 
                (20 U.S.C. 7801).
                  ``(B) Inclusion.--The term `local educational agency' 
                includes, in the case of a private nonprofit school 
                food authority, an appropriate entity determined by the 
                Secretary.''.
  (c) School Breakfast Program.--Section 4(b)(1)(E)) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1773(b)(1)(E)) is amended by striking 
``school food authority'' each place it appears and inserting ``local 
educational agency''.

SEC. 204. COMPLIANCE AND ACCOUNTABILITY.

  Section 22 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1769c) is amended by inserting ``and local educational 
agencies'' after ``food service authorities'' each place it appears.

SEC. 205. TECHNOLOGY IMPROVEMENT.

  (a) Priority for Reallocated Funds.--Section 7(a)(5)(B)(ii) of the 
Child Nutrition Act of 1966 (42 U.S.C. 1776(a)(5)(B)(ii)) is amended by 
inserting the following new sentence at the end: ``The Secretary shall 
give priority consideration to States that will use the funds for 
improvements in technology and information management systems described 
in subsection (e)(2).''.
  (b) Conforming Amendment.--Section 7(b) of the Child Nutrition Act of 
1966 (42 U.S.C. 1776(b)) is amended by striking ``and for staff 
development'' and inserting ``for staff development; and technology and 
information management systems''.

SEC. 206. MINIMUM STATE ADMINISTRATIVE EXPENSE GRANTS.

   Section 7(a) of the Child Nutrition Act (42 U.S.C. 1776(a)(1)) is 
further amended--
          (1) by striking the heading and all that follows through 
        paragraph (1), and inserting the following:

``SEC. 7. STATE ADMINISTRATIVE EXPENSES.

  ``(a) Amount and Allocation of Funds.--
          ``(1) Amount available.--
                  ``(A) In general.--Except as provided in subparagraph 
                (B), 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, 17, and 
                17A of the Richard B. Russell National School Lunch Act 
                (42 U.S.C. 1753, 1759a, 1766, and 1766a)) and sections 
                3 and 4 of this Act during the second preceding fiscal 
                year.
                  ``(B) Minimum amount.--In the case of each of fiscal 
                years 2005 through 2007, the Secretary shall make 
                available to each State for their administrative costs 
                not less than the initial allocation made to the State 
                under this subsection for fiscal year 2004.
                  ``(C) Allocation.--The Secretary shall allocate the 
                funds so provided in accordance with paragraphs (2), 
                (3), and (4) of this subsection.
                  ``(D) Authorization of appropriations.--There is 
                authorized to be appropriated such sums as may be 
                necessary to carry out the purposes of this section.''; 
                and
          (2) in paragraph (2), by striking ``$100,000'' and inserting 
        ``$200,000''.

SEC. 207. DISTRICT-WIDE ELIGIBILITY FOR SPECIAL ASSISTANCE.

  Section 11(a)(1) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1759a(a)(1)) is amended--
          (1) in subparagraph (C)--
                  (A) in clause (i)--
                          (i) by inserting ``or school district'' after 
                        ``in the case of any school'';
                          (ii) by inserting ``or school district'' 
                        after ``in the school'' both times it appears;
                          (iii) by inserting ``or school district'' 
                        after ``in the case of a school''; and
                          (iv) by inserting ``or school district'' 
                        after ``with respect to the school'';
                  (B) in clause (ii)--
                          (i) by inserting ``or school district'' after 
                        ``served by a school''; and
                          (ii) by inserting ``or school district'' 
                        after ``served by the school''; and
                  (C) in clause (iii) by inserting ``or school 
                district'' after ``a school'';
          (2) in subparagraph (D)--
                  (A) in clause (i)--
                          (i) by inserting ``or school district'' after 
                        ``any school''; and
                          (ii) by inserting ``or school district'' 
                        after ``the school'';
                  (B) in clause (ii)--
                          (i) by inserting ``or school district'' after 
                        ``A school''; and
                          (ii) by inserting ``or school district'' 
                        after ``the school'';
                  (C) in clause (iii)--
                          (i) by inserting ``or school district'' after 
                        ``a school''; and
                          (ii) by inserting ``or school district'' 
                        after ``the school''; and
                  (D) in clause (iv) by inserting ``or school 
                district'' after ``levels, a school''; and
          (3) in subparagraph (E)--
                  (A) in clause (i)--
                          (i) by inserting ``or school district'' after 
                        ``In the case of any school'';
                          (ii) by inserting ``or school district'' 
                        after ``in the school'' both times it appears;
                          (iii) by inserting ``or school district'' 
                        after ``in the case of a school'';
                          (iv) by inserting ``or school district'' 
                        after ``with respect to the school'';
                          (v) by inserting ``or school district'' after 
                        ``received by the school''; and
                          (vi) by inserting ``or school district'' 
                        after ``for which the school''; and
                  (B) in clause (ii)--
                          (i) by inserting ``or school district'' after 
                        ``A school'';
                          (ii) by inserting ``or school district'' 
                        after ``for which the school'' both times it 
                        appears; and
                          (iii) by inserting ``or school district'' 
                        after ``population of the school'' both times 
                        it appears.

SEC. 208. ADMINISTRATIVE ERROR REDUCTION.

  (a) Federal Support for Training and Technical Assistance.--Section 
21 of the Richard B. Russell National School Lunch Act (42 U.S.C. 
1769b-1) is amended--
          (1) by redesignating subsection (e) as subsection (g); and
          (2) by inserting after subsection (d) the following:
  ``(e) Administrative Training and Technical Assistance Materials.--In 
collaboration with State educational agencies, school food authorities, 
and local educational agencies of varying sizes, the Secretary shall 
develop and distribute training and technical assistance materials 
relating to the administration of school meal programs that are--
          ``(1) prepared by the Secretary (based on research or other 
        sources), a State educational agency, a school food authority, 
        or a local educational agency; and
          ``(2) representative of the best management and 
        administrative practices of State agencies, school food 
        authorities, and local educational agencies as determined by 
        the Secretary.
  ``(f) 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; and
                          ``(ii) on October 1, 2006, and October 1, 
                        2007, $2,000,000.
                  ``(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 
                related to administrative practices designed to improve 
                program integrity and administrative accuracy in school 
                meals programs (including administrative requirements 
                established by the Child Nutrition Improvement and 
                Integrity Act and amendments made by that Act) to State 
                educational agencies and, to the extent determined by 
                the Secretary, to school food authorities and local 
                educational agencies;
                  ``(B) to assist State educational agencies in 
                reviewing the administrative practices of school food 
                authorities, to the extent determined by the Secretary; 
                and
                  ``(C) to carry out the activities described in 
                subsection (e).''.
  (b) Selected Administrative Reviews.--Section 22(b) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1769c(b)) is amended by 
adding at the end the following:
          ``(3) Additional review requirement for selected local 
        educational agencies.--
                  ``(A) Definition of selected local educational 
                agency.--In this paragraph, the term `selected local 
                educational agency' means a local educational agency 
                that has a demonstrated a 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 follow-up review of the 
                        selected local educational agency under 
                        standards established by the Secretary.
          ``(4) Recovering 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 follow-up 
                review under paragraph (1) or (3) or subsection (a), 
                the Secretary may require the State educational agency 
                to recover funds from the local educational agency that 
                would otherwise be paid to the school food authority or 
                local educational agency for school meals programs 
                under procedures prescribed by the Secretary.
                  ``(B) Amount.--The amount of funds recovered under 
                subparagraph (A) shall equal the value of any 
                overpayments made to the school food authority or local 
                educational agency 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 such overpayments 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 review 
                                conducted by the State educational 
                                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 
                                review conducted by the State 
                                educational 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) Use of recovered funds.--
                  ``(A) In general.--Subject to subparagraph (B), funds 
                recovered under paragraph (4) shall--
                          ``(i) be returned to the Secretary under 
                        procedures established by 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 (including administrative 
                                requirements established by the Child 
                                Nutrition Improvement and Integrity Act 
                                and amendments made by that Act) to 
                                State educational agencies and, to the 
                                extent determined by the Secretary, to 
                                school food authorities and local 
                                educational agencies;
                                  ``(II) to assist State educational 
                                agencies in reviewing the 
                                administrative practices of school food 
                                authorities, to the extent determined 
                                by the Secretary; and
                                  ``(III) to carry out section 21(e); 
                                or
                          ``(ii) be credited to the child nutrition 
                        programs appropriation account.
                  ``(B) State share.--Subject to subparagraph (C), a 
                State educational agency may retain not more than 25 
                percent of an amount recovered under paragraph (4), to 
                carry out school meals program integrity initiatives to 
                assist school food authorities and local educational 
                agencies 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 
                shall--
                          ``(i) submit to the Secretary a plan 
                        describing how the State educational agency 
                        will use the funds to improve school meals 
                        program integrity, including measures to give 
                        priority to school food authorities and local 
                        educational agencies from which funds were 
                        retained under paragraph (4); and
                          ``(ii) obtain the approval of the Secretary 
                        for the plan.''.
  (c) Training and Technical Assistance.--Section 7 of the Child 
Nutrition Act of 1966 (42 U.S.C. 1776) is amended--
          (1) in subsection (e)--
                  (A) by striking ``(e) Each'' and inserting the 
                following:
  ``(e) Plans for Use of Administrative Expense Funds.--
          ``(1) In general.--Each''; and
                  (B) by striking ``After submitting'' and all that 
                follows through ``change in the plan.'', and inserting 
                the following:
          ``(2) Updates and information management systems.--After 
        submitting the initial plan, a State shall be required to 
        submit to the Secretary for approval only a substantive change 
        in the plan. 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--
                  ``(A) monitoring the nutrient content of meals 
                served;
                  ``(B) training schools and school food authorities 
                how to utilize technology and information management 
                systems for activities such as menu planning, 
                collecting point of sale data, processing applications 
                for free and reduced price meals and verifying 
                eligibility for free and reduced price meals using 
                existing databases to access program participation or 
                income data collected by State or local educational 
                agencies; 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) 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 (as added by section 208 of the Child Nutrition 
        Improvement and Integrity Act).'';
          (2) by redesignating subsection (g) as subsection (i); and
          (3) by inserting after subsection (f) the following:
  ``(g) State Training.--
          ``(1) 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 school food 
        authority administrative personnel and other appropriate 
        personnel, with emphasis on the requirements established by the 
        Child Nutrition Improvement and Integrity Act and the 
        amendments made by that Act.
          ``(2) Federal role.--The Secretary shall--
                  ``(A) provide training and technical assistance 
                (including training materials and information developed 
                under subsections (e) and (f) of section 21 of the 
                Richard B. Russell National School Lunch Act (42 U.S.C. 
                1769b-1)) to a State to assist the State in carrying 
                out paragraph (1); or
                  ``(B) at the option of the Secretary, directly 
                provide training and technical assistance described in 
                paragraph (1).
          ``(3) Third-party contracting.--In carrying out this 
        subsection, the Secretary or a State may contract with a third 
        party under procedures established by the Secretary.
          ``(4) Required participation.--Under procedures established 
        by the Secretary that consider the various needs and 
        circumstances of school food authorities, each school food 
        authority or local educational agency shall ensure that an 
        individual conducting or overseeing administrative procedures 
        described in paragraph (1) receives training at least annually, 
        unless determined otherwise by the Secretary.
  ``(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 school food 
                authorities and local educational agencies under 
                section 22(b)(3) of the Richard B. Russell National 
                School Lunch Act (42 U.S.C. 1769c(b)(3)).
                  ``(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 in 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 Improvement and Integrity Act 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.''.

TITLE III--PROMOTING NUTRITION QUALITY AND PREVENTING CHILDHOOD OBESITY

SEC. 301. LOCAL SCHOOL WELLNESS POLICY.

  Not later than the first day of the school year beginning after June 
30, 2006, local educational agencies participating in the programs 
authorized by 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.) shall establish a local school wellness policy for such 
local agency that at a minimum--
          (1) includes goals for nutrition education, physical activity 
        and other school-based activities designed to promote student 
        wellness that the local educational agency determines are 
        appropriate;
          (2) includes nutrition guidelines selected by the local 
        educational agencies for all foods available on school campus 
        during the school day with the objective of promoting student 
        health and reducing childhood obesity;
          (3) provides an assurance that guidelines for reimbursable 
        school meals shall not be less restrictive than regulations and 
        guidance issued by the Secretary pursuant to section 10(a) and 
        (b) of the Child Nutrition Act (42 U.S.C. 1779(a) and (b)) and 
        section 9(f)(1) and section 17(a) of the Richard B. Russell 
        National School Lunch Act (42 U.S.C. 1758(f)(1) and 1766(a)), 
        as those regulations and guidance apply to schools;
          (4) establishes a plan for ensuring implementation of the 
        local wellness policy, including designation of a person or 
        persons within the local educational agency, or at each school 
        as appropriate, charged with operational responsibility for 
        ensuring that such school meets the local wellness policy; and
          (5) involves parents, students, representatives of the school 
        food authority, the school board, school administrators, and 
        public in the development of the school wellness policy.

SEC. 302. SUPPORTING NUTRITION EDUCATION, IMPROVING MEAL QUALITY, AND 
                    ACCESS TO LOCAL FOODS.

  Section 19 of the Child Nutrition Act of 1966 (42 U.S.C. 1788) is 
amended--
          (1) by amending subsection (b) to read as follows:
  ``(b) Purpose.--It is the purpose of this section to support 
effective nutrition education through assistance to State agencies, 
schools, and nonprofit entities for Team Nutrition and other nutrition 
education projects that improve student understanding of healthful 
eating patterns, including an awareness and understanding of the 
Dietary Guidelines for Americans, the quality of school meals and 
access to local foods in schools and institutions operating programs 
under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 
et seq.) and section 4 of this Act.'';
          (2) by striking subsections (c) through (h) and inserting 
        after subsection (b) the following:
  ``(c) Team Nutrition Network.--
          ``(1) Purpose.--The purpose of the Team Nutrition Network is 
        to--
                  ``(A) promote the nutritional health of the Nation's 
                school children through nutrition education, physical 
                activity and other activities that support healthy 
                lifestyles for children based on the Dietary Guidelines 
                for Americans, issued jointly by the Secretary of 
                Agriculture and the Secretary of Health and Human 
                Services, and the physical fitness guidelines issued by 
                the Secretary of Health and Human Services;
                  ``(B) provide assistance to States for the 
                development of State-wide, comprehensive, and 
                integrated nutrition education and physical fitness 
                programs; and
                  ``(C) provide training and technical assistance to 
                States, school and community nutrition programs, and 
                child nutrition food service professionals.
          ``(2) State coordinator.--The State Team Nutrition Network 
        Coordinator shall--
                  ``(A) administer and coordinate a comprehensive 
                integrated statewide nutrition education program; and
                  ``(B) coordinate efforts with the Food and Nutrition 
                Service and State agencies responsible for children's 
                health programs.
          ``(3) Team nutrition network.--Subject to the availability or 
        appropriations to carry out this subsection, the Secretary, in 
        consultation with the Secretary of Education, shall, on a 
        competitive basis, provide assistance to States for the purpose 
        of creating model nutrition education and physical activity 
        programs, consistent with current dietary and fitness 
        guidelines, for students in elementary schools and secondary 
        schools.
          ``(4) Requirements for state participation.--To be eligible 
        to receive assistance under this subsection, a State 
        Coordinator shall submit an application to the Secretary at 
        such time, an in such manner, and containing such information 
        as the Secretary may require, including--
                  ``(A) a description of how the proposed nutrition and 
                physical activity program will promote healthy eating 
                and physical activity and fitness and address the 
                health and social consequences of children who are at 
                risk of becoming overweight or obese;
                  ``(B) information describing how nutrition activities 
                are to be coordinated at the State level with other 
                health activities conducted by education, health and 
                agriculture agencies;
                  ``(C) information describing how initiatives to 
                promote physical activity are to be coordinated at the 
                State level with other initiatives to promote physical 
                activity conducted by education, health, and parks and 
                recreation agencies;
                  ``(D) a description of the consultative process that 
                the State Coordinator 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, and 
                organizations representing the agriculture, food and 
                beverage, fitness, and sports and recreation 
                industries;
                  ``(E) a description of how the State Coordinator will 
                evaluate the effectiveness of its program; and
                  ``(F) a description of how any and all communications 
                to parents and guardians of all 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 extent 
                practicable, in a language that parents can understand.
          ``(5) Duration.--Subject to the availability of funds made 
        available to carry out this subsection, a State Coordinator 
        shall conduct the project for a period of 3 successive school 
        years.
          ``(6) Authorized activities.--An eligible applicant that 
        receives assistance under this subsection may use funds to 
        carry out one or more of the following activities--
                  ``(A) collecting, analyzing, and disseminating data 
                regarding the extent to which children and youth in the 
                State are overweight or physically inactive and the 
                programs and services available to meet those needs;
                  ``(B) developing and implementing model elementary 
                and secondary education curricula to create a 
                comprehensive, coordinated nutrition and physical 
                fitness awareness and obesity prevention program;
                  ``(C) developing and implementing pilot programs in 
                schools to increase physical activity and to enhance 
                the nutritional status of students, including through 
                the increased consumption of fruits and vegetables, 
                whole grains, and lowfat dairy products;
                  ``(D) developing and implementing State guidelines in 
                health, which include nutrition education, and physical 
                education and emphasize regular physical activity 
                during school hours;
                  ``(E) collaborating with community based 
                organizations, volunteer 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;
                  ``(F) collaborating with public or private 
                organizations that have as a mission the raising of 
                public awareness of the importance of a balanced diet 
                and an active lifestyle; and
                  ``(G) providing training and technical assistance to 
                teachers and school food service professionals 
                consistent with the purpose of this section.
          ``(7) Limitation.--Materials prepared under this subsection 
        regarding agricultural commodities, food, or beverages must be 
        factual and without bias.
          ``(8) Report.--Within 18 months of completion of the projects 
        and the evaluations, the Secretary shall submit to the 
        Committee on Education and the Workforce of the House of 
        Representatives and the Committee on Health, Education, Labor, 
        and Pensions of the Senate and the Committee on Agriculture, 
        Nutrition and Forestry of the Senate a report describing the 
        results of the evaluation of the demonstration programs and 
        shall make such reports available to the public, including 
        through the Internet.
          ``(9) Independent evaluation.--
                  ``(A) In general.--The Secretary shall enter into an 
                agreement with an independent, non-partisan science-
                based research organization to conduct a comprehensive 
                independent evaluation of the effectiveness of the Team 
                Nutrition initiative and the Team Nutrition Network 
                authorized by this subsection and to identify best 
                practices 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 healthier meal 
                        choices 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; and
                          ``(vii) successfully involving school 
                        administrators, the private sector, public 
                        health agencies, non-profit organizations, and 
                        other community partners.
                  ``(B) Report.--Not later than October 1, 2007, the 
                Secretary shall transmit the findings of the 
                independent evaluation 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.
  ``(d) Local Nutrition and Physical Activity Project.--
          ``(1) In general.--Subject to the availability of 
        appropriations to carry out this subsection, the Secretary, in 
        consultation with the Secretary of Education, shall provide 
        assistance to not more than 100 local educational agencies, at 
        least one per State, for the establishment of pilot projects 
        for purposes of promoting healthy eating habits and increasing 
        physical activity, consistent with the Dietary Guidelines for 
        Americans issued jointly by the Secretary of Agriculture and 
        the Secretary of Health and Human Services, among elementary 
        and secondary education students.
          ``(2) Requirement for participation in pilot project.--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 local educational agency's 
                need for nutrition and physical activity programs;
                  ``(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 funds under this 
                subsection will be coordinated with other programs 
                under this Act, the Richard B. Russell National School 
                Lunch Act, or other Acts, as appropriate, to improve 
                student health and nutrition;
                  ``(D) a statement of the local educational agency's 
                measurable goals for nutrition and physical education 
                programs and promotion;
                  ``(E) a description of how the proposed project will 
                be aligned with the local wellness policy required 
                under the Act;
                  ``(F) a description of the procedures the agency will 
                use for assessing and publicly reporting 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 
                practicable, in a language that parents can understand.
          ``(3) 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.
          ``(4) 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; and
                          ``(ii) increase opportunities for physical 
                        activity through after school programs, 
                        athletics, intramural activities, and recess; 
                        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 nutritious, more appealing menus and 
                        recipes;
                          ``(iv) incorporate nutrition education into 
                        physical education, health education, and after 
                        school programs, including athletics;
                          ``(v) 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) provide nutrient content or nutrition 
                        information on meals served through the school 
                        lunch or school breakfast programs and items 
                        sold a la carte during meal times;
                          ``(vii) encourage the increased consumption 
                        of a variety of healthy foods through new 
                        initiatives such as salad bars and fruit bars; 
                        and
                          ``(viii) provide nutrition education, 
                        including sports nutrition education, for 
                        teachers, coaches, food service staff, athletic 
                        trainers, and school nurses.
          ``(5) Limitation.--Materials prepared under this subsection 
        regarding agricultural commodities, food, or beverages must be 
        factual and without bias.
          ``(6) Report.--Within 18 months of completion of the projects 
        and evaluations, the Secretary shall transmit 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 of the 
        pilot projects and shall make such reports available to the 
        public, including through the Internet.
  ``(e) Nutrition Education Support.--
          ``(1) In general.--In carrying out the purpose of this 
        section to support nutrition education, the Secretary may 
        provide for technical assistance and grants to improve the 
        quality of school meals and access to local foods in schools 
        and institutions.
          ``(2) School meals initiative.--The Secretary may provide 
        assistance to enable State educational agencies to--
                  ``(A) implement the recommendations of the 
                Secretary's School Meals Initiative for Healthy 
                Children;
                  ``(B) increase the consumption of fruits, vegetables, 
                low-fat dairy products, and whole grains;
                  ``(C) reduce saturated fat and sodium in school 
                meals;
                  ``(D) improve school nutritional environments; and
                  ``(E) conduct other activities that aid schools in 
                carrying out the Secretary's School Meals Initiative 
                for Healthy Children.
          ``(3) Access to local foods.--The Secretary may provide 
        assistance, through competitive matching grants and technical 
        assistance, to schools and nonprofit entities for projects 
        that--
                  ``(A) improve access to local foods in schools and 
                institutions participating in programs under the 
                Richard B. Russell National School Lunch Act (42 U.S.C. 
                1751 et seq.) and Section 4 of this Act through farm-
                to-cafeteria activities that may include the 
                acquisition of food and appropriate equipment and the 
                provision of training and education;
                  ``(B) are, at a minimum, designed to procure local 
                foods from small- and medium-sized farms for school 
                meals;
                  ``(C) support nutrition education activities or 
                curriculum planning that incorporates the participation 
                of schoolchildren in farm and agriculture education 
                activities;
                  ``(D) develop a sustained commitment to farm-to-
                cafeteria projects in the community by linking schools, 
                agricultural producers, parents, and other community 
                stakeholders;
                  ``(E) require $100,000 or less in Federal 
                contributions;
                  ``(F) require a Federal share of costs not to exceed 
                75 percent;
                  ``(G) provide matching support in the form of cash or 
                in kind contributions (including facilities, equipment, 
                or services provided by State and local governments and 
                private sources); and
                  ``(H) cooperate in an evaluation to be carried out by 
                the Secretary.''; and
          (3) by redesignating subsection (i) as subsection (f), and 
        amending paragraph (1) of such subsection to read as follows:
          ``(1) In general.--There is authorized to be appropriated 
        such sums as may be necessary for carrying out this section for 
        fiscal years 2004 through 2008.''.

SEC. 303. FRUITS AND VEGETABLE COMMODITIES.

  Section 6(c)(1)(D) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1755(c)(1)(D)) is amended by inserting ``, and fruits 
and vegetables'' before the period.

SEC. 304. FLUID MILK.

  Section 9(a)(2) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1758(a)(2)) is amended to read as follows:
          ``(2) Fluid milk.--
                  ``(A) In general.--Lunches served by schools 
                participating in the school lunch program under this 
                Act--
                          ``(i) shall offer students fluid milk in a 
                        variety of fat contents;
                          ``(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, upon 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.--Schools 
                        may substitute for the fluid milk provided 
                        under subparagraph (A), a non-dairy beverage 
                        that is nutritionally equivalent to fluid milk 
                        and meets nutritional standards as 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.--Such substitutions may be 
                        made if the school notifies the State agency 
                        that it is implementing a variation allowed 
                        under this subparagraph, and if such 
                        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, provided that the school 
                        shall not be required to provide beverages 
                        other than those it has identified as 
                        acceptable substitutes.
                          ``(iii) Excess expenses borne by the school 
                        district.--Expenses incurred in providing 
                        substitutions pursuant to this subparagraph 
                        that are in excess of those covered by 
                        reimbursements under this Act shall be paid by 
                        the school district.
                  ``(C) Restrictions on sale of milk prohibited.--A 
                school or institution 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.''.

SEC. 305. WAIVER OF REQUIREMENTS FOR WEIGHTED AVERAGES FOR NUTRIENT 
                    ANALYSIS.

  Section 9(f)(5) of the Richard B. Russell National School Lunch Act 
(42 U.S.C 1758(f)(5)) is amended to read as follows:
          ``(5) Waiver of requirements for weighted averages for 
        nutrient analysis.--State educational agencies may grant 
        waivers to school food authorities to the requirement for 
        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) if--
                  ``(A) the school food authority has an equivalent 
                system for conducting a nutrient analysis, subject to 
                State agency approval; and
                  ``(B) the equivalent system adequately documents the 
                extent to which the school food authority is meeting 
                the Dietary Guidelines for Americans and other 
                nutrition standards.
        In addition, the Secretary may waive, on a case by case basis, 
        the requirement for a State agency to use weighted averages 
        when conducting a nutrient analysis as part of a review (of 
        compliance with the Dietary Guidelines and other nutrition 
        standards) of a school food authority not using nutrient 
        standard menu planning, when, in the Secretary's determination, 
        an alternative analysis would yield results that would 
        adequately measure a school food authority's compliance with 
        current nutrition standards for school meals.''.

SEC. 306. WHOLE GRAINS.

  Not later than 18 months after the date of enactment of this Act, the 
Secretary shall promulgate rules, based on Federal nutrition 
guidelines, to increase the presence of whole grains in foods offered 
in school nutrition programs 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.).

      TITLE IV--IMPROVING THE WOMEN, INFANTS, AND CHILDREN PROGRAM

SEC. 401. DEFINITION OF NUTRITION EDUCATION.

  Section 17(b)(7) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(b)(7)) is amended--
          (1) by inserting ``and physical activity'' after ``dietary 
        habits''; and
          (2) by striking ``nutrition and health'' and inserting 
        ``nutrition, health, and child development''.

SEC. 402. DEFINITION OF SUPPLEMENTAL FOODS.

  Section 17(b)(14) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(b)(14)) is amended by inserting after ``children'' the following: 
``and foods that promote health as indicated 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)''.

SEC. 403. IMPROVING CERTIFICATION.

  (a) Certification of Women Who Are Breastfeeding.--Section 
17(d)(3)(A) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(d)(3)(A)) is amended by adding at the end the following: ``A State 
may certify breast-feeding women for up to 1 year, or until women stop 
breast-feeding, whichever is earlier.''
  (b) Physical Presence Requirement.--Section 17(d)(3)(C)(ii) of the 
Child Nutrition Act of 1966 (42 U.S.C. 1786(d)(3)(C)(ii)) is amended--
          (1) in subclause (I)(bb), by striking ``from a provider other 
        than the local agency; or'' and inserting a semicolon;
          (2) in subclause (II)(cc), by striking the period at the end 
        and inserting ``; and''; and
          (3) by inserting after subclause (II) the following:
                                  ``(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.''.
  (c) Processing Applications Under Special Circumstances.--Section 
17(f)(1)(C) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(f)(1)(C)) is amended by--
          (1) redesignating clauses (ix) and (x) as clauses (x) and 
        (xi), respectively; and
          (2) inserting after clause (viii) the following:
                          ``(ix) procedures whereby a State agency may 
                        accept and process vendor applications outside 
                        of the established time-frames, such as in 
                        situations in which a previously authorized 
                        vendor changes ownership under circumstances 
                        that do not permit timely notification to the 
                        State agency of such change in ownership;''.
  (d) Rescheduling Policies.--Section 17(f)(19) of the Child Nutrition 
Act of 1966 (42 U.S.C. 1786(f)(19)) is amended--
          (1) in subparagraph (A), by striking ``; and'' and inserting 
        a semicolon;
          (2) in subparagraph (B), by striking the period and inserting 
        ``; and''; and
          (3) by adding at the end the following:
          ``(C) require local agencies to permit an applicant or 
        participant to reschedule an appointment to apply or be 
        recertified for the program.''.

SEC. 404. REVIEWS OF AVAILABLE SUPPLEMENTAL FOODS.

  (a) Scientific Review.--Section 17(f)(11) of the Child Nutrition Act 
of 1966 (42 U.S.C. 1786(f)(11)) is amended to read as follows:
  ``(11)(A) The Secretary shall prescribe by regulations the 
supplemental foods to be made available in the program under this 
section. To the degree possible the Secretary shall assure that the 
fat, sugar, and salt content of the prescribed foods is appropriate.
  ``(B) Beginning in 2013 and every 10 years thereafter, or more 
frequently if determined by the Secretary to be necessary to reflect 
current scientific knowledge, the Secretary shall conduct a scientific 
review of the supplemental foods available in the program and 
recommend, as necessary, changes to reflect nutrition science, current 
public health concerns, and cultural eating patterns.''.
  (b) Rulemaking.--The Secretary shall promulgate a rule updating the 
prescribed supplemental foods available through the program authorized 
under section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786) 
within 6 months of receiving the review of the food package for such 
program undertaken by the National Academy of Sciences, Institute of 
Medicine in September 2003.

SEC. 405. NOTIFICATION OF VIOLATIONS AND INFANT FORMULA BENEFITS.

  Section 17(f) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(f)) 
is amended by adding at the end the following:
          ``(25) 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 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 
        its investigation.
          ``(26) Infant formula benefits.--
                  ``(A) In general.--The State agency may round up to 
                the next whole can of infant formula to ensure that all 
                infants receive the full-authorized nutritional benefit 
                specified by regulation.
                  ``(B) Limitation.--Subparagraph (A) applies only to 
                infant formula contracts awarded under bid 
                solicitations made on or after October 1, 2004.''.

SEC. 406. HEALTHY PEOPLE 2010 INITIATIVE.

  Section 17(h)(4) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(4)) is amended--
          (1) in subparagraph (D), by striking ``; and'' and inserting 
        a semicolon;
          (2) in subparagraph (E), by striking the period at the end 
        and inserting ``; and''; and
          (3) by inserting after subparagraph (E) the following:
                  ``(F) partner with communities, State and local 
                agencies, employers, health care professionals, and 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 2010 initiative.''.

SEC. 407. COMPETITIVE BIDDING.

  Section 17(h)(8)(A) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(8)(A)) is amended by adding at the end the following:
                          ``(iv) Rebate invoices.--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.
                          ``(v) Cent-for-cent adjustments.--A bid 
                        solicitation for infant formula under the 
                        program made on or after October 1, 2004 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; or
                                  ``(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.''.

SEC. 408. FRUIT AND VEGETABLE PROJECTS.

  Section 17(h)(10)(B)(ii) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(h)(10)(B)(ii)) is amended by inserting after ``under this 
section'' the following: ``, which may include demonstration projects 
in up to 10 local sites, determined to be geographically and culturally 
representative of local States and Indian agencies, to evaluate the 
inclusion of fresh, frozen, or canned fruits and vegetables (to be made 
available through private funds) as an addition to the supplemental 
food provided under this section''.

SEC. 409. PRICE LEVELS OF RETAIL STORES.

  Section 17(h)(11) of the Child Nutrition Act of 1966 is amended by 
adding at the end the following:
                  ``(C) Additional requirements.--
                          ``(i) The State agency shall evaluate a 
                        vendor applicant based on its shelf prices or 
                        on the prices it bids for supplemental foods, 
                        which may not exceed its shelf prices.
                          ``(ii) The State agency shall establish price 
                        limitations on the amount that it will pay 
                        vendors for supplemental foods. The State 
                        agency shall ensure that price limitations do 
                        not result in inadequate participant access by 
                        geographic area.
                          ``(iii) In establishing competitive price and 
                        price limitation requirements, the State agency 
                        may exclude pharmacy vendors that supply only 
                        exempt infant formula or medical foods that are 
                        eligible under the program.
                          ``(iv) The State agency shall establish 
                        competitive price requirements and price 
                        limitations for vendor peer groups, as 
                        necessary to ensure that prices paid to vendors 
                        are competitive. Vendor peer group competitive 
                        price requirements and price limitations may 
                        reflect reasonable estimates of varying costs 
                        of acquisition of supplemental foods.
                  ``(D) Incentive items.--The State agency shall not 
                authorize a retail food store that provides incentive 
                items or other free merchandise to program participants 
                if funds available under this program were used to 
                purchase such items or merchandise.
                  ``(E) Rules of construction.--Nothing in this section 
                may be construed to authorize violation of the Sherman 
                Antitrust Act (15 U.S.C. 1 et seq.) or the Robinson-
                Patman Act (15 U.S.C. 13 et seq.).''.

SEC. 410. MANAGEMENT INFORMATION SYSTEMS.

  Section 17(h)(12) of the Child Nutrition Act of 1996 (42 U.S.C. 
1786(h)(12)) is amended--
          (1) by amending subparagraph (B) to read as follows:
                  ``(B) Electronic benefit transfer systems.--
                          ``(i) In general.--All States that receive 
                        Federal funds for design or implementation of 
                        electronic benefit transfer (EBT) systems for 
                        the program under this section shall use 
                        technical specifications or standards, as 
                        applicable, as determined by the Secretary, 
                        except as provided in clause (ii).
                          ``(ii) Existing systems.--EBT systems for the 
                        program under this section that are in 
                        development or are issuing benefits as of the 
                        date of enactment shall be required to submit 
                        within 6 months after the date of enactment of 
                        this subparagraph a plan for compliance.
                          ``(iii) Waiver.--The Secretary may waive 
                        compliance with this subparagraph for State EBT 
                        systems for the program under this section that 
                        are issuing benefits as of the date of 
                        enactment of this subparagraph until such time 
                        that compliance is feasible.''; and
          (2) by amended subparagraph (C) to read as follows:
          ``(C) Universal product codes database.--The Secretary shall 
        implement a national Universal Product Code Database for use by 
        all State agencies in carrying out the program and shall make 
        available from appropriated funds such sums as may be required 
        for hosting, hardware, and software configuration, and 
        support.''.

SEC. 411. INFANT FORMULA FRAUD PREVENTION.

  Section 17(h) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(h)) 
is further amended by adding at the end the following:
  ``(13) Approved providers of infant formula.--
          ``(A) In general.--The State agency shall maintain a list of 
        infant formula manufacturers, wholesalers, distributors, and 
        retailers approved to provide infant formula to vendors.
          ``(B) List.--The list required under subparagraph (A) shall 
        include food manufacturers, wholesalers, distributors, and 
        retailers licensed in the State in accordance with State law 
        and regulations to distribute infant formula and food 
        manufacturers registered with the U.S. Food and Drug 
        Administration that provide infant formula.
          ``(C) Purchase requirement.--Vendors authorized to 
        participate in the program under this section shall purchase 
        infant formula from the list required under subparagraph 
        (A).''.

SEC. 412. STATE ALLIANCES.

  Section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786) is 
further amended--
          (1) in subsection (b) by adding at the end the following:
          ``(22) `State alliance' means 2 or more State agencies that 
        join together for the purpose of procuring infant formula by 
        soliciting competitive bids.''; and
          (2) in subsection (h)(8)(A) by adding at the end the 
        following:
                          ``(vi) Size of state alliances.--No State 
                        alliance may form among States whose infant 
                        participation exceeds 200,000 based on program 
                        participation as of October 2003, except that--
                                  ``(I) an alliance among States with a 
                                combined 200,000 infant participants as 
                                of October 2003 may continue, and may 
                                expand to include more than 200,000 
                                infants, but may not expand to include 
                                any additional State agencies that were 
                                not included in the alliance as of 
                                October 1, 2003, other than as provided 
                                in subclause (II); and
                                  ``(II) any State agency serving fewer 
                                than 5,000 infant participants as of 
                                October 2003, or any Indian Tribal 
                                Organization, may request to join any 
                                State alliance.''.

SEC. 413. LIMITS ON EXPENDITURES.

  Section 17(i)(3)(A)(ii)(I) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(i)(3)(A)(ii)(I)) is amended by striking ``1 percent'' and 
inserting ``3 percent''.

SEC. 414. MIGRANT AND COMMUNITY HEALTH CENTERS INITIATIVE.

  Section 17(j) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(j)) 
is amended by striking paragraph (4) and redesignating paragraph (5) as 
paragraph (4).

SEC. 415. DEMONSTRATION PROJECTS.

  (a) Child Nutrition Act of 1966.--Section 17 of the Child Nutrition 
Act of 1966 (42 U.S.C. 1786) is amended by striking subsection (r).
  (b) National School Lunch Act.--Section 12 of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1760) is amended by striking 
subsection (p).

SEC. 416. AUTHORIZATION OF APPROPRIATIONS.

  (a) Reauthorization of Program.--Section 17(g) of the Child Nutrition 
Act of 1966 (42 U.S.C. 1786(g)) is amended by striking ``(g)(1) There 
are authorized'' and all that follows through ``through 2003.'' in 
paragraph (1) and inserting the following:
  ``(g) Authorization of Appropriations.--
          ``(1) In general.--There is authorized to be appropriated to 
        carry out this section such sums as are necessary for each of 
        fiscal years 2004 through 2008.''.
  (b) Nutrition Services and Administration Funds.--Section 17(h) of 
the Child Nutrition Act of 1966 (42 U.S.C. 1786(h)) is amended--
          (1) in paragraph (2)(A), by striking ``1995 through 2003'' 
        and inserting ``2004 through 2008''; and
          (2) in paragraph (10)(A), by striking ``1995 through 2003'' 
        and inserting ``2004 through 2008''.
  (c) Farmers' Market Nutrition Program.--Section 17(m)(9)(A)(i) of the 
Child Nutrition Act of 1966 (42 U.S.C. 1786(m)(9)) is amended to read 
as follows:
                          ``(i) Authorization of appropriations.--There 
                        is authorized to be appropriated to carry out 
                        this subsection such sums as are necessary for 
                        each of fiscal years 2004 through 2008.''.

TITLE V--REAUTHORIZATION, MISCELLANEOUS PROVISIONS, AND EFFECTIVE DATE.

SEC. 501. TRAINING, TECHNICAL, AND OTHER ASSISTANCE.

  Section 21(a)(1) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1769b-1(a)(1)) is amended to read as follows:
          ``(1) subject to the availability of and from amounts 
        appropriated pursuant to subsection (e)(1), shall provide--
                  ``(A) training and technical assistance to improve 
                the skills of individuals employed in food service 
                programs carried out under this Act, section 4 of the 
                Child Nutrition Act of 1966 (42 U.S.C. 1773), and, as 
                appropriate, other federally assisted feeding programs;
                  ``(B) training and technical assistance to States, 
                State agencies, schools, and school food authorities in 
                the procurement of goods and services for programs 
                under this Act and the Child Nutrition Act of 1966 (42 
                U.S.C. 1771 et seq.), including training and technical 
                assistance to ensure compliance with section 12(n) of 
                this Act (42 U.S.C. 1760(n));
                  ``(C) 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 addresses the cost 
                savings and improvements in program integrity and 
                operations that would result from the use of new or 
                upgraded technology in--
                          ``(i) methods to ensure that there shall not 
                        be any overt identification of any such child 
                        by special tokens or tickets, announced or 
                        published list of names, or by any other means;
                          ``(ii) processing and verifying applications 
                        for free and reduced price school meals;
                          ``(iii) integrating menu planning, 
                        production, and serving data to monitor 
                        compliance with section 9(f)(1); and
                          ``(iv) establishing compatibility with 
                        statewide reporting systems;
                  ``(D) assistance, on a competitive basis, to State 
                agencies with low proportions of schools or students 
                that participate in the school breakfast program under 
                section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 
                1773) and that 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''.

SEC. 502. NOTICE OF IRRADIATED FOOD.

  Section 14 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1762a) is amended by adding at the end the following:
  ``(h) Notice of Irradiated Food.--The Secretary shall develop policy 
and establish procedures for the purchase and distribution of 
irradiated food products in Federal school meals programs. The policies 
and procedures shall ensure at a minimum that--
          ``(1) irradiated food products are made available only at the 
        request of States and school food authorities;
          ``(2) reimbursements to schools for irradiated food products 
        are equal to reimbursements to schools for non-irradiated 
        products;
          ``(3) States and school food service authorities are provided 
        factual information on the science and evidence regarding 
        irradiation technology, including notice that irradiation is 
        not a substitute for safe food handling techniques and any such 
        other information necessary to promote food safety in school 
        meal programs;
          ``(4) States and school food service authorities are provided 
        model procedures for providing factual information on the 
        science and evidence regarding irradiation technology and any 
        such other information necessary to promote food safety in 
        school meals to school food service authorities, parents, and 
        students regarding irradiation technology;
          ``(5) irradiated food products distributed to the Federal 
        school meals program are labeled with a symbol or other printed 
        notice indicating that the product was treated with irradiation 
        and is prominently displayed in a clear and understandable 
        format on the container;
          ``(6) irradiated products are not commingled with non-
        irradiated products in containers; and
          ``(7) encourages schools that offer irradiated foods to offer 
        alternatives to irradiated food products as part of the meal 
        plan used by schools.''.

SEC. 503. SENSE OF CONGRESS.

  Section 12 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1760) is further amended by adding at the end the following:
  ``(p) Sense of Congress.--It is the sense of Congress that Federal 
resources provided under this Act and the Child Nutrition Act of 1966 
dedicated to child nutrition should support the most effective programs 
within the Federal agency that is most capable of assisting children in 
nutritional need. Congress encourages the elimination of initiatives 
that are duplicative of other Federal efforts, particularly those that 
are duplicative of programs conducted under this Act and the Child 
Nutrition Act of 1966.''.

SEC. 504. REAUTHORIZATION OF PROGRAMS.

  (a) State Administrative Expenses.--Section 7(i) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1776(g)) (as amended by this Act) is 
amended by striking ``2003'' and inserting ``2008''.
  (b) Commodity Distribution Program.--
          (1) Section 14(a) of the Richard B. Russell National School 
        Lunch Act (42 U.S.C. 1762a(a)) is amended by striking ``March 
        31, 2004'' and inserting ``September 30, 2008''.
          (2) Section 15(e) of the Commodity Distribution Reform Act 
        and WIC Amendments of 1987 (7 U.S.C. 612c note; Public Law 100-
        237) is amended by striking ``April 1, 2004'' and inserting 
        ``October 1, 2008''.
  (c) Purchases of Locally Produced Foods.--Section 9(j)(2)(A) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 758(j)(2)(A)) 
is amended by striking ``2007'' and inserting ``2008''.
  (d) Training, Technical Assistance, and Food Service Management 
Institute.--Section 21(g)(1) of the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1769b-1(e)(1)) (as amended by this Act) is further 
amended by striking ``for each of fiscal years 1992 through 2003'' and 
inserting ``for fiscal year 2004, and such sums as may be necessary for 
fiscal years 2005 through 2008''.
  (e) Compliance and Accountability.--Section 22(d) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1769c(d)) is amended by 
striking ``2003'' and inserting ``2008''.

SEC. 505. EFFECTIVE DATES.

  The amendments made by sections 101, 104, 105(a), 202, 410, 416, and 
504 shall take effect on the date of enactment of this Act. The 
amendments made by sections 201 and 208(c) shall take effect on July 1, 
2005. All other amendments made by this Act shall take effect October 
1, 2005.

                                Purpose

    H.R. 3873, the Child Nutrition Improvement and Integrity 
Act of 2004, amends and improves the Child Nutrition Act of 
1966 and the Richard B. Russell National School Lunch Act to 
provide children with access to food and nutrition assistance, 
to simplify program operations, to improve children's 
nutritional health, to enhance the integrity of child nutrition 
programs, and for other purposes.

                            Committee Action


                         SUBCOMMITTEE HEARINGS

    On July 16, 2003, the Subcommittee on Education Reform held 
a hearing on Food for Thought: How to Improve Child Nutrition 
Programs. This hearing was the first of the child nutrition 
hearings, and highlighted the key issues of the reauthorization 
of the Child Nutrition Act and the Richard B. Russell School 
Lunch Act. The testifying witnesses were divided into two 
panels.
    The first panel included Vice Admiral Dr. Richard H. 
Carmona, United States Surgeon General, U.S. Department of 
Health and Human Services, Washington, DC, and the Honorable 
Eric M. Bost, Undersecretary of the Food, Nutrition, and 
Consumer Services, U.S. Department of Agriculture, Washington, 
DC.
    The second panel included Dr. Tom Baranowski, Professor of 
Pediatrics at Baylor College of Medicine, Houston, Texas, Betsy 
Clarke, President of the National WIC Association and Director 
of Women, Infants, and Children at the Minnesota Department of 
Health, St. Paul, Minnesota; Gaye Lynn MacDonald, President of 
the American School Food Service Association and Manager of 
Food Services at the Bellingham Public Schools, Bellingham, 
Washington; and Dr. Deborah Frank, Professor of Pediatrics, 
Boston University Medical School, Boston, Massachusetts.
    On February 12, 2004, the Subcommittee on Education Reform 
held a second hearing, entitled Encouraging Healthy Choices for 
Healthy Children. This hearing focused on the role of schools 
in preventing childhood obesity and promoting healthy 
lifestyles. Dr. Kenneth H. Cooper, President of the Cooper 
Institute, Dallas, Texas; Mr. Tim McCord, Health and Physical 
Education Department Chair, Titusville Area School District, 
Titusville, Pennsylvania; and Dr. Judith C. Young, Vice 
President of Programs for the American Alliance for Health, 
Physical Education, Recreation, and Dance, Reston, Virginia, 
all testified for the Subcommittee.

                        FULL COMMITTEE HEARINGS

    On October 7, 2003, the Full Committee held a hearing 
entitled Improving the Quality and Efficiency of Commodity 
Distribution to Federal Child Nutrition Programs. The 
testifying witnesses were divided into two panels. The first 
panel included the Honorable Eric M. Bost, Undersecretary of 
Food, Nutrition, and Consumer Services, U.S. Department of 
Agriculture, Washington, DC, and Mr. A.J. Yates, Administrator 
of the Agriculture Marketing Service, U.S. Department of 
Agriculture, Washington, DC.
    The second panel included Mr. Thomas E. Stenzel, President 
and CEO, United Fresh Fruit and Vegetable Association, 
Washington, DC; Dr. Joanne L. Slavin, Professor of Nutrition, 
University of Minnesota, St. Paul, Minnesota; Mr. Robinson W. 
Joslin, President of the Ohio Soybean Association, Sidney, 
Ohio; Dr. Robert P. Heaney, Professor of Medicine, Creighton 
University, Omaha, Nebraska; and Ms. Paula Cockwell, Manager of 
Nutrition Services, Adams County School District #14, and Food 
Service Director, Mapleton Public School District, Denver, 
Colorado.

                           LEGISLATIVE ACTION

    On Tuesday, March 2, 2004, Representative Michael N. 
Castle, along with Representatives Boehner, McKeon, Upton, 
Ehlers, Keller, Wilson (SC), Porter, Carter, Case, Pearce, 
Simmons, Watson, Peterson (MN), and Kilpatrick, introduced H.R. 
3873, the Child Nutrition Improvement and Integrity Act, a bill 
to reauthorize the Child Nutrition Act of 1966 and the Richard 
B. Russell National School Lunch Act through 2008.
    On March 4, 2004 the Subcommittee on Education Reform 
considered H.R. 3873 in legislative session and reported it 
favorably, by voice vote, to the Committee on Education and the 
Workforce. The Subcommittee adopted the following amendments:
    An amendment in the nature of a substitute was offered by 
Mr. Castle and adopted by voice vote. The substitute amendment 
contained technical and clarifying changes. As well, it would:
           Reauthorize the child nutrition programs 
        through 2008, and not 2009;
           Make a technical correction in the fruit and 
        vegetable pilot program;
           Specify that the Secretary shall promulgate 
        a rule, instead of issuing guidance, to increase the 
        presence of whole grains in child nutrition programs;
           Make nutrition education provided through 
        Team Nutrition consistent with dietary guidelines;
           Ensure WIC infant formula contracting 
        changes occur prospectively;
           Ensure materials regarding school nutrition 
        programs distributed to families are, to the extent 
        practicable, in a language parents can understand;
           Clarify the application verification 
        language; and
           Extend the Lugar pilot program operating in 
        14 States to private, non-profit sponsors of the Summer 
        Food Service Program.
    On March 10, 2004 the Committee on Education and the 
Workforce considered H.R. 3873 in legislative session and 
reported the bill favorably, as amended, to the House of 
Representatives. The rollcall vote was 42-0. The Committee 
adopted the following amendments:
    Representative Castle offered an amendment in the nature of 
a substitute, adopted by voice vote. The substitute amendment 
contained technical and clarifying changes as well as the 
following:
           An independent evaluation of USDA's Team 
        Nutrition program to support nutrition education in 
        schools;
           Language authorizing the use of automatic 
        certification for migrant children to facilitate access 
        to free meals in school;
           A clarification that schools may sell 100 
        percent fluid milk to students throughout the school 
        day without restriction;
           A removal of the Fruit and Vegetable Pilot 
        Program pending resolution of funding issues;
           A requirement that States establish policies 
        under which they may issue interim licenses for WIC 
        vendors; and
           Language encouraging breastfeeding promotion 
        activities for WIC participants that support the goals 
        of Healthy People 2010.
    Chairman Boehner offered six amendments en bloc, adopted by 
voice vote, which included the following provisions:
           An expansion of the Lugar pilot program to 
        three additional states;
           An authorization of a one-state 
        demonstration project that lowers area eligibility for 
        the Summer Food Service Program in rural areas;
           An increase in reimbursement rates in 
        extreme poverty areas participating in the School 
        Breakfast Program;
           Language authorizing non-profit 
        organizations in one state to provide meals year-round 
        under simplified administrative procedures;
           Clarification that states must have policies 
        to contain costs of WIC supplemental foods and ensure 
        competitive pricing; and
           Language allowing schools to provide school 
        meals year-round instead of operating both a school 
        lunch program and summer food program, in exchange for 
        agreeing to a lower reimbursement rate for summer 
        meals.

                                Summary


Purpose

    The Child Nutrition Improvement and Integrity Act of 2004 
reauthorizes the federal child nutrition programs operating 
under the Child Nutrition Act of 1966 and the Richard B. 
Russell National School Lunch Act. The legislation will ensure 
access to program benefits for eligible children, improve the 
quality of meals served by federal child nutrition programs, 
and enhance program integrity through a series of measures to 
ensure that program benefits are accurately targeted to 
eligible individuals. This legislation also will extend through 
2008 five program rules critical for children's access to safe 
and healthy food, which are due to expire on March 31, 2004.

          TITLE I: ENSURING ACCESS TO CHILD NUTRITION PROGRAMS

    H.R. 3873 proposes a number of program improvements to 
improve access for eligible children and enhance operational 
efficiency. Title I of H.R. 3873 ensures that children living 
in privatized military housing whose parents serve in the Armed 
Services may continue to participate in federal child nutrition 
programs provided that they meet eligibility criteria. Section 
102 authorizes automatic National School Lunch Program (NSLP) 
eligibility for homeless and runaway youth defined under the 
McKinney-Vento Homeless Assistance Act, and migratory children 
up to age eighteen.
    H.R. 3873 also reauthorizes the Summer Food Service Program 
(SFSP) and extends the Lugar pilot program, including private, 
non-profit sponsors, in the fourteen states currently operating 
under the Lugar pilot and adds three additional states. For-
profit child care centers are permanently authorized to 
participate in the Child and Adult Care Food Program (CACFP), 
provided that 25 percent of enrolled children in the center 
meet the NSLP income eligibility criteria for free or reduced 
price meals.
    Finally, the legislation extends the age limit on CACFP 
eligibility for youth in homeless and domestic violence 
shelters from 12 to 18 years of age, requires the Secretary of 
Agriculture to work with States and institutions operating the 
CACFP to identify paperwork reduction strategies, and retains 
current law eligibility criteria for free and reduced-price 
meals offered under the NSLP and other federal child nutrition 
programs.

           TITLE II: IMPROVING PROGRAM QUALITY AND INTEGRITY

    H.R. 3873 requires local educational agencies, not school 
food authorities, to approve free and reduced-price meal 
applications, and holds local educational agencies accountable 
for the accuracy of benefit determinations. School districts 
would be required to request that the State agency overseeing 
food stamps assist local educational agencies in directly 
certifying children for free meals if their family is enrolled 
in the Food Stamp Program. H.R. 3873 also retains current law 
authority for schools, at their option, to directly certify 
students using other means-tested programs such as Temporary 
Assistance for Needy Families (TANF). The legislation 
encourages schools to use automated systems for submitting and 
approving school meal applications, including the use of 
electronic signatures and the electronic transmission of 
applications when secure servers are available. Children who 
are from migratory families, and runaway or homeless youth, are 
automatically certified as eligible to receive free meals and 
do not have to complete the application process.
    A number of measures would simplify the application process 
for parents and provide additional information in materials 
accompanying the school meal application. H.R. 3873 would allow 
parents or guardians to fill out a single application when 
applying for meal benefits for multiple children in a 
household, and remove the current law requirement that parents 
notify the school if their household income changes throughout 
the school year. To simplify the certification process, H.R. 
3873 would require schools to establish a year-long 
certification period for children eligible for free or reduced-
price school meals. This legislation also requires application 
materials to be provided, to the extent practicable, to parents 
in a language they can understand.
    H.R. 3873 would hold local educational agencies accountable 
for the accuracy of free- and reduced price meal certifications 
by requiring that three percent (up to a maximum of 3,000) of 
all approved applications be verified by the local educational 
agency. Districts with non-response rates greater than 25 
percent would be required to select their sample from error-
prone applications (within $100 of the maximum allowable income 
for their eligibility category). Districts that receive 
responses to requests for income documentation information from 
at least 75 percent of households selected for verification in 
the prior year could select their verification sample at 
random, or reduce the number of error-prone applications to be 
verified by half.
    Districts that receive more than 20,000 applications could 
verify applications based on a random sample or smaller 
targeted sample if they demonstrated a ten percent or greater 
reduction in their non-response rate from the previous year. 
Local educational agencies also would be given discretion to 
substitute one application for another on a case by case basis, 
in instances where criteria established by the Secretary apply, 
for up to two percent of the total pool of applications 
selected for verification.
    In order to assist local educational agencies to improve 
meal certification accuracy, H.R. 3873 provides additional 
resources for training and requires additional administrative 
reviews. Districts that fail to meet established standards 
during the review will be required to develop a corrective 
action plan, and will receive technical assistance to improve 
administrative practices. The Department of Agriculture may 
make recoveries of payments made for ineligible children from 
the date the error was made to the date it was corrected up to 
a maximum of 90 days. Recovered funds are reinvested into 
improving administrative procedures for the certification, 
verification, and meal claiming processes.

TITLE III: PROMOTING NUTRITION QUALITY AND PREVENTING CHILDHOOD OBESITY

    Recognizing the growing trend of childhood obesity, H.R. 
3873 requires every local educational agency by the first day 
of the 2006 school year, to have a local wellness policy. The 
policy must include goals for nutrition education and physical 
activity, include nutrition guidelines for foods sold in 
schools, and establish a plan to ensure implementation. The 
policy must be developed in consultation with parents, 
students, school food service professionals, school boards, 
school administrators, and the public.
    The legislation also supports nutrition education, improved 
meal quality, and access to local foods. H.R. 3873 supports a 
Team Nutrition Network to promote health through nutrition 
education and physical activity, and authorizes state and local 
grants to states and local educational agencies that develop 
and implement model programs to improve student health through 
nutrition education and physical fitness promotion.
    H.R. 3873 promotes the availability of foods containing 
whole grains by requiring the Secretary of Agriculture to 
promulgate regulations to improve the availability of whole 
grains in school meals. The legislation adds fruits and 
vegetables to the list of preferred agricultural commodities 
purchased by the Department of Agriculture, and authorizes an 
initiative to support partnerships between schools and local 
produce farms. Finally, H.R. 3873 authorizes schools, at their 
option, to offer children, with parental consent, a non-dairy 
beverage that meets nutrition standards established by the 
Secretary that are equivalent to those for cow's milk. Children 
must request a non-dairy beverage due to a medical or other 
special dietary need, and schools must report to USDA if they 
make non-dairy beverages available to students.

   TITLE IV: IMPROVNG THE WOMEN, INFANTS, AND CHILDREN SUPPLEMENTAL 
                            FEEDING PROGRAM

    The bill authorizes such sums as necessary for fiscal years 
2004 through 2008 for the Special Supplemental Program for 
Women, Infants, and Children Program (WIC), which includes 
grants to States, nutrition services and administration funds, 
and a farmers' market nutrition program.
    The Child Nutrition Improvement and Integrity Act makes 
several changes to improve the nutrition of supplemental foods 
provided through the program. It requires supplemental foods 
available through WIC to be consistent with the most recent 
Dietary Guidelines for Americans. The bill allows nutrition 
education to include information on physical activity, and 
connects improved dietary habits to child development in 
addition to health. The bill requires the Secretary to update 
the prescribed supplemental foods available through the program 
after receiving the study regarding such foods undertaken by 
the National Academy of Sciences, Institute of Medicine. In 
addition, it requires the Secretary to conduct a scientific 
review of the supplemental foods available in the program, 
beginning in 2013 and every ten years thereafter. The Secretary 
shall recommend changes to the available food package as 
necessary. The bill also permits the Secretary to authorize ten 
demonstration projects to provide fruits and vegetables to WIC 
participants using private funds. The Secretary shall evaluate 
such demonstrations.
    The bill improves the certification processes for 
participants. It allows states to certify breastfeeding women 
for up to one year, or until women stop breastfeeding, 
whichever is earlier. It provides additional flexibility for 
local agencies in determining when an infant or child must be 
physically present at certification or recertification. An 
infant or child does not need to be present at recertification 
if she or he is under the care of any health care provider. In 
addition, an infant under eight weeks of age does not need to 
be present at certification as long as all certification 
information is provided. The bill also requires local agencies 
to permit an applicant or participant to reschedule an 
appointment to apply or be recertified for the program.
    The bill increases from one to three percent the amount of 
nutrition services and administration funds a state may expend 
during the subsequent fiscal year for allowable expenses 
incurred during a fiscal year.
    The Child Nutrition Improvement and Integrity Act improves 
the provision of infant formula benefits and competitive 
bidding. It allows state agencies to round up to the next whole 
can of infant formula to ensure that all infants receive the 
full benefit specified by regulation. In addition, it limits 
the size of state alliances developed for purposes of 
soliciting competitive bids for infant formula to a maximum of 
200,000 infants. Current alliances of greater size as of 
October 1, 2003 may continue, and tribal organizations and 
states serving fewer than 5,000 infants may request to join any 
alliance. The bill ensures integrity in the formula rebate 
process by requiring a reasonable estimate or an actual account 
of infant formula redeemed under the program. It also requires 
a cent for cent decrease in the manufacturers' infant formula 
rebate if the wholesale price of infant formula goes down, and 
requires a cent for cent increase in the rebate if the 
wholesale price goes up.
    To encourage the continued promotion of breastfeeding among 
WIC participants, the bill requires the Secretary to partner 
with communities, State and local agencies, employers, health 
care professionals, and the private sector to build a 
supportive breastfeeding environment for women participating in 
the WIC program.
    The Child Nutrition Improvement and Integrity Act improves 
the integrity of the WIC program. It requires participating 
vendors to purchase infant formula from a list of state-
licensed wholesalers, retailers, and distributors approved to 
distribute infant formula. It requires the Secretary to 
implement a National Universal Product Code database for use by 
all state agencies. The bill requires the Secretary to 
establish common technical specifications for WIC Electronic 
Benefit Transfer (EBT) systems. In addition, it permits states 
to provide approval for vendors to participate in the program 
outside of normal timeframes if a store changes ownership. The 
bill requires a state to notify a vendor of an initial 
violation in writing prior to documentation of another 
violation, unless the state agency determines that notifying 
the vendor would compromise an investigation. The bill ensures 
the program pays fair prices for supplemental foods by 
requiring states to establish competitive pricing and price 
limitations for different vendor peer groups. The bill also 
eliminates expired provisions.

TITLE V: REAUTHORIZATION, MISCELLANEOUS PROVISIONS, AND EFFECTIVE DATES

    H.R. 3873 designates training and technical assistance to 
improve the skills of school food service employees; to assist 
in the procurement of goods and services, including compliance 
with the ``Buy American'' provision; and to aid schools in 
upgrading technology and information management for food 
service providers, including methods to protect the privacy of 
children and families enrolled in programs under these Acts.
    The Child Nutrition Improvement and Integrity Act requires 
the Secretary of Agriculture to develop policy and establish 
procedures regarding the purchase, distribution, notice of 
consumption, and provision of information regarding irradiated 
foods served by federal school meal programs.
    To promote efficiency and eliminate waste, the bill 
contains a Sense of Congress expressing the desire that federal 
resources expended under these Acts should support those 
programs that are most effective in meeting the needs of 
children, and should not support duplicative efforts.
    H.R. 3873 reauthorizes the Child Nutrition Act of 1966 and 
the Richard B. Russell National School Lunch Act through fiscal 
year 2008, and determines appropriate dates for sections of the 
bill to take effect.

                            Committee Views


Overview

    A healthful diet is necessary for children to achieve full 
physical development and long-term health and is critical for 
academic success in school. The Committee is committed to 
ensuring that all children have access to nutritious school 
meals and that income-eligible children receive these meals at 
low or no cost. The Committee believes that schools and other 
institutions should receive funding sufficient to provide 
children with nutritious meals that meet federal dietary 
guidelines.
    The Committee is well aware of the importance of nutritious 
meals in the cognitive development of our youngest learners. 
For many low income children enrolled in participating schools 
and child care centers, the meals provided to the most 
vulnerable children under Department of Agriculture guidelines 
are very often their most substantial meal of the day.
    The federal child nutrition programs were conceived to 
offer wholesome meals and snacks to children in need, and to 
support the health of lower-income pregnant women, 
breastfeeding mothers, and their young children. These programs 
represent a national investment totaling more than $16 billion 
per year. These programs have been heralded as successful, and 
the reforms found in H.R. 3873 continue this progress through 
improvements in program integrity and operational efficiency 
while enhancing access to healthy and affordable meals.
    The National School Lunch Program alone serves an average 
of 27 million children each school day. Fifty-eight percent of 
these children receive a nutritious lunch free or at a reduced 
price. Nearly eleven million also take part in school 
breakfast, after-school snacks, and summer meals. These 
programs provide an extraordinary opportunity to reach young 
Americans and send out strong, consistent messages about 
achieving and maintaining a healthy lifestyle. Through school 
meals programs, summer feeding, child care and WIC programs, 
reforms contained in H.R. 3873 have been developed to improve 
the quality of children's diets and raise their awareness of 
healthy choices.

Reimbursement Rates for Breakfasts in Severe Need Areas

    The Committee recognizes that currently new schools must 
wait two years in order to qualify for additional reimbursement 
for breakfast served in schools with high percentage of free 
and reduced price breakfast. This provision is intended to 
provide for those new schools, which draw a majority of their 
enrollment from schools qualifying for the additional 
reimbursement, the additional school breakfast reimbursement 
upon the opening of the school.

Summer Food Service Program

    The Summer Food Service Program (SFSP) brings children 
together for organized activities (such as sports activities 
and camps) by providing meals and snacks to children under the 
age of 18 during the summer months. Local public and private 
nonprofit organizations may apply to become a SFSP sponsor. 
Approximately 3,500 sponsors operate an estimated 30,000 sites, 
providing subsidized meals and snacks to an average 1.9 million 
children per day.
    The Committee supports the highly successful Lugar pilot 
program, relaxing paperwork and other administrative 
requirements, which are the strongest deterrents to SFSP 
sponsor participation. During testimony before the Committee, 
the Department of Agriculture expressed interest in expanding 
access to child nutrition programs for eligible children, with 
a special focus on the Summer Food Service Program. The 
Committee, along with the Department and community 
stakeholders, is committed to improving access to nutritious 
food for children in the summer months when school is not in 
session. In 2002, the Food and Nutrition Service of the 
Department of Agriculture launched a major effort to expand the 
number of sponsors, feeding sites, and participants in the 
Summer Food Service Program, and provisions contained in 
Section 104 of this legislation would support those efforts.
    Section 104 extends the Lugar pilot in the fourteen 
existing states, authorizes participation among private, non-
profit sponsors of summer feeding programs in those states and 
adds three new states to the pilot program. The Committee 
recognizes the benefits of improved efficiency and 
administrative streamlining provided by the Lugar pilot, and 
supports applying these program rules nationwide when 
sufficient funding is available.
    Section 107 authorizes sponsors of the Summer Food Service 
Program in rural Pennsylvania to reduce the area eligibility 
threshold from 50 percent of the children in a geographical 
area be eligible for free or reduced-price school meals to 
participate in summer food to 40 percent. The purpose of this 
eligibility change is to explore the impact of lowering the 
requirement in rural areas. Nationally, rural children 
participate in the Summer Food Service Program at a much lower 
rate than children in urban areas. The Committee recognizes the 
unique barriers faced by rural sponsors and the need to take 
steps to ensure that rural children have access to the Summer 
Food Service Program to the same degree that urban children do. 
The Committee urges the Department to monitor the effect of 
lowering the area eligibility threshold on rural participation 
so that the Committee can evaluate the need to implement this 
change to additional rural communities and potentially in non-
rural areas as well.
    Section 108 permanently authorizes a Department of 
Agriculture waiver allowing local educational agencies to 
operate the Summer Food Service Program under National School 
Lunch Program rules and reimbursement rates. The waiver option 
is currently available to schools nationwide and has been shown 
to reduce paperwork resulting in cost savings to school 
districts. Local educational agencies that offer summer meals 
under the waiver authority must agree to receive the National 
School Lunch Program reimbursement rate for summer meals 
instead of the higher rate. Currently, over 500 school food 
authorities have chosen to deliver program benefits through 
this streamlined approach. The Committee recognizes that the 
Secretary has discretion to grant such waivers and will 
continue this streamlining effort in the Summer Food Service 
Program.
    Section 109 includes a provision to evaluate the effects of 
streamlining program operations and easing excessive paperwork 
burdens by authorizing community based non-profits and local 
government agencies in California to feed children year round 
through a single child nutrition program, primarily under the 
rules of the Summer Food Service Program.
    For historical reasons, the child nutrition programs that 
serve out-of-school programs developed independently and 
include many variations from program to program in the 
application process, and eligibility, benefits, and 
administrative requirements. Streamlining program operations is 
expected to decrease the paperwork and administrative burdens 
in current programs operating summer feeding sites during out-
of-school times and the state child nutrition agency. The 
redundant paperwork required to participate in multiple 
nutrition programs does not improve program integrity, but does 
raise costs and discourages potential program sponsors, 
resulting in fewer children served through the federal child 
nutrition programs.
    The Committee understands the need to ease excessive 
administrative burdens in the child nutrition programs to 
ensure that children have access to the programs and views the 
pilot as an important first step toward achieving that goal.

Child and Adult Care Food Program (CACFP)

    The Child and Adult Care Food Program (CACFP) plays a 
central role in shaping the dietary habits of very young 
children participating in public and private child care centers 
and family child care homes. Section 105 is intended to assure 
that state CACFP agencies and sponsoring organizations (the 
non-profit organizations that administer Child and Adult Care 
Food Program to family child care providers) have the resources 
needed to focus on important nutrition education and support 
services. The Committee recognizes that under current law, 
paperwork requirements and other administrative burdens have 
affected the efficiency of CACFP operations and the ability of 
sponsors to spend time on critical activities such as nutrition 
education. For this reason, the Committee has included 
provisions in H.R. 3873 to maximize CACFP's positive role in 
supporting healthy meals and snacks for children in child care.
    Section 105 also would establish permanent participation 
criteria that Congress has authorized for the last three years 
for private, for-profit child care centers. The current CACFP 
statute allows licensed, proprietary child care centers to 
participate in the CACFP if 25 percent of their enrollment 
receives child care assistance from Title XX, the Social 
Services Block Grant. In 1981, when Title XX was the sole 
source of federal child care assistance, Congress specified 
Title XX in the CACFP statute to authorize participation for 
proprietary child care centers. The clear intent in 1981, as 
now, is that child care centers that serve a significant number 
of needy and vulnerable children should be able to participate 
in the program.
    Because the Child Care and Development Block Grant (CCDBG) 
and TANF have replaced Title XX as the primary means of child 
care assistance, continued participation of for-profit child 
care centers in CACFP is in jeopardy. States no longer use 
Title XX as their primary source for child care assistance; and 
as a result many for-profit child care centers serving eligible 
children have been unable to meet the statutory requirement 
that of 25 percent Title XX children. Many proprietary programs 
serve a significantly higher percentage of subsidized children. 
These centers are serving the children the CACFP is intended to 
reach, but are not able to participate in this program and 
provide children with healthful and nutritious meals because of 
new funding streams created by Congress for child care 
assistance.
    The Committee bill includes an alternative means for 
participation by allowing child care centers to participate if 
at least 25 percent of the program's enrollment is eligible for 
free or reduced priced meals. This streamlines the 
participation criteria to conform to the participation criteria 
for other eligible organizations and avoids any future problems 
related to linking participation to any specific funding 
stream. This update, without changing current policy, realigns 
the statute with Congress's original intent.
    The Committee recognizes the role that states have played 
to temporarily address the current Title XX requirement by 
pooling a certain amount of Title XX funding in the Child Care 
Development Fund so that every subsidized child will receive 
Title XX assistance as required by the CACFP statute. The 
Committee encourages states to continue to pool to the extent 
practicable for a period of time that will allow participating 
child care centers to transition to the new participation 
criteria included in the bill.

Certification for Free and Reduced Price Meals

    Improving the accuracy of certifications for free- and 
reduced-price school meals was a priority of this Committee in 
drafting legislation to reauthorize and improve federal child 
nutrition programs. Studies have produced disparate information 
regarding the extent to which children are certified 
inaccurately, yet most agree that the problem is more complex 
than understood initially. While there are conflicting reports 
regarding the extent of the problem, the number of ineligible 
children receiving free- or reduced-price meals may be 
significantly smaller than initial estimates projected. 
However, providing free- or reduced-priced meals to ineligible 
children is costly and diverts valuable resources away from the 
children and schools with the greatest need.
    Among the provisions included in H.R. 3873 to improve 
program integrity, the Committee did not propose an increase in 
the percent of school meal applications that schools must 
verify. This decision was made following the release of data 
from Department of Agriculture pilot studies suggesting that 
expanded income verification requirements do not decrease the 
number of ineligible children certified and may lead to a 
substantial increase in the number of eligible children who 
lose their benefits. Department of Agriculture studies also 
suggested that administrative errors by school officials in 
processing applications are partially responsible for 
inaccurate certifications, and that many of the children found 
ineligible for a free-lunch were eligible for a reduced-priced 
lunch. The Committee also recognized that under current law and 
regulations, there are no incentives for schools to ensure the 
accuracy of school meal certifications. Furthermore, there is 
insufficient oversight and enforcement by USDA and only minor 
consequences for schools that inaccurately certify students.
    H.R. 3873 proposes a series of measures to improve program 
integrity by addressing the accuracy of certifications for 
free- or reduced-price school meals. This legislation would 
help schools reduce certification error and encourage 
participation by eligible children by providing incentives for 
schools to improve certification accuracy and reduce non-
response rates.
    The Committee believes strongly that program integrity 
should not be achieved at the cost of risking the participation 
of eligible children. Reforms proposed in H.R. 3873 would 
protect eligible children by ensuring continued access to 
program benefits.

Certification by Local Educational Agencies

    During the Committee's review of current application and 
certification processes, a number of factors suggested that 
local educational agencies, not school food authorities should 
be the authority designated to oversee the certification of 
children to receive free- or reduced-price meals. Under current 
law, school food service operators are responsible for 
processing meal applications, which the Committee believes is 
an activity more appropriately conducted by local educational 
agencies. Because eligibility determinations for free- and 
reduced-price meals are used for purposes that extend beyond 
the receipt of free or reduced-price school meals, the 
Committee believes that school and district administrators, not 
food service personnel, should be held accountable for the 
accuracy of meal certifications reported to the state and the 
Secretary of Agriculture.

Administrative Error Reduction

    Recent studies suggest that administrative error is a 
contributing factor in the certification of ineligible children 
to receive free- or reduced-price school meals. Section 208(a) 
authorizes new oversight requirements and additional financial 
resources to support efforts by schools to improve the accuracy 
of school meal certifications. This legislation would direct 
the Secretary of Agriculture, in conjunction with State 
agencies, to conduct training and develop technical assistance 
materials to assist schools in improving program integrity. 
Schools that fail to reduce administrative error to acceptable 
levels, as established by the Department of Agriculture, would 
be required to develop a corrective action plan, would receive 
additional technical assistance, and would be subject to 
additional administrative reviews.
    More frequent reviews of administrative practices would 
encourage local educational agencies to examine their own 
administrative practices more regularly and would bring any 
administrative problems associated with school meal 
certifications to the attention of the state agency and USDA 
more quickly. For local educational agencies that fail to meet 
performance standards, requiring additional administrative 
reviews is consistent with the current model for comprehensive 
reviews, which emphasizes correcting administrative problems 
over punitive measures.
    The Committee expects that funds authorized to reduce 
administrative error would be used to implement the new 
training, technical assistance, and administrative review 
provisions, including, but not limited to, producing and 
distributing training materials, hiring new employees, and 
contracting with third parties. The Committee also expects 
these provisions to be implemented in a manner that addresses 
the needs of local educational agencies of varying sizes and 
characteristics, including the development of different 
training and technical assistance materials as needed.

Direct Certification

    Direct certification of children enrolled in the Food Stamp 
Program or Temporary Assistance for Needy Families has been 
shown to improve certification accuracy over paper applications 
while increasing access for the lowest-income families. 
Further, direct certification reduces the application and 
verification burden for families and schools. Due to the 
success that schools have reported in using methods of direct 
certification, and that research has documented, H.R. 3873 
directs local educational agencies to enter into an agreement, 
to the extent practicable, with the state agency overseeing the 
Food Stamp Program to directly certify children in households 
receiving food stamps. At their option, as in current law, 
local educational agencies also may work with other income-
based programs to establish eligibility for free school meals.
    Section 201(a) provides for the direct certification for 
free school meals of migrant children and children in 
households receiving food stamps or benefits under the 
Temporary Assistance for Needy Families program. These 
provisions are meant to improve certification accuracy and 
reduce the paperwork burden placed on school districts and 
families. The Committee expects the U.S. Department of 
Agriculture and state agencies, when implementing these 
provisions, to encourage local educational agencies to 
disregard the paper applications of students that have already 
been directly certified.

Annual Certification

    The Committee recognizes that one of the factors affecting 
reports on program integrity is fluctuation in income. Under 
current requirements, households are expected to report changes 
in household size or in income of $50 per month or more. This 
requirement is burdensome for families and is more likely to 
affect low-income earners. The data indicate that a significant 
number of families who respond to requests to verify the income 
reported on the school meal application have a change of status 
from free to reduced-price. Additionally, it increases 
paperwork and other administrative burdens on schools.
    For these reasons, H.R. 3873 would authorize an annual 
certification period so that a household that is approved for 
free and reduced-price meals retains that eligibility for the 
entire school year. To fully realize this provision, households 
that are selected to provide documentation supporting the 
application must be permitted to provide such documentation for 
the point in time that the application was submitted. Current 
regulations allow school food authorities to request this 
documentation at any point in time but, in fact, most school 
food authorities do so subsequent to October 31 of the year, 
the date on which the size of the required sample is set.
    The Committee requires the Secretary to issue guidance on 
two approaches to achieve the Committee's intent. First, 
applications for free or reduced-price meals should clearly 
state that households should retain records of the income upon 
which the application is based for such period of time that 
ensures its availability if the household is required to verify 
the data. The recommendation to households should be in 
language that is clearly understood and in such fashion as to 
ensure it is noticed.
    However, for many households, records and record retention 
are an insurmountable problem. Therefore, the Secretary should 
also include guidance encouraging local educational agencies to 
begin selection of households for verification as applications 
are received. That is, using the appropriate sampling method 
defined in this bill, local educational agencies should request 
verification documentation shortly after eligibility 
determination is made, when the required documents might still 
be available. Local educational agencies may, but would not be 
required to complete the verification process earlier than 
currently required by regulation.
    The Committee further clarifies that documentation that 
supports eligibility may be provided by the household at any 
time during the eligibility period. This is consistent with 
regulations that allow application at any time during the 
school year.

Incentives To Improve Certification Accuracy and Non-Response Rates

    The verification requirements contained in H.R. 3873 create 
an incentive for local educational agencies to improve 
certification accuracy by obtaining verification data for a 
greater portion of the verification sample--that is, by 
lowering the non-response rate. The largest districts are 
unlikely to meet the absolute non-response rate criteria but 
have an incentive to meet the improvement criteria for 
districts with more than 20,000 paper applications. This 
incentive will be most effective if districts know their target 
non-response rates and take steps to achieve them.
    The Committee recognizes that, for certain local 
educational agencies, more than 50 percent of requests for 
income documentation are ignored by parents. This is a 
troubling statistic because parent failure to respond to 
requests for income documentation leads to the termination of 
their child's school meal benefits. The Committee encourages 
local educational agencies to work with other public agencies 
to use such data, which has already been verified, to verify 
eligibility for free or reduced-price school meals whenever 
possible. For households whose eligibility cannot be verified 
using such data, the Committee encourages schools to conduct 
multiple follow-up attempts to collect verification 
information, but recognizes that parents, not schools, are 
ultimately responsible for ensuring that income documentation 
is provided to schools when requested.
    The Committee encourages the Food and Nutrition Service of 
the Department of Agriculture, and state agencies to examine 
the practices of local educational agencies that have achieved 
successful response rates to requests for income verification. 
The Committee found a general lack of information on how 
schools could lower non-response rates, and urges a review of 
best practices and the dissemination of information to local 
educational agencies, particularly large, urban school 
districts, to help improve their efforts to reduce non-response 
rates.
    Section 201(a) establishes different verification sampling 
requirements for local educational agencies that are able to 
reduce the verification non-response rate below a threshold or, 
for local educational agencies with more than 20,000 meal 
applications, which show significant improvement in the 
verification non-response rate. In implementing new 
verification requirements, the Committee encourages the U.S. 
Department of Agriculture or State agencies to notify local 
educational agencies with more than 20,000 meal applications, 
before the start of each school year, of the verification non-
response rate they would need to achieve in order to be subject 
to the verification sampling requirements for the following 
school year. To this end, it would be helpful for the 
Department of Agriculture or the state agency to calculate the 
target non-response rates for these districts. Under a new 
regulation that takes effect for the 2004-2005 school year, 
state agencies will have the information they need to make such 
a calculation by March 1 of the prior school year.

Eligibility for Free- and Reduced-Price Meals

    Under current law, eligibility for free and reduced-price 
meals is determined by poverty guidelines established by the 
Department of Health and Human Services. H.R. 3873 retains 
current law eligibility guidelines for the provision of free 
and reduced-price meals. Under these rules, families with 
household incomes at or below 185 percent of poverty are 
eligible to receive school meals at a reduced price, and 
children in families with incomes at or below 130 percent of 
poverty are eligible to receive meals free.
    This year, a family of four earning an annual income less 
than $23,920 and up to $34,040 is eligible for free and reduced 
price lunches, respectively. Due to regional differences in 
cost of living, families who are eligible for a reduced price 
meal in communities where the cost of living is higher than the 
national average may actually have a standard of living similar 
to a family who is eligible for a free meal in a community 
where the average cost of living is lower than the national 
average. Congress addressed regional differences in the cost of 
meal preparation in a previous reauthorization. It has not 
attempted to make further changes to reimbursement rates based 
on regional cost differences nor has there been an exploration 
of establishing income guidelines for eligibility determination 
based on regional differences in the cost of living.
    The current budget allocation does not allow for changes in 
reimbursement rates or adjustments in eligibility requirements, 
however these issues are appropriate matters for the Committee 
and the U.S. Department of Agriculture to take into 
consideration for future reauthorizations.

Participation of Children Enrolled in Schools Operating During Non-
        Traditional Hours

    The Committee recognizes that some children attend 
alternative schools during nontraditional hours and programs 
preparing students to obtain a General Educational Development 
credential (GED). While states are allowed to apply for a 
waiver to provide meals to students attending schools during 
non-traditional hours, the waiver is not widely used. 
Consistent with the Committee's desire to ensure access for all 
eligible children, the Committee urges the Department of 
Agriculture to develop guidance for states addressing meal 
service during non-traditional school hours. Such guidance will 
encourage schools to provide access to school meals for high 
school students enrolled in schools that operate during 
nontraditional hours.

Technology Improvements

    H.R. 3873 contains several provisions to encourage the use 
of technology to enhance program operations by increasing 
efficiency, reducing human error, eliminating stigma associated 
with the identification of children receiving free- or reduced-
price school meals, and significantly reducing administrative 
costs to schools.
    Current regulations under 7 CFR Sec. 245.6 require 
applicants for free- or reduced-price meals to provide a 
written signature on a paper application. Section 201 
authorizes the use of electronic signatures so that parents may 
transmit a complete application for free- or reduced-price 
meals over the Internet when a secure server is available. The 
electronic transmission of applications will expedite 
application processing, reduce common administrative errors, 
improve overall administrative accuracy, provide a higher level 
of confidentiality, and could significantly reduce 
administrative costs to local educational agencies.
    While Internet use by individuals in low-income households 
is steadily increasing, the Committee acknowledges that low-
income families and those living in rural areas may have 
limited access to computers and the Internet. For this reason, 
the Committee encourages schools and communities that offer 
electronic applications for free- and reduced-price school 
meals, to provide online access at public school and community 
libraries.
    The Committee recognizes that children can be stigmatized 
if their peers know that their parents cannot afford to pay for 
daily meals. For this reason, H.R. 3873 includes legislation 
introduced by Representative Ric Keller of Florida to prevent 
children from being singled out in the lunch line as recipients 
of free or reduced-price meals. Schools that have adopted meal 
card, debit systems, or other forms of point-of-sale 
technologies enable every child to go through the school lunch 
line without being identified as a free or reduced lunch 
program recipient.
    The Committee recognizes that while many schools have 
implemented technological solutions to enhance program 
operations and reduce stigma, many others lack the resources to 
do so. Section 501 provides assistance, on a competitive basis, 
to schools through state agencies, to help meet the cost of 
acquiring or upgrading technology and information systems for 
use in school food service programs. These funds are targeted 
for schools with at least 50 percent free and reduced price 
enrollment. If there are funds remaining in any fiscal year 
after these schools have received grants, the state agency is 
authorized to allow other schools to apply for the funds. At 
the option of the individual schools, the Secretary should also 
allow state agencies to spend the funds on behalf of schools, 
as this would help ensure that such systems are purchased or 
upgraded in a cost-effective and efficient manner.
    In addition to technological support for meal application 
and certification processes, management information systems and 
other forms of technology may be used to monitor the nutrient 
content of foods, establishing meal card systems, and for other 
purposes.

Promoting Health Through Nutrition and Physical Activity

    Obesity among American children has become an ``epidemic,'' 
according to public health experts. Childhood obesity has 
skyrocketed since the 1970s and children today are more 
overweight and less fit than at any other time in our history. 
In the past two decades the proportion of children and teens in 
America who are obese or at risk of becoming obese has tripled. 
Approximately 20 percent of American children are now 
considered to be overweight, with millions more at serious risk 
according to the Centers for Disease Control and Prevention. 
The problem appears most serious among minority children. If 
the trend continues, this generation of children may be the 
first in modern times to have a shorter life expectancy than 
their parents.
    The Honorable Eric M. Bost, Under Secretary for Food, 
Nutrition, and Consumer Services, stated in testimony before 
the Committee:

          The challenge of obesity did not appear overnight; it 
        will not be solved overnight, and we cannot solve it 
        alone. But our responsibilities to promote the Nation's 
        health demand action now. * * * The cost in increased 
        health problems among future generations is a price 
        that is too high to pay.

    The Committee believes that schools, along with parents, 
must play a vital role in order to reverse the troubling trend 
of childhood obesity. While parents bear first responsibility 
for ensuring their children eat well and exercise regularly, 
the Committee believes that programs authorized under the Child 
Nutrition Act and National School Lunch Act can play a positive 
role by providing nutrition education and access to nutritious 
meals and snacks.
    Schools should support the responsibility of parents by 
providing information to help children make informed choices, 
and encourage children to choose a variety of foods, and eat in 
moderation. Local schools should be supported in their efforts 
to create such an environment, and given the flexibility they 
need to do so. Nutrition education and other activities are 
needed to inform children about the short- and long-term 
benefits of a healthy diet and regular physical activity.
    Despite the need to encourage student selection of fruits 
and vegetables, whole grains, and low-fat dairy products, the 
Committee is concerned that significant emphasis is placed on 
poor dietary choices, and that food and beverages are 
shouldering an unfair portion of the blame. The Committee 
believes strongly that comprehensive policy addressing 
childhood obesity must address both sides of the weight loss 
equation--dietary intake and physical activity.
    According to testimony by Dr. Kenneth H. Cooper, President 
and Founder of the Cooper Clinic in Dallas, Texas:

          In looking at the total diet, we should identify the 
        amount of excess calories in an individual's diet 
        rather than declaring that individual foods are 
        ``good'' or ``bad.'' Restricting, taxing or prohibiting 
        certain foods will almost certainly not work as these 
        policies will do little or nothing to help people 
        choose the best foods for their own needs.

The Critical Role of Physical Activity in Preventing and Reversing 
        Childhood Obesity

    The Committee recognizes the significant physical, mental, 
cognitive, and social benefits that are achieved by regular 
physical activity, and that physical activity among children is 
especially important. Studies have shown that children who 
participate in quality physical education programs are 
healthier physically and mentally than children who are 
inactive. Children who begin a consistent regimen of exercise 
will have greater self-esteem, less risk of depression, and 
will perform better academically in school.
    The Committee is aware of the evidence that unfit children 
may suffer academically. As the Committee heard in testimony 
presented by Mr. Tim McCord, Physical Education Director in 
Titusville, Pennsylvania, local schools that make a commitment 
to help students become more physically active observe marked 
improvements in student achievement and a healthier school 
community. This statement is consistent with a December 2002 
report from the National Association for Sport and Physical 
Education that found higher achievement was associated with 
greater levels of fitness. Students who met minimum fitness 
levels in three or more physical fitness areas showed the 
greatest gains in academic achievement.

The Continuing Prevalence of Hunger in America

    While considerable attention has shifted from concern about 
hunger and malnutrition to concern about childhood obesity, the 
Committee recognizes that hunger and food insecurity persist as 
a significant problem for some American families. According to 
the United States Department of Agriculture, a half million 
children lived in households where they experienced hunger 
during 2003 because the family lacked resources to purchase 
food. Federal child nutrition programs make worthwhile 
investments in children because research shows that hungry 
children have more health problems, are more likely to be tardy 
or absent from school, and score lower on academic achievement 
tests. Hunger and obesity co-exist in the United States and 
this Committee is committed to ensuring access both to enough 
food and to the skills and motivation to make healthy lifestyle 
choices.

Nutrition Education

    Section 302 is intended to make available effective 
nutrition education opportunities for children through 
assistance to state agencies, schools, and other non-profit 
entities. The Committee recognizes the importance of nutrition 
education, especially for children, and strongly encourages 
funding to be appropriated to support the Team Nutrition 
Network, including state Team Nutrition Network Coordinators. 
Consistent with the current goal of the Department of 
Agriculture's Team Nutrition program to improve children's 
eating and physical activity habits through nutrition 
education, the Team Nutrition Network would provide assistance 
to states for the development of state-wide, comprehensive, and 
integrated nutrition education and physical fitness programs, 
including technical assistance in developing and implementing 
science-based education programs. State coordinators would 
administer and coordinate these efforts to ensure maximum reach 
and effectiveness. As in the current Team Nutrition program, 
nutrition education initiatives authorized under this Section 
should be based on the principles of the Dietary Guidelines for 
Americans issued jointly by the Department of Health and Human 
Services and the Department of Agriculture, the Guidelines for 
Personal Exercise Programs, issued by the Department of Health 
and Human Services, and other science-based recommendations for 
nutrition and physical activity.
    Section 302 also authorizes state and local projects 
similar to those contained in H.R. 2227 introduced by 
Representative Michael N. Castle of Delaware. The Committee 
encourages the appropriation of funds to be awarded 
competitively to states and local educational agencies that 
develop innovative approaches to student wellness.

Local Wellness Policy

    Recognizing that a growing number of children are obese or 
at risk of becoming obese, H.R. 3873 seeks to address a piece 
of the problem by requiring local educational agencies 
participating in the programs authorized by this legislation to 
establish local school wellness policies designed to improve 
nutrition education and increase physical activity in schools. 
While there is a limit to what local educational agencies can 
contribute in this area, the Committee believes that schools 
can play an important role in: (1) developing nutrition 
education programs that can provide school children with 
important information so that they can make informed choices 
with regard to the broad variety of foods and beverages 
available to them in schools and elsewhere; and (2) encouraging 
and providing the opportunities for students to engage in 
physical activity as a part of a healthy lifestyle.
    The Local Wellness Policy does not extend the Department of 
Agriculture's jurisdiction beyond current regulation of the 
reimbursable school meal. Rather, local schools would be 
responsible for the development, implementation, and oversight 
of its policy. The Committee does not intend to direct local 
educational agencies to develop nutrition guidelines for each 
and every food or beverage available to students on school 
grounds. Rather, nutrition guidelines should be based on sound 
nutritional science and should take into consideration the role 
of school food as it relates to total daily dietary intake. 
Moreover, H.R. 3873 requires that the guidelines selected by 
the local educational agency for reimbursable school meals 
shall not be less restrictive than current regulations and 
guidance issued by the Secretary pursuant to sections 10(a) and 
(b) of the Child Nutrition Act and sections 9(f)(1) and 17(a) 
of the National School Lunch Act.
    The Committee also notes that physical activity does not 
have to be limited to physical education classes, and local 
educational agencies are encouraged to develop innovative ideas 
to motivate their students to increase their levels of physical 
activity.
    The Committee believes that positive messages promoting a 
balanced diet, moderation in food consumption, and the health 
benefits of physical activity as part of these local school 
wellness policies are essential if these policies are to be 
successful.

Complementing Current Activities

    The Committee recognizes that a variety of health promotion 
initiatives are underway at the local, state, and federal 
level. Title III of H.R. 3873 is designed to complement those 
efforts. For example, as part of the President's HealthierUS 
Initiative, the Departments of Health and Human Services and 
Agriculture are pursuing a vigorous nutrition promotion 
campaign, Eat Smart, Play Hard, to motivate healthy eating and 
more physical activity among children.
    The Carol M. White Physical Education for Progress (PEP) 
program administered by the Department of Education awards 
competitive grants to local educational agencies to initiate 
and improve physical education programs. School districts may 
use PEP grants to fund activities including staff development 
and training, as well as the purchase of equipment and other 
supports to enable student participation in physical 
activities. The PEP program was funded at $70 million in fiscal 
year 2004.
    The Department of Agriculture's ongoing Team Nutrition 
activities have been a particularly effective and efficient 
mechanism for funding a variety of unduplicated nutrition 
education functions at the local, state and federal levels, and 
the Committee intends for these to continue. None of the 
provisions in H.R. 3873, particularly those found in Section 
302, are intended to diminish the funds made available through 
appropriations to the Secretary of Agriculture for current Team 
Nutrition activities, including training and technical 
assistance for child nutrition foodservice professionals, 
nutrition education and publications, funding for the National 
Food Service Management Institute and the National Agricultural 
Library, and grants to States to assist in the delivery of new 
and innovative training programs.
    The Committee recognizes that an increasing number of 
research and promotion activities related to nutrition, 
physical activity, and health are ongoing at multiple federal 
agencies and departments, and encourages such activities to be 
coordinated, to the greatest extent practicable, to leverage 
resources and reduce duplication of efforts. The Committee also 
encourages local, state, and federal collaboration with private 
sector efforts to leverage funding and maximize effectiveness 
in attaining goals of mutual interest.

Nutrition Monitoring

    National nutrition monitoring provided through the combined 
efforts of the Department of Health and Human Services and the 
Department of Agriculture, is the primary source of information 
used by Congress to make informed, science-based decisions and 
to develop policy or evaluate existing food and nutrition 
programs. Without fully understanding nutrient intake and food 
patterns, this Committee could not appropriately design 
policies and programs that improve the quality of foods 
available through federal child nutrition programs. This 
Committee relies upon nutrition monitoring data to track 
consumption of agricultural commodities, to evaluate public 
health and nutrition assistance programs for low-income, child, 
and elderly populations, and to measure the adequacy of 
Americans' diets against nationally recognized dietary 
recommendations. The ongoing need for timely collection and 
availability of nutrition monitoring data, specifically related 
to the nutrition and health status of children, is of 
particular interest to this Committee. Nutrition monitoring 
data also help to support the design of nutrition education 
programs based on data about children's nutritional needs.

Commodity Support

    The Committee recognizes the importance of donated 
commodities to the success of the National School Lunch Program 
and other nutrition assistance programs authorized under the 
Child Nutrition Act of 1966 and the Richard B. Russell National 
School Lunch Act. As of September 30, 2003, the combined value 
of entitlement and bonus commodities distributed to schools 
must equal 12 percent of the total cash and commodity 
assistance provided under the National School Lunch Program. 
Prior to 2004, bonus commodities could not count toward the 12 
percent requirement. The Committee is aware that this may 
result in a decrease of overall levels of commodities 
distributed to schools, and support the total amount of 
required commodity purchases to exclude bonus commodities. The 
Committee regrets that resources were not available to enact 
this rule change.
    The Committee further recognizes that Department of 
Agriculture's purchase decisions are often driven by economic 
factors, not the nutritional needs and food preferences of 
children, and that the conflict between these dual objectives 
poses an ongoing challenge for the Department. The Committee 
urges, to the extent practicable, that children's nutritional 
needs are the Department's first consideration when deciding 
what commodities to purchase.
    The Committee commends the Department on Agriculture for 
initiating a broad evaluation of its commodity procurement and 
distribution systems. The goal of this exercise was to improve 
service to both producers and consumers by improving both the 
efficiency of the distribution process and the quality of foods 
delivered. The Committee appreciates the work of the Food 
Distribution 2000 panel, which included representatives from 
the Department, schools, and state commodity distribution 
agencies, and encourages the continued implementation of the 
Panel's recommendations for change.

Promotion of Fruit and Vegetable Consumption

    The Committee recognizes the value of fruits and vegetables 
to good health and encourages nutrition education and other 
activities that result in children's consumption of fruits and 
vegetables. The Committee supports initiatives to promote fruit 
and vegetable consumption as part of nutrition education 
programs such as Team Nutrition and WIC. A goal of Healthy 
People 2010 is to increase the proportion of federal food 
assistance program participants who consume two to three 
servings of fruits and vegetable daily. The Committee 
recognizes that several federally-supported programs exist to 
encourage fruit and vegetable consumption, consistent with 
federal dietary recommendations to eat five to nine servings of 
fruits and vegetables daily as prescribed by the 2000 Dietary 
Guidelines for Americans.
    National consumption data show that most children do not 
consume the recommended amounts of fruits and vegetables and 
that fewer than fifteen percent of elementary school-aged 
children eat the recommended five or more servings of fruits 
and vegetables daily. On any given day, 45 percent of children 
eat no fruit, and 20 percent eat less than one serving of 
vegetables. Nutrition assistance programs play an important 
role in helping children meet federal recommendations and 
should continue to support increased fruit and vegetable 
consumption.
    The Committee recognizes that schools generally receive 
lower levels of commodity support in the form of fruits and 
vegetables because the Department of Agriculture has a limited 
capacity to store and distribute perishable commodities. 
According to their own data, the Department procured about $184 
million of fruits and vegetables for child nutrition programs 
in 2001, of which about fifteen percent (about $27 million) 
were fresh fruits and vegetables, and purchases of fresh fruits 
and vegetables were approximately four percent of total 
Department of Agriculture commodity purchases in 2002.
    Due the Department of Agriculture's logistical constraints 
in providing perishable goods to schools, the Department of 
Defense (DOD) has procured and distributed fresh fruits and 
vegetables to schools since 1995. This program currently 
provides the majority of fresh produce received by schools 
participating in the National School Lunch Program.
    While there is considerable support for the availability of 
more fresh produce in schools, the Committee recognizes that 
frozen and canned fruits and vegetables also have value. Unless 
otherwise modified, the term fruits and vegetables encompass 
those commodities whether fresh, frozen or canned. On March 25, 
1998, the Food and Drug Administration (FDA) acknowledged in 
the Federal Register its conclusion that frozen fruits and 
vegetables are nutritionally comparable to raw fruits and 
vegetables and can be used interchangeably in the diet. 
Overall, processed fruits and vegetables do not lose 
nutritional value, are cost-effective, convenient for schools, 
and are preferred in some cases by children. Additionally, it 
is widely accepted that the freezing and canning processes 
inhibit the growth of some pathogens and therefore reduce the 
likelihood of serving contaminated products.
    The Committee also recognizes data that suggests that 100 
percent juice products, along with other forms of fruits and 
vegetables, promote better health and may help prevent disease. 
The Committee encourages the Department of Agriculture to 
provide access to nutritionally valuable fruit and vegetable 
products, including 100 percent juices, in programs authorized 
under this legislation. The Committee further encourages 
schools to make available salad bars and fruit bars to 
encourage consumption of a variety of fruit and vegetables. In 
one school district, placing these bars in primary schools 
resulted in a tripling of the amount of fruits and vegetables 
served.
    H.R. 3873, as reported by this Committee, does not extend 
authorization of the Fruit and Vegetable Pilot Program, but 
strongly supports the continuation of this program, which makes 
free fresh and dried fruits and fresh vegetables available to 
students in 25 schools in each of four states and students in 
schools on one Indian reservation.
    The Committee recognizes that the pilot has been heralded 
as a great success in increasing children's access to fruit and 
vegetables in participating schools. A recent evaluation of the 
fruit and vegetable pilot program by the Department of 
Agriculture states that this pilot was popular among parents, 
teachers, and students, and successfully increased children's 
interest in making fruits and vegetables a regular part of 
their diet. While this information is useful, the Committee 
hopes that any future evaluations of this pilot would measure 
its success in increasing children's overall fruit and 
vegetable consumption and improving children's overall 
consumption patterns.
    H.R. 3873 also authorizes the use of nutrition education 
funding contained in current law to assist non-profit 
organizations and local educational agencies procure local 
foods from small and medium-sized farms for school meals. 
Projects must support nutrition education activities or 
curriculum planning and incorporate school children's 
participation in farm and agriculture education projects by 
linking schools, producers, parents, and community 
stakeholders. Farm-to-Cafeteria programs in operation have been 
shown to support local farmers, promote fresh, locally-grown 
produce, and complement nutrition and agriculture education in 
schools. The language included in Section 408 reflects farm-to-
cafeteria legislation introduced by Representatives Fred Upton 
of Michigan and Ron Kind of Wisconsin.

The Importance of Dairy

    Dairy foods, including fluid milk, provide three quarters 
of the calcium in the diets of children and adolescents. The 
daily recommended intake (DRI) for calcium in adolescents ages 
twelve to eighteen years is 1,300 mg--the equivalent of four 
servings of milk, cheese or yogurt. For children ages six to 
eleven, the DRI for calcium is 800 mg or three servings every 
day. Dairy foods like milk, cheese and yogurt contain nine 
essential nutrients that are necessary for strong bones, 
healthy teeth, and better bodies.
    The Committee recognizes the important role that fluid milk 
and other low-fat dairy products play in the National School 
Lunch Program to help foster children's healthy growth and 
development. Section 304 provides school food service 
professionals flexibility in deciding the fat contents of fluid 
milk offered to children. In making such decisions, the 
Committee encourages schools to consider children's taste 
preferences and make available low-fat varieties of fluid milk. 
The Committee also encourages schools to make lactose-free milk 
available to students who may experience lactose intolerance.
    Section 304 also clarifies that schools may make 100 
percent fluid milk available to students at any time throughout 
the school day. The sale of 100 percent fluid milk does not 
violate school exclusivity contracts for the vending of other 
beverages provided that the vendor with which the school has 
entered into a contract does not supply 100 percent fluid milk.
    The Committee received expert testimony from Dr. Robert 
Heaney, M.D., Professor of Medicine at Creighton University in 
Omaha, Nebraska, who noted that the extremely high lactose 
intolerance rates often cited for some minority populations 
reflects the lack of an intestinal enzyme that helps the body 
break down milk, and that the absence of the enzyme does not 
equate to an inability to consume dairy products. Even persons 
lacking the enzyme can usually consume two to three servings of 
milk per day without difficulty, according to Heaney. Heaney 
explained that consumption of calcium may be especially 
important for African Americans because of higher rates of 
hypertension among this population.
    In addition, while lactose intolerance is more common in 
Asian, African American and Hispanic adults, according to the 
National Institute of Child Health and Human Development 
(NICHD), lactose intolerance is less prevalent among infants 
and children. The NICHD indicates that ``recent studies show 
that even children diagnosed with lactose intolerance can drink 
one or two cups of milk each day without suffering abdominal 
discomfort.''

Dairy Substitutes for Children With Medical or Special Dietary Needs

    Section 304 continues current policy encouraging all 
children to consume cow's milk, yet gives schools the option to 
offer an acceptable non-dairy substitute to children who cannot 
drink cow's milk for medical or other special dietary reasons. 
Section 304 is intended to reduce barriers that may exist for 
participation in the National School Lunch Program by allowing 
greater accessibility to a fluid milk substitute for children 
with a medical or other special dietary need.
    The Committee recognizes that schools may make 
substitutions, at their discretion, for individual children who 
do not have a disability, but who have special medical or 
dietary need. Such determinations are to be made on a case-by-
case basis, and cover children who have milk allergies or 
intolerances (for example, lactose intolerance). Each request 
must include an explanation of the special dietary need; and 
which of the school selected alternative beverages is to be 
substituted. This provision complements the regulatory 
directive that schools should consider the ethnic and religious 
preferences of students when planning and preparing meals, and 
allows the Secretary to approve variations in the food 
components as long as the variations are nutritionally sound 
and needed to meet ethnic, religious, or economic need.
    Section 304 amends Section 9(a)(2) of the Richard B. 
Russell National School Lunch Act by legislating certain 
regulatory provisions governing meal substitutions that are 
found in 7 CFR Sec. 210.10(g). Section 304 modifies these 
provisions in only one significant aspect to permit a statement 
from a student's parent or legal guardian identifying a medical 
or other special dietary need that restricts a student's diet 
in order to allow a substitution. Under present regulation, a 
request for a substitute for fluid milk is required from a 
licensed physician or other medical authority. Section 304 
maintains current regulations requiring a statement from a 
licensed physician in cases of a medical disability.
    The term ``disability'' as defined by the Americans with 
Disabilities Act includes severe food allergies (food 
anaphylaxis) or other special food needs of children with 
disabilities. Department of Agriculture regulations (7 CFR Part 
15b) require substitutions or modifications for children whose 
disabilities restrict their diet. The term ``medical or other 
special dietary need'' does not include children with 
disabilities and schools may, but are not required to provide 
dietary substitutions. The Committee encourages local 
educational agencies and school food service personnel to 
consult regulations and guidance published by the Food and 
Nutrition Service to understand definitions established for the 
terms ``medical need'' and ``special dietary needs.'' These 
documents make clear that the term ``special dietary needs'' 
among other things, includes the needs of children who do not 
consume animal products for religious reasons.
    In implementing the substitution provisions of Section 304, 
the Committee intends that the privacy rights of students and 
parents will be safeguarded. Further, the Committee expects 
that the Department of Agriculture will assist schools that 
wish to offer substitutions in cases of medical or other 
special dietary needs by carrying out rulemaking that will 
provide certainty to schools in assessing the statutory 
requirement that such substitutions be nutritionally equivalent 
to milk. The Committee intends that in determining nutritional 
equivalence, the Secretary will take into account the 
bioavailability of the nutrients specified in the statute.
    This provision will ensure consistency among substitute 
beverages so that children will receive recommended nutrients. 
This amendment, while requiring that substitutes be of 
equivalent nutritional value, does not provide authority for 
the Secretary to ensure the nutrient content of such beverages. 
The Secretary is encouraged to make available to schools a list 
of substitutions for fluid milk determined to meet established 
requirements for nutritional equivalence. However, the 
Committee does not intend to require the Secretary to approve 
specific products. Schools wishing to make available 
substitutions for fluid milk not identified by the Secretary as 
nutritionally acceptable are responsible for making a 
determination in accordance with regulations issued by the 
Secretary.
    The Committee does not intend for Section 304 to create any 
additional paperwork or administrative burdens for parents or 
schools, as schools already operate under a similar system. 
H.R. 3873 provides schools maximum flexibility in fulfilling 
notification requirements under this Section, and the Committee 
encourages schools to identify ways to make parental 
notification simple. For example, a written request from a 
parent or a legal guardian for a non-dairy substitute may be 
included in eligibility forms for a free or reduced price meal, 
provided the parent or legal guardian specifies what substitute 
is requested and the reason for the substitute, as indicated in 
this legislation. Moreover, the Committee recommends that 
schools permit requests for substitutions to remain in effect 
until the medical authority or student's parent or legal 
guardian revokes such request in writing.
    Schools that make available to students an alternative to 
fluid milk would be required to notify the state agency that 
substitute beverages are being made available. If this 
information is contained in an existing report, this 
requirement will be considered as met.
    The reporting requirements contained in Section 304 will be 
useful as better data is sought on the availability of fluid 
milk substitutes for children. The Committee hopes that better 
overall data on the student demand for fluid milk substitutes 
is available to inform future policy discussions. While the 
Committee received anecdotal information about the need and 
student interest in receiving access to fluid milk substitutes, 
no studies or other factual information were available to 
assist the Committee in making an informed policy decision.

Increasing Children's Consumption of Foods Containing Whole Grains

    In Section 306, the Committee intends that the Department 
of Agriculture determine standards for the availability of 
foods containing whole grains in programs under the Richard B. 
Russell National School Lunch Act and the Child Nutrition Act 
of 1966. Currently, the per capita consumption of whole grains 
is 0.8-1 serving per day. This is far below the recommended 
levels set forth by numerous government and health 
organizations, as outlined below. However, no specific 
recommendation exists within the school feeding programs. 
Specific recommendations on the part of the Department will 
encourage local school food service administrators to pursue 
foods with whole grains as part of feeding programs.
    The Healthy People 2010 report recommends that persons ages 
two years and older increase their consumption of grain 
products to six servings per day, with three of those being 
whole grains. The 2000 revision of the Dietary Guidelines for 
Americans included a separate guideline for grains, directing 
Americans to ``choose a variety of grains daily, especially 
whole grains.''

Weighted Averages

    Section 305 authorizes the Department of Agriculture to 
issue waivers to local educational agencies and states that 
wish to use a method of nutrient analysis for school meals 
other than the weighted average method. By Congressional 
action, the weighted average used in analyzing menus has not 
been required, but has been an option at the state and local 
level. All subsidized meals served must comply with the Dietary 
Guidelines for Americans published jointly by the Department of 
Health and Human Services and the Department of Agriculture. A 
weighted nutrient analysis provides a picture of the average 
meal selected by students, reflecting what foods students 
choose to eat versus what foods are offered. The weighted 
analysis may capture more accurately the nutrient intake of 
students. However, the Committee recognizes the additional time 
necessary to conduct weighted analyses, which could result in 
school food services limiting options to students.
    The Committee believes that state and local administrators 
should have maximum flexibility in how they achieve the goal of 
meeting nutritional requirements of meals served under the 
Child Nutrition Act of 1966 and the Richard B. Russell National 
School Lunch Act. Therefore, the Committee has included waiver 
authority for the requirement for weighted averages and will 
reconsider the necessity of this administrative activity after 
reviewing the results of this second cycle of menu reviews.

The Importance of Breakfast

    The Department of Agriculture's Center for Nutrition Policy 
and Promotion shows that children who eat breakfast have better 
overall diets. For this reason, the Committee strongly supports 
increasing the number of schools that serve breakfast. In 
addition to providing breakfast to children who otherwise would 
not eat a morning meal, research shows that children who eat 
breakfast improve their math and reading scores as well as 
improve their memory in cognitive tests. School breakfast also 
improves student behavior and attendance. Children who eat 
breakfast have lower rates of absenteeism and tardiness; 
increased attentiveness, fewer discipline problems and visit 
the school nurse less often.
    Breakfast consumption can play a key role in maintaining a 
significant weight loss as Congress looks at ways to combat 
childhood obesity. In a major study, regular breakfast 
consumption was associated with being able to maintain a 
significant weight loss. In over 2900 individuals that had 
maintained for at least a year a weight loss of at least 30 
pounds, 78 percent reported eating breakfast everyday.
    In another report overweight females were more likely to 
skip breakfast and normal weight males were least likely to 
skip breakfast. Breakfast skipping has been reported to be more 
prevalent in obese children and is particularly high in obese 
girls.
    More than a dozen studies from around the world have 
reported that eating a ready-to-eat (RTE) cereal breakfast 
provides many nutritional benefits including consumption of 
less total fat, less saturated fat, less cholesterol, more 
dietary fiber, and more vitamins and minerals. This result is 
independent of age and geography as studies have been conducted 
in children, adults and the elderly and studies have been 
conducted in over six different countries.
    The Child Nutrition Improvement and Integrity Act includes 
three provisions that the Committee hopes will result in more 
children eating breakfast. First, it provides increased 
assistance to state agencies with low proportions of schools or 
students that participate in the federal school breakfast 
program and that demonstrate the greatest need. Second, it 
expands the eligibility for severe need assistance for 
breakfast programs. Underpinning both of these provisions is 
the Review of Best Practices in the Breakfast Program, which 
directs the Secretary, subject to the availability of funds, to 
engage a research organization to study the state and local 
impediments that keep more schools from offering breakfast, and 
to make recommendations and describe model breakfast programs 
that will help schools to overcome these obstacles. The 
Secretary will disseminate the results of this study to school 
districts, this Committee and the Senate Committee on 
Agriculture.
    The Committee also encourages schools to develop innovative 
strategies to make time for student breakfasts, such as 
breakfast on the bus or breakfast in the classroom, a practice 
that has been shown to be very effective in schools across the 
country. Breakfast on the bus or in the classroom does not 
require the use of a cafeteria or additional time in the school 
day and are easy and efficient ways to provide a nutritious 
meal to children.

IMPROVING THE SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS 
                           AND CHILDREN (WIC)

    The WIC program helps safeguard the health of nutritionally 
at-risk pregnant and breastfeeding women, infants, and children 
up to age five by providing certain nutrient-dense foods that 
supplement the diet, nutrition education, and referrals to 
health care and other social services. The program is based on 
the premise that early intervention programs to at-risk 
populations during critical times of growth and development can 
prevent future medical and developmental problems.
    WIC has proven to be one of the most successful nutrition 
and public health programs. The Honorable Eric M. Bost, Under 
Secretary for Food, Nutrition and Consumer Services at the 
Department of Agriculture testified before the Subcommittee on 
Education Reform about the successes of WIC:

    The success of WIC is well documented. Participation in WIC 
leads to better pregnancy outcomes--fewer infant deaths, fewer 
premature births, and increased birth weights. Medicaid savings 
for newborns and their mothers in the first 60 days after birth 
average between $1.77 and $3.13 for every dollar spent on WIC. 
These results, we believe are attributable to the unique design 
of the program, which is comprised of:
           A nutrition prescription that allows 
        pregnant and new mothers to purchase food dense in 
        nutrients that are often lacking in the WIC population;
           Individualized nutrition education and 
        counseling; and
           Critical referrals to other health care and 
        social service assistance programs.

    While recognizing the clear benefits of WIC, through this 
reauthorization the Committee seeks to address the challenges 
of improving the health of WIC's population and program 
operations.

Improving Nutrition

    Just as the Committee has addressed the growing prevalence 
of obesity among children by improving nutrition education and 
promoting physical activity within the school environment, the 
Committee likewise believes that the WIC program may assist in 
reducing the incidence of obesity and overweight children among 
its diverse participants. While the primary role of the WIC 
program is to increase birth weights and fight malnutrition, 
the growing crisis of pediatric obesity cannot be ignored. 
Today, one out of every six children is overweight, with the 
problem growing fastest among four- to five-year-old children.
    Childhood obesity raises special concerns. It places 
children at high risk for diseases and conditions previously 
only associated with adults. Nearly two-thirds of obese five- 
to ten-year-old children have at least one additional risk 
factor for cardiovascular disease. There has been a dramatic 
increase in the numbers of children with type-2 diabetes, the 
form of the disease directly linked to overweight adults. In 
addition, childhood obesity is a strong predictor of adult 
obesity. A recent study found that 77 percent of children with 
a body mass index greater than the 95th percentile remained 
obese as adults. A study just released by the Centers for 
Disease Control and Prevention found that if current trends 
continue, obesity will become the leading cause of preventable 
death by next year.
    The WIC program already provides nutrition education and 
counseling as a key component of the program. Currently, 
nutrition education aims to achieve positive change in dietary 
habits, and emphasizes relationships between nutrition and 
health, all keeping with the individual's personal, cultural, 
and socioeconomic preferences. To further encourage WIC 
agencies to enhance nutrition education, the Committee has 
enhanced the definition of nutrition education so that it aims 
to achieve positive change in physical activity in addition to 
dietary habits. In addition, the language now emphasizes the 
relationships between nutrition, health and child development, 
since nutrition can dramatically impact physical and cognitive 
development in a child's first years.
    The Committee also recognizes that the WIC food package has 
remained unchanged for over 30 years and is inconsistent with 
current dietary guidelines and nutrition science. The specific 
foods currently provided include eggs, milk, juice, beans, 
tuna, carrots, cereal, and infant formula, which vary according 
to the recipient type (pregnant women, breastfeeding women, 
infants and children).
    The Committee supports the WIC program's efforts to 
encourage healthy food choices and healthy eating practices. To 
provide WIC agencies the opportunity to modify the food package 
to address obesity while promoting healthful choices for women 
and children, H.R. 3873 specifies that supplemental foods 
provided through the program shall promote health as indicated 
by current nutritional science. While many agencies are doing 
so now, operating according to current nutritional guidelines 
will ensure agencies encourage food choices that are lower in 
fats, cholesterol, and calories.
    The Department of Agriculture already has recognized that 
the food packages do not reflect current nutrition science. 
Consequently, the Department has contracted with the Institutes 
of Medicine of the National Academies of Science (IOM) to 
review the nutritional requirements and assess the supplemental 
nutrition needs of the population served by the program. The 
Institutes of Medicine will, in part, review and assess the 
nutritional needs of the WIC population using current 
scientific research identifying nutrient deficiencies, develop 
a specific set of priority nutrients and a general set of key 
nutritional recommendations for the food packages, review 
specific foods dense in the priority nutrients, recommend and 
prioritize scientific food selection and food package 
development criteria for each WIC category, and recommend 
relatively cost neutral changes to the WIC food packages. The 
Committee anticipates the IOM will complete the report in 2005. 
H.R. 3873 requires the Secretary of Agriculture to promulgate a 
rule updating the prescribed supplemental foods available 
through the program within six months of receiving this study.
    The Committee aims to ensure that the WIC food packages 
will remain appropriate in the future, as well. As a result, 
the legislation requires the Secretary to conduct a scientific 
review of the supplemental foods available in the program and 
recommend, as necessary, changes to reflect nutrition science, 
current public health concerns, and cultural eating patterns. 
The Secretary shall begin subsequent studies ten years after 
the current IOM study underway began, which will be 2013, and 
every ten years thereafter. The Secretary is authorized to 
conduct such studies more frequently, if needed to reflect 
current scientific knowledge.
    The Child Nutrition Improvement and Integrity Act also 
permits the Secretary to conduct demonstration projects in up 
to ten local sites to evaluate the inclusion of fruits and 
vegetables in the WIC food package. Such foods would be 
provided using private funds. Serving almost half of the 
infants and one quarter of American children ages one to five, 
WIC is in a unique position to contribute to federal efforts to 
decrease childhood obesity. These demonstration projects will 
provide the WIC program, USDA and the Committee with 
information regarding the logistical and practical challenges 
of providing fruits and vegetables to WIC participants and the 
best ways to overcome them. The pilots will also show whether 
any special approaches will need to be taken to increase 
consumption of fruits and vegetables by WIC participants and 
give WIC staff needed time to learn how to best promote fruits 
and vegetables as part of obesity prevention.

Improving Certification

    The Committee seeks to reduce the burden on families during 
certification and recertification while maintaining program 
integrity and recognizing the importance of physical presence. 
Currently, infants and children must be present at initial 
certification and recertification. This attendance is valuable 
for fraud prevention, but more importantly it is critical for 
the agency to see children for purposes of health assessment 
and health care referrals. For instance, the agency measures a 
child's health and weight, consistent with the American Academy 
of Pediatrics' recommended schedule for preventive pediatric 
health care for children. This information can be used to 
provide appropriate nutrition education and counseling. The 
agencies also provide referrals for immunizations. WIC agencies 
play a valuable role as an adjunct to health care and this 
purpose must be maintained.
    However, the Committee recognizes that there are occasions 
where it is not feasible or necessary for a child to be present 
for recertification. Under current law, a child need not be 
present for recertification if he or she is under the care of a 
health care professional at the local agency. H.R. 3873 adds 
additional flexibility so that a child need only be under the 
care of any health care professional, not necessarily at the 
local agency, for the agency to waive the requirement of 
physical presence. In addition, the bill adds a new waiver to 
the current physical presence requirements. An infant under 
eight weeks of age does not need to be physically present at 
initial certification if all certification information is 
provided.
    Further, the Committee believes that there are 
circumstances that will prevent a mother, either with or 
without an infant or child, from keeping an appointment to 
apply or be recertified. Such circumstances include 
transportation, weather conditions, or preferring not to remove 
a child from child care for the day. Although the Committee 
acknowledges that it is general practice for local agencies to 
reschedule cancelled appointments, H.R. 3873 formalizes this 
practice. The bill requires that each local agency permit an 
applicant or participant to reschedule an appointment to apply 
or be recertified for the program. The Committee believes that 
the Secretary should allow reasonable extensions of 
certification, with appropriate limitations to avoid abuse, 
until a mother is able to attend a recertification meeting with 
her children.

Breastfeeding Promotion

    The Committee seeks to promote breastfeeding among WIC 
participant mothers. Research shows that breastfeeding is the 
healthiest way to nourish infants and may result in fewer 
infections for the infant and a strengthened immune system. In 
addition, breastfeeding has health benefits for mothers, 
including faster return to pre-pregnancy weight and reduced 
risk of osteoporosis and pre-menopausal breast cancer. In order 
to encourage this practice, H.R. 3873 permits States to certify 
breastfeeding women for up to one year or until women stop 
breastfeeding, whichever is earlier. The Committee understands 
that current practice is to certify such women for six months, 
at which point many women discontinue breastfeeding their 
children. The Committee anticipates that certifying 
breastfeeding women for up to a year may encourage women to 
continue breastfeeding beyond six months.
    Healthy People 2010, published by the Department of Health 
and Human Services, is a comprehensive set of disease 
prevention and health promotion objectives for the nation to 
achieve over the first decade of the new century. Several of 
the goals pertain to breastfeeding. Healthy People 2010 
established a breastfeeding initiation goal of 75 percent of 
all mothers in the United States. A second breastfeeding goal 
is to have 50 percent of all mothers still breastfeeding when 
the child is six months of age. Currently, 64 percent of all 
mothers initiate breastfeeding, but only 58 percent of WIC 
mothers initiate breastfeeding.
    There are many reasons for this discrepancy. The report 
indicates that the lowest rates of breastfeeding are found 
among those whose infants are at highest risk of poor health 
and development: women aged 21 years and under and women with 
low educational levels. Many of these women likely will qualify 
for WIC assistance. WIC administrators are making significant 
efforts to address the challenge, and since 1989 rates of 
breastfeeding have been increasing for this population. 
However, additional work remains. As a result, H.R. 3873 builds 
upon current law promoting breastfeeding within the WIC program 
by requiring State agencies to partner with communities, State 
and local agencies, employers, health care professionals, and 
the private sector to build a supportive breastfeeding 
environment for women participating in WIC to support the 
breastfeeding goals of Healthy People 2010. The Committee urges 
the Secretary of Agriculture to work collaboratively with the 
Secretary of Health and Human Services, State and local 
agencies, and other interested parties, in implementing efforts 
in support of this provision.

Program Operations

    The Child Nutrition Improvement and Integrity Act also 
makes operational improvements to the WIC program, which should 
benefit participants, State and local agencies, and retailers.
    Under current law, State agencies must conduct compliance 
investigations of retail vendors. Often such investigations are 
conducted using ``secret shoppers.'' While such investigations 
are critical for the integrity of the program, retailers ought 
to have the opportunity to correct violations, particularly 
those that are simple errors, prior to implementation of a 
sanction. Therefore, the bill requires that, if a State agency 
finds that a vendor has committed a violation that requires a 
pattern of occurrences in order to impose a 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 its investigation. The Committee intends that such 
investigations include suspicion that the owner or manager is 
involved in fraudulent activity.
    In developing policy guidance or regulations to implement 
this provision, the Committee encourages the Secretary to work 
collaboratively with State agencies to ensure that guidance or 
regulations do not compromise or prejudice current or future 
investigations and offer State agencies adequate flexibility 
and discretion so as to avoid alerting vendors that may be 
knowingly committing fraud that they are suspect.
    The Committee recognizes that occasionally a WIC-authorized 
retail store may change ownership quickly, sometimes overnight. 
In such circumstances, participants may find that their regular 
store location no longer is able to accept WIC food instruments 
until the new store owner obtains authorization. This could 
hurt participant access. If a WIC-authorized retail store is 
sold to another entity holding a WIC authorization at another 
location, or a new store is opened by an entity owning another 
WIC-authorized location, the Committee believes States should 
provide for an interim WIC license for the new store in 
applicable situations. Such authorization could remain in 
effect until the state agency approves or rejects the 
application for license by the subsequent owner provided that 
an application is filed with the State agency in accordance 
with State regulations. Therefore, H.R. 3873 requires State 
agencies to include in their state plans procedures for 
accepting and processing vendor applications outside of the 
established timeframes, such as in situations in which a 
previously authorized vendor changes ownership under 
circumstances that do not permit timely notification to the 
State agency of the change.
    The Committee understands that there may be situations in 
which fraudulent vendors may sell or transfer store ownership 
to agents or others for the purposes of circumventing 
investigations, charges, or prosecutions. Further, the 
Committee recognizes that ownership changes under these 
circumstances may negate disqualification processes. The 
Committee encourages the Secretary to work with State agencies 
and retailers, as appropriate, in formulating policy guidance 
or regulations to safeguard against such practices.
    As State agencies pay WIC retailers, the Committee believes 
that the agencies should permit line-item rejection of a single 
item on a WIC food instrument, when possible, rather than 
rejecting the entire food instrument that contains a vendor 
error, if the State agencies are satisfied with the vendor's 
justification for the error. The practice of line-item 
rejection does not lessen the vendor's responsibility for 
correcting the problems that contribute to chronic errors in 
food instrument transactions. In addition to denying payment or 
assessing a claim, the Committee recognizes that the State 
agencies may sanction the vendor for such errors according to 
State regulations.
    Federal regulations set a maximum amount of infant formula 
to be issued to WIC participants each month. The current amount 
is 944 reconstituted fluid ounces, at standard dilution. Infant 
formula manufacturers offer powdered formula in a variety of 
can sizes, which they may and do choose to change periodically. 
The program needs to be able to respond to changes in product 
packaging. Because the amount of infant formula provided 
currently cannot exceed the amount permitted in regulation, and 
because the powdered can size variations frequently do not 
match the authorized amount, WIC participants may be provided 
less formula and receive less nutritional benefit than they are 
authorized to receive. The Committee is concerned that, instead 
of choosing to purchase additional formula, parents are 
choosing to add more water to the powdered formula to make it 
last longer. Such a practice could have significant nutritional 
consequences for infants. Therefore, H.R. 3873 allows State 
agencies to round up to the next whole can of infant formula to 
ensure that all infants receive the full-authorized nutritional 
benefit specified by regulation. Because infant formula 
manufacturers establish their rebates based on expected 
quantity of formula provided, this provision will apply 
prospectively to future bid solicitations.
    State agencies must establish minimum inventory 
requirements to ensure that authorized vendors have sufficient 
quantities of supplemental foods available to meet the needs of 
WIC participants. The Committee encourages state agencies, to 
the extent possible, to allow vendors the flexibility to obtain 
exempt infant formula or medical foods for participants within 
a reasonable time period, such as 24 to 48 hours, depending on 
manufacturer availability, rather than requiring the vendor to 
stock these items continually.

Electronic Benefit Transfer

    The bill adds to language in current law outlining the 
development of Electronic Benefit Transfer (EBT) systems. 
Current law requires the Secretary to establish a long-range 
plan for the development and implementation of management 
information systems, including EBT, to be used in carrying out 
the program. In January 2003, the Department of Agriculture 
published its five-year plan for WIC EBT system development, 
implementation, and expansion. The Department will pursue WIC 
EBT through support of current state projects, while testing 
the feasibility of technical alternatives in line with current 
trends in commercial retail transaction processing. The 
Committee believes that consistent operating rules from state 
to state would help standardize retail transaction processing 
and help reduce system design cost.
    Therefore, H.R. 3873 requires that all states that receive 
federal funds for design or implementation of WIC EBT systems 
must use technical specifications or standards, as applicable, 
as determined by the Secretary. States with EBT systems that 
are in development or are issuing benefits as of the date of 
enactment shall be required to submit within six months after 
the date of enactment a plan for compliance. The Secretary may 
waive compliance for state EBT systems that are issuing 
benefits as of the date of enactment of this provision until 
such time that compliance is feasible.
    The Committee urges the Secretary to work with WIC state 
agencies, retailer groups and other interested stakeholders to 
develop and implement specifications and standards that will 
promote cost effectiveness, standardization of design, and 
efficient adoption of technologies that support WIC EBT. 
Examples of standards that support WIC EBT include ``Financial 
Transaction Messages--Electronic Benefits Transfer (EBT) 
Guidelines for WIC, X9.93 as published by the American National 
Standards Institute (ANSI), Accredited Standards Committee 
(ASC) X9'' and the ``WIC Smart Card Interoperability 
Specification, X9.108. The Committee intends that this 
provision may also apply to future specifications and standards 
that the Department determines are applicable.
    The Committee encourages the Secretary not to impose, or 
allow State agencies to impose the costs of any equipment, 
systems, or processing required for electronic benefit transfer 
systems that do not comply with these specifications and 
standards on any retail store authorized to transact food 
instruments, as a condition for authorization or participation 
in the program. In addition, the Committee encourages the 
Secretary to allow states that currently are in development or 
issuing benefits using EBT systems to request funds for 
purposes of converting to these standards and specifications 
under the EBT competitive grant process.
    The Committee understands that completion is near on the 
development of a national database of WIC-eligible foods and 
Universal Product Codes (UPCs). The Child Nutrition Improvement 
and Integrity Act requires the Secretary to implement a 
national UPC database for use by all State agencies in carrying 
out the program. The national coding scheme should improve 
transaction processing. The Committee believes the Secretary 
should use funds from prior fiscal years that have not been 
obligated to pay for these activities. The Committee intends 
that the Secretary will work closely with the vendor community 
and State and local WIC agencies in implementing this 
provision.

Preventing Infant Formula Theft

    The Committee aims to curb a growing trend in infant 
formula theft. The black market sales of infant formula 
constitute a potential health hazard. Hazards from stolen 
formula include direct tampering with formula before it is sold 
to unsuspecting retailers, falsification of labeling to change 
expiration dates, counterfeiting, cutting formula with unknown 
and even harmful ingredients, and storage of the formula at 
improper temperatures in trucks and warehouses.
    To address this concern, H.R. 3873 incorporates language 
offered by Representative John Carter that mirrors the 
methodology used in the State of Texas to address this issue. 
The bill requires the State agency to maintain a list of infant 
formula manufacturers, wholesalers, distributors, and retailers 
approved to provide infant formula. The list shall include food 
manufacturers, wholesalers, distributors, and retailers 
licensed in the State in accordance with state law and 
regulations to distribute infant formula and food manufacturers 
registered with the U.S. Food and Drug Administration that 
provide infant formula. Vendors authorized to participate in 
WIC must purchase infant formula from entities on this list.
    The Committee is aware that licensing requirements and 
types of licenses may vary significantly among States. For 
instance, some States may rely on State health licensing 
requirements, and others may utilize State business licenses. 
The Committee further recognizes that this provision authorizes 
an additional activity for State agencies and does not intend 
for the State agencies to be the policing agent to the 
requirements of this provision.

Cost Containment

    The Committee believes that containing costs through price 
limitations paid to vendors for supplemental foods is critical 
for ensuring program access for the maximum number of eligible 
individuals. Under current law, state agencies must, when 
selecting a retail store for participation in the WIC program, 
take into consideration the prices that the store charges for 
foods under the program as compared to the prices that other 
stores charge for the foods. To reinforce the importance of 
cost containment in retail pricing, H.R. 3873 places in statute 
and enhances requirements that currently are in regulation.
    Section 409 of the bill clarifies authority regarding WIC 
program vendor cost containment and related matters. The bill 
reflects the Committee's intention that State agencies, with 
the support and assistance of the Department, establish clear, 
effective vendor cost containment requirements that assure WIC 
program food package costs reasonably reflect competitive 
prices for such foods. This charge to limit vendor prices is 
compelled by the need to assure efficient use of taxpayer 
resources and assure that WIC program participation levels will 
be as high as practicable within available funding. The bill 
requires state agencies to establish price limitations on the 
amount that they will pay vendors for supplemental foods, while 
ensuring such limitations do not result in inadequate 
participant access by geographic area.
    H.R. 3873 would provide to state agencies significant 
discretion in establishing vendor cost containment 
requirements. State vendor authorization is to be governed by 
the principles of providing convenient vendor access to program 
participants at vendor prices that avoid excessive food package 
costs. States would be required to establish a vendor cost 
containment system that ensures competitive prices through an 
evaluation of shelf prices of the vendor applicant or prices 
bid by the vendor applicant for supplemental foods and sets 
price limitations to establish the maximum prices that vendors 
may charge for supplemental foods.
    The bill would require the state agency to establish 
competitive price requirements and price limitations for vendor 
peer groups, as necessary to ensure that prices paid to vendors 
are competitive. The Committee expects vendor peer group 
competitive price requirements and price limitations to reflect 
reasonable estimates of varying costs of acquiring supplemental 
foods by stores of differing characteristics. For example, for 
various reasons, independent grocery stores that have a small 
total sales volume may have significantly higher cost of 
acquisition of supplemental foods than stores that are part of 
a large national chain. The Committee expects the state agency 
to rely upon such evidence as may be available to reasonably 
estimate such acquisition cost variations.
    In establishing competitive price and price limitation 
requirements, the state agency may exclude pharmacy vendors 
that supply only exempt infant formula or medical foods that 
are eligible under the program. The Committee provides this 
discretionary authority to assure that participants may be 
provided access to vendors that supply medical foods or exempt 
infant formulas. The Committee expects the state agency to 
exercise diligence to assure that the vendor cost for such 
supplemental foods is not excessive.
    The Committee also believes that WIC program funds must not 
be used by retail stores to purchase and provide incentive 
items or free merchandise to program participants, and the bill 
prohibits States from authorizing vendors that engage in such 
practices. The Committee would expect state agencies and the 
Department of Agriculture to seek criminal prosecution of any 
vendor that misused WIC program monies in such a manner. The 
Committee expects vendor marketing activities to be paid for 
exclusively with private funds. The Committee does not intend 
to prevent retailers from offering weekly specials, promotions, 
or coupons on any product, including WIC supplemental foods, if 
such specials, promotions or coupons are paid for with non-WIC 
funds, are available to any member of the public and the store 
accepts various payment types. Examples of payment types 
include checks, credit cards, and cash.
    Finally, Section 409 includes a rule of construction that 
makes clear that nothing in the WIC statute may be construed to 
authorize violation of federal antitrust laws.
    The Committee encourages other efforts to contain food 
costs under the WIC program, as well. In approving supplemental 
foods for use within their jurisdictions, the Committee 
encourages State agencies to approve private label or store 
branded products that are nutritionally equivalent to national 
brands as a cost containment measure.
    The Committee believes that the delivery of supplemental 
foods under the program in large part relies on successful 
partnerships between WIC agencies and retail food vendors. Some 
of the provisions outlined above aim to improve those 
interactions. However, most operational practices are 
determined at the state and local level. As a result, the 
Committee recognizes that the benefits of maintaining a process 
of ongoing dialogue and collaboration between state agencies, 
authorized WIC vendors, representatives of retailer 
associations, and other entities interested in vendor 
management activities. A number of state agencies have 
established vendor advisory panels or boards as a means of 
obtaining input into the development and implementation of 
effective vendor management policies and procedures. The 
Committee encourages state agencies to establish a mechanism, 
such as vendor advisory panels, to strengthen ongoing 
communication and collaboration between state agencies and the 
retail vendor community that provides supplemental foods.
    To ease administration within states, the bill permits 
states to expend up to three percent of nutrition services and 
administration funds during the subsequent fiscal year for 
allowable expenses incurred during a fiscal year. Under current 
law, states are permitted to carry forward one percent of these 
funds. The Committee encourages the Secretary to work 
collaboratively with state and local agencies in the 
development of any regulations or policy guidance to implement 
the requirements of this provision.

Infant Formula Competitive Bidding

    The WIC program has required for more than 13 years that 
states use sole-source competitive bidding to purchase infant 
formula. The manufacturer that offers the lowest next price in 
each State is awarded the contract to provide infant formula 
through the state WIC program. Competitive bidding is critical 
to the financing of the WIC program. Betsy Clarke, the 
Minnesota State WIC Director who testified before the 
Subcommittee on Education Reform on behalf of the National WIC 
Association (NWA), stated:

          (T)he competitive bidding requirement for infant 
        formula has resulted in significant savings to the WIC 
        program. Indeed, USDA reports that use of competitive 
        bidding reduces federal WIC costs by approximately $1.5 
        billion a year. Roughly 1 in 5 WIC participants are 
        able to participate in WIC because of the infant 
        formula cost containment program. It generated $1.7 
        billion last year in non-tax revenue for WIC.

    While affirming that the current competitive bidding 
process provides critical cost containment to the program, the 
Child Nutrition Improvement and Integrity Act seeks to enhance 
the fairness and integrity of the contract bidding and rebate 
process.
    Infant formula rebates are provided to each state for every 
can of formula sold through the program in that state. Payments 
to the states are based on WIC voucher redemptions. Yet despite 
past efforts to improve integrity issues, manufacturers may be 
inadvertently billed for units of formula that actually have 
not been provided to WIC participants. To help correct this 
situation, the bill requires each state agency to have a system 
to ensure that infant formula rebate invoices, pursuant to 
competitive bidding, provide a reasonable estimate or an actual 
count of the number of units of infant formula sold to WIC 
participants.
    While noting that a reasonable estimate or an actual count 
of the number of units of infant formula sold to participants 
in the WIC program is desirable, the Committee is aware of the 
numerous infrastructure challenges state agencies and retailers 
face in responding to this provision. It is the intent of the 
Committee that this provision not be burdensome to either State 
agencies or retailers. A number of states have worked 
collaboratively with infant formula manufacturers to develop 
methodologies that provide a close approximation or reasonable 
estimate of the number of units of infant formula, including 
Massachusetts, Maine, New Hampshire, Connecticut, and 
Pennsylvania. In every instance, these methodologies are 
acceptable to the infant formula manufacturers. The Committee 
urges state agencies, retailers and formula manufacturers that 
have not yet developed such methodologies to consider these 
best practices in responding to this provision.
    All state infant formula rebate contracts are required by 
regulation to include contract provisions requiring 
manufacturers to increase the amount of their rebates on a 
cent-for-cent basis each time the manufacturer raises the 
wholesale price of its formula. The purpose of these provisions 
is to ensure that the net wholesale price agreed to at the time 
of bidding remains the same throughout the term of the 
contract. However, nothing encourages a cent-for-cent decrease 
in rebates if wholesale prices are lowered. An absence of such 
provisions discourages a reduction in prices. Therefore, the 
bill requires that bid solicitations for infant formula made on 
or after October 1, 2004 shall require cent-for-cent increases 
in the rebate amounts if there is an increase in the lowest 
national wholesale price for a truckload of the particular 
infant formula, and a corresponding cent-for-cent decrease for 
a decrease in the wholesale price.
    Many states partner with other states for the purpose of 
requesting infant formula rebate bids and implementing the 
resulting contracts. States form these alliances for 
administrative simplification and with the goal of obtaining 
more competitive bids. However, an unintended consequence of 
these larger alliances is that competition may be diminished 
because only two infant formula manufacturers have the capacity 
to bid for the largest contracts.
    As a result, the bill limits the size of state alliances. 
No state alliance may form among states whose infant 
participation exceeds 200,000 based on program participation as 
of October 1, 2003. Those alliances of that size existing on 
that date may continue. In addition, any state agency serving 
fewer than 5,000 infant participants as of October 2003, or any 
Indian Tribal Organization, may request to join any alliance.

Conclusion

    The Committee on Education and the Workforce supports the 
numerous reforms included in H.R. 3873 that will ensure 
eligible children and families have access to services and 
federal resources are being effectively leveraged to serve 
children in need.
    The federal child nutrition programs ensure millions of 
children have access to healthy and nutritious meals. The 
investment in these programs is considerable, and so is our 
obligation to ensure our federal resources are being used 
effectively and efficiently. Children and families depend on 
federal child nutrition programs.
    H.R. 3873 will extend the life of programs that help to 
provide nutritional services to America's most vulnerable 
children, while making some common-sense reforms. It places a 
special emphasis on ensuring children are encouraged to make 
healthy choices through these taxpayer-funded programs, and on 
strengthening program integrity to ensure fewer funds are 
diverted away from the needy children these programs are meant 
to serve.
    The Committee appreciates Members from both sides of the 
aisle that worked diligently and remained dedicated to a 
bipartisan process. Out of that process is the Child Nutrition 
Improvement and Integrity Act that will result in positive 
reforms for millions of American children.

                      Section-by-Section Analysis

    Section 1--Short Title. Cites the short title as the Child 
Nutrition Improvement and Integrity Act.
    Section 2--Table of Contents. Outlays the numbers and 
headings of the titles and sections of this Act.

          TITLE I--ENSURING ACCESS TO CHILD NUTRITION PROGRAMS

    Section 101--Exclusion of Military Housing Allowances. 
Amends Section 9(b)(7) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1758 (b)). Permanently reauthorizes 
a provision allowing military housing not to be considered as 
income in determining eligibility for free or reduced price 
lunch under the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1751).
    Section 102--Homeless Children and Runaway Youth, and 
Migratory Child Eligibility. Amends Section 9(b)(6)(A) and 
Section 9(d)(2) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1758 (b)(6)(A)) and (42 U.S.C. 1758(d)(2)). 
Includes children or youth defined as homeless under the 
McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a), 
youth served under the Runaway and Homeless Youth Act (42 
U.S.C. 5701), and migrant youth as defined in the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 6399(2)) as 
automatically eligible for free breakfast or lunch under the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1751) 
and the Child Nutrition Act of 1966 (42 U.S.C. 1771).
    Section 103--Eligibility for Severe Need Assistance. Amends 
Section 4(d) of the Child Nutrition Act of 1966 (42 U.S.C. 
1773(d)). Allows new schools to be classified as ``severe 
need'' if they are drawing attendance from schools in areas 
already designated as such. This changes the existing two-year 
wait to be classified as ``severe need.'' Eliminates the cost 
accounting requirement for severe need breakfast.
    Section 104--Reauthorization of Summer Food Programs. 
Amends Section 18(f) of the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1769 (f)(2)). Reauthorizes the Summer Food 
Pilot Projects and the Summer Food Service Program for Children 
through fiscal year 2008, and allows non-profits to 
participate. Expands the pilot to three additional States, 
selected by the greatest percentage of households determined to 
be food insecure with hunger.
    Section 105--Child and Adult Food Program. Amends Section 
17 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1766). Continues to allow private day care providers 
with at least 25 percent of served children eligible for free 
and reduced price lunch to participate in this program. Changes 
the length of ``tier 1'' classification of a family or group 
day care home from 3 years to 5 years. Instructs the Secretary 
to issue regulations regarding a standard form of agreement 
between States and family or group day care homes and sponsors 
of homes; this agreement specifies the rights and 
responsibilities of each party, and shall remain in effect 
until terminated by either party. Updates applicable fiscal 
years for funding allowing the Secretary to provide training 
and technical assistance to the States to improve program 
management and oversight. Adds language allowing the Secretary 
or State agency to disregard any overpayment to an institution 
that is lesser than the cost of recovering the overpaid funds, 
unless there is evidence of criminal fraud or violation. Adds 
language allowing children up to age 18 to be served meals, 
while residing at an emergency shelter. Adds a freestanding 
direction to the Secretary, in conjunction with States and 
participating institutions, to examine the feasibility of 
reducing paperwork.
    Section 106--Review of Best Practices in the Breakfast 
Program. Adds a freestanding directive to the Secretary to 
enter into an agreement with a research organization to collect 
and disseminate a review of best practices to promote the 
growth of the school breakfast program under Section 4 of the 
Child Nutrition Act of 1966 (42 U.S.C. 1773).
    Section 107--Area Eligibility Demonstration. Amends Section 
13 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1761). Adds a single state demonstration project in 
which rural areas are eligible for Summer Food Service Program 
if they have 40 percent of the children enrolled eligible for 
free or reduced price lunch. All other States enrolled in the 
program continue to have a 50 percent area eligibility 
requirement.
    Section 108--Seamless Summer Administration. Amends Section 
13(a) and 13(b)(1) of the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1761(a) and 1761(b)(1)). Adds language 
allowing schools that participate in the National School Lunch 
Program to offer summer or school vacation food service at 
Summer Food Service Program reimbursement rates without having 
to apply to be a Summer Food Service Program sponsor.
    Section 109--Year Round Community Child Nutrition Program 
Pilot. Amends Section 13(a) of the Richard B. Russell National 
School Lunch Act (452 U.S.C. 1761(a)). Adds a single state 
pilot project allowing non-profit organizations to provide 
meals year round without applying to the Child and Adult Care 
Food Program.

           TITLE II--IMPROVING PROGRAM QUALITY AND INTEGRITY

    Section 201--Eligibility and Certification for Free and 
Reduced Price Lunches. Amends Section 9(b) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1758). Adds the 
subsection heading ``Eligibility for Free and Reduced Price 
Lunches.'' States that the income eligibility guidelines shall 
be based on the nonfarm income poverty guidelines issued by the 
Secretary of Health and Human Services. Ensures that 
applications for free and reduced price lunch and any 
descriptive material are distributed, at least annually, to 
parents and guardians in a clear and understandable format, 
including in an understandable language. States that 
descriptive material shall contain only the income levels for 
reduced price lunch (with an explanation that those with a 
lower level of income may be eligible for free lunch), and also 
must contain a notice that participants in the WIC program are 
eligible for free or reduced price lunch. Allows a household to 
submit one application for all children in the household, and 
allows applications to be submitted completely online, provided 
that they are submitted by an adult member of the household 
from a secure and confidential filing site. Instructs local 
education agencies with a high rate of non-response to focus 
verification on error prone applications. Allows local 
education agencies without a high non-response rate the option 
to verify a smaller percentage of applications if the 
verification is focused on error prone applications. Instructs 
State agencies, to the extent practicable, to enter into an 
agreement with the State agency administering the food stamp 
program, for the purpose of directly certifying children in 
households classified as migratory, receiving food stamps, or 
enrolled in Temporary Assistance for Needy Families as eligible 
for free meals. Adds language protecting the privacy of those 
families enrolled in the food stamp and temporary assistance 
for needy families programs. Adds language allowing an local 
education agency not to re-submit a policy statement to the 
State agency unless there is a substantive change in policy.
    Section 202--Duration of Eligibility for Free and Reduced 
Price Lunches. Amends Section 9(b)(3) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1758(b)(3)). Adds language 
stating that children are to be certified for one full school 
year.
    Section 203--Certification by Local Education Agencies. 
Amends Section 9 of the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1758). Changes language to place the 
responsibility of the local administration of the school lunch 
and breakfast programs from the local school food authority to 
the local education agency, and defines the local education 
agency as it is defined in Section 9101 of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7801).
    Section 204--Compliance and Accountability. Amends Section 
22 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1769c). Adds language placing a shared responsibility 
for compliance and accountability on the local school food 
authority and the local education agency.
    Section 205--Technology Improvement. Amends Section 7 of 
the Child Nutrition Act of 1996 (42 U.S.C. 1776). Places 
priority for the reallocation of funds on States that will use 
the funds for technology and information management 
improvements.
    Section 206--Minimum State Administrative Expense Grants. 
Amends Section 7 of the Child Nutrition Act of 1966 (42 U.S.C. 
1776(a)(1)). Adds language that raises the minimum state 
administrative expense grant over time, and prevents States 
from receiving less than they did the previous year.
    Section 207--District-Wide Eligibility for Special 
Assistance. Amends Section 11(a)(1) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1759a(a)(1)). Allows 
eligibility for special assistance to be determined district-
wide as opposed to by each school individually.
    Section 208--Administrative Error Reduction. Amends 
Sections 21 and 22(b) of the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1769b-1, 42 U.S.C. 1769c(b)) and Section 7 
of the Child Nutrition Act of 1966 (42 U.S.C. 1776). Adds 
language providing training and technical assistance and 
funding for the improvement of program integrity and 
administration accuracy. Institutes additional administrative 
and performance reviews, of which the results are to be used to 
develop a plan of corrective action and to identify the need 
for technical assistance when performance criterion are not 
met. Allows the Secretary require the State agency to recover 
funds that were expended in error and use the recovered funds 
to improve program integrity and administrative accuracy. 
Allows the Secretary or State agency to contract with a third 
party while conducting these activities. Instructs assistive 
funds to be provided to States with excessive error rates. Adds 
language requiring States to develop a description of how they 
will use technology and information management systems to 
improve program integrity.

TITLE III--PROMOTING NUTRITION QUALITY AND PREVENTING CHILDHOOD OBESITY

    Section 301--Local School Wellness Policy. Adds a 
freestanding directive to local education agencies to establish 
a local school wellness policy including goals for nutrition 
education, physical activity, and nutrition guidelines, and 
establishes a plan for ensuring implementation of the local 
wellness policy. The formation of the policy shall involve 
parents, students, representatives of the school food 
authority, the school board, the school administrators, and the 
public.
    Section 302--Supporting Nutrition Education, Improving Meal 
Quality, and Access to Local Foods. Amends Section 19 of the 
Child Nutrition Act of 1966 (42 U.S.C. 1788). Adds language 
supporting effective nutrition education through assistance to 
State Agencies, schools, and nonprofit entities for Team 
Nutrition and other nutrition education projects to improve 
student understanding of healthful eating and physical activity 
patterns. Allows the Secretary to provide assistance to States 
to implement a 3 year pilot project for the purpose of 
promoting healthy eating habits and increasing physical 
fitness. After 18 months of this project, the Secretary shall 
transmit a report on the evaluation of these projects. The 
Secretary may also provide assistance to State education 
agencies, schools, and nonprofit entities to improve meal 
quality and to improve access to local foods in schools through 
farm-to-cafeteria activities that may include the acquisition 
of food and the appropriate equipment, and the provision of 
training and education. Requires an independent evaluation of 
Team Nutrition.
    Section 303--Fruits and Vegetable Commodities. Amends 
Section 6(c)(1)(D) of the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1755(c)(1)(D)). Adds language to include 
fruits and vegetables among foods that are emphasized in 
commodity distribution.
    Section 304--Fluid Milk. Amends Section 9(a)(2) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1758 
(a)(2)). Adds language requiring schools to serve milk in a 
variety of fat contents and allowing a nutritionally equivalent 
non-dairy beverage to be reimbursable, if the child provides a 
note from parents or a doctor. Prohibits any restriction of the 
sale of milk on school property or at a school-sponsored event.
    Section 305--Waiver of Requirements for Weighted Averages 
for Nutrient Analysis. Amends Section 9(f)(5) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1758(f)(5)). 
Extends the period of time during which the use of weighted 
averages are not required in a nutrient analysis of foods under 
the school lunch program, provided that the school food 
authority has an equivalent system for conducting a nutrient 
analysis.
    Section 306--Whole Grains. Adds a freestanding directive to 
the Secretary to promulgate rules, based on federal nutrition 
guidelines, to increase the presence of whole grains in foods 
offered in school nutrition programs.

      TITLE IV--IMPROVING THE WOMEN, INFANTS, AND CHILDREN PROGRAM

    Section 401--Definition of Nutrition Education. Amends 
Section 17(b)(7) of 1966 (42 U.S.C. 1786(b)(7)). Adds language 
updating the definition to include child development and 
physical activity.
    Section 402--Definition of Supplemental Foods. Amends 
Section 17(b)(14) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(b)(14)). Adds language updating the definition to consider 
the most recent Dietary Guidelines for Americans.
    Section 403--Improving Certification. Amends Section 17 of 
the Child Nutrition Act of 1966 (42 U.S.C. 1786). Allows 
breastfeeding women to be certified for up to one year while 
they continue to breastfeed, relaxes the physical presence 
requirement for infants under 8 weeks of age, allows patients 
to reschedule an appointment to apply or be re-certified, and 
allows States to issue interim licenses for WIC vendors with 
WIC procedures already in place.
    Section 404--Reviews of Available Supplemental Foods. 
Amends Section 17(f)(11) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(f)(11)). Requires the Secretary to conduct a 
scientific review of the foods available in the program and 
promulgate a rule to make changes, based on nutrition science, 
current public health concerns, cultural eating patterns, and 
the review of the food package undertaken by the National 
Academy of Sciences, Institute of Medicine in September 2003.
    Section 405--Notification of Violations and Infant Formula 
Benefits. Amends Section 17(f) of the Child Nutrition Act of 
1966 (42 U.S.C. 1786(f)). Adds language requiring the State 
agency to notify vendors in writing of violations (unless the 
notification compromises an investigation) and allowing State 
agencies to round up to the next whole can size of infant 
formula on contracts formed after October 1, 2004.
    Section 406--Healthy People 2010 Initiative. Amends Section 
17(h)(4) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(4)). Adds language encouraging breastfeeding promotion 
activities for WIC participants, supporting the goals of 
Healthy People 2010.
    Section 407--Competitive Bidding. Amends Section 
17(h)(8)(A) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(8)(A)). Adds language allowing infant formula rebate 
amounts to increase or decrease on a cent-by-cent basis 
according to change in the lowest national wholesale price.
    Section 408--Fruit and Vegetable Projects. Amends Section 
17(h)(10)(B)(ii) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(10)(B)(ii)). Allows private funds to be used to provide 
10 sites with fresh, frozen, and canned fruits and vegetables, 
with an evaluation of their inclusion.
    Section 409--Price Levels of Retail Stores. Amends Section 
17(h)(11) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(11)). Clarifies that States must have policies to 
contain costs of WIC supplemental foods and ensure competitive 
pricing.
    Section 410--Management Information Systems. Amends Section 
17(h)(12) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(12)). Requires States to institute standards for 
electronic benefit systems and the Secretary to implement a 
national Universal Product Code Database, for use by all State 
agencies.
    Section 411--Infant Formula Fraud Prevention. Amends 
Section 17(h) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)). Requires vendors to purchase infant formula from a 
list of approved manufacturers, wholesalers, distributors, and 
retailers, maintained by the State.
    Section 412--State Alliances. Amends Section 17 of the 
Child Nutrition Act of 1966 (42 U.S.C. 1786). Adds language 
preventing State alliances exceeding 200,000 infant 
participants, except for those already in existence. Allows a 
State agency serving under 5,000 participants or an Indian or 
Tribal Organization to join any State alliance.
    Section 413--Limits on Expenditures. Amends Section 
17(i)(3)(A)(ii)(I) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(i)(3)(A)(ii)(I)). Increases from one to three 
percent the amount of nutrition services and administration 
funds a state may expend during the subsequent fiscal year for 
allowable expenses incurred during a fiscal year.
    Section 414--Migrant and Community Health Centers 
Initiative. Amends Section 17(j) of the Child Nutrition Act of 
1966 (42 U.S.C. 1786(j)). Removes outdated language.
    Section 415--Demonstration Projects. Amends Section 17 of 
the Child Nutrition Act of 1966 (42 U.S.C. 1786) and Section 12 
of the Richard B. Russell National School Lunch Act (42 U.S.C. 
1760). Removes outdated language.
    Section 416--Authorization of Appropriations. Amends 
Section 17, subsections (g), (h), and (m) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1786). Authorizes 
appropriations for these programs through fiscal year 2008.

 TITLE V--REAUTHORIZATION, MISCELLANEOUS PROVISIONS, AND EFFECTIVE DATE

    Section 501--Training Technical, and other Assistance. 
Amends Section 21(a)(1) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1769b-1(a)(1)). Adds language 
designating training and technical assistance, and language 
protecting the privacy of students enrolled in these programs.
    Section 502--Notice of Irradiated Food. Amends Section 14 
of the Richard B. Russell National School Lunch Act (42 U.S.C. 
1762a). Requires the Secretary to develop policy and establish 
procedures regarding the purchase, distribution, notice of 
consumption, and provision of information regarding irradiated 
foods.
    Section 503--Sense of Congress. Amends Section 12 of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1760). 
Adds language expressing the sense of Congress that federal 
resources expended for programs under the Richard B. Russell 
National School Lunch Act (42 U.S.C 1750) and the Child 
Nutrition Act of 1966 (42 U.S.C. 1770) should be effective and 
not duplicative.
    Section 504--Reauthorization of Programs. Amends Section 
7(i) of the Child Nutrition Act of 1966 (42 U.S.C. 1776(g)), 
Section 14(a) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1762a(a)), Section 15(e) of the Commodity 
Distribution Reform Act and WIC Amendments of 1987 (7 U.S.C. 
612c note; Public Law 100-237), Section 9(j)(2)(A) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 
758(j)(2)(A)), Section 21(g)(1) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1769b-1(e)(1)), and 
Section 22(d) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1769c(d)). Changes outdated language.
    Section 505--Effective Dates. States the effective dates of 
the amendments made by Sections 101, 104, 105(a), 202, 410, 
416, and 504 shall take effect on the date of enactment of this 
Act. The amendments made by Section 201 and Section 208(c) 
shall take effect on July 1, 2005. All other amendments made by 
this Act shall take effect October 1, 2004.)

                       Explanation of Amendments

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

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. H.R. 3873, the Child Nutrition Improvement and 
Integrity Act of 2004, amends and improves the Child Nutrition 
Act of 1966 and the Richard B. Russell National School Lunch 
Act to provide children with access to food and nutrition 
assistance, to simplify program operations, to improve 
children's nutritional health, to enhance the integrity of 
child nutrition programs. This bill does not prevent 
legislative branch employees from receiving the benefits of 
this legislation.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (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. H.R. 3873, provides children with access to food and 
nutrition assistance through support for mandatory and 
discretionary funded programs at State and local option to 
participate. As such, the bill does not contain any unfunded 
mandates.
[GRAPHIC] [TIFF OMITTED] TR445.001

[GRAPHIC] [TIFF OMITTED] TR445.002

                             Correspondence

                                  House of Representatives,
                                    Washington, DC, March 19, 2004.
Congressman John A. Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Congressman Boehner: Due to other legislative duties, 
I was unavoidably detained during Committee consideration of 
H.R. 3873, ``The Child Nutrition Improvement and Integrity 
Act.'' Consequently, I missed roll call number one on the 
amendment offered by Representative Ryan. Had I been present, I 
would have voted against the amendment. I also missed roll call 
number two on final passage of the bill. Has I been present, I 
would have voted in favor of the bill.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 3873. Thank you for your 
attention to this matter.
            Sincerely,
                                             Pete Hoekstra,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                    Washington, DC, March 22, 2004.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 
3873, ``The Child Nutrition Improvement and Integrity Act.'' 
Consequently, I missed roll call number one on the amendment 
offer by Representative Ryan. Had I been present, I would have 
voted in against the amendment.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 3873. Thank you for your 
attention to this matter.
            Sincerely,
                                            John R. Carter,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                    Washington, DC, March 22, 2004.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 
3873, ``The Child Nutrition Improvement and Integrity Act.'' 
Consequently, I missed roll call number two on final passage of 
the bill. Had I been present, I would have voted in favor of 
the bill.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 3873. Thank you for your 
attention to this matter.
            Sincerely,
                                            John R. Carter,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                    Washington, DC, March 22, 2004.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 
3873, ``The Child Nutrition Improvement and Integrity Act.'' 
Consequently, I missed roll call number one on the amendment 
offered by Representative Ryan and the roll call vote on final 
passage of the bill. Had I been present, I would have voted 
against the amendment and in favor of the bill.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 3873. Thank you for your 
attention to this matter.
            Sincerely,
                                                Ric Keller,
                                                Member of Congress.

  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 Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 3873 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                              Congresssional Budget Office,
                                    Washington, DC, March 23, 2004.
Hon. John A. Boehner,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: CBO has prepared the enclosed estimate 
of the direct spending effects of H.R. 3873, the Child 
Nutrition Improvement and Integrity Act. (CBO has not yet 
completed an estimate of the bill's effects on spending subject 
to appropriation.)
    If you would like additional details on this estimate, we 
will be pleased to provide them. The CBO staff contact is 
Kathleen FitzGerald.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 3875--Child Nutrition Improvement and Integrity Act

    Summary: H.R. 3873, the Child Nutrition Improvement and 
Integrity Act, would amend and reauthorize child nutrition 
programs and the Special Supplemental Nutrition Program for 
Women, Infants, and Children (WIC). CBO estimates that enacting 
the bill would increase direct spending by $278 million over 
the 2004-2009 period and about $550 million over the 2004-2014 
period. (The bill would increase direct spending by $226 
million over the 2004-2008 period, the five-year period covered 
by the Concurrent Resolution on the Budget for Fiscal Year 
2004.)
    In addition, enactment of H.R. 3873 would also affect 
spending subject to appropriation action. However, CBO has not 
yet completed an estimate of the potential discretionary 
spending effects of the bill.
    H.R. 3873 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Because states and schools have flexibility in how they 
implement the child nutrition program and because they would 
receive new financial assistance, the new requirements of H.R. 
3873 would not be intergovernmental mandates.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 3873 on direct spending is shown in 
Table 1. The changes in direct spending fall within budget 
function 600 (income security).

                          TABLE 1.--SUMMARY OF EFFECTS OF H.R. 3873 ON DIRECT SPENDING
----------------------------------------------------------------------------------------------------------------
                                                       By fiscal year, in millions of dollars--
                                    ----------------------------------------------------------------------------
                                      2004   2005   2006   2007   2008   2009   2010   2011   2012   2013   2014
----------------------------------------------------------------------------------------------------------------
Estimated Budget Authority.........     17     64     52     51     52     51     52     53     54     55     56
Estimated Outlays..................     13     54     55     52     52     52     52     53     54     55     56
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: The following description and Table 2 
detail those provisions that have significant budgetary 
effects. The estimate assumes that H.R. 3873 will be enacted 
this spring.

Exclusion of Military Housing Allowances

    Section 101 would make permanent a provision requiring that 
the housing allowance of military personnel living in 
privatized housing units not be counted toward income when 
determining the eligibility of children for free and reduced-
price school meals. This provision was set to expire on 
September 30, 2003, but was extended to March 31, 2004, by 
Public Laws 108-84, 108-104, 108-107, and 108-134. Based on the 
income, housing, and family size data for enlisted military 
personnel, CBO estimates that benefits for about 7,000 children 
would increase in 2005 as a result of this provision, 
eventually rising to 16,000 as more privatized units become 
available. This provision would take effect upon enactment of 
the bill. CBO estimates that the increase in direct spending 
would not be significant (less than $500,000) for the remainder 
of the 2004 fiscal year. In 2005, CBO estimates that it would 
cost $1 million, rising to an average of about $4 million a 
year thereafter.

Eligibility for Severe Need Assistance

    Section 103 would eliminate cost accounting for breakfasts 
served in schools classified as ``severe need'' schools 
(defined below) and eliminate the waiting period for new 
schools to receive the severe need rate. CBO estimates that 
this provision would increase direct spending by $1 million 
annually.

                                         TABLE 2.--ESTIMATED DIRECT SPENDING EFFECTS OF H.R. 3873, BY PROVISION
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         By fiscal year, in millions of dollars--
                                                                 ---------------------------------------------------------------------------------------
                                                                   2004    2005    2006    2007    2008    2009    2010    2011    2012    2013    2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Title I, Ensuring Access to Child Nutrition Programs

Exclusion of Military Housing Allowances:
    Estimated Budget Authority..................................       *       2       3       4       4       4       4       4       4       5       5
    Estimated Outlays...........................................       *       1       3       4       4       4       4       4       4       5       5
Eligibility for Severe Need Assistance:
    Estimated Budget Authority..................................       0       1       1       1       1       1       1       1       1       1       1
    Estimated Outlays...........................................       0       1       1       1       1       1       1       1       1       1       1
Reauthorization of Summer Food Program:
    Estimated Budget Authority..................................       1       1       2       2       2       2       2       2       2       2       2
    Estimated Outlays...........................................       1       1       2       2       2       2       2       2       2       2       2
Child and Adult Care Food Program:
    Estimated Budget Authority..................................      15      44      45      46      47      48      50      51      52      53      55
    Estimated Outlays...........................................      12      39      45      45      47      48      49      51      52      53      54
Area Eligibility Demonstration:
    Estimated Budget Authority..................................       0       1       1       1       1       1       1       1       1       1       1
    Estimated Outlays...........................................       0       *       1       1       1       1       1       1       1       1       1
Year-Round Community Child Nutrition Program Pilot:
    Estimated Budget Authority..................................       0       7      10      10      10      11      11      12      12      13      14
    Estimated Outlays...........................................       0       6       9      10      10      11      11      12      12      13      14

                                                    Title II, Improving Program Quality and Integrity

Eligibility and Certification for Free and Reduced Price
 Lunches:
    Estimated Budget Authority..................................       0       1     -16     -17     -19     -20     -21     -22     -23     -25     -26
    Estimated Outlays...........................................       0       1     -13     -17     -18     -19     -21     -22     -23     -24     -26
Minimum State Administrative Expense Grants:
    Estimated Budget Authority..................................       0       1       1       1       2       2       2       2       2       2       2
    Estimated Outlays...........................................       0       1       1       1       2       2       2       2       2       2       2
Administrative Error Reduction:
    Estimated Budget Authority..................................       0       6       6       5       5       3       3       3       2       2       2
    Estimated Outlays...........................................       0       3       7       5       5       4       3       3       3       3       3

                                                            Total Changes in Direct Spending

Estimated Budget Authority......................................      17      64      52      51      52      51      52      53      54      55      55
    Estimated Outlays...........................................      13      54      55      52      52      52      52      53      54      55      56
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--Less than $500,000.

    Currently, a school participating in the School Breakfast 
Program (SBP) is classified as a ``severe need'' school and 
eligible for a higher reimbursement for free and reduced-price 
breakfasts if at least 40 percent of the lunches served in the 
school in the second preceding year were free or reduced price. 
Severe need schools are reimbursed for their actual costs 
incurred in providing breakfast, up to the maximum severe need 
rate. Based on discussions with the Food and Nutrition Service 
(FNS), there are some schools that are eligible for the severe 
need rate but do not receive it because of the paperwork 
entailed in accounting for per-meal costs. This provision would 
allow these schools to automatically receive the maximum severe 
need rate for each breakfast served. Based on data on the 
number of schools that would meet the severe need eligibility 
requirements and the number reported to be receiving the higher 
rate, CBO estimates that about 200 schools would begin 
receiving the severe need rate under this provision, increasing 
payments by about $1,800 per school on average.
    In addition, this provision would allow new schools to 
automatically receive the severe need rate if they drew their 
student body from schools that already receive the severe need 
rate. Based on the number of schools that enter the National 
School Lunch Program (NSLP) each year and the participiation 
rate in SBP, CBO estimates that each year, about 150 additional 
schools would start receiving the severe need rate earlier than 
they would have under current law, increasing payments by about 
$1,800 per school on average.

Reauthorization of Summer Food Programs

    Section 104 would reauthorize the Summer Food Service 
Program (SFSP) and extend and expand the current Summer Food 
Pilot Project (known as the ``Lugar pilot''). In the SFSP, 
sponsors are reimbursed for actual costs incurred for providing 
meals, up to the maximum reimbursement rate. In the current 
pilot, SFSP sites in 13 states and Puerto Rico, other than 
those run by private, nonprofit sponsors, automatically receive 
the maximum reimbursement per meal. This provision would extend 
the pilot to three additional states as well as allow private, 
nonprofit sponsors to participate in the pilot. That expansion 
would result in serving about 300,000 additional meals, for an 
incremental cost of close to $1 million a year. By 2007, CBO 
estimates that roughly six million meals in the SFSP will be 
reimbursed 16 cents more per meal than under current law. CBO 
estimates that, taken together, these changes would cost $1 
million to $2 million a year over the 2004-2014 period.

Child and Adult Care Food Program

    Section 105 would expand eligibility for participation in 
the Child and Adult Care Food Program (CACFP) and reauthorize a 
management improvement initiative. CBO estimates that this 
entire provision would increase direct spending by $237 million 
from 2004 through 2009 and $497 million over the 2004-1014 
period.
    Section 105(a) would make permanent a provision to allow 
for-profit child care centers to participate in the CACFP if at 
least 25 percent of the children served by a center are income-
eligible for free and reduced-price school meals. Under current 
law, the authority expires March 31, 2004. Based on the 
estimated growth in the number of for-profit centers that have 
participated in CACFP under this provision since it was 
instituted, CBO anticipates that about 2,000 for-profit centers 
would participate in CACFP once this provision is made 
permanent. Each center would receive about $21,000 on average 
in reimbursements from CACFP. CBO estimates that this expandion 
would cost $481 million over the 2004-2014 period.
    Section 105(f) would increase the age limit for children 
served in emergency shelters participating in the CACFP from 12 
to 18. CBO estimates that about 1,500 additional homeless youth 
would be served through the increase in the age limit and a 
small increase in providers participating in the CACFP. This 
estimate is based on data from the National Survey of Homeless 
Assistance Providers and Clients on the number and age of 
homeless youth in emergency shelters. CBO estimates that this 
provision would cost $14 million through 2014.
    Section 105(d) would reauthorize mandatory spending for the 
CACFP management support for 2005 and 2006 at $1 million a 
year. Under the provision, the Secretary provides management 
training and technical assistance to state CACFP agencies.

Area Eligibility Demonstration

    Section 107 would permanently authorize a demonstration 
project to lower the area eligiblity requirements for the SFSP 
in rural areas of Pennsylvania. Under current law, 
organizations are eligible to participate in the SFSP if they 
are located in a neighborhood where at least 50 percent of the 
children are eligible for free or reduced-price school meals or 
if at least 50 percent of the children enrolled in the program 
meet those income requirements. In this demonstration project, 
the requirement would be lowered to 40 percent. Based on data 
on rural schools in Pennsylvania and SFSP participation rates 
in rural areas, CBO estimates that by 2006, 60 new sites would 
participate in the SFSP, increasing federal costs by about $1 
million a year.

Year-Round Community Child Nutrition Program Pilot

    Section 109 would a pilot program in California to allow 
private, nonprofit sponsors to serve up to three meals and two 
snacks on any day during the year, reimbursed at the SFSP rate. 
CBO estimates that this pilot would cost $109 million over the 
2004-2014 period.
    Under current law, sites are limited to serving two meals 
and one snack or three meals on school vacation days. This 
provision would allow private, nonprofit SFSP sites to expand 
their service throughout the school year. It is also likely to 
induce organizations participating in the CACFP at-risk snack 
program during the school year and CACFP day care centers in 
low-income areas to switch to this program because of the 
higher SFSP reimbursement rate and greater number of meals.
    Based on the current distribution of meals served in the 
SFSP, CBO assumes that only sites that serve the current 
maximum number of allowed meals will add a snack as a result of 
the pilot. CBO assumes that about 15-to-20 percent of the SFSP 
sites that would be eligible for this pilot will expand their 
services to days when school is in session and serve a snack. 
We assume that about one-third of current private, nonprofit 
SFSP sponsors participate in the CACFP at-risk snack program 
described below in the winter.
    Under current law, after-school programs that provide 
educational enrichment and are located in areas where at least 
50 percent of the students are eligible for free or reduced-
price meals can receive reimbursement for snacks at the free 
rate through the CACFP at-risk snack program. CBO assumes that 
all of the private, nonprofit organizations in California that 
participate in the at-risk program now would switch to the 
pilot program because it would offer a higher reimbursement 
rate and great flexibility in the number of meals and days of 
operation. We assume that most of these sites would start to 
offer a dinner during the school year. This is based on data on 
the growth of dinners in CACFP at-risk programs in the seven 
states that allow these programs to serve a snack as well as a 
dinner. We also assume that about a quarter of these programs 
would expand to serve meals during the day in the summer.
    CBO assumes that virtually all of the private, nonprofit 
day care centers participating in CACFP that meet the area 
eligibility requirements would also switch to the pilot program 
for the higher reimbursement levels and greater number of 
meals. Under the pilot, these centers would be reimbursed at 
the free rate for all of their meals, regardless of income. 
Under current law, CACFP centers offer meals at the free, 
reduced, and paid rates. We assume that sites that currently 
offer three meals and one snack to children will add an 
additional snack and a small number of centers will add a 
dinner.

Eligibility and Certification for Free and Reduced-Price Lunches

    Section 201 would make changes to the verification 
requirements for free and reduced-price meal applications and 
require direct certification, to the extent practical, of 
students in Food Stamp households. CBO estimates that this 
entire provision would result in net savings of $182 million 
through 2014.
    Under current regulations, local school food authorities 
are required to verify either: 3 percent or 3,000 free and 
reduced-price meal applications drawn at random from all 
applications; or the lesser of 1 percent or 1,000 of total 
applications from non-Food Stamp households with monthly 
incomes within $100 of the monthly income eligibility limit for 
free or reduced-price meals plus the lesser of 0.5 percent or 
500 applications from households that provide a Food Stamp, 
Temporary Assistance to Needy Families (TANF), or Food 
Distribution Program on Indian Reservations (FDPIR) case 
number.
    This provision would change the verification requirements 
for local education agencies with high nonresponse rates in 
their verification procedures. A nonresponse rate is the 
percentage of applications chosen for verification for which 
the local education agency is not able to get the required 
documentation from the household. Districts that are unable to 
verify at least 75 percent of applications chosen for 
verification or districts that receive 20,000 or more 
applications and do not decrease their nonresponse rate by at 
least 10 percent over the second prior year would be required 
to comply with the new verification procedures. These districts 
would be required to verify the lesser of 3,000 or 3 percent of 
all applications selected from households that report monthly 
incomes within $100 of the monthly income eligibility limit.
    CBO estimates that about 70 percent of free and reduced-
price students are in districts that will be subject to the new 
income verification procedures. Under the new verification 
procedures, a slightly greater share of applications will be 
verified nationwide and a greater share of them will be error-
prone (within $100 of the monthly income limit). The increased 
verification procedures will increase savings by uncovering 
more errors in reporting of household income. When the 
verification process uncovers errors in underreporting 
household income, the student's meal eligibility status is 
reduced. In a few cases, however, households may have 
overreported income leading to an increase in meal benefits. In 
addition, some students will lose meal benefits because they 
fail to provide the necessary documents for verification. When 
a household fails to respond to a verification request, the 
student loses his free or reduced-price certification. By 2010, 
CBO estimates that an additional 80,000 students annually will 
have meal benefits reduced by an average of $355 as a result of 
increased verification procedures. This estimate is based on 
data from FNS on the results of the verification process for 
both a random and error-prone sample of applications.
    Current regulations give school food authorities the option 
to directly certify children for free meals by obtaining 
documentation from the state or local Food Stamp, TANF, or 
FDPIR agency. Students who are directly certified for free 
meals do not have to complete an application and are not 
potentially subject to the income verification process. 
According to a recent report from the U.S. Department of 
Agriculture's Economic Research Service (ERS), 68 percent of 
all students were enrolled in a district that used direct 
certification in the 2001-2002 school year.
    This bill would require state agencies, to the extent 
practical, to enter into direct certification agreements with 
the appropriate local agencies and would require schools to 
directly certify eligible children. CBO assumes that about half 
of the students receiving free and reduced-price meals in 
districts that do not currently use direct certification would 
be directly certified as a result of this provision. This 
assumption is based on data from ERS, that indicate that about 
half of the districts that do not currently use direct 
certification cite difficulty in working with the local Food 
Stamp/TANF/FDPIR agency as a significant factor in why they do 
not use direct certification.
    The overwhelming majority of students who will now be 
directly certified are students who are already receiving free 
meals because they have submitted a paper application. Research 
from ERS on direct certification indicates that direct 
certification leads to a small increase in participation among 
students eligible for free meals. By 2010, CBO estimates that 
meal benefits will increase by about $340 on average for 
roughly 25,000 students due to the increase in direct 
certification.

Minimum State Administrative Expense Grants

    Section 206 would add snacks served through the National 
School Lunch Program to the calculations for state 
administrative expense grants. Currently, state administrative 
grants are calculated as 1.5 percent of federal spending in the 
state for school lunches, breakfasts, and milk in the second 
preceding fiscal year. This section would also increase the 
minimum state administrative expense grant by $100,000 to 
$200,000 a year and require that no state shall receive a grant 
for 2005 through 2007 that is less than the amount it received 
in 2004. CBO estimates these changes would increase direct 
spending by about $1 million a year for 2005, 2006, and 2007. 
These costs would rise to $2 million a year beginning in 2008.

Administative Error Reduction

    Section 208 would provide funds for training and technical 
assistance to reduce administrative error in school meals 
programs as well as increase the number of administrative 
reviews of certain local education agencies' meals programs. 
Section 208(a) would provide $3 million in each of 2005 and 
2006 and $2 million a year thereafter for federal training and 
technical assistance to state and local agencies on best 
management and administrative practices.
    Section 208(b) would require an additional review for a 
local education agency that the Secretary of Agriculture 
determines to be at high risk for administrative error. Under 
current regulations, school food authorities (SFA) are required 
to have an administrative review at least once every five years 
and a follow-up review if it fails to meet review standards. If 
the audit reveals that an SFA has received payments in error, 
FNS recovers those overpayments. For example, if a student is 
found to have been incorrectly certified as eligible for free 
meals when he is actually only eligible for reduced-price 
meals, FNS recoups those overpayments. This provision also 
would extend the maximum period of time for which overpayments 
be collected to 60 days for initial reviews or 90 days in 
follow-up reviews. Based on data on the amount of money 
recouped from the current administrative review procedure, CBO 
estimates that the additional review and the extended period of 
collection will result in savings of $1 million to $2 million 
annually over the 2004-2014 period.
    Section 208(c) would require each state to provide annual 
training on administrative practices to local school food 
authority personnel. This provision would provide $4 million a 
year to the Secretary to assist states in providing training 
and conducting additional administrative reviews.
    CBO estimates that all of these provisions would increase 
direct spending by $40 million over the 2004-2014 period.
    Estimated impact on state, local, and tribal governments: 
For large entitlement programs like the child nutrition 
program, the Unfunded Mandates Reform Act defines an increase 
in the stringency of conditions or a cap on federal funding as 
an intergovernmental mandate if the affected governments lack 
authority to offset those costs while continuing to provide 
required services. H.R. 3873 would alter, and in some cases 
increase, some of the conditions for receiving assistance under 
the child nutrition program; however, the bill also would 
increase federal reimbursements for administrative expenses and 
would provide funding for some of the requirements. In other 
cases, schools and school food authorities currently have 
sufficient flexibility in the program to enable them to comply 
with the changes and still provide the required services. 
Consequently, H.R. 3873 contains no intergovernmental mandates 
as defined in UMRA.
    Estimated impact on the private sector: H.R. 3873 contains 
no private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal Costs: Kathleen FitzGerald. 
Impact on State, Local, and Tribal Governments: Leo Lex. Impact 
on the Private Sector: Samuel Kina.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    In accordance with Clause (3)(c) of House rule XIII, the 
goal of H.R. 3873 is to provide children with access to food 
and nutrition assistance, to simplify program operations, to 
improve children's nutritional health, and to enhance the 
integrity of child nutrition programs. The Committee expects 
the Department of Agriculture to comply with H.R. 3873 and 
implement the changes to the law in accordance with the 
changes.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress in the 
Constitution to enact the law proposed by H.R. 3873. The 
Committee believes that the amendments made by this bill, which 
appropriate and authorize appropriations for nutrition, are 
within Congress' authority under Article I, section 8, Clause 1 
of the Constitution.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 3873. However, clause 3(d)(3)(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 (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

RICHARD B. RUSSELL NATIONAL SCHOOL LUNCH ACT

           *       *       *       *       *       *       *



                      DIRECT FEDERAL EXPENDITURES

  Sec. 6. (a) * * *

           *       *       *       *       *       *       *

  (c)(1)(A) * * *

           *       *       *       *       *       *       *

  (D) 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), and fruits and vegetables.

           *       *       *       *       *       *       *


               NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS

  Sec. 9. (a)(1) * * *
  [(2) Lunches served by schools participating in the school 
lunch program under this Act--
          [(A) shall offer students fluid milk; and
          [(B) shall offer students a variety of fluid milk 
        consistent with prior year preferences unless the prior 
        year preference for any such variety of fluid milk is 
        less than 1 percent of the total milk consumed at the 
        school.]
          (2) Fluid milk.--
                  (A) In general.--Lunches served by schools 
                participating in the school lunch program under 
                this Act--
                          (i) shall offer students fluid milk 
                        in a variety of fat contents;
                          (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, upon 
                        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.--
                        Schools may substitute for the fluid 
                        milk provided under subparagraph (A), a 
                        non-dairy beverage that is 
                        nutritionally equivalent to fluid milk 
                        and meets nutritional standards as 
                        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.--Such substitutions may 
                        be made if the school notifies the 
                        State agency that it is implementing a 
                        variation allowed under this 
                        subparagraph, and if such 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, provided that the 
                        school shall not be required to provide 
                        beverages other than those it has 
                        identified as acceptable substitutes.
                          (iii) Excess expenses borne by the 
                        school district.--Expenses incurred in 
                        providing substitutions pursuant to 
                        this subparagraph that are in excess of 
                        those covered by reimbursements under 
                        this Act shall be paid by the school 
                        district.
                  (C) Restrictions on sale of milk 
                prohibited.--A school or institution 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.

           *       *       *       *       *       *       *

  [(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 
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 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. Such forms and descriptive 
material may not contain the income eligibility guidelines for 
free lunches.
  [(C)(i) Except as provided in clause (ii), each eligibility 
determination shall be made on the basis of a complete 
application executed by an adult member of the household. The 
Secretary, State, or local food authority may verify any data 
contained in such application. A local school food authority 
shall undertake such verification of information contained in 
any such application as the Secretary may by regulation 
prescribe and, in accordance with such regulations, shall make 
appropriate changes in the eligibility determination with 
respect to such application on the basis of such verification.
  [(ii) Subject to clause (iii), any school food authority may 
certify any child as eligible for free or reduced price lunches 
or breakfasts, without further application, by directly 
communicating with the appropriate State or local agency to 
obtain documentation of such child's status as a member of--
          [(I) a household that is receiving food stamps under 
        the Food Stamp Act of 1977; or
          [(II) a family that 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.
  [(iii) 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 clause (ii), 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.), or a 
        regulation issued pursuant to either Act;
          [(II) a person directly connected with the 
        administration or enforcement of--
                  [(aa) a Federal education program;
                  [(bb) a State health or education program 
                administered by the State or local educational 
                agency (other than a program carried out under 
                title XIX of the Social Security Act (42 U.S.C. 
                1396 et seq.)); or
                  [(cc) a Federal, State, or local means-tested 
                nutrition program with eligibility standards 
                comparable to the program under this section; 
                and
          [(III)(aa) the Comptroller General of the United 
        States for audit and examination authorized by any 
        other provision of law; and
          [(bb) 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 paragraph (1) or this paragraph; 
        and
                                  [(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 
                                purpose of identifying children 
                                eligible for benefits under, 
                                and enrolling children in, such 
                                programs, except that this 
                                subclause shall apply only to 
                                the extent that the State and 
                                the school food authority so 
                                elect.
  [(iv) Information provided under clause (iii)(II) shall be 
limited to the income eligibility status of the child for whom 
application for free or reduced price meal benefits was made or 
for whom eligibility information was provided under clause 
(ii), unless the consent of the parent or guardian of the child 
for whom application for benefits was made is obtained.
  [(v) A person described in clause (iii) 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.
                          [(vi) Requirements for waiver of 
                        confidentiality.--A State that elects 
                        to exercise the option described in 
                        clause (iii)(IV) shall ensure that any 
                        school food authority acting in 
                        accordance with that option--
                                  [(I) has a written agreement 
                                with the State or local agency 
                                or agencies administering 
                                health insurance 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 
                                clause (iii) to seek to enroll 
                                children in those health 
                                insurance programs; and
                                  [(II)(aa) notifies each 
                                household, the information of 
                                which shall be disclosed under 
                                clause (iii), that the 
                                information disclosed will be 
                                used only to enroll children in 
                                health programs referred to in 
                                clause (iii)(IV); and
                                  [(bb) provides each parent or 
                                guardian of a child in the 
                                household with an opportunity 
                                to elect not to have the 
                                information disclosed.
                          [(vii) Use of disclosed 
                        information.--A person to which 
                        information is disclosed under clause 
                        (iii)(IV) shall use or disclose the 
                        information only as necessary for the 
                        purpose of enrolling children in health 
                        programs referred to in clause 
                        (iii)(IV).
                  [(D) Free and reduced price policy 
                statement.--After the initial submission, a 
                school food authority shall not be required to 
                submit a free and reduced price policy 
                statement to a State educational agency under 
                this Act unless there is a substantive change 
                in the free and reduced price policy of the 
                school food authority. A routine change in the 
                policy of a school food authority, such as an 
                annual adjustment of the income eligibility 
                guidelines for free and reduced price meals, 
                shall not be sufficient cause for requiring the 
                school food authority to submit a policy 
                statement.
  [(3) 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. 
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. The price charged for a 
reduced price lunch shall not exceed 40 cents.]
  (b) Eligibility for Free and Reduced Price Lunches.--
          (1) Income guidelines.--
                  (A) In general.--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 issued by the Secretary of Health 
                and Human Services, 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 issued by the Secretary of 
                Health and Human Services, as adjusted annually 
                in accordance with subparagraph (B). Such 
                guidelines shall be revised at annual 
                intervals, or at any shorter interval deemed 
                feasible and desirable.
                  (B) Formula for revision.--The revision 
                required by subparagraph (A) of this paragraph 
                shall be made by multiplying--
                          (i) the official poverty line (as 
                        defined by the Secretary of Health and 
                        Human Services); 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) Certification of eligibility.--
                  (A) Announcement by state educational 
                agency.--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 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 educational agencies shall, each 
                year, publicly announce the income eligibility 
                guidelines for free and reduced price lunches 
                on or before the opening of school.
                  (B) Applications.--
                          (i) In general.--Applications for 
                        free and reduced price lunches, in such 
                        form as the Secretary may prescribe or 
                        approve, and any descriptive material, 
                        in an understandable and uniform 
                        format, and to the extent practicable, 
                        in a language that parents can 
                        understand, shall be distributed at 
                        least annually to the parents or 
                        guardians of children in attendance at 
                        the school.
                          (ii) Income levels.--Applications and 
                        descriptive material shall contain only 
                        the family size income eligibility 
                        guidelines 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. Such 
                        applications and descriptive material 
                        may not contain the income eligibility 
                        guidelines for free lunches.
                          (iii) Notification.--Descriptive 
                        materials shall contain a notification 
                        that participants in 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. 1771 et seq.), 
                        the food stamp program established 
                        under the Food Stamp Act of 1977 (7 
                        U.S.C. 2011 et seq.), the Food 
                        Distribution Program on Indian 
                        Reservations (FDPIR) authorized under 
                        section 4(b) of the Food Stamp Act of 
                        1977 (7 U.S.C. 2013(b)), or a State 
                        program funded under part A of title IV 
                        of the Social Security Act (if the 
                        Secretary determines the State program 
                        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) are 
                        eligible for free or reduced price 
                        lunches. Such descriptive materials 
                        shall also contain a notice to parents 
                        that documentation may be requested for 
                        verification.
                          (iv) Electronic availability.--In 
                        addition to the distribution of such 
                        applications and descriptive material 
                        in paper form as provided for in this 
                        paragraph, such applications and 
                        material may be made available 
                        electronically via the Internet.
                  (C) Eligibility.--
                          (i) Household applications.--
                                  (I) In general.--If an 
                                eligibility determination for a 
                                child is not made under clause 
                                (ii) or (iii), 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 other guidance issued by 
                                the Secretary.
                                  (II) Additional bases.--
                                Eligibility may be determined 
                                by the local educational agency 
                                on the basis of a complete 
                                application executed by an 
                                adult member of the household, 
                                or in accordance with other 
                                guidance issued by the 
                                Secretary, including an 
                                electronic signature when the 
                                application is submitted 
                                electronically, and if the 
                                application filing system meets 
                                confidentiality standards 
                                established by the Secretary.
                                  (III) Children in 
                                household.--
                                          (aa) In general.--The 
                                        application shall 
                                        identify the names of 
                                        each child in the 
                                        household for whom meal 
                                        benefits are requested.
                                          (bb) Separate 
                                        applications.--A State 
                                        educational agency or 
                                        local educational 
                                        agency may not request 
                                        a separate application 
                                        for each child in the 
                                        household.
                                  (IV) Verification.--The 
                                Secretary, State, or local 
                                educational agency may verify 
                                any data contained in such 
                                application. In accordance with 
                                guidance issued by the 
                                Secretary, each local 
                                educational agency shall verify 
                                a sample of approved free and 
                                reduced price applications and 
                                shall make appropriate changes 
                                in the eligibility 
                                determination with respect to 
                                such applications on the basis 
                                of such verification. The 
                                sample selected for 
                                verification shall be as 
                                follows:
                                          (aa) For local 
                                        educational agencies 
                                        able to obtain 
                                        verification 
                                        information for at 
                                        least 75 percent of all 
                                        applications selected 
                                        for verification in the 
                                        prior year, or local 
                                        educational agencies 
                                        receiving more than 
                                        20,000 applications and 
                                        that in the prior year 
                                        had a verification non-
                                        response rate that was 
                                        10 percent below the 
                                        verification non-
                                        response rate of the 
                                        second prior year, the 
                                        sample selected shall 
                                        be either--
                                                  (AA) the 
                                                lesser of 3,000 
                                                or 3 percent of 
                                                approved 
                                                applications 
                                                selected at 
                                                random by the 
                                                local 
                                                educational 
                                                agencies from 
                                                all approved 
                                                applications; 
                                                or
                                                  (BB) the 
                                                lesser of 1,000 
                                                or 1 percent of 
                                                all approved 
                                                applications 
                                                selected from 
                                                applications 
                                                that indicate 
                                                monthly income 
                                                that is within 
                                                $100, or annual 
                                                income that is 
                                                within $1,200, 
                                                of the income 
                                                eligibility 
                                                limits for free 
                                                or reduced 
                                                price meals, 
                                                plus the lesser 
                                                of 500 or \1/2\ 
                                                of 1 percent of 
                                                approved 
                                                applications 
                                                that provided a 
                                                case number in 
                                                lieu of income 
                                                information 
                                                showing 
                                                participation 
                                                in the food 
                                                stamp program 
                                                or Temporary 
                                                Assistance for 
                                                Needy Families 
                                                program 
                                                selected from 
                                                those approved 
                                                applications 
                                                that provided a 
                                                case number in 
                                                lieu of income 
                                                information 
                                                verifying such 
                                                participation.
                                          (bb) For all other 
                                        local educational 
                                        agencies, the sample 
                                        selected shall be the 
                                        lesser of 3,000 or 3 
                                        percent of all approved 
                                        applications selected 
                                        from applications that 
                                        indicate monthly income 
                                        that is within $100, or 
                                        annual income that is 
                                        within $1,200, of the 
                                        income eligibility 
                                        limits for free or 
                                        reduced price meals. 
                                        If, for any local 
                                        educational agency, the 
                                        total number of such 
                                        applications is less 
                                        than 3,000 or 3 percent 
                                        of all approved 
                                        applications, the local 
                                        educational agency 
                                        shall select additional 
                                        applications at random 
                                        from all approved 
                                        applications in order 
                                        to obtain a total 
                                        sample for verification 
                                        of 3,000 or 3 percent 
                                        of all approved 
                                        applications.
                                  (V) Substitutions.--
                                          (aa) In general.--In 
                                        accordance with the 
                                        regulations prescribed 
                                        by the Secretary, the 
                                        local educational 
                                        agency may, upon 
                                        individual review, 
                                        decline to verify any 
                                        application selected 
                                        under subclause (IV) 
                                        and replace it with 
                                        another application to 
                                        be verified. Such 
                                        agency may decline to 
                                        verify no more than 2 
                                        percent of the 
                                        applications selected 
                                        for verification under 
                                        this subclause.
                                          (bb) Substitute 
                                        criteria in cases of 
                                        emergencies.--The 
                                        Secretary may 
                                        substitute alternative 
                                        criteria for the sample 
                                        size and sample 
                                        selection criteria in 
                                        subclause (IV) to 
                                        address a natural 
                                        disaster, civil 
                                        disorder, strike, or 
                                        other local condition.
                                  (VI) Direct verification.--
                                          (aa) In general.--In 
                                        accordance with 
                                        regulations promulgated 
                                        by the Secretary, in 
                                        verifying the sample 
                                        selected in accordance 
                                        with subclause (IV), 
                                        the local educational 
                                        agency may first obtain 
                                        from certain public 
                                        agencies administering 
                                        the programs identified 
                                        in item (bb) of this 
                                        subclause, and similar 
                                        income-tested programs, 
                                        information to verify 
                                        eligibility for free or 
                                        reduced price meals.
                                          (bb) Public agency 
                                        records.--Public agency 
                                        records that may be 
                                        used to verify 
                                        eligibility for free 
                                        meals shall include 
                                        income information 
                                        relied upon within 12 
                                        months prior to 
                                        verification under 
                                        subclause (IV) in the 
                                        administration of the 
                                        following programs: the 
                                        food stamp program 
                                        established under the 
                                        Food Stamp Act of 1977 
                                        (7 U.S.C. 2011 et 
                                        seq.); the State 
                                        program funded under 
                                        part A of title IV of 
                                        the Social Security 
                                        Act; the Food 
                                        Distribution Program on 
                                        Indian Reservations 
                                        (FDPIR) authorized 
                                        under section 4(b) of 
                                        the Food Stamp Act of 
                                        1977 (7 U.S.C. 
                                        2013(b)); and the State 
                                        Medicaid program under 
                                        title XIX of the Social 
                                        Security Act (42 U.S.C. 
                                        1396 et seq.) in a 
                                        State in which the 
                                        income eligibility 
                                        limit described in 
                                        section 1902(l)(2)(C) 
                                        of the Social Security 
                                        Act is no higher than 
                                        133 percent of the 
                                        income official poverty 
                                        line as specified in 
                                        section 1902(l)(2)(A) 
                                        of such Act, in the 
                                        case of eligibility for 
                                        free meals, and 185 
                                        percent of the income 
                                        official poverty line 
                                        as specified in such 
                                        section in the case of 
                                        reduced price meals.
                                  (VII) Plain, understandable 
                                language.--Any and all 
                                communications to parents 
                                regarding verification under 
                                subclause (IV) shall be in an 
                                understandable and uniform 
                                format, and, to the extent 
                                practicable, in a language that 
                                parents can understand.
                          (ii) Direct certification for 
                        children in food stamp households.--
                                  (I) In general.--Each State 
                                agency shall, to the extent 
                                practicable, enter into an 
                                agreement with the State agency 
                                conducting eligibility 
                                determinations for the food 
                                stamp program established under 
                                the Food Stamp Act of 1977 (7 
                                U.S.C. 2011 et seq.).
                                  (II) Procedures.--Subject to 
                                clause (iv), the agreement 
                                shall establish procedures 
                                under which a child who is a 
                                member of a household receiving 
                                assistance under the program 
                                referred to in subclause (I) 
                                shall be certified as eligible 
                                for free meals under this Act, 
                                without further application.
                                  (III) Direct certification.--
                                Subject to clause (iv), under 
                                the agreement, the local 
                                educational agency conducting 
                                eligibility determinations for 
                                a school meal program conducted 
                                under this Act shall certify a 
                                child who is a member of a 
                                household receiving assistance 
                                under the program referred to 
                                in subclause (I) as eligible 
                                for free meals under this Act 
                                without further application.
                                  (IV) Notice.--The appropriate 
                                local educational agency shall 
                                provide annually to the parents 
                                or guardians of all students 
                                who are members of a household 
                                receiving assistance under the 
                                program referred to in 
                                subclause (I), notification, in 
                                an understandable and uniform 
                                format, and, to the extent 
                                practicable, in a language that 
                                parents can understand, that 
                                any school-aged child in that 
                                household is eligible for free 
                                lunches or breakfasts.
                          (iii) Direct certification of 
                        children in other households.--Subject 
                        to clause (iv), 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 such 
                        child's status as a migratory child, as 
                        such term is defined in section 1309(2) 
                        of the Elementary and Secondary 
                        Education Act of 1965 (20 U.S.C. 
                        6399(2)), or a member of a family that 
                        is receiving assistance under a State 
                        program funded under part A of title IV 
                        of the Social Security Act if the 
                        Secretary determines the State program 
                        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) Disclosure of information.--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 clauses 
                        (ii) and (iii), 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.), or a 
                                regulation issued pursuant to 
                                either Act;
                                  (II) a person directly 
                                connected with the 
                                administration or enforcement 
                                of--
                                          (aa) a Federal 
                                        education program;
                                          (bb) a State health 
                                        or education program 
                                        administered by the 
                                        State or local 
                                        educational agency 
                                        (other than a program 
                                        carried out under title 
                                        XIX of the Social 
                                        Security Act (42 U.S.C. 
                                        1396 et seq.); or
                                          (cc) a Federal, 
                                        State, or local means-
                                        tested nutrition 
                                        program with 
                                        eligibility standards 
                                        comparable to the 
                                        program under this 
                                        section;
                                  (III)(aa) the Comptroller 
                                General of the United States 
                                for audit and examination 
                                authorized by any other 
                                provision of law; and
                                  (bb) 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 requirements under 
                                paragraph (1) or this 
                                paragraph; and
                                  (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 
                                purpose of identifying children 
                                eligible for benefits under, 
                                and enrolling children in, such 
                                programs, except that this 
                                subclause shall apply only to 
                                the extent that the State and 
                                the local educational agency so 
                                elect.
                          (v) Limitation.--Information provided 
                        under clause (iv)(II) shall be limited 
                        to the income eligibility status of the 
                        child for whom application for free or 
                        reduced price meal benefits was made or 
                        for whom eligibility information was 
                        provided under clause (ii) or (iii), 
                        unless the consent of the parent or 
                        guardian of the child for whom 
                        application for benefits was made is 
                        obtained.
                          (vi) Penalty for unauthorized 
                        disclosure.--A person described in 
                        clause (iv) 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.
                          (vii) Requirements for waiver of 
                        confidentiality.--A State that elects 
                        to exercise the option described in 
                        clause (iv)(IV) shall ensure that any 
                        local educational agency acting in 
                        accordance with that option--
                                  (I) has a written agreement 
                                with the State or local agency 
                                or agencies administering 
                                health insurance 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 
                                clause (iv) to seek to enroll 
                                children in those health 
                                insurance programs; and
                                  (II)(aa) notifies each 
                                household, the information of 
                                which shall be disclosed under 
                                clause (iv), that the 
                                information disclosed will be 
                                used only to enroll children in 
                                health programs referred to in 
                                clause (iv)(IV); and
                                  (bb) provides each parent or 
                                guardian of a child in the 
                                household with an opportunity 
                                to elect not to have the 
                                information disclosed.
                          (viii) Use of disclosed 
                        information.--A person to which 
                        information is disclosed under clause 
                        (iv)(IV) shall use or disclose the 
                        information only as necessary for the 
                        purpose of enrolling children in health 
                        programs referred to in clause 
                        (iv)(IV).
                  (D) 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 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.
          (3) 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 section 11(a) or section 9(b)(2)(C)(i)(IV), 
                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 the date of the 
                        beginning of school in the subsequent 
                        school year or as otherwise specified 
                        by the Secretary.

           *       *       *       *       *       *       *

  (5) 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 school authorities] 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.
  (6)(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) * * *
          (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; [or]
          (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 is a member of a family that meets the low-income 
        criteria prescribed under section 645(a)(1)(A) of the 
        Head Start Act (42 U.S.C. 9840(a)(1)(A))[.];
          (iv) a homeless child or youth (as defined in section 
        725(2) of the McKinney-Vento Homeless Assistance Act 
        (42 U.S.C. 11434a));
          (v) a youth served by programs under the Runaway and 
        Homeless Youth Act (42 U.S.C. 5701 et seq.); or
          (vi) a migratory child, as such term is defined in 
        section 1309(2) of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6399(2)).
  (B) Proof of receipt of food stamps 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), or 
documentation showing the child's status as a migratory child, 
as such term is defined in section 1309(2) of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 6399(2)), shall 
be sufficient to satisfy any verification requirement imposed 
under paragraph (2)(C).
          (7) Exclusion of certain military housing 
        allowances.--[For each of fiscal years 2002 and 2003 
        and through March 31, 2004, the amount] 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.

           *       *       *       *       *       *       *

  (d)(1) * * *
  (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 school food 
        authority] local educational agency so that [such 
        authority] the local educational agency may calculate 
        the total income of such household;
          (B) documentation showing that the household is 
        participating in the food stamp program under the Food 
        Stamp Act of 1977 has been provided to the appropriate 
        [local school food authority; or] local educational 
        agency;
          (C) documentation has been provided to the 
        appropriate [local school food authority] 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)(6); or
          (E) documentation has been provided to the 
        appropriate local educational agency showing the 
        child's status as a migratory child, as such term is 
        defined in section 1309(2) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6399(2)).

           *       *       *       *       *       *       *

  (f)
          (1) * * *

           *       *       *       *       *       *       *

          [(5) Waiver of requirement for weighted averages for 
        nutrient analysis.--During the period ending on 
        September 30, 2003, 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).]
          (5) Waiver of requirements for weighted averages for 
        nutrient analysis.--State educational agencies may 
        grant waivers to school food authorities to the 
        requirement for 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) if--
                  (A) the school food authority has an 
                equivalent system for conducting a nutrient 
                analysis, subject to State agency approval; and
                  (B) the equivalent system adequately 
                documents the extent to which the school food 
                authority is meeting the Dietary Guidelines for 
                Americans and other nutrition standards.
        In addition, the Secretary may waive, on a case by case 
        basis, the requirement for a State agency to use 
        weighted averages when conducting a nutrient analysis 
        as part of a review (of compliance with the Dietary 
        Guidelines and other nutrition standards) of a school 
        food authority not using nutrient standard menu 
        planning, when, in the Secretary's determination, an 
        alternative analysis would yield results that would 
        adequately measure a school food authority's compliance 
        with current nutrition standards for school meals.

           *       *       *       *       *       *       *

  (j) Purchases of Locally Produced Foods.--
          (1) * * *
          (2) Authorization of appropriations.--
                  (A) In general.--There is authorized to be 
                appropriated to carry out this subsection 
                $400,000 for each of fiscal years 2003 through 
                [2007] 2008, to remain available until 
                expended.

           *       *       *       *       *       *       *


                           SPECIAL ASSISTANCE

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

           *       *       *       *       *       *       *

  (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 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 
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 has remained consistent with the income level of the 
population of the school in the last school year for which the 
school or school district accepted the applications described 
in clause (i).

           *       *       *       *       *       *       *


                MISCELLANEOUS PROVISIONS AND DEFINITIONS

  Sec. 12. (a) * * *

           *       *       *       *       *       *       *

  (d) For the purposes of this Act--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Local educational agency.--
                  (A) In general.--The term ``local educational 
                agency'' has the meaning given the term in 
                section 9101 of the Elementary and Secondary 
                Education Act of 1965 (20 U.S.C. 7801).
                  (B) Inclusion.--The term ``local educational 
                agency'' includes, in the case of a private 
                nonprofit school food authority, an appropriate 
                entity determined by the Secretary.
          [(3)] (4) ``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.
          [(4)] (5) ``School year'' means the annual period 
        from July 1 through June 30.
          [(5)] (6) ``Secretary'' means the Secretary of 
        Agriculture.
          [(6)] (7) ``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.
          [(7)] (8) ``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.
          [(8)] (9) 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.).

           *       *       *       *       *       *       *

  [(p) Grant for Demonstration Project.--
          [(1) Use of funds for wic demonstration project.--
                  [(A) In general.--The Secretary shall make 
                grants of funds under this subsection to a 
                State--
                          [(i) for purposes that include 
                        carrying out the demonstration project 
                        under section 17(r) of the Child 
                        Nutrition Act of 1966 (42 U.S.C. 
                        1786(r)); and
                          [(ii) for the purpose described in 
                        clause (i), in amounts not to exceed 
                        $10,000 for each fiscal year for each 
                        site in the State.
                  [(B) Apportionment.--A State that receives a 
                grant under subparagraph (A) shall apportion 
                the funds received to ensure that each site in 
                the State receives not more than $10,000 for 
                any fiscal year.
          [(2) Evaluations of demonstration project.--The 
        Secretary shall conduct an evaluation of the 
        demonstration project and grant program for 
        identification and enrollment efforts funded under this 
        subsection that include a determination of--
                  [(A) the number of children enrolled as a 
                result of the enactment of this subsection;
                  [(B) the income levels of the families of 
                enrolled children;
                  [(C) the cost of identification and 
                enrollment assistance services provided under 
                the project or grant program;
                  [(D) the effect on the caseloads of local 
                agencies that carry out the special 
                supplemental nutrition program for woman, 
                infants, and children established under section 
                17 of the Child Nutrition Act of 1966 (42 
                U.S.C. 1786); and
                  [(E) such other factors as the Secretary 
                determines to be appropriate.
          [(3) Funding.--
                  [(A) In general.--Out of any moneys in the 
                Treasury not otherwise appropriated, the 
                Secretary of the Treasury shall provide to the 
                Secretary to carry out this subsection 
                $1,000,000 for the period of fiscal years 2001 
                through 2004, to remain available until 
                expended but not later than September 30, 2004.
                  [(B) Receipt and acceptance.--The Secretary 
                shall be entitled to receive the funds and 
                shall accept the funds provided under 
                subparagraph (A), without further 
                appropriation.]
  (p) Sense of Congress.--It is the sense of Congress that 
Federal resources provided under this Act and the Child 
Nutrition Act of 1966 dedicated to child nutrition should 
support the most effective programs within the Federal agency 
that is most capable of assisting children in nutritional need. 
Congress encourages the elimination of initiatives that are 
duplicative of other Federal efforts, particularly those that 
are duplicative of programs conducted under this Act and the 
Child Nutrition Act of 1966.

                SUMMER FOOD SERVICE PROGRAM FOR CHILDREN

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

           *       *       *       *       *       *       *

          (8) Service institutions that are public or private 
        nonprofit school food authorities may administer summer 
        or school vacation food service under the provisions of 
        the school lunch program established under this Act and 
        the school breakfast program established under the 
        Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), 
        except as determined by the Secretary.
          (9) Year round community child nutrition program 
        pilot.--
                  (A) In general.--A service institution as 
                defined in paragraph (7) may be reimbursed for 
                up to 3 meals and 2 supplements for any day for 
                which services are being offered at such 
                institution. Such service institution shall be 
                reimbursed for costs consistent with section 
                13(b).
                  (B) Maximum reimbursement.--No reimbursement 
                may be made to any institution under this 
                paragraph for more than 3 meals and 2 
                supplements per child per day.
                  (C) Limitation.--The Secretary shall limit 
                reimbursement under this paragraph for meals 
                and supplements served under a program to 
                service institutions defined paragraph (7) 
                located in California.
  (b) Service Institutions.--
          (1) Payments.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) Service institutions described in 
                paragraph (a)(8) of this section shall be 
                reimbursed for meals and meal supplements in 
                accordance with the applicable provisions under 
                this Act (other than subparagraphs (A), (B), 
                and (C) of this paragraph) and the Child 
                Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), 
                as determined by the Secretary.

           *       *       *       *       *       *       *

  (q) For the period beginning October 1, 1977, and ending 
[March 31, 2004] September 30, 2008, there are hereby 
authorized to be appropriated such sums as are necessary to 
carry out the purposes of this section.
  (r) Demonstration Program.--The Secretary shall support a 
demonstration program in rural areas of the State of 
Pennsylvania under the same terms and conditions as contained 
in this section, except that the threshold for determining 
``areas in which poor economic conditions exist'' under 
subsection (a)(1)(C) for such program shall be 40 percent of 
children enrolled are eligible for free or reduced price school 
meals and the State agency shall report to the Secretary on the 
effect of the demonstration on program participation in rural 
areas.

                     COMMODITY DISTRIBUTION PROGRAM

  Sec. 14. (a) Notwithstanding any other provision of law, the 
Secretary, during the period beginning July 1, 1974, and ending 
[March 31, 2004] September 30, 2008, shall--
          (1)  * * *

           *       *       *       *       *       *       *

  (h) Notice of Irradiated Food.--The Secretary shall develop 
policy and establish procedures for the purchase and 
distribution of irradiated food products in Federal school 
meals programs. The policies and procedures shall ensure at a 
minimum that--
          (1) irradiated food products are made available only 
        at the request of States and school food authorities;
          (2) reimbursements to schools for irradiated food 
        products are equal to reimbursements to schools for 
        non-irradiated products;
          (3) States and school food service authorities are 
        provided factual information on the science and 
        evidence regarding irradiation technology, including 
        notice that irradiation is not a substitute for safe 
        food handling techniques and any such other information 
        necessary to promote food safety in school meal 
        programs;
          (4) States and school food service authorities are 
        provided model procedures for providing factual 
        information on the science and evidence regarding 
        irradiation technology and any such other information 
        necessary to promote food safety in school meals to 
        school food service authorities, parents, and students 
        regarding irradiation technology;
          (5) irradiated food products distributed to the 
        Federal school meals program are labeled with a symbol 
        or other printed notice indicating that the product was 
        treated with irradiation and is prominently displayed 
        in a clear and understandable format on the container;
          (6) irradiated products are not commingled with non-
        irradiated products in containers; and
          (7) encourages schools that offer irradiated foods to 
        offer alternatives to irradiated food products as part 
        of the meal plan used by schools.

           *       *       *       *       *       *       *


SEC. 17. CHILD AND ADULT CARE FOOD PROGRAM.

  (a) Grant Authority and Institution Eligibility.--
          (1) * * *
          (2) Definition of institution.--In this section, the 
        term ``institution'' means--
                  (A) * * *
                  (B) any other private organization providing 
                nonresidential child care or day care outside 
                school hours for school children, if--
                          (i) [during the period beginning on 
                        the date of enactment of this clause 
                        and ending on March 31, 2004], 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

           *       *       *       *       *       *       *

  (f) State Disbursements to Institutions.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Reimbursement of family or group day care home 
        sponsoring organizations.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (E) Provision of data to family or group day 
                care home sponsoring organizations.--
                          (i) * * *

           *       *       *       *       *       *       *

                          (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 [3] 
                        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.

           *       *       *       *       *       *       *

  [(i) The Secretary shall make available for each fiscal year 
to States administering the child care food program, for the 
purpose of conducting audits of participating institutions, an 
amount up to 1.5 percent (except, in the case of each of fiscal 
years 2005 through 2007, 1 percent) of the funds used by each 
State in the program under this section, during the second 
preceding fiscal year.
  [(j) The Secretary may issue regulations directing States to 
develop and provide for the use of a standard form of agreement 
between each family or group day care sponsoring organization 
and the family or group day care homes participating in the 
program under such organization, for the purpose of specifying 
the rights and responsibilities of each party.]
  (i) Audits.--
          (1) Funds for audits.--The Secretary shall make 
        available for each fiscal year to a State administering 
        the child and adult care food program, for the purpose 
        of conducting audits of participating institutions, an 
        amount up to 1.5 percent (except in the case of fiscal 
        years 2005 through 2007, 1 percent) of the funds used 
        by the State in the program under this section during 
        the second preceding fiscal year.
          (2) Audit procedures.--
                  (A) In general.--Subject to subparagraph (B), 
                in conducting management evaluations, reviews, 
                or audits of the program under this subsection, 
                the Secretary or a State agency may disregard 
                any overpayment to an institution if the total 
                overpayment for any fiscal year does not exceed 
                an amount, consistent with the disregards 
                allowed in other programs under this Act, which 
                recognizes the cost of collecting small claims.
                  (B) Criminal or fraud violations.--In 
                carrying out this subsection, 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.
  (j) Agreements.--
          (1) In general.--The Secretary may issue regulations 
        directing States to develop and provide for the use of 
        a standard form of agreement between each family or 
        group day care sponsoring organization and the family 
        or group day care homes 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.

           *       *       *       *       *       *       *

  [(p)(1) From amounts appropriated or otherwise made available 
for purposes of carrying out this section, the Secretary shall 
carry out State-wide demonstration projects in three States 
under which private for-profit organizations providing 
nonresidential day care services shall qualify as institutions 
for the purposes of this section. An organization may 
participate in a demonstration project described in the 
preceding sentence if--
          [(A) at least 25 percent of the children enrolled in 
        the organization or 25 percent of the licensed capacity 
        of the organization for children, whichever is less, 
        meet the income eligibility criteria established under 
        section 9(b) for free or reduced price meals; and
          [(B) as a result of the participation of the 
        organization in the project--
                  [(i) the nutritional content or quality of 
                meals and snacks served to children under the 
                care of such organization will be improved; or
                  [(ii) fees charged by such organization for 
                the care of the children described in 
                subparagraph (A) will be lowered.
  [(2) Under each such project, the Secretary shall examine--
          [(A) the budgetary impact of the change in 
        eligibility being tested;
          [(B) the extent to which, as a result of such change, 
        additional low-income children can be reached; and
          [(C) which outreach methods are most effective.
  [(3) The Secretary shall choose to conduct demonstration 
projects under this subsection in--
          [(A) 1 State that--
                  [(i) has a history of participation of for-
                profit organizations in the child care food 
                program;
                  [(ii) allocates a significant proportion of 
                the amounts it receives for child care under 
                title XX of the Social Security Act in a manner 
                that allows low-income parents to choose the 
                type of child care their children will receive;
                  [(iii) has other funding mechanisms that 
                support parental choice for child care;
                  [(iv) has a large, State-regulated for-profit 
                child care industry that serves low-income 
                children; and
                  [(v) has large sponsors of family or group 
                day care homes that have a history of 
                recruiting and sponsoring for-profit child care 
                centers in the child care food program;
          [(B) 1 State in which--
                  [(i) the majority of children for whom child 
                care arrangements are made are being cared for 
                in center-based child care facilities;
                  [(ii) for-profit child care centers and 
                preschools are located throughout the State and 
                serve both rural and urban populations;
                  [(iii) at least \1/3\ of the licensed child 
                care centers and preschools operate as for-
                profit facilities;
                  [(iv) all licensed facilities are subject to 
                identical nutritional requirements for food 
                service that are similar to those required 
                under the child care food program; and
                  [(v) less than 1 percent of child care 
                centers participating in the child care food 
                program receive assistance under title XX of 
                the Social Security Act; and
          [(C) one other State--
                  [(i) with fewer than 60,000 children below 5 
                years of age;
                  [(ii) that serves more than the national 
                average proportion of children potentially 
                eligible for assistance provided under the 
                Child Care and Development Fund (as indicated 
                in data published by the Department of Health 
                and Human Services in October 1999);
                  [(iii) that exempts all low-income families 
                from cost sharing requirements under programs 
                funded by the Child Care and Development Fund; 
                and
                  [(iv) in which State spending represents more 
                than 50 percent of total expenditures reported 
                for fiscal year 1998 under the Child Care and 
                Development Fund.]
  (q) Management Support.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Funding.--For each of fiscal years [1999 through 
        2003] 2005 and 2006, the Secretary shall reserve to 
        carry out paragraph (1) $1,000,000 of the amounts made 
        available to carry out this section.

           *       *       *       *       *       *       *

  (t) Participation by Emergency Shelters.--
          (1) * * *

           *       *       *       *       *       *       *

          (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 [12] 18 
                                years of age; or
                                  [(II) children of migrant 
                                workers, if the children are 
                                not more than 15 years of age; 
                                or]
                                  [(III)] (II) children with 
                                disabilities; and

           *       *       *       *       *       *       *


                             PILOT PROJECTS

  Sec. 18. (a) * * *

           *       *       *       *       *       *       *

  (f) Summer Food Pilot Projects.--
          (1) * * *
          (2) Additional states eligible.--In addition to the 
        States meeting the criteria set forth in paragraph (1), 
        the 3 States with the highest percentage of households 
        that are determined to be food insecure with hunger, as 
        determined annually by the Secretary, shall be 
        ``eligible States'' for purposes of this subsection.
          [(2)] (3) Pilot projects.--During the period 
        beginning October 1, 2000, and ending [March 31, 2004] 
        September 30, 2008, the Secretary shall carry out a 
        summer food pilot project in each eligible State to 
        increase the number of children participating in the 
        summer food service program in the State.
          [(3)] (4) Support levels for service institutions.--
                  (A) Food service.--Under the pilot project, a 
                service institution [(other than a service 
                institution described in section 13(a)(7))] in 
                an eligible State shall receive the maximum 
                amounts for food service under section 13(b)(1) 
                without regard to the requirement under section 
                13(b)(1)(A) that payments shall equal the full 
                cost of food service operations.
                  (B) Administrative costs.--Under the pilot 
                project, a service institution [(other than a 
                service institution described in section 
                13(a)(7))] in an eligible State shall receive 
                the maximum amounts for administrative costs 
                determined by the Secretary under section 
                13(b)(4) without regard to the requirement 
                under section 13(b)(3) that payments to service 
                institutions shall equal the full amount of 
                State-approved administrative costs incurred.

           *       *       *       *       *       *       *

          [(4)] (5) Maintenance of effort.--Expenditures of 
        funds from State and local sources for maintenance of a 
        summer food service program shall not be diminished as 
        a result of assistance from the Secretary received 
        under this subsection.
          [(5)] (6) Evaluation of pilot projects.--
                  (A) * * *

           *       *       *       *       *       *       *

          [(6)] (7) Reports.--
                  (A) * * *

           *       *       *       *       *       *       *


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 technical 
        assistance to improve the skills of individuals 
        employed in--
                  [(A) food service programs carried out with 
                assistance under this Act;
                  [(B) school breakfast programs carried out 
                with assistance under section 4 of the Child 
                Nutrition Act of 1966; and
                  [(C) as appropriate, other federally assisted 
                feeding programs; and]
          (1) subject to the availability of and from amounts 
        appropriated pursuant to subsection (e)(1), shall 
        provide--
                  (A) training and technical assistance to 
                improve the skills of individuals employed in 
                food service programs carried out under this 
                Act, section 4 of the Child Nutrition Act of 
                1966 (42 U.S.C. 1773), and, as appropriate, 
                other federally assisted feeding programs;
                  (B) training and technical assistance to 
                States, State agencies, schools, and school 
                food authorities in the procurement of goods 
                and services for programs under this Act and 
                the Child Nutrition Act of 1966 (42 U.S.C. 1771 
                et seq.), including training and technical 
                assistance to ensure compliance with section 
                12(n) of this Act (42 U.S.C. 1760(n));
                  (C) 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 addresses 
                the cost savings and improvements in program 
                integrity and operations that would result from 
                the use of new or upgraded technology in--
                          (i) methods to ensure that there 
                        shall not be any overt identification 
                        of any such child by special tokens or 
                        tickets, announced or published list of 
                        names, or by any other means;
                          (ii) processing and verifying 
                        applications for free and reduced price 
                        school meals;
                          (iii) integrating menu planning, 
                        production, and serving data to monitor 
                        compliance with section 9(f)(1); and
                          (iv) establishing compatibility with 
                        statewide reporting systems;
                  (D) assistance, on a competitive basis, to 
                State agencies with low proportions of schools 
                or students that participate in the school 
                breakfast program under section 4 of the Child 
                Nutrition Act of 1966 (42 U.S.C. 1773) and that 
                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

           *       *       *       *       *       *       *

  (e) Administrative Training and Technical Assistance 
Materials.--In collaboration with State educational agencies, 
school food authorities, and local educational agencies of 
varying sizes, the Secretary shall develop and distribute 
training and technical assistance materials relating to the 
administration of school meal programs that are--
          (1) prepared by the Secretary (based on research or 
        other sources), a State educational agency, a school 
        food authority, or a local educational agency; and
          (2) representative of the best management and 
        administrative practices of State agencies, school food 
        authorities, and local educational agencies as 
        determined by the Secretary.
  (f) 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; and
                          (ii) on October 1, 2006, and October 
                        1, 2007, $2,000,000.
                  (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 related to administrative practices 
                designed to improve program integrity and 
                administrative accuracy in school meals 
                programs (including administrative requirements 
                established by the Child Nutrition Improvement 
                and Integrity Act and amendments made by that 
                Act) to State educational agencies and, to the 
                extent determined by the Secretary, to school 
                food authorities and local educational 
                agencies;
                  (B) to assist State educational agencies in 
                reviewing the administrative practices of 
                school food authorities, to the extent 
                determined by the Secretary; and
                  (C) to carry out the activities described in 
                subsection (e).
  [(e)] (g) Authorization of Appropriations.--
          (1) Training activities and technical assistance.--
        There are authorized to be appropriated to carry out 
        subsection (a)(1) $3,000,000 for fiscal year 1990, 
        $2,000,000 for fiscal year 1991, and $1,000,000 [for 
        each of fiscal years 1992 through 2003] for fiscal year 
        2004, and such sums as may be necessary for fiscal 
        years 2005 through 2008.

           *       *       *       *       *       *       *


SEC. 22. COMPLIANCE AND ACCOUNTABILITY.

  (a) Unified Accountability System.--There shall be a unified 
system prescribed and administered by the Secretary for 
ensuring that local food service authorities and local 
educational agencies that participate in the school lunch 
program under this Act comply with the provisions of this Act. 
Such system shall be established through the publication of 
regulations and the provision of an opportunity for public 
comment, consistent with the provisions of section 553 of title 
5, United States Code.
  (b) Functions of System.--
          (1) In general.--Under the system described in 
        subsection (a), each State educational agency shall--
                  (A) require that local food service 
                authorities and local educational agencies 
                comply with the provisions of this Act; and

           *       *       *       *       *       *       *

          (2) Minimization of additional duties.--Each State 
        educational 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 and local 
        educational agencies.
          (3) Additional review requirement for selected local 
        educational agencies.--
                  (A) Definition of selected local educational 
                agency.--In this paragraph, the term ``selected 
                local educational agency'' means a local 
                educational agency that has a demonstrated a 
                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 follow-up review of 
                        the selected local educational agency 
                        under standards established by the 
                        Secretary.
          (4) Recovering 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 follow-up review under paragraph 
                (1) or (3) or subsection (a), the Secretary may 
                require the State educational agency to recover 
                funds from the local educational agency that 
                would otherwise be paid to the school food 
                authority or local educational agency for 
                school meals programs under procedures 
                prescribed by the Secretary.
                  (B) Amount.--The amount of funds recovered 
                under subparagraph (A) shall equal the value of 
                any overpayments made to the school food 
                authority or local educational agency 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 such overpayments 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 
                                review conducted by the State 
                                educational 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 review conducted by 
                                the State educational 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) Use of recovered funds.--
                  (A) In general.--Subject to subparagraph (B), 
                funds recovered under paragraph (4) shall--
                          (i) be returned to the Secretary 
                        under procedures established by 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 (including 
                                administrative requirements 
                                established by the Child 
                                Nutrition Improvement and 
                                Integrity Act and amendments 
                                made by that Act) to State 
                                educational agencies and, to 
                                the extent determined by the 
                                Secretary, to school food 
                                authorities and local 
                                educational agencies;
                                  (II) to assist State 
                                educational agencies in 
                                reviewing the administrative 
                                practices of school food 
                                authorities, to the extent 
                                determined by the Secretary; 
                                and
                                  (III) to carry out section 
                                21(e); or
                          (ii) be credited to the child 
                        nutrition programs appropriation 
                        account.
                  (B) State share.--Subject to subparagraph 
                (C), a State educational agency may retain not 
                more than 25 percent of an amount recovered 
                under paragraph (4), to carry out school meals 
                program integrity initiatives to assist school 
                food authorities and local educational agencies 
                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 shall--
                          (i) submit to the Secretary a plan 
                        describing how the State educational 
                        agency will use the funds to improve 
                        school meals program integrity, 
                        including measures to give priority to 
                        school food authorities and local 
                        educational agencies from which funds 
                        were retained under paragraph (4); and
                          (ii) obtain the approval of the 
                        Secretary for the plan.
  (c) Role of Secretary.--In carrying out this section, the 
Secretary shall--
          (1) assist the State educational agency in the 
        monitoring of programs conducted by local food service 
        authorities and local educational agencies; and
          (2) through management evaluations, review the 
        compliance of the State educational agency and the 
        local school food service authorities and local 
        educational agencies 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) 
$3,000,000 for each of the fiscal years 1994 through [2003] 
2008.

           *       *       *       *       *       *       *

                              ----------                              


CHILD NUTRITION ACT OF 1966

           *       *       *       *       *       *       *


                 SCHOOL BREAKFAST PROGRAM AUTHORIZATION

  Sec. 4. (a)
  (b)(1)(A) * * *

           *       *       *       *       *       *       *

                  (E) Free and reduced price policy 
                statement.--After the initial submission, a 
                [school food authority] local educational 
                agency shall not be required to submit a free 
                and reduced price policy statement to a State 
                educational agency under this Act unless there 
                is a substantive change in the free and reduced 
                price policy of the [school food authority] 
                local educational agency. A routine change in 
                the policy of a [school food authority] 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 [school food 
                authority] local educational agency to submit a 
                policy statement.

           *       *       *       *       *       *       *

  [(d)(1) Each State educational agency shall provide 
additional assistance to schools in severe need, which shall 
include only--
          [(A) those schools in which the service of breakfasts 
        is required pursuant to State law; and
          [(B) those schools (having a breakfast program or 
        desiring to initiate a breakfast program) in which, 
        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, and in which the rate per 
        meal established by the Secretary is insufficient to 
        cover the costs of the breakfast program.
The provision of eligibility specified in clause (A) of this 
paragraph shall terminate effective July 1, 1983, for schools 
in States where the State legislatures meet annually and shall 
terminate effective July 1, 1984, for schools in States where 
the State legislatures meet biennially.]
  (d) Severe Need Assistance.--
          (1) In general.--Each State educational 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, 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 
        those new schools drawing their attendance from schools 
        receiving severe need assistance).
  (2) A school, upon the submission of appropriate 
documentation about the need circumstances in that school and 
the school's eligibility for additional assistance, shall be 
entitled to receive [100 percent of the operating costs of the 
breakfast program, including the costs of obtaining, preparing, 
and serving food, or] the meal reimbursement rate specified in 
paragraph (2) of section 4(b) of this Act[, whichever is less].

           *       *       *       *       *       *       *


                     [STATE ADMINISTRATIVE EXPENSES

  [Sec. 7. (a)(1) 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. The Secretary 
shall allocate the funds so provided in accordance with 
paragraphs (2), (3), and (4) of this subsection. There are 
hereby authorized to be appropriated such sums as may be 
necessary to carry out the purposes of this section.]

SEC. 7. STATE ADMINISTRATIVE EXPENSES.

  (a) Amount and Allocation of Funds.--
          (1) Amount available.--
                  (A) In general.--Except as provided in 
                subparagraph (B), 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, 17, and 
                17A of the Richard B. Russell National School 
                Lunch Act (42 U.S.C. 1753, 1759a, 1766, and 
                1766a)) and sections 3 and 4 of this Act during 
                the second preceding fiscal year.
                  (B) Minimum amount.--In the case of each of 
                fiscal years 2005 through 2007, the Secretary 
                shall make available to each State for their 
                administrative costs not less than the initial 
                allocation made to the State under this 
                subsection for fiscal year 2004.
                  (C) Allocation.--The Secretary shall allocate 
                the funds so provided in accordance with 
                paragraphs (2), (3), and (4) of this 
                subsection.
                  (D) Authorization of appropriations.--There 
                is authorized to be appropriated such sums as 
                may be necessary to carry out the purposes of 
                this section.
  (2) 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. In no case shall the grant available to 
any State under this subsection be less than the amount such 
State was allocated in the fiscal year ending September 30, 
1981, or [$100,000] $200,000, whichever is larger.

           *       *       *       *       *       *       *

  (5)(A) * * *
                  (B) Reallocation of funds.--
                          (i) * * *
                          (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. The Secretary 
                        shall give priority consideration to 
                        States that will use the funds for 
                        improvements in technology and 
                        information management systems 
                        described in subsection (e)(2).

           *       *       *       *       *       *       *

  (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 and 
supervisory personnel; for support services; for office 
equipment; [and for staff development] for staff development; 
and technology and information management systems.

           *       *       *       *       *       *       *

  [(e) Each] (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. [After 
        submitting the initial plan, a State shall be required 
        to submit to the Secretary for approval only a 
        substantive change in the plan.]
          (2) Updates and information management systems.--
        After submitting the initial plan, a State shall be 
        required to submit to the Secretary for approval only a 
        substantive change in the plan. 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--
                  (A) monitoring the nutrient content of meals 
                served;
                  (B) training schools and school food 
                authorities how to utilize technology and 
                information management systems for activities 
                such as menu planning, collecting point of sale 
                data, processing applications for free and 
                reduced price meals and verifying eligibility 
                for free and reduced price meals using existing 
                databases to access program participation or 
                income data collected by State or local 
                educational agencies; 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) 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 (as added 
        by section 208 of the Child Nutrition Improvement and 
        Integrity Act).

           *       *       *       *       *       *       *

  (g) State Training.--
          (1) 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 school 
        food authority administrative personnel and other 
        appropriate personnel, with emphasis on the 
        requirements established by the Child Nutrition 
        Improvement and Integrity Act and the amendments made 
        by that Act.
          (2) Federal role.--The Secretary shall--
                  (A) provide training and technical assistance 
                (including training materials and information 
                developed under subsections (e) and (f) of 
                section 21 of the Richard B. Russell National 
                School Lunch Act (42 U.S.C. 1769b-1)) to a 
                State to assist the State in carrying out 
                paragraph (1); or
                  (B) at the option of the Secretary, directly 
                provide training and technical assistance 
                described in paragraph (1).
          (3) Third-party contracting.--In carrying out this 
        subsection, the Secretary or a State may contract with 
        a third party under procedures established by the 
        Secretary.
          (4) Required participation.--Under procedures 
        established by the Secretary that consider the various 
        needs and circumstances of school food authorities, 
        each school food authority or local educational agency 
        shall ensure that an individual conducting or 
        overseeing administrative procedures described in 
        paragraph (1) receives training at least annually, 
        unless determined otherwise by the Secretary.
  (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 school food 
                authorities and local educational agencies 
                under section 22(b)(3) of the Richard B. 
                Russell National School Lunch Act (42 U.S.C. 
                1769c(b)(3)).
                  (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 in 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 Improvement and Integrity Act 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.
  [(g)] (i) For the fiscal year beginning October 1, 1977, and 
each succeeding fiscal year ending before October 1, [2003] 
2008, there are hereby authorized to be appropriated such sums 
as may be necessary for the purposes of this section.

           *       *       *       *       *       *       *


SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN

  Sec. 17. (a) * * *
  (b) As used in this section--
          (1) * * *

           *       *       *       *       *       *       *

          (7) ``Nutrition education'' means individual or group 
        sessions and the provision of materials designed to 
        improve health status that achieve positive change in 
        dietary habits and physical activity, and emphasize 
        relationships between [nutrition and health] nutrition, 
        health, and child development, all in keeping with the 
        individual's personal, cultural, and socioeconomic 
        preferences.

           *       *       *       *       *       *       *

          (14) ``Supplemental foods'' means those foods 
        containing nutrients determined by nutritional research 
        to be lacking in the diets of pregnant, breastfeeding, 
        and pospartum women, infants, and children and foods 
        that promote health as indicated 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), 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.

           *       *       *       *       *       *       *

          (22) ``State alliance'' means 2 or more State 
        agencies that join together for the purpose of 
        procuring infant formula by soliciting competitive 
        bids.

           *       *       *       *       *       *       *

  (d)(1) * * *

           *       *       *       *       *       *       *

  (3)(A) Persons shall be certified for participation in 
accordance with general procedures prescribed by the Secretary. 
A State may certify breast-feeding women for up to 1 year, or 
until women stop breast-feeding, whichever is earlier.

           *       *       *       *       *       *       *

                  (C) Physical presence.--
                          (i) * * *
                          (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 
                                        [from a provider other 
                                        than the local agency; 
                                        or];
                                  (II) an infant or child who--
                                          (aa) * * *

           *       *       *       *       *       *       *

                                          (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.

           *       *       *       *       *       *       *

  (f)(1)(A) * * *

           *       *       *       *       *       *       *

  (C) The plan shall include--
          (i) * * *

           *       *       *       *       *       *       *

                          (ix) procedures whereby a State 
                        agency may accept and process vendor 
                        applications outside of the established 
                        time-frames, such as in situations in 
                        which a previously authorized vendor 
                        changes ownership under circumstances 
                        that do not permit timely notification 
                        to the State agency of such change in 
                        ownership;
          [(ix)] (x) a plan to provide nutrition education and 
        promote breastfeeding; and
          [(x)] (xi) such other information as the Secretary 
        may reasonably require.

           *       *       *       *       *       *       *

  [(11) The Secretary shall prescribe by regulation the 
supplemental foods to be made available in the program under 
this section. To the degree possible, the Secretary shall 
assure that the fat, sugar, and salt content of the prescribed 
foods is appropriate.]
  (11)(A) The Secretary shall prescribe by regulations the 
supplemental foods to be made available in the program under 
this section. To the degree possible the Secretary shall assure 
that the fat, sugar, and salt content of the prescribed foods 
is appropriate.
  (B) Beginning in 2013 and every 10 years thereafter, or more 
frequently if determined by the Secretary to be necessary to 
reflect current scientific knowledge, the Secretary shall 
conduct a scientific review of the supplemental foods available 
in the program and recommend, as necessary, changes to reflect 
nutrition science, current public health concerns, and cultural 
eating patterns.

           *       *       *       *       *       *       *

  (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[.]; and
          (C) require local agencies to permit an applicant or 
        participant to reschedule an appointment to apply or be 
        recertified for the program.

           *       *       *       *       *       *       *

          (25) 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 
        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 
        its investigation.
          (26) Infant formula benefits.--
                  (A) In general.--The State agency may round 
                up to the next whole can of infant formula to 
                ensure that all infants receive the full-
                authorized nutritional benefit specified by 
                regulation.
                  (B) Limitation.--Subparagraph (A) applies 
                only to infant formula contracts awarded under 
                bid solicitations made on or after October 1, 
                2004.
  [(g)(1) There are authorized to be appropriated to carry out 
this section $2,158,000,000 for the fiscal year 1990, and such 
sums as may be necessary for each of the fiscal years 1995 
through 2003.]
  (g) Authorization of Appropriations.--
          (1) In general.--There is authorized to be 
        appropriated to carry out this section such sums as are 
        necessary for each of fiscal years 2004 through 2008. 
        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.

           *       *       *       *       *       *       *

  (h)(1) * * *
  (2)(A) For each of the fiscal years [1995 through 2003] 2004 
through 2008, 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)  * * *

           *       *       *       *       *       *       *

  (4) The Secretary shall--
          (A) * * *

           *       *       *       *       *       *       *

          (D) 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; [and]
          (E) 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[.]; and
                  (F) partner with communities, State and local 
                agencies, employers, health care professionals, 
                and 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 2010 initiative.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                          (iv) Rebate invoices.--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.
                          (v) Cent-for-cent adjustments.--A bid 
                        solicitation for infant formula under 
                        the program made on or after October 1, 
                        2004 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; or
                                  (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.
                          (vi) Size of state alliances.--No 
                        State alliance may form among States 
                        whose infant participation exceeds 
                        200,000 based on program participation 
                        as of October 2003, except that--
                                  (I) an alliance among States 
                                with a combined 200,000 infant 
                                participants as of October 2003 
                                may continue, and may expand to 
                                include more than 200,000 
                                infants, but may not expand to 
                                include any additional State 
                                agencies that were not included 
                                in the alliance as of October 
                                1, 2003, other than as provided 
                                in subclause (II); and
                                  (II) any State agency serving 
                                fewer than 5,000 infant 
                                participants as of October 
                                2003, or any Indian Tribal 
                                Organization, may request to 
                                join any State alliance.

           *       *       *       *       *       *       *

  (10)(A) For each of fiscal years [1995 through 2003] 2004 
through 2008, the Secretary shall use for the purposes 
specified in subparagraph (B), $10,000,000 or the amount of 
nutrition services and administration funds and supplemental 
foods funds for the prior fiscal year that has not been 
obligated, whichever is less.
  (B) Funds under subparagraph (A) shall be used for--
          (i) * * *
          (ii) special State projects of regional or national 
        significance to improve the services of the program 
        under this section, which may include demonstration 
        projects in up to 10 local sites, determined to be 
        geographically and culturally representative of local 
        States and Indian agencies, to evaluate the inclusion 
        of fresh, frozen, or canned fruits and vegetables (to 
        be made available through private funds) as an addition 
        to the supplemental food provided under this section; 
        and
          (11) Consideration of price levels of retail stores 
        for participation in program.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) Additional requirements.--
                          (i) The State agency shall evaluate a 
                        vendor applicant based on its shelf 
                        prices or on the prices it bids for 
                        supplemental foods, which may not 
                        exceed its shelf prices.
                          (ii) The State agency shall establish 
                        price limitations on the amount that it 
                        will pay vendors for supplemental 
                        foods. The State agency shall ensure 
                        that price limitations do not result in 
                        inadequate participant access by 
                        geographic area.
                          (iii) In establishing competitive 
                        price and price limitation 
                        requirements, the State agency may 
                        exclude pharmacy vendors that supply 
                        only exempt infant formula or medical 
                        foods that are eligible under the 
                        program.
                          (iv) The State agency shall establish 
                        competitive price requirements and 
                        price limitations for vendor peer 
                        groups, as necessary to ensure that 
                        prices paid to vendors are competitive. 
                        Vendor peer group competitive price 
                        requirements and price limitations may 
                        reflect reasonable estimates of varying 
                        costs of acquisition of supplemental 
                        foods.
                  (D) Incentive items.--The State agency shall 
                not authorize a retail food store that provides 
                incentive items or other free merchandise to 
                program participants if funds available under 
                this program were used to purchase such items 
                or merchandise.
                  (E) Rules of construction.--Nothing in this 
                section may be construed to authorize violation 
                of the Sherman Antitrust Act (15 U.S.C. 1 et 
                seq.) or the Robinson-Patman Act (15 U.S.C. 13 
                et seq.).
          (12) Management information system plan.--
                  (A) * * *
                  [(B) Report.--Not later than 2 years 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 on actions taken to carry out 
                subparagraph (A).
                  [(C) Interim period.--Prior to the date of 
                submission of the report of the Secretary 
                required under subparagraph (B), a State agency 
                may not require retail stores to pay the cost 
                of systems or equipment that may be required to 
                test electronic benefit transfer systems.]
                  (B) Electronic benefit transfer systems.--
                          (i) In general.--All States that 
                        receive Federal funds for design or 
                        implementation of electronic benefit 
                        transfer (EBT) systems for the program 
                        under this section shall use technical 
                        specifications or standards, as 
                        applicable, as determined by the 
                        Secretary, except as provided in clause 
                        (ii).
                          (ii) Existing systems.--EBT systems 
                        for the program under this section that 
                        are in development or are issuing 
                        benefits as of the date of enactment 
                        shall be required to submit within 6 
                        months after the date of enactment of 
                        this subparagraph a plan for 
                        compliance.
                          (iii) Waiver.--The Secretary may 
                        waive compliance with this subparagraph 
                        for State EBT systems for the program 
                        under this section that are issuing 
                        benefits as of the date of enactment of 
                        this subparagraph until such time that 
                        compliance is feasible.
          (C) Universal product codes database.--The Secretary 
        shall implement a national Universal Product Code 
        Database for use by all State agencies in carrying out 
        the program and shall make available from appropriated 
        funds such sums as may be required for hosting, 
        hardware, and software configuration, and support.
  (13) Approved providers of infant formula.--
          (A) In general.--The State agency shall maintain a 
        list of infant formula manufacturers, wholesalers, 
        distributors, and retailers approved to provide infant 
        formula to vendors.
          (B) List.--The list required under subparagraph (A) 
        shall include food manufacturers, wholesalers, 
        distributors, and retailers licensed in the State in 
        accordance with State law and regulations to distribute 
        infant formula and food manufacturers registered with 
        the U.S. Food and Drug Administration that provide 
        infant formula.
          (C) Purchase requirement.--Vendors authorized to 
        participate in the program under this section shall 
        purchase infant formula from the list required under 
        subparagraph (A).

           *       *       *       *       *       *       *

  (i)(1) * * *

           *       *       *       *       *       *       *

  (3)(A) Notwithstanding paragraph (2) and subject to 
subparagraph (B)--
          (i) * * *
          (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 [1] 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

           *       *       *       *       *       *       *

  (j)(1) * * *

           *       *       *       *       *       *       *

  [(4)(A) Not later than April 1, 1995, the Secretaries shall 
provide to Congress a notification concerning the actions the 
Secretaries intend to take to carry out the initiative.
  [(B) Not later than July 1, 1996, the Secretaries shall 
provide to Congress a notification concerning the actions the 
Secretaries are taking under the initiative or actions the 
Secretaries intend to take under the initiative as a result of 
their experience in implementing the initiative.
  [(C) On completion of the initiative, the Secretaries shall 
provide to Congress a notification concerning an evaluation of 
the initiative by the Secretaries and a plan of the Secretaries 
to further the goals of the initiative.]
  [(5)] (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)).

           *       *       *       *       *       *       *

  (m)(1) * * *

           *       *       *       *       *       *       *

          (9) Funding.--
                  (A) In general.--
                          [(i) Authorization of 
                        appropriations.--There are authorized 
                        to be appropriated to carry out this 
                        subsection $8,000,000 for fiscal year 
                        1994, $10,500,000 for fiscal year 1995, 
                        and such sums as may be necessary for 
                        each of fiscal years 1996 through 
                        2003.]
                          (i) Authorization of 
                        appropriations.--There is authorized to 
                        be appropriated to carry out this 
                        subsection such sums as are necessary 
                        for each of fiscal years 2004 through 
                        2008.

           *       *       *       *       *       *       *

  [(r) Demonstration Project Relating to Use of the WIC Program 
for Identification and Enrollment of Children in Certain Health 
Programs.--
          [(1) In general.--In accordance with paragraph (2), 
        the Secretary shall establish a demonstration project 
        in not more than 20 local agencies in one State under 
        which costs of nutrition services and administration 
        (as defined in subsection (b)(4)) shall include the 
        costs of identification of children eligible for 
        benefits under, and the provision of enrollment 
        assistance for children in--
                  [(A) the State medicaid program under title 
                XIX of the Social Security Act (42 U.S.C. 1396 
                et seq.); and
                  [(B) the State children's health insurance 
                program under title XXI of that Act (42 U.S.C. 
                1397aa et seq.).
          [(2) State-related requirements.--The State in which 
        a demonstration project is established under paragraph 
        (1)--
                  [(A) shall operate not fewer than 20 pilot 
                site locations;
                  [(B) as of the date of establishment of the 
                demonstration project--
                          [(i) with respect to the programs 
                        referred to in subparagraphs (A) and 
                        (B) of paragraph (1)--
                                  [(I) shall have in use a 
                                simplified application form 
                                with a length of not more than 
                                two pages;
                                  [(II) shall accept mail-in 
                                applications; and
                                  [(III) shall permit 
                                enrollment in the program in a 
                                variety of locations; and
                          [(ii) shall have served as an 
                        original pilot site for the program 
                        under this section; and
                  [(C) as of December 31, 1998, shall have 
                had--
                          [(i) an infant mortality rate that is 
                        above the national average; and
                          [(ii) an overall rate of age-
                        appropriate immunizations against 
                        vaccine-preventable diseases that is 
                        below 80 percent.
          [(3) Termination of authority.--The authority 
        provided by this subsection terminates September 30, 
        2003.]

           *       *       *       *       *       *       *


                    NUTRITION EDUCATION AND TRAINING

  Sec. 19. (a) * * *

                                [PURPOSE

  [(b) It is the purpose of this section to establish a system 
of grants to State educational agencies for the development of 
comprehensive nutrition education and training programs. Such 
nutrition education programs shall fully use as a learning 
laboratory the school lunch and child nutrition programs.

                              [DEFINITIONS

  [(c) For purposes of this section, the term ``nutrition 
education and training program'' means a multidisciplinary 
program by which scientifically valid information about foods 
and nutrients is imparted in a manner that individuals 
receiving such information will understand the principles of 
nutrition and seek to maximize their well-being through food 
consumption practices. Nutrition education programs shall 
include, but not be limited to, (A) instructing students with 
regard to the nutritional value of foods and the relationship 
between food and human health; (B) training child nutrition 
program personnel in the principles and practices of food 
service management; (C) instructing teachers in sound 
principles of nutrition education; (D) developing and using 
classroom materials and curricula; and (E) providing 
information to parents and caregivers regarding the nutritional 
value of food and the relationship between food and health.

                  [NUTRITION INFORMATION AND TRAINING

  [(d)(1) The Secretary is authorized to formulate and carry 
out a nutrition education and training through a system of 
grants to State educational agencies, to provide for (A) the 
nutritional training of educational and food service personnel, 
(B) training school food service personnel in the principles 
and practices of food service management, in cooperation with 
materials developed at any food service management institute 
established as authorized by section 21(a)(2) of the Richard B. 
Russell National School Lunch Act, and (C) the conduct of 
nutrition education activities in schools, child care 
institutions, and institutions offering summer food service 
programs under section 13 of the Richard B. Russell National 
School Lunch Act, and the provision of nutrition education to 
parents and caregivers.
  [(2) The program is to be coordinated at the State level with 
other nutrition activities conducted by education, health, and 
State Cooperative Extension Service agencies. In formulating 
the program, the Secretary and the State may solicit the advice 
and recommendations of State educational agencies, the 
Department of Health and Human Services, and other interested 
groups and individuals concerned with improvement of child 
nutrition.
  [(3) If a State educational agency is conducting or applying 
to conduct a health education program which includes a school-
related nutrition education component as defined by the 
Secretary, and that health education program is eligible for 
funds under programs administered by the Department of Health 
and Human Services, the Secretary may make funds authorized in 
this section available to the Department of Health and Human 
Services to fund the nutrition education component of the State 
program without requiring an additional grant application.
  [(4) The Secretary, in carrying out the provisions of this 
subsection, shall make grants to State educational agencies 
who, in turn, may contract with land-grant colleges eligible to 
receive funds under the Act of July 2, 1862, or the Act of 
August 30, 1890, including the Tuskegee Institute, other 
institutions of higher education, and nonprofit organizations 
and agencies, for the training of educational, school food 
service, child care, and summer food service personnel with 
respect to providing nutrition education programs in schools 
and the training of school food service personnel in school 
food service management, in coordination with the activities 
authorized under section 21 of the Richard B. Russell National 
School Lunch Act. Such grants may be used to develop and 
conduct training programs for early childhood, elementary, and 
secondary educational personnel and food service personnel with 
respect to the relationship between food, nutrition, and 
health; educational methods and techniques, and issues relating 
to nutrition education; and principles and skills of food 
service management for cafeteria personnel.
  [(5) The State, in carrying out the provisions of this 
subsection, may contract with State and local educational 
agencies, land-grant colleges eligible to receive funds under 
the Act of July 2, 1862, or the Act of August 30, 1890, 
including the Tuskegee Institute, other institutions of higher 
education, and other public or private nonprofit educational or 
research agencies, institutions, or organizations to pay the 
cost of pilot demonstration projects in elementary and 
secondary schools, and in child care institutions and summer 
food service institutions, with respect to nutrition education. 
Such projects may include, but are not limited to, projects for 
the development, demonstration, testing, and evaluation of 
curricula for use in early childhood, elementary, and secondary 
education programs.

                    [AGREEMENTS WITH STATE AGENCIES

  [(e) The Secretary is authorized to enter into agreements 
with State educational agencies incorporating the provisions of 
this section, and issue such regulations as are necessary to 
implement this section.

                             [USE OF FUNDS

  [(f)(1) The funds made available under this section may, 
under guidelines established by the Secretary, be used by State 
educational agencies for--
          [(A) employing a nutrition education specialist to 
        coordinate the program, including travel and related 
        personnel costs;
          [(B) undertaking an assessment of the nutrition 
        education needs of the State;
          [(C) developing a State plan of operation and 
        management for nutrition education;
          [(D) applying for and carrying out planning and 
        assessment grants;
          [(E) pilot projects and related purposes;
          [(F) the planning, development, and conduct of 
        nutrition education programs and workshops for food 
        service and educational personnel;
          [(G) coordinating and promoting nutrition education 
        and training activities in local school districts 
        (incorporating, to the maximum extent practicable, as a 
        learning laboratory, the child nutrition programs);
          [(H) contracting with public and private nonprofit 
        educational institutions for the conduct of nutrition 
        education instruction and programs relating to the 
        purposes of this section;
          [(I) related nutrition education purposes, including 
        the preparation, testing, distribution, and evaluation 
        of visual aids and other informational and educational 
        materials; and
          [(J) other appropriate related activities, as 
        determined by the State.
  [(2) A State agency may use an amount equal to not more than 
15 percent of the funds made available through a grant under 
this section for expenditures for administrative purposes in 
connection with the program authorized under this section if 
the State makes available at least an equal amount for 
administrative or program purposes in connection with the 
program.

                    [ACCOUNTS, RECORDS, AND REPORTS

  [(g)(1) State educational agencies 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 to be necessary.
  [(2) State educational agencies shall provide reports on 
expenditures of Federal funds, program participation, program 
costs, and related matters, in such form and at such times as 
the Secretary may prescribe.

             [STATE COORDINATORS FOR NUTRITION; STATE PLAN

  [(h)(1) In order to be eligible for assistance under this 
section, a State shall appoint a nutrition education specialist 
to serve as a State coordinator for school nutrition education. 
It shall be the responsibility of the State coordinator to make 
an assessment of the nutrition education needs in the State, 
prepare a State plan, and coordinate programs under this Act 
with all other nutrition education programs provided by the 
State with Federal or State funds.
  [(2) Upon receipt of funds authorized by this section, the 
State coordinator shall prepare an itemized budget and assess 
the nutrition education and training needs of the State.]
  (b) Purpose.--It is the purpose of this section to support 
effective nutrition education through assistance to State 
agencies, schools, and nonprofit entities for Team Nutrition 
and other nutrition education projects that improve student 
understanding of healthful eating patterns, including an 
awareness and understanding of the Dietary Guidelines for 
Americans, the quality of school meals and access to local 
foods in schools and institutions operating programs under the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et 
seq.) and section 4 of this Act.
  (c) Team Nutrition Network.--
          (1) Purpose.--The purpose of the Team Nutrition 
        Network is to--
                  (A) promote the nutritional health of the 
                Nation's school children through nutrition 
                education, physical activity and other 
                activities that support healthy lifestyles for 
                children based on the Dietary Guidelines for 
                Americans, issued jointly by the Secretary of 
                Agriculture and the Secretary of Health and 
                Human Services, and the physical fitness 
                guidelines issued by the Secretary of Health 
                and Human Services;
                  (B) provide assistance to States for the 
                development of State-wide, comprehensive, and 
                integrated nutrition education and physical 
                fitness programs; and
                  (C) provide training and technical assistance 
                to States, school and community nutrition 
                programs, and child nutrition food service 
                professionals.
          (2) State coordinator.--The State Team Nutrition 
        Network Coordinator shall--
                  (A) administer and coordinate a comprehensive 
                integrated statewide nutrition education 
                program; and
                  (B) coordinate efforts with the Food and 
                Nutrition Service and State agencies 
                responsible for children's health programs.
          (3) Team nutrition network.--Subject to the 
        availability or appropriations to carry out this 
        subsection, the Secretary, in consultation with the 
        Secretary of Education, shall, on a competitive basis, 
        provide assistance to States for the purpose of 
        creating model nutrition education and physical 
        activity programs, consistent with current dietary and 
        fitness guidelines, for students in elementary schools 
        and secondary schools.
          (4) Requirements for state participation.--To be 
        eligible to receive assistance under this subsection, a 
        State Coordinator shall submit an application to the 
        Secretary at such time, an in such manner, and 
        containing such information as the Secretary may 
        require, including--
                  (A) a description of how the proposed 
                nutrition and physical activity program will 
                promote healthy eating and physical activity 
                and fitness and address the health and social 
                consequences of children who are at risk of 
                becoming overweight or obese;
                  (B) information describing how nutrition 
                activities are to be coordinated at the State 
                level with other health activities conducted by 
                education, health and agriculture agencies;
                  (C) information describing how initiatives to 
                promote physical activity are to be coordinated 
                at the State level with other initiatives to 
                promote physical activity conducted by 
                education, health, and parks and recreation 
                agencies;
                  (D) a description of the consultative process 
                that the State Coordinator 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, and organizations representing the 
                agriculture, food and beverage, fitness, and 
                sports and recreation industries;
                  (E) a description of how the State 
                Coordinator will evaluate the effectiveness of 
                its program; and
                  (F) a description of how any and all 
                communications to parents and guardians of all 
                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 extent practicable, 
                in a language that parents can understand.
          (5) Duration.--Subject to the availability of funds 
        made available to carry out this subsection, a State 
        Coordinator shall conduct the project for a period of 3 
        successive school years.
          (6) Authorized activities.--An eligible applicant 
        that receives assistance under this subsection may use 
        funds to carry out one or more of the following 
        activities--
                  (A) collecting, analyzing, and disseminating 
                data regarding the extent to which children and 
                youth in the State are overweight or physically 
                inactive and the programs and services 
                available to meet those needs;
                  (B) developing and implementing model 
                elementary and secondary education curricula to 
                create a comprehensive, coordinated nutrition 
                and physical fitness awareness and obesity 
                prevention program;
                  (C) developing and implementing pilot 
                programs in schools to increase physical 
                activity and to enhance the nutritional status 
                of students, including through the increased 
                consumption of fruits and vegetables, whole 
                grains, and lowfat dairy products;
                  (D) developing and implementing State 
                guidelines in health, which include nutrition 
                education, and physical education and emphasize 
                regular physical activity during school hours;
                  (E) collaborating with community based 
                organizations, volunteer 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;
                  (F) collaborating with public or private 
                organizations that have as a mission the 
                raising of public awareness of the importance 
                of a balanced diet and an active lifestyle; and
                  (G) providing training and technical 
                assistance to teachers and school food service 
                professionals consistent with the purpose of 
                this section.
          (7) Limitation.--Materials prepared under this 
        subsection regarding agricultural commodities, food, or 
        beverages must be factual and without bias.
          (8) Report.--Within 18 months of completion of the 
        projects and the evaluations, the Secretary shall 
        submit to the Committee on Education and the Workforce 
        of the House of Representatives and the Committee on 
        Health, Education, Labor, and Pensions of the Senate 
        and the Committee on Agriculture, Nutrition and 
        Forestry of the Senate a report describing the results 
        of the evaluation of the demonstration programs and 
        shall make such reports available to the public, 
        including through the Internet.
          (9) Independent evaluation.--
                  (A) In general.--The Secretary shall enter 
                into an agreement with an independent, non-
                partisan science-based research organization to 
                conduct a comprehensive independent evaluation 
                of the effectiveness of the Team Nutrition 
                initiative and the Team Nutrition Network 
                authorized by this subsection and to identify 
                best practices 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 healthier meal choices 
                        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; and
                          (vii) successfully involving school 
                        administrators, the private sector, 
                        public health agencies, non-profit 
                        organizations, and other community 
                        partners.
                  (B) Report.--Not later than October 1, 2007, 
                the Secretary shall transmit the findings of 
                the independent evaluation 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.
  (d) Local Nutrition and Physical Activity Project.--
          (1) In general.--Subject to the availability of 
        appropriations to carry out this subsection, the 
        Secretary, in consultation with the Secretary of 
        Education, shall provide assistance to not more than 
        100 local educational agencies, at least one per State, 
        for the establishment of pilot projects for purposes of 
        promoting healthy eating habits and increasing physical 
        activity, consistent with the Dietary Guidelines for 
        Americans issued jointly by the Secretary of 
        Agriculture and the Secretary of Health and Human 
        Services, among elementary and secondary education 
        students.
          (2) Requirement for participation in pilot project.--
        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 local educational 
                agency's need for nutrition and physical 
                activity programs;
                  (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 funds under this 
                subsection will be coordinated with other 
                programs under this Act, the Richard B. Russell 
                National School Lunch Act, or other Acts, as 
                appropriate, to improve student health and 
                nutrition;
                  (D) a statement of the local educational 
                agency's measurable goals for nutrition and 
                physical education programs and promotion;
                  (E) a description of how the proposed project 
                will be aligned with the local wellness policy 
                required under the Act;
                  (F) a description of the procedures the 
                agency will use for assessing and publicly 
                reporting 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 practicable, in a 
                language that parents can understand.
          (3) 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.
          (4) 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; and
                          (ii) increase opportunities for 
                        physical activity through after school 
                        programs, athletics, intramural 
                        activities, and recess; 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 nutritious, 
                        more appealing menus and recipes;
                          (iv) incorporate nutrition education 
                        into physical education, health 
                        education, and after school programs, 
                        including athletics;
                          (v) 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) provide nutrient content or 
                        nutrition information on meals served 
                        through the school lunch or school 
                        breakfast programs and items sold a la 
                        carte during meal times;
                          (vii) encourage the increased 
                        consumption of a variety of healthy 
                        foods through new initiatives such as 
                        salad bars and fruit bars; and
                          (viii) provide nutrition education, 
                        including sports nutrition education, 
                        for teachers, coaches, food service 
                        staff, athletic trainers, and school 
                        nurses.
          (5) Limitation.--Materials prepared under this 
        subsection regarding agricultural commodities, food, or 
        beverages must be factual and without bias.
          (6) Report.--Within 18 months of completion of the 
        projects and evaluations, the Secretary shall transmit 
        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 of the 
        pilot projects and shall make such reports available to 
        the public, including through the Internet.
  (e) Nutrition Education Support.--
          (1) In general.--In carrying out the purpose of this 
        section to support nutrition education, the Secretary 
        may provide for technical assistance and grants to 
        improve the quality of school meals and access to local 
        foods in schools and institutions.
          (2) School meals initiative.--The Secretary may 
        provide assistance to enable State educational agencies 
        to--
                  (A) implement the recommendations of the 
                Secretary's School Meals Initiative for Healthy 
                Children;
                  (B) increase the consumption of fruits, 
                vegetables, low-fat dairy products, and whole 
                grains;
                  (C) reduce saturated fat and sodium in school 
                meals;
                  (D) improve school nutritional environments; 
                and
                  (E) conduct other activities that aid schools 
                in carrying out the Secretary's School Meals 
                Initiative for Healthy Children.
          (3) Access to local foods.--The Secretary may provide 
        assistance, through competitive matching grants and 
        technical assistance, to schools and nonprofit entities 
        for projects that--
                  (A) improve access to local foods in schools 
                and institutions participating in programs 
                under the Richard B. Russell National School 
                Lunch Act (42 U.S.C. 1751 et seq.) and Section 
                4 of this Act through farm-to-cafeteria 
                activities that may include the acquisition of 
                food and appropriate equipment and the 
                provision of training and education;
                  (B) are, at a minimum, designed to procure 
                local foods from small- and medium-sized farms 
                for school meals;
                  (C) support nutrition education activities or 
                curriculum planning that incorporates the 
                participation of schoolchildren in farm and 
                agriculture education activities;
                  (D) develop a sustained commitment to farm-
                to-cafeteria projects in the community by 
                linking schools, agricultural producers, 
                parents, and other community stakeholders;
                  (E) require $100,000 or less in Federal 
                contributions;
                  (F) require a Federal share of costs not to 
                exceed 75 percent;
                  (G) provide matching support in the form of 
                cash or in kind contributions (including 
                facilities, equipment, or services provided by 
                State and local governments and private 
                sources); and
                  (H) cooperate in an evaluation to be carried 
                out by the Secretary.
  [(i)] (f) Authorization of Appropriations.--
          [(1) In general.--
                  [(A) Funding.--There are authorized to be 
                appropriated such sums as are necessary to 
                carry out this section for each of fiscal years 
                1997 through 2003.
                  [(B) Grants.--
                          [(i) In general.--Grants to each 
                        State from the amounts made available 
                        under subparagraph (A) shall be based 
                        on a rate of 50 cents for each child 
                        enrolled in schools or institutions 
                        within the State, except that no State 
                        shall receive an amount less than 
                        $75,000 per fiscal year.
                          [(ii) Insufficient funds.--If the 
                        amount made available for any fiscal 
                        year is insufficient to pay the amount 
                        to which each State is entitled under 
                        clause (i), the amount of each grant 
                        shall be ratably reduced.]
          (1) In general.--There is authorized to be 
        appropriated such sums as may be necessary for carrying 
        out this section for fiscal years 2004 through 2008.

           *       *       *       *       *       *       *

                              ----------                              


SECTION 15 OF THE COMMODITY DISTRIBUTION REFORM ACT AND WIC AMENDMENTS 
                                OF 1987

SEC. 15. PAYMENT OF COSTS ASSOCIATED WITH REMOVAL OF COMMODITIES THAT 
                    POSE A HEALTH OR SAFETY RISK.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Termination Date.--The authority provided by this section 
terminates effective [April 1, 2004] October 1, 2008.

                            ADDITIONAL VIEWS

    H.R. 3873, the Child Nutrition Improvement and Integrity 
Act sets the stage for important reforms in federal child 
nutrition programs. It will eliminate various barriers to 
participation for low-income children and families and ensure 
greater access to these critical nutrition programs. However, 
we are concerned that this bill misses a key opportunity by not 
addressing a critical health issue for children and youth: the 
increasing rate of childhood obesity.
    According to the 1999-2000 National Health and Nutrition 
Examination Survey (NHANES), the percentage of children ages 12 
through 19 who are overweight is 15.5 percent, among children 
6-11 years of age is 15.3 percent, and among children between 2 
and 5 years old is 10.4 percent. These numbers have grown 
significantly over the last decade. Chronic diseases associated 
with adulthood are showing up in our overweight children, 
including ``adult-onset'' diabetes and hypertension. This 
health threat comes with numerous costs. Children who are obese 
report greater levels of emotional distress than children who 
suffer from cancer, and children who are obese are more likely 
to become overweight or obese adults. We also know that there 
has been a threefold increase in annual hospital costs for 
obesity-related diseases in children over the past twenty 
years.
    Federal child nutrition programs should ensure that the 
foods available to children are nutritious and healthy and 
provide children with choices necessary to achieve a healthy 
lifestyle. Unfortunately, there is much evidence to suggest 
that many of the foods available to children during the school 
day do not advance this goal. Over the last decade there has 
been a shocking trend toward increasing sales of unhealthful 
beverages and snacks in competition with the provision of 
breakfasts and lunches offered through the Federal school meals 
program. According to the most recent national data, 98 percent 
of high schools, 74 percent of middle schools and 43 percent of 
elementary schools have vending machines, school stores or 
snack bars. The most common foods they sell are carbonated 
sodas, fruit drinks with low percentages of juice, salty snacks 
and high fat baked goods. School cafeteria ``a la carte'' lines 
most commonly sell desserts, ice cream, chips and fruit drinks 
with little or no juice content.
    While there are federal dietary guidelines for meals served 
that are reimbursed through the federal meals program, federal 
nutrition standards for foods that are not offered through the 
federal meals program are lacking. As a result, children are 
faced with numerous food choices during the school day with 
little nutritional value.
    The statutory authority to regulate foods sold in 
competition with the reimbursable meal is extremely limited. 
During school meal periods, foods of minimal nutritional value 
are not allowed to be sold in the food service areas, but may 
be sold anywhere else in the school at any time. Our colleague, 
Representative Tim Ryan (D-OH) offered an amendment in 
Committee that would have resulted in enormous improvements in 
the school nutrition environment for children. His amendment 
would have given the Secretary clear authority in the 
development of regulations to control the sale of less 
healthful beverages and snacks to children in schools that 
offer school breakfast and lunch programs. The amendment also 
would have required the Secretary to commission a study by the 
Institute of Medicine to recommend nutrition standards, based 
on nutritional science, for foods sold on the school campus. 
This study would have been invaluable in assisting the 
Secretary in the development of national standards for 
competitive foods, and it also would have been a very helpful 
reference for the local wellness councils required by the bill 
as they review nutrition standards for foods sold in schools. 
We regret that the Amendment failed along party lines. 
Nutritional quality should not be a partisan issue.
    Additionally, we feel it is critical that Congress address 
the issue of safety in summer camps. Congressman Robert Andrews 
offered an amendment during the mark up that would have 
increased health and safety standards for children at summer 
camps in states without standards, but withdrew the measure in 
the hopes of working with the majority on report language. The 
concern was not addressed in the report, and members urge 
Congress to take strides in closing the health and safety gap 
at summer camps.
Elimination of Reduced Price School Meals
    Democratic Members strongly support the elimination of the 
reduced price meal category to allow more children to receive 
free meals. Currently, there are three income categories in the 
school meal program (school lunch and breakfast): free meals 
for children with family income below 130% of poverty; reduced 
price meals (usually, 40 cents) between 130% and 185% of 
poverty; paid meals above 185%. The Special Supplemental 
Feeding Program for Women, Infants and Children, known as WIC, 
targets its services and benefits to low-income women and their 
children below 185% of poverty.
    School boards all over the country are reporting that many 
parents are finding it increasingly difficult to pay the 
reduced price lunch and breakfast charge, each day, for all 
children. For some families, the fee is an insurmountable 
barrier to participation. Over 500 school boards, including 
many state boards of education, have passed resolutions urging 
the Congress to eliminate the reduced price charge. Such action 
would make the school meal programs more accessible to low-
income families; better prepare students to learn; and make the 
programs easier to administer.
    While funding is not presently available under the 
Republican budget resolution to eliminate the reduced price 
lunch category, Democratic Members believe this should be a 
priority. Committee Democratic Members support elimination of 
the reduced price category and look forward to making this a 
priority for future budget allocations.

                                   George Miller.
                                   Ron Kind.
                                   Dennis J. Kucinich.
                                   Betty McCollum.
                                   Carolyn McCarthy.
                                   Ruben Hinojosa.
                                   Donald M. Payne.
                                   Dale E. Kildee.
                                   John F. Tierney.
                                   Danny K. Davis.
                                   Timothy Bishop.
                                   Chris Van Hollen.
                                   Raul M. Grijalva.
                                   Rush Holt.
                                   Tim Ryan.
                                   Major R. Owens.
                                   Lynn Woolsey.
                                   Robert E. Andrews.
                                   Susan A. Davis.