Report text available as:

(PDF provides a complete and accurate display of this text.) Tip?



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

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



 
          IMPROVING CHILD NUTRITION AND EDUCATION ACT OF 2016

                                _______
                                

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

                                _______
                                

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

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 5003]

      [Including cost estimate of the Congressional Budget Office]

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

                   TITLE I--NATIONAL SCHOOL LUNCH ACT

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

                     TITLE II--CHILD NUTRITION ACT

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

                        TITLE III--MISCELLANEOUS

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

SEC. 2. DEFINITION OF SECRETARY.

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

                   TITLE I--NATIONAL SCHOOL LUNCH ACT

SEC. 100. STATE AGENCY.

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

SEC. 101. APPORTIONMENTS TO STATES.

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

SEC. 102. REPEAL OF NUTRITION PROMOTION.

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

SEC. 103. DIRECT FEDERAL EXPENDITURES.

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

SEC. 104. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

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

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

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

SEC. 105. MISCELLANEOUS PROVISIONS.

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

SEC. 106. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

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

SEC. 107. COMMODITY DISTRIBUTION PROGRAM.

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

SEC. 108. CHILD AND ADULT CARE FOOD PROGRAM.

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

SEC. 109. DEMONSTRATION PROJECTS.

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

SEC. 110. FRUIT AND VEGETABLE PROGRAM.

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

SEC. 111. COMPLIANCE AND ACCOUNTABILITY.

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

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

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

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

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

SEC. 114. IMPROVEMENTS TO SCHOOL LUNCH FACILITIES.

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

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

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

SEC. 115. PROHIBITIONS.

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

``SEC. 30. PROHIBITIONS.

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

                     TITLE II--CHILD NUTRITION ACT

SEC. 201. SPECIAL MILK PROGRAM AUTHORIZATION.

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

SEC. 202. SCHOOL BREAKFAST PROGRAM.

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

SEC. 203. STATE ADMINISTRATIVE EXPENSES.

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

SEC. 204. REGULATIONS.

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

SEC. 205. DEFINITION OF STATE AGENCY.

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

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

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

SEC. 207. TEAM NUTRITION NETWORK.

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

                        TITLE III--MISCELLANEOUS

SEC. 301. REVIEWS.

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

SEC. 302. PROGRAM DELIVERY.

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

SEC. 303. PRODUCT AVAILABILITY.

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

SEC. 304. PROCUREMENT.

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

SEC. 305. SCHOOL NUTRITION ADVISORY COMMITTEE.

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

SEC. 306. PAPERWORK REDUCTION.

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

SEC. 307. TECHNOLOGY.

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

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

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

SEC. 309. TECHNICAL CORRECTIONS.

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

SEC. 310. BUDGETARY EFFECTS.

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

SEC. 311. EFFECTIVE DATE.

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

                                Purpose

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

                            Committee Action

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

                             112TH CONGRESS

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

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

                             113TH CONGRESS

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

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

                             114TH CONGRESS

First Session--hearings

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

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

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

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

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

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

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

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

Second Session--Legislative action

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

                                Summary

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

Supporting innovation

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

Other notable provisions

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

                            Committee Views


Introduction

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

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

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

Addressing waste, fraud, and abuse

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

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

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

Nutrition standards

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

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

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

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

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

Sodium targets

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

Milk varieties

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

Potable water

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

Special dietary needs

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

Family Meal Days

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

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

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

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

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

Access to local foods: Farm to school program

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

Summer meal service through business partnership

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

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

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

Summer electronic benefit transfer for children

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

State administration of child nutrition programs

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

                     Title II--Child Nutrition Act

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

School Breakfast Program

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

State administrative expenses

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

Smart snack rule

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

Special Supplemental Nutrition Program for Women, Infants, and Children

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

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

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

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

Team nutrition network

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

                        Title III--Miscellaneous

    Title III of the bill addresses miscellaneous provisions.

Reviews

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

Program delivery

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

School nutrition advisory committee

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

Conclusion

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

                           Section-by-Section


Section 1--Short title; Table of contents

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

Section 2--Definition of Secretary

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

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


Section 100--Authorized State agency

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

Section 101--Apportionment to states

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

Section 102--Repeal of nutrition promotion

    Repeals the nutrition promotion program.

Section 103--Direct federal expenditures

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

Section 104--Nutritional and other requirements

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

Section 105--Miscellaneous provisions

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

Section 106--Summer food service program for children

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

Section 107--Commodity Distribution process

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

Section 108--Child and adult care food program

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

Section 109--Demonstration projects

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

Section 110--Fruit and vegetable program

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

Section 111--Compliance and accountability

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

Section 112--Repeal of State Childhood Hunger Challenge Grants

    Repeals the State Childhood Hunger Challenge Grants.

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

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

Section 114--Improvements to school lunch facilities

    Authorizes kitchen equipment grants and loans.

Section 115--Prohibitions

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

                     Title II--Child Nutrition Act


Section 201--Special Milk Program Authorization

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

Section 202--School Breakfast Program

    Increases the reimbursement rate for breakfast.

Section 203--State Administrative Expenses

    Clarifies the use of state administrative expenses.

Section 204--Regulations

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

Section 205--Definition of State agency

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

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

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

Section 207--Team nutrition network

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

                        Title III--Miscellaneous


Section 301--Reviews

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

Section 302--Program delivery

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

Section 303--Product availability

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

Section 304--Procurement

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

Section 305--School nutrition advisory committee

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

Section 306--Paperwork reduction

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

Section 307--Technology

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

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

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

Section 309--Technical corrections

    Makes technical and conforming corrections.

Section 310--Budgetary effects

    Establishes PAYGO compliance.

Section 311--Effective date

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

                       Explanation of Amendments

    The amendments, including the amendment in the nature of a 
substitute, are explained in the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. H.R. 5003 builds upon the Committee's ongoing efforts 
to improve child nutrition programs by examining federal 
investments, reducing burdensome requirements, and 
strengthening programs.

                       Unfunded Mandate Statement

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

                           Earmark Statement

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

                            Roll Call Votes

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


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

         Statement of General Performance Goals and Objectives

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

                    Duplication of Federal Programs

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

                  Disclosure of Directed Rule Makings

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

  Statement of Oversight Findings and Recommendations of the Committee

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

               New Budget Authority and CBO Cost Estimate

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

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 30, 2016.
Hon. John Kline,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5003, the 
Improving Child Nutrition and Education Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jennifer 
Gray.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

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

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

                              TABLE 1.--BUDGETARY EFFECTS OF H.R. 5003, IMPROVING CHILD NUTRITION AND EDUCATION ACT OF 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2017    2018    2019    2020    2021    2022    2023    2024    2025    2026   2017-2021  2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      INCREASES OR DECREASES (-) IN DIRECT SPENDING
 
Estimated Budget Authority........................      20      22     -74     -58     -42     -19       1      17      32      42      -130        -54
Estimated Outlays.................................      17      15     -62     -62     -38     -16      -2      15      28      41      -128        -59
 
                                                                  INCREASES IN REVENUES
 
Estimated Revenues................................       *       *       1       1       1       1       1       1       1       1         3          8
 
                                    INCREASE OR DECREASE (-) IN DEFICITS FROM CHANGES IN DIRECT SPENDING AND REVENUES
 
Effect on Deficit.................................      17      15     -63     -63     -39     -17      -3      14      27      40      -131        -67
 
                                                     INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level.....................   6,448   6,422   6,422   6,397   6,397       5       5       5       5       5    32,084     32,109
Estimated Outlays.................................   5,126   6,062   6,167   6,212   6,208   1,108     197      69       5       5    29,775     31,159
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Components may not sum to totals because of rounding; * = between zero and $500,000.

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

Background

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

Direct Spending

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

                                          TABLE 2.--ESTIMATED DIRECT SPENDING UNDER H.R. 5003, THE IMPROVING CHILD NUTRITION AND EDUCATION ACT OF 2016
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          By fiscal year, in millions of dollars--
                                                           -------------------------------------------------------------------------------------------------------------------------------------
                                                               2017       2018       2019       2020       2021       2022       2023       2024       2025       2026    2017-2021   2017-2026
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          INCREASES OR DECREASES (-) IN DIRECT SPENDING
 
Community Eligibility Provision:
    Estimated Budget Authority............................         -1        -33       -171       -179       -185       -192       -198       -205       -212       -219       -569       -1,595
    Estimated Outlays.....................................         -1        -28       -148       -178       -184       -190       -197       -204       -211       -218       -539       -1,559
Summer and CACFP At-Risk Streamlining:
    Estimated Budget Authority............................          2         14         24         34         65         92        113        131        148        162        139          785
    Estimated Outlays.....................................          2         12         23         32         60         87        109        128        145        160        129          758
Off-Site Consumption Option:
    Estimated Budget Authority............................          6          8         10         14         14         15         15         16         16         17         52          131
    Estimated Outlays.....................................          6          8         10         14         14         15         15         16         16         17         52          131
Health Inspections:
    Estimated Budget Authority............................          *          *          *          *          *          *          *          *          *          *          *            *
    Estimated Outlays.....................................          *          *          *          *          *          *          *          *          *          *          *            *
Breakfast Reimbursement Rates:
    Estimated Budget Authority............................          0         10         60         69        100        105        111        118        124        130        239          827
    Estimated Outlays.....................................          0          8         51         67         94        104        110        116        122        129        220          801
Income Verification Procedures:
    Estimated Budget Authority............................          0          0        -18        -17        -35        -37        -38        -40        -41        -43        -70         -269
    Estimated Outlays.....................................          0          0        -15        -17        -32        -36        -38        -39        -41        -43        -64         -261
Farm to School Program:
    Estimated Budget Authority............................          5          5          5          5          5          5          5          5          5          5         25           50
    Estimated Outlays.....................................          4          5          5          5          5          5          5          5          5          5         24           49
Equipment Grants:
    Estimated Budget Authority............................          *          3          4          5          5          5          5          5          5          5         17           42
    Estimated Outlays.....................................          *          3          4          5          5          5          5          5          5          5         17           42
Summer EBT Demonstration Project:
    Estimated Budget Authority............................          0         10         10         10          0          0          0          0          0          0         30           30
    Estimated Outlays.....................................          0          1          5          9          9          5          1          0          0          0         24           30
Business Partnership Demonstration Project:
    Estimated Budget Authority............................          0          2          4          4          0          0          0          0          0          0         10           10
    Estimated Outlays.....................................          0          2          4          4          0          0          0          0          0          0         10           10
New Institutions In CACFP:
    Estimated Budget Authority............................          *         -3         -5         -5         -5         -5         -5         -5         -5         -5        -18          -43
    Estimated Outlays.....................................          *         -2         -5         -5         -5         -5         -5         -5         -5         -5        -17          -42
Eligibility For For-Profit Institutions:
    Estimated Budget Authority............................          1          1          1          1          1          1          1          1          1          1          5           10
    Estimated Outlays.....................................          *          1          1          1          1          1          1          1          1          1          4            9
Team Nutrition:
    Estimated Budget Authority............................          *         -1         -1         -2         -2         -3         -3         -4         -4         -5         -6          -25
    Estimated Outlays.....................................          *         -1         -1         -2         -2         -2         -3         -3         -4         -4         -6          -22
Commodity Reimbursement Calculation:
    Estimated Budget Authority............................          6          6          6          6          0          0          0          0          0          0         24           24
    Estimated Outlays.....................................          5          6          6          6          1          0          0          0          0          0         24           24
Other Provisions:
    Estimated Budget Authority............................          1          *          *          *          *          *          *          *          *          *          3            6
    Estimated Outlays.....................................          1          *          *          *          *          *          *          *          *          *          3            6
Interaction Effects:
    Estimated Budget Authority............................          *          *         -3         -3         -5         -5         -5         -5         -5         -6        -11          -37
    Estimated Outlays.....................................          *          *         -2         -3         -4         -5         -5         -5         -5         -6         -9          -35
Total Changes In Direct Spending:
    Estimated Budget Authority............................         20         22        -74        -58        -42        -19          1         17         32         42       -130          -54
    Estimated Outlays.....................................         17         15        -62        -62        -38        -16         -2         15         28         41       -128          -59
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Components may not sum to totals because of rounding; * = between -$500,000 and $500,000. CACFP = Child and Adult Care Food Program; EBT = Electronic Benefit Transfer.

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

Revenues

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

Spending subject to appropriation

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

                                   TABLE 3.--SPENDING SUBJECT TO APPROPRIATION
----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2017     2018     2019     2020     2021   2017-2021
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Reauthorize WIC:
    Authorization Level.................................    6,395    6,394    6,394    6,369    6,369     31,919
    Estimated Outlays...................................    5,116    6,012    6,139    6,184    6,180     29,630
Grants and Other Activities:
    Estimated Authorization Level.......................       53       28       28       28       28        165
    Estimated Outlays...................................       11       51       28       28       28        145
    Total Changes:
        Estimated Authorization Level...................    6,448    6,422    6,422    6,397    6,397     32,084
        Estimated Outlays...............................    5,126    6,062    6,167    6,212    6,208     29,775
----------------------------------------------------------------------------------------------------------------
Notes: Components may not sum to totals because of rounding; WIC = Special Supplemental Nutrition Program for
  Women, Infants, and Children.

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

                    TABLE 4.--CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 5003, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON EDUCATION AND THE WORKFORCE ON MAY 18, 2016
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      By fiscal year, in millions of dollars--
                                                  ----------------------------------------------------------------------------------------------------------------------------------------------
                                                      2016       2017       2018       2019       2020       2021       2022       2023       2024       2025       2026    2016-2021  2016-2026
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           NET INCREASE OR DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact...................          0         17         15         63        -63        -39        -17         -3         14         27         40       -131        -67
Memorandum:
    Changes in Outlays...........................          0         17         15        -62        -62        -38        -16         -2         15         28         41       -128        -59
    Changes in Revenues..........................          0          0          0          1          1          1          1          1          1          1          1          3          8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.

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

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 5003. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

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

         Changes in Existing Law Made by the Bill, as Reported

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

              RICHARD B. RUSSELL NATIONAL SCHOOL LUNCH ACT




           *       *       *       *       *       *       *
                        APPORTIONMENTS TO STATES

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

[SEC. 5. NUTRITION PROMOTION.

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

                      DIRECT FEDERAL EXPENDITURES

  Sec. 6. (a) The funds provided by appropriation or transfer 
from other accounts for any fiscal year for carrying out the 
provisions of this Act, and for carrying out the provisions of 
the Child Nutrition Act of 1966, other than section 3 thereof, 
less
          (1) not to exceed 3\1/2\ per centum thereof which per 
        centum is hereby made available to the Secretary for 
        the Secretary's administrative expenses under this Act 
        and under the Child Nutrition Act of 1966;
          (2) the amount apportioned by the Secretary pursuant 
        to section 4 of this Act and the amount appropriated 
        pursuant to sections 11 and 13 of this Act and sections 
        4 and 7 of the Child Nutrition Act of 1966; and
          (3) not to exceed 1 per centum of the funds provided 
        for carrying out the programs under this Act and the 
        programs under the Child Nutrition Act of 1966, other 
        than section 3, which per centum is hereby made 
        available to the Secretary to supplement the 
        nutritional benefits of these programs through grants 
        to States and other means for nutritional training and 
        education for workers, cooperators, and participants in 
        these programs, for pilot projects and the cash-in-lieu 
        of commodities study required to be carried out under 
        section 18 of this Act, and for necessary surveys and 
        studies of requirements for food service programs in 
        furtherance of the purposes expressed in section 2 of 
        this Act and section 2 of the Child Nutrition Act of 
        1966,
shall be available to the Secretary during such year for direct 
expenditure by the Secretary for agricultural commodities and 
other foods to be distributed among the States and schools and 
service institutions participating in the food service programs 
under this Act and under the Child Nutrition Act of 1966 in 
accordance with the needs as determined by the local school and 
service institution authorities. Except as provided in the next 
2 sentences, any school participating in food service programs 
under this Act may refuse to accept delivery of not more than 
20 percent of the total value of agricultural commodities and 
other foods tendered to it in any school year; and if a school 
so refuses, that school may receive, in lieu of the refused 
commodities, other commodities to the extent that other 
commodities are available to the State during that year. Any 
school food authority may refuse some or all of the fresh 
fruits and vegetables offered to the school food authority in 
any school year and shall receive, in lieu of the offered 
fruits and vegetables, other more desirable fresh fruits and 
vegetables that are at least equal in value to the fresh fruits 
and vegetables refused by the school food authority. The value 
of any fresh fruits and vegetables refused by a school under 
the preceding sentence for a school year shall not be used to 
determine the 20 percent of the total value of agricultural 
commodities and other foods tendered to the school food 
authority in the school year under the second sentence. The 
provisions of law contained in the proviso of the Act of June 
28, 1937, facilitating operations with respect to the purchase 
and disposition of surplus agricultural commodities under 
section 32 of the Act approved August 24, 1935, shall, to the 
extent not inconsistent with the provisions of this Act, also 
be applicable to expenditures of funds by the Secretary under 
this Act. In making purchases of such agricultural commodities 
and other foods, the Secretary shall not issue specifications 
which restrict participation of local producers unless such 
specifications will result in significant advantages to the 
food service programs authorized by this Act and the Child 
Nutrition Act of 1966.
  (b) The Secretary shall deliver, to each State participating 
in the school lunch program under this Act, commodities valued 
at the total level of assistance authorized under subsection 
(c) for each school year for the school lunch program in the 
State, not later than September 30 of the following school 
year.
  [(c)(1)(A) The national average value of donated foods, or 
cash payments in lieu thereof, shall be 11 cents, adjusted on 
July 1, 1982, and each July 1 thereafter to reflect changes in 
the Price Index for Food Used in Schools and Institutions. The 
Index shall be computed using 5 major food components in the 
Bureau of Labor Statistics' Producer Price Index (cereal and 
bakery products, meats, poultry and fish, dairy products, 
processed fruits and vegetables, and fats and oils). Each 
component shall be weighed using the same relative weight as 
determined by the Bureau of Labor Statistics.
  [(B) The value of food assistance for each meal shall be 
adjusted each July 1 by the annual percentage change in a 3-
month average value of the Price Index for Foods Used in 
Schools and Institutions for March, April, and May each year. 
Such adjustment shall be computed to the nearest \1/4\ cent.
  [(C) For each school year, the total commodity assistance or 
cash in lieu thereof available to a State for the school lunch 
program shall be calculated by multiplying the number of 
lunches served in the preceding school year by the rate 
established by subparagraph (B). After the end of each school 
year, the Secretary shall reconcile the number of lunches 
served by schools in each State with the number of lunches 
served by schools in each State during the preceding school 
year and increase or reduce subsequent commodity assistance or 
cash in lieu thereof provided to each State based on such 
reconciliation.
  [(D) Among those commodities]
  (c) Calculation of Total Assistance.--
          (1) National average value.--
                  (A) In general Subject to subparagraphs (B) 
                and (C), the national average value of donated 
                foods, or cash payments in lieu thereof, shall 
                be equal to the quotient obtained by dividing, 
                not later than February 15 of each year for the 
                upcoming school year--
                          (i) the total funds available in the 
                        preceding school year under section 4, 
                        this section, and section 11; by
                          (ii) the number of lunches served in 
                        the preceding school year in all 
                        schools participating in the school 
                        lunch program under this Act.
                  (B) Adjustment.--
                          (i) In general.--The value determined 
                        under subparagraph (A) shall be 
                        adjusted by the annual percentage 
                        change in a 3-month average value of 
                        the Producer Price Index for Foods Used 
                        in Schools and Institutions of the 
                        Bureau of Labor Statistics (in this 
                        subparagraph referred to as the 
                        ``Index'') for the preceding September, 
                        October, and November.
                          (ii) Requirement.--An adjustment 
                        under clause (i) shall be computed to 
                        the nearest \1/4\ cent.
                          (iii) Index.--
                                  (I) In general.--The Index 
                                shall be computed using 5 major 
                                food components in the Index 
                                (cereal and bakery products, 
                                meats, poultry and fish, dairy 
                                products, processed fruits and 
                                vegetables, and fats and oils).
                                  (II) Components.--Each 
                                component described in 
                                subclause (I) shall be weighted 
                                using the same relative weight 
                                as determined by the Bureau of 
                                Labor Statistics.
                          (iv) Minimum amount of commodity 
                        assistance.--Not less than 12 percent 
                        of the value adjusted in accordance 
                        with this subparagraph shall be 
                        provided in the form of commodity 
                        assistance.
                  (C) Insufficient amounts.--If amounts 
                available to carry out section 4, this section, 
                and section 11 are insufficient to meet the 
                requirements of such sections for a school 
                year, the Secretary shall, to the extent 
                necessary, use the authority provided under 
                section 14(a) to meet the requirements for the 
                school year.
                  (D) Amount for each state.--For each school 
                year, the total commodity assistance or cash in 
                lieu thereof available to a State for the 
                school lunch program shall be equal to the 
                product obtained by multiplying--
                          (i) the number of lunches served in 
                        such State in the most recent school 
                        year for which data are available; by
                          (ii) the rate determined under 
                        subparagraphs (A) and (B).
                  (E) Special emphasis.--Among those 
                commodities delivered under this section, the 
                Secretary shall give special emphasis to high 
                protein foods, meat, and meat alternates (which 
                may include domestic seafood commodities and 
                their products).
  [(E) Notwithstanding]
          (F) Minimum quantity of donated foods._
        Notwithstanding any other provision of this section, 
        not less than 75 percent of the assistance provided 
        under this subsection shall be in the form of donated 
        foods for the school lunch program.
  (2) To the maximum extent feasible, each State agency shall 
offer to each school food authority under its jurisdiction that 
participates in the school lunch program and receives 
commodities, agricultural commodities and their products, the 
per meal value of which is not less than the national average 
value of donated foods established under paragraph (1). Each 
such offer shall include the full range of such commodities and 
products that are available from the Secretary to the extent 
that quantities requested are sufficient to allow efficient 
delivery to and within the State.
  (d) Beginning with the school year ending June 30, 1981, the 
Secretary shall not offer commodity assistance based upon the 
number of breakfasts served to children under section 4 of the 
Child Nutrition Act of 1966.
  [(e)(1) Subject to paragraph (2), in each school year the 
Secretary shall ensure that not less than 12 percent of the 
assistance provided under section 4, this section, and section 
11 shall be in the form of--
          [(A) commodity assistance provided under this 
        section, including cash in lieu of commodities and 
        administrative costs for procurement of commodities 
        under this section; or
          [(B) during the period beginning October 1, 2003, and 
        ending September 30, 2020, commodities provided by the 
        Secretary under any provision of law.
  [(2) If amounts available to carry out the requirements of 
the sections described in paragraph (1) are insufficient to 
meet the requirement contained in paragraph (1) for a school 
year, the Secretary shall, to the extent necessary, use the 
authority provided under section 14(a) to meet the requirement 
for the school year.]
  [(f)] (e) Pilot Project for Procurement of Unprocessed Fruits 
and Vegetables.--
          (1) In general.--The Secretary shall conduct a pilot 
        project under which the Secretary shall facilitate the 
        procurement of unprocessed fruits and vegetables in not 
        more than 8 States receiving funds under this Act.
          (2) Purpose.--The purpose of the pilot project 
        required by this subsection is to provide selected 
        States flexibility for the procurement of unprocessed 
        fruits and vegetables by permitting each State--
                  (A) to utilize multiple suppliers and 
                products established and qualified by the 
                Secretary; and
                  (B) to allow geographic preference, if 
                desired, in the procurement of the products 
                under the pilot project.
          (3) Selection and participation.--
                  (A) In general.--The Secretary shall select 
                States for participation in the pilot project 
                in accordance with criteria established by the 
                Secretary and terms and conditions established 
                for participation.
                  (B) Requirement.--The Secretary shall ensure 
                that at least 1 project is located in a State 
                in each of--
                          (i) the Pacific Northwest Region;
                          (ii) the Northeast Region;
                          (iii) the Western Region;
                          (iv) the Midwest Region; and
                          (v) the Southern Region.
          (4) Priority.--In selecting States for participation 
        in the pilot project, the Secretary shall prioritize 
        applications based on--
                  (A) the quantity and variety of growers of 
                local fruits and vegetables in the States on a 
                per capita basis;
                  (B) the demonstrated commitment of the States 
                to farm-to-school efforts, as evidenced by 
                prior efforts to increase and promote farm-to-
                school programs in the States; and
                  (C) whether the States contain a sufficient 
                quantity of local educational agencies, various 
                population sizes, and geographical locations.
          (5) Recordkeeping and reporting requirements.--
                  (A) Recordkeeping requirement.--States 
                selected to participate in the pilot project, 
                and participating school food authorities 
                within those States, shall keep records of the 
                fruits and vegetables received under the pilot 
                project in such manner and form as requested by 
                the Secretary.
                  (B) Reporting requirement.--Each 
                participating State shall submit to the 
                Secretary a report on the success of the pilot 
                project in the State, including information 
                on--
                          (i) the quantity and cost of each 
                        type of fruit and vegetable received by 
                        the State under the pilot project; and
                          (ii) the benefit provided by those 
                        procurements in conducting school food 
                        service in the State, including meeting 
                        school meal requirements.

                           PAYMENTS TO STATES

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

                     STATE DISBURSEMENT TO SCHOOLS

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

              [NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS

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

SEC. 9. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

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

SEC. 9A. LOCAL SCHOOL WELLNESS POLICY.

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

                DISBURSEMENT TO SCHOOLS BY THE SECRETARY

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

                           SPECIAL ASSISTANCE

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

                MISCELLANEOUS PROVISIONS AND DEFINITIONS

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

SEC. 13. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

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

                     COMMODITY DISTRIBUTION PROGRAM

  Sec. 14. (a) Notwithstanding any other provision of law, the 
Secretary shall--
          (1) use funds available to carry out the provisions 
        of section 32 of the Act of August 24, 1935 (7 U.S.C. 
        612c) which are not expended or needed to carry out 
        such provisions, to purchase (without regard to the 
        provisions of existing law governing the expenditure of 
        public funds) agricultural commodities and their 
        products of the types customarily purchased under such 
        section (which may include domestic seafood commodities 
        and their products), for donation to maintain the 
        annually programmed level of assistance for programs 
        carried on under this Act, the Child Nutrition Act of 
        1966, and title III of the Older Americans Act of 1965; 
        and
          (2) if stocks of the Commodity Credit Corporation are 
        not available, use the funds of such Corporation to 
        purchase agricultural commodities and their products of 
        the types customarily available under section 416 of 
        the Agricultural Act of 1949 (7 U.S.C. 1431), for such 
        donation.
  (b)(1) The Secretary shall maintain and continue to improve 
the overall nutritional quality of entitlement commodities 
provided to schools to assist the schools in improving the 
nutritional content of meals.
  (2) The Secretary shall--
          (A) require that nutritional content information 
        labels be placed on packages or shipments of 
        entitlement commodities provided to the schools; or
          (B) otherwise provide nutritional content information 
        regarding the commodities provided to the schools.
  (c) The Secretary may use funds appropriated from the general 
fund of the Treasury to purchase agricultural commodities and 
their products of the types customarily purchased for donation 
under [section 311(a)(4) of the Older Americans Act of 1965 (42 
U.S.C. 3030(a)(4))] section 311(c)(4) of the Older Americans 
Act of 1965 (42 U.S.C. 3030a(c)(4)) or for cash payments in 
lieu of such donations under section 311(b)(1) of such Act [(42 
U.S.C. 3030(b)(1))] (42 U.S.C. 3030a(b)(1)). There are hereby 
authorized to be appropriated such sums as are necessary to 
carry out the purposes of this subsection.
  (d) In providing assistance under this Act and the Child 
Nutrition Act of 1966 for school lunch and breakfast programs, 
the Secretary shall establish procedures which will--
          (1) ensure that the views of local school districts 
        and private nonprofit schools with respect to the type 
        of commodity assistance needed in schools are fully and 
        accurately reflected in reports to the Secretary by the 
        State with respect to State commodity preferences and 
        that such views are considered by the Secretary in the 
        purchase and distribution of commodities and by the 
        States in the allocation of such commodities among 
        schools within the States;
          (2) solicit the views of States with respect to the 
        acceptability of commodities;
          (3) ensure that the timing of commodity deliveries to 
        States is consistent with State school year calendars 
        and that such deliveries occur with sufficient advance 
        notice;
          (4) provide for systematic review of the costs and 
        benefits of providing commodities of the kind and 
        quantity that are suitable to the needs of local school 
        districts and private nonprofit schools; and
          (5) make available technical assistance on the use of 
        commodities available under this Act and the Child 
        Nutrition Act of 1966.
  (e) Each State agency that receives food assistance payments 
under this section for any school year shall consult with 
representatives of schools in the State that participate in the 
school lunch program with respect to the needs of such schools 
relating to the manner of selection and distribution of 
commodity assistance for such program.
  (f) Commodity only schools shall be eligible to receive 
donated commodities equal in value to the sum of the national 
average value of donated foods established under section 6(c) 
of this Act and the national average payment established under 
section 4 of this Act. Such schools shall be eligible to 
receive up to 5 cents per meal of such value in cash for 
processing and handling expenses related to the use of such 
commodities. Lunches served in such schools shall consist of a 
combination of foods which meet the minimum nutritional 
requirements prescribed by the Secretary under [section 9(a) of 
this Act] section 9(f), and shall [represent the four basic 
food groups, including] include a serving of fluid milk.
  (g)(1) As used in this subsection, the term ``eligible school 
district'' has the same meaning given such term in section 
1581(a) of the Food Security Act of 1985.
  (2) In accordance with the terms and conditions of section 
1581 of such Act, the Secretary shall permit an eligible school 
district to continue to receive assistance in the form of cash 
or commodity letters of credit assistance, in lieu of 
commodities, to carry out the school lunch program operated in 
the district.
  [(h) Notice of Irradiated Food Products.--
          [(1) In general.--The Secretary shall develop a 
        policy and establish procedures for the purchase and 
        distribution of irradiated food products in school 
        meals programs under this Act and the Child Nutrition 
        Act of 1966 (42 U.S.C. 1771 et seq.).
          [(2) Minimum requirements.--The policy and procedures 
        shall ensure, at a minimum, that--
                  [(A) irradiated food products are made 
                available only at the request of States and 
                school food authorities;
                  [(B) reimbursements to schools for irradiated 
                food products are equal to reimbursements to 
                schools for food products that are not 
                irradiated;
                  [(C) States and school food authorities are 
                provided factual information on the science and 
                evidence regarding irradiation technology, 
                including--
                          [(i) notice that irradiation is not a 
                        substitute for safe food handling 
                        techniques; and
                          [(ii) any other similar information 
                        determined by the Secretary to be 
                        necessary to promote food safety in 
                        school meals programs;
                  [(D) States and school food authorities are 
                provided model procedures for providing to 
                school food authorities, parents, and 
                students--
                          [(i) factual information on the 
                        science and evidence regarding 
                        irradiation technology; and
                          [(ii) any other similar information 
                        determined by the Secretary to be 
                        necessary to promote food safety in 
                        school meals;
                  [(E) irradiated food products distributed to 
                the Federal school meals program under this Act 
                and the Child Nutrition Act of 1966 (42 U.S.C. 
                1771 et seq.) are labeled with a symbol or 
                other printed notice that--
                          [(i) indicates that the product was 
                        irradiated; and
                          [(ii) is prominently displayed in a 
                        clear and understandable format on the 
                        container;
                  [(F) irradiated food products are not 
                commingled in containers with food products 
                that are not irradiated; and
                  [(G) schools that offer irradiated food 
                products are encouraged to offer alternatives 
                to irradiated food products as part of the meal 
                plan used by the schools.]

           *       *       *       *       *       *       *


                   ELECTION TO RECEIVE CASH PAYMENTS

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

SEC. 17. CHILD AND ADULT CARE FOOD PROGRAM.

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

           *       *       *       *       *       *       *


                             PILOT PROJECTS

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

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

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

           *       *       *       *       *       *       *


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

  (a) General Authority.--The Secretary--
          (1) subject to the availability of, and from, amounts 
        appropriated pursuant to subsection (e)(1), shall 
        conduct training activities and provide--
                  (A) training and technical assistance to 
                improve the skills of individuals employed in--
                          (i) food service programs carried out 
                        with assistance under this Act and, to 
                        the maximum extent practicable, using 
                        individuals who administer exemplary 
                        local food service programs in the 
                        State;
                          (ii) school breakfast programs 
                        carried out with assistance under 
                        section 4 of the Child Nutrition Act of 
                        1966 (42 U.S.C. 1773); and
                          (iii) as appropriate, other federally 
                        assisted feeding programs; and
                  (B) assistance, on a competitive basis, to 
                State agencies for the purpose of aiding 
                schools and school food authorities with at 
                least 50 percent of enrolled children certified 
                to receive free or reduced price meals (and, if 
                there are any remaining funds, other schools 
                and school food authorities) in meeting the 
                cost of acquiring or upgrading technology and 
                information management systems for use in food 
                service programs carried out under this Act and 
                section 4 of the Child Nutrition Act of 1966 
                (42 U.S.C. 1773), if the school or school food 
                authority submits to the State agency an 
                infrastructure development plan that--
                          (i) addresses the cost savings and 
                        improvements in program integrity and 
                        operations that would result from the 
                        use of new or upgraded