(1) In any action under this section, the court may award relief as follows:

38 U.S.C. 4324.  Enforcement of rights with respect to Federal executive agencies.

(a)

(1) A person who receives from the Secretary a notification pursuant to section 4322(e) may request that the Secretary refer the complaint for litigation before the Merit Systems Protection Board. The Secretary shall refer the complaint to the Office of Special Counsel established by section 1211 of title 5.

(2) (A) If the Special Counsel is reasonably satisfied that the person on whose behalf a complaint is referred under paragraph (1) is entitled to the rights or benefits sought, the Special Counsel (upon the request of the person submitting the complaint) may appear on behalf of, and act as attorney for, the person and initiate an action regarding such complaint before the Merit Systems Protection Board.

(B) If the Special Counsel declines to initiate an action and represent a person before the Merit Systems Protection Board under subparagraph (A), the Special Counsel shall notify such person of that decision.

(b) A person may submit a complaint against a Federal executive agency or the Office of Personnel Management under this subchapter [38 USCS §§ 4321 et seq.] directly to the Merit Systems Protection Board if that person--

(1) has chosen not to apply to the Secretary for assistance under section 4322(a);

(2) has received a notification from the Secretary under section 4322(e);

(3) has chosen not to be represented before the Board by the Special Counsel pursuant to subsection (a)(2)(A); or

(4) has received a notification of a decision from the Special Counsel under subsection (a)(2)(B).

(c) (1) The Merit Systems Protection Board shall adjudicate any complaint brought before the Board pursuant to subsection (a)(2)(A) or (b), without regard as to whether the complaint accrued before, on, or after October 13, 1994. A person who seeks a hearing or adjudication by submitting such a complaint under this paragraph may be represented at such hearing or adjudication in accordance with the rules of the Board.

(2) If the Board determines that a Federal executive agency or the Office of Personnel Management has not complied with the provisions of this chapter [38 USCS §§ 4301 et seq.] relating to the employment or reemployment of a person by the agency, the Board shall enter an order requiring the agency or Office to comply with such provisions and to compensate such person for any loss of wages or benefits suffered by such person by reason of such lack of compliance.

(3) Any compensation received by a person pursuant to an order under paragraph (2) shall be in addition to any other right or benefit provided for by this chapter [38 USCS §§ 4301 et seq.] and shall not diminish any such right or benefit.

(4) If the Board determines as a result of a hearing or adjudication conducted pursuant to a complaint submitted by a person directly to the Board pursuant to subsection (b) that such person is entitled to an order referred to in paragraph (2), the Board may, in its discretion, award such person reasonable attorney fees, expert witness fees, and other litigation expenses.

(d)

(1) A person adversely affected or aggrieved by a final order or decision of the Merit Systems Protection Board under subsection (c) may petition the United States Court of Appeals for the Federal Circuit to review the final order or decision. Such petition and review shall be in accordance with the procedures set forth in section 7703 of title 5.

(2) Such person may be represented in the Federal Circuit proceeding by the Special Counsel unless the person was not represented by the Special Counsel before the Merit Systems Protection Board regarding such order or decision.

38 U.S.C. 4325.  Enforcement of rights with respect to certain Federal agencies.

(a) This section applies to any person who alleges that--

(1) the reemployment of such person by an agency referred to in subsection (a) of section 4315 was not in accordance with procedures for the reemployment of such person under subsection (b) of such section; or

(2) the failure of such agency to reemploy the person under such section was otherwise wrongful.

(b) Any person referred to in subsection (a) may submit a claim relating to an allegation referred to in that subsection to the inspector general of the agency which is the subject of the allegation. The inspector general shall investigate and resolve the allegation pursuant to procedures prescribed by the head of the agency.

(c) In prescribing procedures for the investigation and resolution of allegations under subsection (b), the head of an agency shall ensure, to the maximum extent practicable, that the procedures are similar to the procedures for investigating and resolving complaints utilized by the Secretary under section 4322(d).

(d) This section may not be construed--

(1) as prohibiting an employee of an agency referred to in subsection (a) from seeking information from the Secretary regarding assistance in seeking reemployment from the agency under this chapter [38 USCS §§ 4301 et seq.] or information relating to the rights and obligations of employees and Federal agencies under this chapter [38 USCS §§ 4301 et seq.]; or

(2) as prohibiting such an agency from voluntarily cooperating with or seeking assistance in or of clarification from the Secretary or the Director of the Office of Personnel Management of any matter arising under this chapter [38 USCS §§ 4301 et seq.].

38 U.S.C. 4326.  Conduct of investigation; subpoenas.

(a) In carrying out any investigation under this chapter [38 USCS §§ 4301 et seq.], the Secretary's duly authorized representatives shall, at all reasonable times, have reasonable access to and the right to interview persons with information relevant to the investigation and shall have reasonable access to, for purposes of examination, and the right to copy and receive, any documents of any person or employer that the Secretary considers relevant to the investigation.

(b) In carrying out any investigation under this chapter [38 USCS §§ 4301 et seq.], the Secretary may require by subpoena the attendance and testimony of witnesses and the production of documents relating to any matter under investigation. In case of disobedience of the subpoena or contumacy and on request of the Secretary, the Attorney General may apply to any district court of the United States in whose jurisdiction such disobedience or contumacy occurs for an order enforcing the subpoena.

(c) Upon application, the district courts of the United States shall have jurisdiction to issue writs commanding any person or employer to comply with the subpoena of the Secretary or to comply with any order of the Secretary made pursuant to a lawful investigation under this chapter [38 USCS §§ 4301 et seq.] and the district courts shall have jurisdiction to punish failure to obey a subpoena or other lawful order of the Secretary as a contempt of court.

(d) Subsections (b) and (c) shall not apply to the legislative branch or the judicial branch of the United States.

Title 38. Veterans' Benefits, Part III. Readjustment and Related Benefits, Chapter 43. Employment and Reemployment Rights of Members of the Uniformed Services, Subchapter IV. Miscellaneous Provisions.

38 U.S.C. 4331.  Regulations.

(a) The Secretary (in consultation with the Secretary of Defense) may prescribe regulations implementing the provisions of this chapter [38 USCS §§ 4301 et seq.] with regard to the application of this chapter [38 USCS §§ 4301 et seq.] to States, local governments, and private employers.

(b) (1) The Director of the Office of Personnel Management (in consultation with the Secretary and the Secretary of Defense) may prescribe regulations implementing the provisions of this chapter [38 USCS §§ 4301 et seq.] with regard to the application of this chapter [38 USCS §§ 4301 et seq.] to Federal executive agencies (other than the agencies referred to in paragraph (2)) as employers. Such regulations shall be consistent with the regulations pertaining to the States as employers and private employers, except that employees of the Federal Government may be given greater or additional rights.

(2) The following entities may prescribe regulations to carry out the activities of such entities under this chapter [38 USCS §§ 4301 et seq.]:

(A) The Merit Systems Protection Board.

(B) The Office of Special Counsel.

(C) The agencies referred to in section 2303(a)(2)(C)(ii) [2302(a)(2)(C)(ii)] of title 5.

38 U.S.C. 4332.  Reports.

The Secretary shall, after consultation with the Attorney General and the Special Counsel referred to in section 4324(a)(1) and no later than February 1, 1996, and annually thereafter through 2000, transmit to the Congress, a report containing the following matters for the fiscal year ending before such February 1:

(1) The number of cases reviewed by the Department of Labor under this chapter [38 USCS §§ 4301 et seq.] during the fiscal year for which the report is made.

(2) The number of cases referred to the Attorney General or the Special Counsel pursuant to section 4323 or 4324, respectively, during such fiscal year.

(3) The number of complaints filed by the Attorney General pursuant to section 4323 during such fiscal year.

(4) The nature and status of each case reported on pursuant to paragraph (1), (2), or (3).

(5) An indication of whether there are any apparent patterns of violation of the provisions of this chapter [38 USCS §§ 4301 et seq.], together with an explanation thereof.

(6) Recommendations for administrative or legislative action that the Secretary, the Attorney General, or the Special Counsel considers necessary for the effective implementation of this chapter [38 USCS §§ 4301 et seq.], including any action that could be taken to encourage mediation, before claims are filed under this chapter [38 USCS §§ 4301 et seq.], between employers and persons seeking employment or reemployment.

38 U.S.C. 4333.  Outreach.

The Secretary, the Secretary of Defense, and the Secretary of Veterans Affairs shall take such actions as such Secretaries determine are appropriate to inform persons entitled to rights and benefits under this chapter [38 USCS §§ 4301 et seq.] and employers of the rights, benefits, and obligations of such persons and such employers under this chapter [38 USCS §§ 4301 et seq.].

Title 41. Public Contracts, Chapter 10. Drug-Free Workplace

41 U.S.C. 702.  Drug-free workplace requirements for Federal grant recipients.

(a) Drug-free workplace requirement.

   (1) Persons other than individuals. No person, other than an individual, shall receive a grant from any Federal agency unless such person agrees to provide a drug-free workplace by--

      (A) publishing a statement notifying employees that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be taken against employees for violations of such prohibition;

      (B) establishing a drug-free awareness program to inform employees about--

         (i) the dangers of drug abuse in the workplace;

         (ii) the grantee's policy of maintaining a drug-free workplace;

         (iii) any available drug counseling, rehabilitation, and employee assistance programs; and

         (iv) the penalties that may be imposed upon employees for drug abuse violations;

      (C) making it a requirement that each employee to be engaged in the performance of such grant be given a copy of the statement required by subparagraph (A);

      (D) notifying the employee in the statement required by subparagraph (A), that as a condition of employment in such grant, the employee will--

         (i) abide by the terms of the statement; and

         (ii) notify the employer of any criminal drug statute conviction for a violation occurring in the workplace no later than 5 days after such conviction;

      (E) notifying the granting agency within 10 days after receiving notice of a conviction under subparagraph (D)(ii) from an employee or otherwise receiving actual notice of such conviction;

      (F) imposing a sanction on, or requiring the satisfactory participation in a drug abuse assistance or rehabilitation program by, any employee who is so convicted, as required by section 5154 [41 USCS § 703]; and

      (G) making a good faith effort to continue to maintain a drug-free workplace through implementation of subparagraphs (A), (B), (C), (D), (E), and (F).

   (2) Individuals. No Federal agency shall make a grant to any individual unless such individual agrees as a condition of such grant that the individual will not engage in the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance in conducting any activity with such grant.

(b) Suspension, termination, or debarment of the grantee.

   (1) Grounds for suspension, termination, or debarment. Each grant awarded by a Federal agency shall be subject to suspension of payments under the grant or termination of the grant, or both, and the grantee thereunder shall be subject to suspension or debarment, in accordance with the requirements of this section if the agency head of the granting agency or his official designee determines, in writing, that--

      (A) the grantee violates the requirements of subparagraph (A), (B), (C), (D), (E), (F), or (G) of subsection (a)(1); or

      (B) such a number of employees of such grantee have been convicted of violations of criminal drug statutes for violations occurring in the workplace as to indicate that the grantee has failed to make a good faith effort to provide a drug-free workplace as required by subsection (a)(1).

      (C) [Redesignated]

   (2) Conduct of suspension, termination, and debarment proceedings. A suspension of payments, termination, or suspension or debarment proceeding subject to this subsection shall be conducted in accordance with applicable law, including Executive Order 12549 [31 USCS § 6101 note] or any superseding Executive order and any regulations promulgated to implement such law or Executive order.

   (3) Effect of debarment. Upon issuance of any final decision under this subsection requiring debarment of a grantee, such grantee shall be ineligible for award of any grant from any Federal agency and for participation in any future grant from any Federal agency for a period specified in the decision, not to exceed 5 years.

41 C.F.R. 60-50.1 et seq.

41 C.F.R. 60-50.2 Equal employment policy.

(a) General requirements. Under the equal opportunity clause contained in section 202 of Executive Order 11246, as amended, employers are prohibited from discriminating against employees or applicants for employment because of religion or national origin, and must take affirmative action to insure that applicants are employed, and that employees are treated during employment, without regard to their religion or national origin. Such action includes, but is not limited to the following: Employment, upgrading, demotion, or transfer: Recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.

(b) Outreach and positive recruitment. Employers shall review their employment practices to determine whether members of the various religious and/or ethnic groups are receiving fair consideration for job opportunities. Special attention shall be directed toward executive and middle-management levels, where employment problems relating to religion and national origin are most likely to occur. Based upon the findings of such reviews, employers shall undertake appropriate outreach and positive recruitment activities, such as those listed below, in order to remedy existing deficiencies. It is not contemplated that employers necessarily will undertake all of the listed activities. The scope of the employer's efforts shall depend upon all the circumstances, including the nature and extent of the employer's deficiencies and the employer's size and resources.

(1) Internal communication of the employer's obligation to provide equal employment opportunity without regard to religion or national origin in such a manner as to foster understanding, acceptance, and support among the employer's executive, management, supervisory, and all other employees and to encourage such persons to take the necessary action to aid the employer in meeting this obligation.

(2) Development of reasonable internal procedures to insure that the employer's obligation to provide equal employment opportunity without regard to religion or national origin is being fully implemented.

(3) Periodically informing all employees of the employer's commitment to equal employment opportunity for all persons, without regard to religion or national origin.

(4) Enlisting the assistance and support of all recruitment sources (including employment agencies, college placement directors, and business associates) for the employer's commitment to provide equal employment opportunity without regard to religion or national origin.

(5) Reviewing employment records to determine the availability of promotable and transferable members of various religious and ethnic groups.

(6) Establishment of meaningful contacts with religious and ethnic organizations and leaders for such purposes as advice, education, technical assistance, and referral of potential employees.

(7) Engaging in significant recruitment activities at educational institutions with substantial enrollments of students from various religious and ethnic groups.

(8) Use of the religious and ethnic media for institutional and employment advertising.

41 C.F.R. 60-50.3 Accommodations to religious observance and practice.

An employer must accommodate to the religious observances and practices of an employee or prospective employee unless the employer demonstrates that it is unable to reasonably accommodate to an employee's or prospective employee's religious observance or practice without undue hardship on the conduct of the employer's business. As part of this obligation, an employer must make reasonable accommodations to the religious observances and practices of an employee or prospective employee who regularly observes Friday evening and Saturday, or some other day of the week, as his Sabbath and/or who observes certain religious holidays during the year and who is conscientiously opposed to performing work or engaging in similar activity on such days, when such accommodations can be made without undue hardship on the conduct of the employer's business. In determining the extent of an employer's obligations under this section, at least the following factors shall be considered: (a) Business necessity, (b) financial costs and expenses, and (c) resulting personnel problems.

41 C.F.R. 60-50.4 Enforcement.

The provisions of this part are subject to the general enforcement, compliance review, and complaint procedures set forth in Subpart B of Part 60-1 of this chapter.

41 C.F.R. 60-50.5 Nondiscrimination.

The provisions of this part are not intended and shall not be used to discriminate against any qualified employee or applicant for employment because of race, color, religion, sex, or national origin.

Title 41.  Public Contracts and Property Management, Subtitle B.  Other Provisions Relating to Public Contracts, Chapter 60.  Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor, Part 60-3.  Uniform Guidelines on Employee Selection Procedures, General Principles.

41 C.F.R. 60-3.2 Scope.

A.  Application of guidelines. These guidelines will be applied by the Equal Employment Opportunity Commission in the enforcement of title VII of the Civil Rights Act of 1964, as amended by the Equal Employment Opportunity Act of 1972 (hereinafter "Title VII"); by the Department of Labor, and the contract compliance agencies until the transfer of authority contemplated by the President's Reorganization Plan No. 1 of 1978, in the administration and enforcement of Executive Order 11246, as amended by Executive Order 11375 (hereinafter "Executive Order 11246"); by the Civil Service Commission and other Federal agencies subject to section 717 of Title VII; by the Civil Service Commission in exercising its responsibilities toward State and local governments under section 208(b)(1) of the Intergovernmental-Personnel Act; by the Department of Justice in exercising its responsibilities under Federal law; by the Office of Revenue Sharing of the Department of the Treasury under the State and Local Fiscal Assistance Act of 1972, as amended; and by any other Federal agency which adopts them.

B.  Employment decisions. These guidelines apply to tests and other selection procedures which are used as a basis for any employment decision. Employment decisions include but are not limited to hiring, promotion, demotion, membership (for example, in a labor organization), referral, retention, and licensing and certification, to the extent that licensing and certification may be covered by Federal equal employment opportunity law. Other selection decisions, such as selection for training or transfer, may also be considered employment decisions if they lead to any of the decisions listed above.

C.  Selection procedures. These guidelines apply only to selection procedures which are used as a basis for making employment decisions. For example, the use of recruiting procedures designed to attract members of a particular race, sex, or ethnic group, which were previously denied employment opportunities or which are currently underutilized, may be necessary to bring an employer into compliance with Federal law, and is frequently an essential element of any effective affirmative action program; but recruitment practices are not considered by these guidelines to be selection procedures. Similarly, these guidelines do not pertain to the question of the lawfulness of a seniority system within the meaning of section 703(h), Executive Order 11246 or other provisions of Federal law or regulation, except to the extent that such systems utilize selection procedures to determine qualifications or abilities to perform the job. Nothing in these guidelines is intended or should be interpreted as discouraging the use of a selection procedure for the purpose of determining qualifications or for the purpose of selection on the basis of relative qualifications, if the selection procedure had been validated in accord with these guidelines for each such purpose for which it is to be used.

D.  Limitations. These guidelines apply only to persons subject to Title VII, Executive Order 11246, or other equal employment opportunity requirements of Federal law. These guidelines do not apply to responsibilities under the Age Discrimination in Employment Act of 1967, as amended, not to discriminate on the basis of age, or under sections 501, 503, and 504 of the Rehabilitation Act of 1973, not to discriminate on the basis of handicap.

E.  Indian preference not affected. These guidelines do not restrict any obligation imposed or right granted by Federal law to users to extend a preference in employment to Indians living on or near an Indian reservation in connection with employment opportunities on or near an Indian reservation.

42 U.S.C. 1751 et seq.  School Lunch Programs

§ 1751.  Congressional declaration of policy

It is hereby declared to be the policy of Congress, as a measure of national security, to safeguard the health and well-being of the Nation's children and to encourage the domestic consumption of nutritious agricultural commodities and other food, by assisting the States, through grants-in-aid and other means, in providing an adequate supply of foods and other facilities for the establishment, maintenance, operation, and expansion of nonprofit school lunch programs.

§ 1752.  Authorization of appropriations; "Secretary" defined

For each fiscal year there is hereby authorized to be appropriated, out of money in the Treasury not otherwise appropriated, such sums as may be necessary to enable the Secretary of Agriculture (hereinafter referred to as the "Secretary") to carry out the provisions of this Act, other than sections 13 and 17 [42 USCS §§ 1761, 1766]. Appropriations to carry out the provisions of this Act and of the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.] for any fiscal year are authorized to be made a year in advance of the beginning of the fiscal year in which the funds will become available for disbursement to the States. Notwithstanding any other provision of law, any funds appropriated to carry out the provisions of such Acts shall remain available for the purposes of the Act for which appropriated until expended.

§ 1753.  Availability of appropriations; food assistance payments

(a) The sums appropriated for any fiscal year pursuant to the authorizations contained in section 3 of this Act [42 USCS § 1752] 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 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 [42 USCS § 1758(a)]) 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; 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 [42 USCS § 1759a(a)]) 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.

§ 1754.  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 [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.] 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 [42 USCS § 1761], 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.

§ 1755.  Direct expenditures for agricultural commodities and other foods

(a) Administrative expenses; nutritional education; pilot projects; cash-in-lieu of commodities study; refusal of commodities and receipt of other commodities available to the State in lieu of the refused commodities. The funds provided by appropriation or transfer from other accounts for any fiscal year for carrying out the provisions of this Act [42 USCS §§ 1751 et seq.], and for carrying out the provisions of the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.], other than section 3 [42 USCS § 1772] 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 [42 USCS §§ 1751 et seq.] and under the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.];
   (2) the amount apportioned by the Secretary pursuant to section 4 of this Act [42 USCS § 1753] and the amount appropriated pursuant to sections 11 and 13 of this Act [42 USCS §§ 1759a and 1761] and sections 4 and 7 of the Child Nutrition Act of 1966 [42 USCS §§ 1773 and 1776]; and
   (3) not to exceed 1 per centum of the funds provided for carrying out the programs under this Act [42 USCS §§ 1751 et seq.] and the programs under the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.], other than section 3 [42 USCS § 1772], 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 [42 USCS § 1769], and for necessary surveys and studies of requirements for food service programs in furtherance of the purposes expressed in section 2 of this Act [42 USCS § 1751] and section 2 of the Child Nutrition Act of 1966 [42 USCS § 1771],

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 [42 USCS §§ 1751 et seq.] and under the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.] 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 [42 USCS §§ 1751 et seq.] 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 [15 USCS § 713c], facilitating operations with respect to the purchase and disposition of surplus agricultural commodities under section 32 of the Act approved August 24, 1935 [7 USCS § 612c], shall, to the extent not inconsistent with the provisions of this Act [42 USCS §§ 1751 et seq.], also be applicable to expenditures of funds by the Secretary under this Act [42 USCS §§ 1751 et seq.]. 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 [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.].

(b) Distribution of commodities for the school lunch program. The Secretary shall deliver, to each State participating in the school lunch program under this Act [42 USCS §§ 1751 et seq.], 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) Level of commodity assistance; computation of index; emphasis on high protein foods; per meal value offer for each school food authority.
   (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 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 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) Termination of commodity assistance based upon school breakfast program. 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 [42 USCS § 1773].

(e) Cash in lieu of commodities; requirements.
   (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 [42 USCS § 1753], this section, and section 11 [42 USCS § 1759a] 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, 2009, 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) [42 USCS § 1762a(a)] to meet the requirement for the school year.

(f), (g) [Redesignated]
§ 1756.  Payments to States

(a) State revenue matching requirements; special provisions for lower than average income per capita States.
   (1) Funds appropriated to carry out section 4 of this Act [42 USCS § 1753] during any fiscal year shall be available for payment to the States for disbursement by State educational 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 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 [42 USCS § 1753] 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 [42 USCS § 1753] 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) Disbursements; private schools. 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 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) Certification of payments by Secretary. 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) Agreements with State agencies to purchase commodities for school lunch programs. 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 [42 USCS § 1753] or 11 [42 USCS § 1759a] 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.

§ 1757.  State disbursement to schools; purpose; "child" and "children" defined; food costs; limitation

(a) Funds paid to any State during any fiscal year pursuant to section 4 [42 USCS §§ 1753] shall be disbursed by the State educational 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, taking into account need and attendance, determines are eligible to participate in 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 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 reimbursment 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 [42 USCS § 1753] 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 [42 USCS § 1759a] may be made in advance or by way of reimbursement in accordance with procedures prescribed by the Secretary.

§ 1758.  Program requirements [Caution: See prospective amendment note below.]

(a) Nutritional standards; medical and special dietary needs of individual students; whole milk as beverage; diminution of food waste; acceptance of offered foods.
   (1)
      (A) Lunches served by schools participating in the school-lunch program under this Act [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.], 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.
   (2) Fluid milk.
      (A) In general. Lunches served by schools participating in the school lunch program under this Act [42 USCS §§ 1751 et seq.]--
         (i) shall offer students fluid milk in a variety of fat contents;
         (ii) may offer students flavored and unflavored fluid milk and lactose-free fluid milk; and
         (iii) shall provide a substitute for fluid milk for students whose disability restricts their diet, 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.
   (3) Students in senior high schools that participate in the school lunch program under this Act [42 USCS §§ 1751 et seq.] (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 which 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 [42 USCS §§ 1751 et seq.] 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 [enacted June 30, 2004], 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 [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).

(b) Income eligibility guidelines for free and reduced price school lunches; duty of Secretary; time to prescribe; relationship to other poverty guidelines; revision; publication; application, verification and approval; maximum reduced price; nondiscrimination or identification of recipients; automatic eligibility for certain programs.
   (1)
      (A) Not later than June 1 of each fiscal year, the Secretary shall prescribe income guidelines for determining eligibility for free and reduced price lunches during the 12-month period beginning July 1 of such fiscal year and ending June 30 of the following fiscal year. The income guidelines for determining eligibility for free lunches shall be 130 percent of the applicable family-size income levels contained in the nonfarm income poverty guidelines prescribed by the Office of Management and Budget, as adjusted annually in accordance with subparagraph (B). The income guidelines for determining eligibility for reduced price lunches for any school year shall be 185 percent of the applicable family size income levels contained in the nonfarm income poverty guidelines prescribed by the Office of Management and Budget, as adjusted annually in accordance with subparagraph (B). The Office of Management and Budget guidelines shall be revised at annual intervals, or at any shorter interval deemed feasible and desirable.
      (B) The revision required by subparagraph (A) of this paragraph shall be made by multiplying--
         (i) the official poverty line (as defined by the Office of Management and Budget); by
         (ii) the percentage change in the Consumer Price Index during the annual or other interval immediately preceding the time at which the adjustment is made.
      Revisions under this subparagraph shall be made not more than 30 days after the date on which the consumer price index data required to compute the adjustment becomes available.
   (2)
      (A) Following the determination by the Secretary under paragraph (1) of this subsection of the income eligibility guidelines for each school year, each State educational agency shall announce the income eligibility guidelines, by family size, to be used by schools in the State in making determinations of eligibility for free and reduced price lunches. Local school authorities shall, each year, publicly announce the income eligibility guidelines for free and reduced price lunches on or before the opening of school.
      (B) Applications 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 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.
            (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 food stamp program established under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);
               (cc) the food distribution program on Indian reservations established under section 4(b) of the Food Stamp Act of 1977 (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.).
   (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 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 food stamp program established under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);
                  (BB) the food distribution program on Indian reservations established under section 4(b) of the Food Stamp Act of 1977 (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.
      (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 (in accordance with criteria established by the Secretary) first obtain and use income and program participation information from a public agency administering--
            (I) the food stamp program established under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);
            (II) the food distribution program on Indian reservations established under section 4(b) of the Food Stamp Act of 1977 (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 [enacted June 30, 2004], 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.
      (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 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).
      (H) Verification deadline.
         (i) General deadline.
            (I) In general. Subject to subclause (II), not later than November 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 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) to reduce--
            (I) overcertification errors in the school lunch program under this Act [42 USCS §§ 1751 et seq.];
            (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 [enacted June 30, 2004], 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.
   (4) Direct certification for children in food stamp 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 food stamp program established under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).
      (B) Procedures. Subject to paragraph (6), the agreement shall establish procedures under which a child who is a member of a household receiving assistance under the food stamp program shall be certified as eligible for free lunches under this Act [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.] 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 food stamp program as eligible for free lunches under this Act [42 USCS §§ 1751 et seq.] 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.
   (5) Discretionary certification.
      (A) In general. 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--
         (i) 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;
         (ii) 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));
         (iii) served by the runaway and homeless youth grant program established under the Runaway and Homeless Youth Act (42 U.S.C. 5701 et seq.); or
         (iv) a migratory child (as defined in section 1309 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6399)).
      (B) Children of households receiving food stamps. 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 member of a household that is receiving food stamps under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).
   (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 [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.];
         (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 [42 USCS §§ 1751 et seq.] 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 under this Act [42 USCS §§ 1751 et seq.] 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) [42 USCS § 1759a(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 by any overt identification of any child by special tokens or tickets, announced or published lists 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 a 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 [42 USCS §§ 1751 et seq.] 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 food stamp program authorized under the Food Stamp Act of 1977 (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 is a member of a family that meets the low-income criteria prescribed under section 645(a)(1)(A) of the Head Start Act (42 U.S.C. 9840(a)(1)(A));
         (iv) a homeless child or youth (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.); or
         (vi) a migratory child (as defined in section 1309 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6399)).
      (B) Proof of receipt of food stamps or assistance under the State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) that the Secretary determines complies with standards established by the Secretary that ensure that the standards under the State program are comparable to or more restrictive than those in effect on June 1, 1995, or of enrollment or participation in a Head Start program on the basis described in subparagraph (A)(iii), 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 [10 USCS §§ 2871 et seq.], 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 [42 USCS §§ 1751 et seq.].

(c) Donation and maximum utilization of agricultural commodities; applicability to nonprofit private schools. School lunch programs under this Act [42 USCS §§ 1751 et seq.] shall be operated on a nonprofit basis. Commodities purchased under the authority of section 32 of the Act of August 24, 1935, as amended [7 USCS § 612c], 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 [42 USCS §§ 1751 et seq.] 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) Social Security numbers of the members of the household to be furnished for eligibility for free or reduced-price lunches.
   (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 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. The Secretary shall require that social security account numbers of all adult members of the household be provided if verification of the data contained in the application is sought under subsection (b)(3)(G).
   (2) No member of a household may be provided a free or reduced price lunch under this Act [42 USCS §§ 1751 et seq.] 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 food stamp program under the Food Stamp Act of 1977 [7 USCS §§ 2011 et seq.] 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 [42 USCS §§ 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;
      (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); or
      (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)).

(e) Food service company required to offer free, reduced price, etc. meals. A school or school food authority participating in a program under this Act [42 USCS §§ 1751 et seq.] 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) Information distribution for participants in school lunch programs; guidelines for meals.
   (1) Nutritional requirements. Except as provided in paragraph (2), not later than the first day of the 1996-1997 school year, schools that are participating in the school lunch or school breakfast program shall serve lunches and breakfasts under the program 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) provide, on the average over each week, at least--
         (i) with respect to school lunches, 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; and
         (ii) with respect to school breakfasts, 1/4 of the daily recommended dietary allowance established by the Food and Nutrition Board of the National Research Council of the National Academy of Sciences.
   (2) State educational agencies may grant waivers from the requirements of paragraph (1) subject to criteria established by the appropriate State educational agency. The waivers shall not permit schools to implement the requirements later than July 1, 1998, or a later date determined by the Secretary.
   (3) 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.
   (4) 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).
      (B) Nutrient analysis. The Secretary may not require a school to conduct or use a nutrient analysis to meet the requirements of this subsection.
   (5) Waiver of requirement for weighted averages for nutrient analysis. During the period ending on September 30, 2009, 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 [42 USCS §§ 1751 et seq.] or the school breakfast program under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773).

(g) Notification to Congress justifying the need for production records; reduction of paperwork. Not later than 1 year after the date of enactment of this subsection [enacted Nov. 2, 1994], 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) Food safety.
   (1) In general. A school participating in the school lunch program under this Act [42 USCS §§ 1751 et seq.] 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 2006 through 2009, 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 2006 through 2009, the Secretary shall annually audit State reports of food safety inspections of schools submitted under paragraph (3).
   (5) School food safety program. 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.

(i) 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 [42 USCS §§ 1751 et seq.], 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 [42 USCS § 1761], or the child and adult care food program under section 17 of this Act [42 USCS § 1766], 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) Purchases of locally produced foods.
   (1) In general. The Secretary shall--
      (A) encourage institutions participating in the school lunch program under this Act [42 USCS §§ 1751 et seq.] and the school breakfast program established by section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) to purchase, in addition to other food purchases, locally produced foods for school meal programs, to the maximum extent practicable and appropriate;
      (B) advise institutions participating in a program described in subparagraph (A) of the policy described in that subparagraph and post information concerning the policy on the website maintained by the Secretary; and
      (C) in accordance with requirements established by the Secretary, provide startup grants to not more than 200 institutions to defray the initial costs of equipment, materials, and storage facilities, and similar costs, incurred in carrying out the policy described in subparagraph (A).
   (2) Authorization of appropriations.
      (A) In general. There is authorized to be appropriated to carry out this subsection $ 400,000 for each of fiscal years 2003 through 2009, to remain available until expended.
      (B) Limitation. No amounts may be made available to carry out this subsection unless specifically provided by an appropriation Act.

§ 1759.  Direct disbursements to schools by Secretary

(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 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.
§ 1759a.  Special assistance funds

(a) Formula for computation of payments; computation for lunches to eligible children in schools funding service to ineligible children from non-Federal sources; special-assistance factors; annual adjustments.
   (1) (A) Except as provided in section 10 of this Act [42 USCS § 1759], in each fiscal year each State educational 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 [42 USCS § 1758(a)]) 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), or (E), 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 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 price 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 [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) with respect to the number of lunches or breakfasts served during the period;special assistance payments shall be paid to the State educational agency with respect to the school or school district during the period on the basis of the number of lunches or breakfasts determined under clause (ii) or (iii).
         (ii) For purposes of making special assistance payments under clause (i), except as provided in clause (iii), the number of lunches or breakfasts served by a school or school district to children who are eligible for free lunches or breakfasts or reduced price lunches or breakfasts during each school year of the 4-school-year period shall be considered to be equal to the number of lunches or breakfasts served by the school or school district to children eligible for free lunches or breakfasts or reduced price lunches or breakfasts during the first school year of the period.
         (iii) For purposes of computing the amount of the payments, a school or school district may elect to determine on a more frequent basis the number of children who are eligible for free or reduced price lunches or breakfasts who are served lunches or breakfasts during the 4-school-year period.
      (D) (i) In the case of any school or school district that is receiving special assistance payments under this paragraph for a 4-school-year period described in subparagraph (C), the State may grant, at the end of the 4-school-year period, an extension of the period for an additional 4 school years, if the State determines, through available socioeconomic data approved by the Secretary, that the income level of the population of the school or school district has remained stable.
         (ii) A school or school district described in clause (i) may reapply to the State at the end of the 4-school-year period, and at the end of each 4-school-year period thereafter for which the school or school district receives special assistance payments under this paragraph, for the purpose of continuing to receive the payments for a subsequent 4-school-year period.
         (iii) If the Secretary determines after considering the best available socioeconomic data that the income level of families of children enrolled in a school or school district has not remained stable, the Secretary may require the submission of applications for free and reduced price lunches, or for free and reduced price lunches and breakfasts, in the first school year of any 4-school-year period for which the school or school district receives special assistance payments under this paragraph, for the purpose of calculating the special assistance payments.
         (iv) For the purpose of updating information and reimbursement levels, a school or school district described in clause (i) that carries out a school lunch or school breakfast program may at any time require submission of applications for free and reduced price lunches or for free and reduced price lunches and breakfasts.
      (E) (i) In the case of any school or school district that--
            (I) elects to serve all children in the school or school district free lunches under the school lunch program during any period of 4 successive school years, or in the case of a school or school district that serves both lunches and breakfasts, elects to serve all children in the school or school district free lunches and free breakfasts under the school lunch program and the school breakfast program during any period of 4 successive school years; and
            (II) pays, from sources other than Federal funds, for the costs of serving the lunches or breakfasts that are in excess of the value of assistance received under this Act [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) with respect to the number of lunches or breakfasts served during the period; total Federal cash reimbursements and total commodity assistance shall be provided to the State educational agency with respect to the school or school district at a level that is equal to the total Federal cash reimbursements and total commodity assistance received by the school or school district in the last school year for which the school or school district accepted applications under the school lunch or school breakfast program, adjusted annually for inflation in accordance with paragraph (3)(B) and for changes in enrollment, to carry out the school lunch or school breakfast program.
         (ii) A school or school district described in clause (i) may reapply to the State at the end of the 4-school-year period described in clause (i), and at the end of each 4-school-year period thereafter for which the school or school district receives reimbursements and assistance under this subparagraph, for the purpose of continuing to receive the reimbursements and assistance for a subsequent 4-school-year period. The State may approve an application under this clause if the State determines, through available socioeconomic data approved by the Secretary, that the income level of the population of the school 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).
         (iii) [Deleted]
   (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, 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 [42 USCS § 1753]).
         (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 [42 USCS § 1773(b)]).
         (iv) The national average payment rates for supplements (as established under section 17(c) of this Act [42 USCS § 1766(c)]).
      (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 [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.], 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.
            (I) Through June 30, 1999. For the period ending June 30, 1999, the adjustments made under this paragraph shall be computed to the nearest one-fourth cent, except that adjustments to payment rates for meals and supplements served to individuals not determined to be eligible for free or reduced price meals and supplements shall be computed to the nearest lower cent increment and based on the unrounded amount for the preceding 12-month period.
            (II) July 1, 1999, and thereafter. 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) Financing cost of free and reduced price lunches on basis of need of school for special assistance; maximum per lunch amount. Except as provided in section 10 of the Child Nutrition Act of 1966 [42 USCS § 1779], 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 [42 USCS § 1758(b)]. 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) Payments to States. Special assistance payments to any State under this section shall be made as provided in the last sentence of section 7 of this Act [42 USCS § 1756].

(d) Report of school to State educational agency, contents; report of State educational agency to Secretary, contents.
   (1) The Secretary, when appropriate, may request each school participating in the school lunch program under this Act [42 USCS §§ 1751 et seq.] to report monthly to the State educational 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 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. Each State educational agency shall provide an estimate as of October 1 and March 1 of each year, of the number of children who are eligible for a free or reduced price lunch.

(e) Eligibility of commodity only schools for special assistance payments; free and reduced-price meals; discrimination and identification prohibited. 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 [42 USCS § 1758(b)], and shall serve meals at a reduced price, not exceeding the price specified in section 9(b)(9) of this Act [42 USCS § 1758(b)(9)], 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 be any overt identification of any such child by any means.

(f) Information and assistance concerning reimbursement options.
   (1) In general. From funds made available under paragraph (3), the Secretary shall provide grants to not more than 10 State agencies in each of fiscal years 2000 and 2001 to enable the agencies, in accordance with criteria established by the Secretary, to--
      (A) identify separately in a list--
         (i) schools that are most likely to benefit from electing to receive special assistance under subparagraph (C) or (E) of subsection (a)(1); and
         (ii) schools that may benefit from electing to receive special assistance under subparagraph (C) or (E) of subsection (a)(1);
      (B) make the list of schools identified under this subsection available to each school district within the State and to the public;
      (C) provide technical assistance to schools, or school districts containing the schools, to enable the schools to evaluate and receive special assistance under subparagraph (C) or (E) of subsection (a)(1);
      (D) take any other actions the Secretary determines are consistent with receiving special assistance under subparagraph (C) or (E) of subsection (a)(1) and receiving a grant under this subsection; and
      (E) as soon as practicable after receipt of the grant, but not later than September 30, 2003, take the actions described in subparagraphs (A) through (D).
   (2) Report.
      (A) In general. 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, 2003, an interim report on the activities of the State agencies receiving grants under this subsection; and
         (ii) not later than January 1, 2004, a final report on the activities of the State agencies receiving grants under this subsection.
      (B) Contents. In the reports, the Secretary shall specify--
         (i) the number of schools identified as likely to benefit from electing to receive special assistance under subparagraph (C) or (E) of subsection (a)(1);
         (ii) the number of schools identified under this subsection that have elected to receive special assistance under subparagraph (C) or (E) of subsection (a)(1); and
         (iii) a description of how the funds and technical assistance made available under this subsection have been used.
   (3) Funding. Out of any moneys in the Treasury not otherwise appropriated, the Secretary of the Treasury shall provide to the Secretary $ 2,250,000 for each of fiscal years 2000 and 2001 to carry out this subsection. The Secretary shall be entitled to receive the funds and shall accept the funds, without further appropriation.
§ 1760.  Miscellaneous provisions

(a) Accounts and records. States, State educational agencies, and schools participating in the school lunch program under this Act [42 USCS §§ 1751 et seq.] shall keep such accounts and records as may be necessary to enable the Secretary to determine whether the provisions of this Act [42 USCS §§ 1751 et seq.] 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 with State educational agencies. The Secretary shall incorporate, in the Secretary's agreements with the State educational agencies, the express requirements under this Act [42 USCS §§ 1751 et seq.] with respect to the operation of the school-lunch program under this Act [42 USCS §§ 1751 et seq.] insofar as they may be applicable and such other provisions as in the Secretary's opinion are reasonably necessary or appropriate to effectuate the purposes of this Act [42 USCS §§ 1751 et seq.].

(c) Requirements with respect to teaching personnel, curriculum, instruction, etc. In carrying out the provisions of this Act [42 USCS §§ 1751 et seq.], 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) Definitions. For the purposes of this Act [42 USCS §§ 1751 et seq.]--
   (1) Child.
      (A) In general. The term "child" includes an individual, regardless of age, who--
         (i) is determined by a State educational 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) [42 USCS § 1766(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 [42 USCS § 1766] 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 [42 USCS §§ 1751 et seq.], 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 760 et seq.).
   (4) Local educational agency.
      (A) In general. The term "local educational agency" has the meaning given the term in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).
      (B) Inclusion. The term "local educational agency" includes, in the case of a private nonprofit school, 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 [26 USCS § 501(c)(3)]. On July 1, 1988, and each July 1 thereafter, the Secretary shall adjust the tuition limitation amount prescribed in clause (A) of the first sentence of this paragraph to reflect changes in the Consumer Price Index for All Urban Consumers during the most recent 12-month period for which the data is available.
   (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.

(e) Value of assistance as income or resources under Federal or State laws. The value of assistance to children under this Act [42 USCS §§ 1751 et seq.] 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) Adjustment of national average payment rate for Alaska, Hawaii, territories and possessions, etc. 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 [42 USCS §§ 1753, 1759a, 1761, and 1766] and section 4 of the Child Nutrition Act of 1966 [42 USCS § 1773] 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) Criminal penalties. 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 [42 USCS §§ 1751 et seq.] or the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.], 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) Combined allocation for breakfast and lunch. No provision of this Act [42 USCS §§ 1751 et seq.] or of the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.] shall require any school receiving funds under this Act [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.] to account separately for the cost incurred in the school lunch and school breakfast programs.

(i) Use of school lunch facilities for elderly programs. Facilities, equipment, and personnel provided to a school food authority for a program authorized under this Act [42 USCS §§ 1751 et seq.] or the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.] 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 [42 USCS §§ 3001 et seq.].

(j) Reimbursements for final claims for service of meals, supplements, and milk.
   (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.

(k) Regulations permitting the use of food-based menu systems.
   (1) Not later than June 1, 1995, the Secretary shall issue final regulations to conform the nutritional requirements of the school lunch and breakfast programs with the guidelines contained in the most recent "Dietary Guidelines for Americans" that is published under section 301 of the National Nutrition Monitoring and Related Research Act of 1990 (7 U.S.C. 5341). The final regulations shall include--
      (A) rules permitting the use of food-based menu systems; and
      (B) adjustments to the rule on nutrition objectives for school meals published in the Federal Register on June 10, 1994 (59 Fed. Reg. 30218).
   (2) No school food service authority shall be required to implement final regulations issued pursuant to this subsection until the regulations have been final for at least 1 year.

(l) Waiver of requirements.
   (1) (A) Except as provided in paragraph (4), the Secretary may waive any requirement under this Act [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.] 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 [42 USCS § 1762a];
      (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 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 [42 USCS § 1761]; or
      (C) a family or group day care home sponsoring organization described in section 17 [42 USCS § 1766].

(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 [42 USCS §§ 1751 et seq.] 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 2005 through 2009, 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 [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.] 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) [Deleted]
§ 1761.  Summer food service programs for children in service institutions

(a) Assistance to States; definitions; facilities to be used; eligible service institutions; order of priority in participation; assistance to rural area eligible service institutions to participate in the programs; reimbursement of camps, limitations, local, municipal and county institutions to be run by government; eligible private nonprofit organizations.
   (1) The Secretary is authorized to 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 service institutions. For purposes of this section, (A) "program" means the summer food service program for children authorized by this section; (B) "service institutions" means public or private nonprofit school food authorities, local, municipal, or county governments, public or private nonprofit higher education institutions participating in the National Youth Sports Program[,], and residential public or private nonprofit summer camps, that develop special summer or school vacation programs providing food service similar to that made available to children during the school year under the school lunch program under this Act [42 USCS §§ 1751 et seq.] or the school breakfast program under the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.]: (C) "areas in which poor economic conditions exist" means areas in which at least 50 percent of the children are eligible for free or reduced price school meals under this Act [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.] as determined by information provided from departments of welfare, zoning commissions, census tracts, by the number of free and reduced price lunches or breakfasts served to children attending public and nonprofit private schools located in the area of program food service sites, or from other appropriate sources, including statements of eligibility based upon income for children enrolled in the program; (D) "children" means individuals who are eighteen years of age and under, and individuals who are older than eighteen who are (i) determined by a State educational agency or a local public educational agency of a State, in accordance with regulations prescribed 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; and (E) "State" means any of the fifty States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, and the Northern Mariana Islands.
   (2) 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. 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 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
         (iii) [Redesignated]
      (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) 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:
      (A) Local schools.
      (B) All other service institutions and private nonprofit organizations eligible under paragraph (7) that have demonstrated successful program performance in a prior year.
      (C) New public institutions.
      (D) New private nonprofit organizations eligible under paragraph (7).
      (E), (F) [Deleted]
   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.
   (5) 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 [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.].
   (6) 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) (A) Private nonprofit organizations, as defined in subparagraph (B) (other than organizations eligible under paragraph (1)), shall be eligible for the program under the same terms and conditions as other service institutions.
      (B) As used in this paragraph, the term "private nonprofit organizations" means those organizations that--
         (i) operate--
            (I) not more than 25 sites, with not more than 300 children being served at any one site; or
            (II) with a waiver granted by the State agency under standards developed by the Secretary, with not more than 500 children being served at any one site;
         (ii) exercise full control and authority over the operation of the program at all sites under their sponsorship;
         (iii) provide ongoing year-around activities for children or families;
         (iv) demonstrate that such organizations have adequate management and the fiscal capacity to operate a program under this section; and
         (v) meet applicable State and local health, safety, and sanitation standards.
         (vi), (vii) [Redesignated]
      (C) [Deleted]
   (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 [42 USCS §§ 1751 et seq.] 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.

(b) Service institutions.
   (1) Payments.
      (A) In general. Except as otherwise provided in this paragraph, payments to service institutions shall equal the full cost of food service operations (which cost shall include the costs of obtaining, preparing, and serving food, but shall not include administrative costs).
      (B) Maximum amounts. Subject to subparagraph (C), payments to any institution under subparagraph (A) shall not exceed--
         (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.
      (C) Adjustments. Amounts specified in subparagraph (B) 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.
      (D) 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 [42 USCS §§ 1751 et seq.] (other than subparagraphs (A), (B), and (C) 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) Every service institution, when applying for participation in the program, shall submit a complete budget for administrative costs related to the program, which shall be subject to approval by the State. Payment to service institutions for administrative costs shall equal the full amount of State approved administrative costs incurred, except that such payment to service institutions may not exceed the maximum allowable levels determined by the Secretary pursuant to the study prescribed in paragraph (4) of this subsection.
   (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) Payments for meals served during May through September; exceptions for continuous school calendars.
   (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) Advance program payments to States for monthly meal service; letters of credit, forwarding to States; determination of amount; valid claims, receipt. 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) Advance program payments to service institutions for monthly meal service; certification of personnel training sessions; minimum days per month operations requirement; payments: computation, limitation; valid claims, receipt; withholding; demand for repayment; subtraction of disputed payments.
   (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) Nutritional standards; free cost meals to children in approved institutions; camp services, charges for meals to ineligible children; quality assurance, model specifications and standards; meal preparation contracts, requirements; inspection and testing.
   (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) Regulations, guidelines, applications, and handbooks; publication; start-up costs. 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) Direct disbursement to service institutions by Secretary. 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 [7 USCS § 1431], or purchased under section 32 of the Act of August 24, 1935 [7 USCS § 612c] or section 709 of the Food and Agriculture Act of 1965 [7 USCS § 1446a-1]. Donated foods may be distributed only to service institutions that can use commodities efficiently and effectively, as determined by the Secretary.

(i) [Repealed]

(j) Administrative expenses of Secretary; authorization of appropriations. 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) Administrative costs of State; payment; adjustment; standards and effective dates, establishment; funds: withholding, inspection.
   (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 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.

(l) Food service management companies; subcontracts; assignments, conditions and limitations; meal capacity information in bids subject to review; registration; record, availability to States; small and minority-owned businesses for supplies and services; contracts: standard form, bid and contract procedures, bonding requirements and exemption, review by States, collusive bidding safeguards.
   (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.
   (5) [Redesignated]

(m) Accounts and records. 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) Management and administration plan; notification and submittal to Secretary; specific provisions. 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.

(o) Violations and penalties.
   (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 of 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 do 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) Monitoring of organizations.
   (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) of this subsection not more than 1/2 of 1 percent of amounts appropriated for purposes of carrying out this section.
   (3) [Redesignated]
   (4) [Deleted]
   (5) [Redesignated]

(q) Authorization of appropriations. For the period beginning October 1, 1977, and ending September 30, 2009, there are hereby authorized to be appropriated such sums as are necessary to carry out the purposes of this section.

§ 1762.  [Repealed]
§ 1762a.  Commodity distribution program

(a) Applicable period; use of funds for purchase of agricultural commodities and products for donation. 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 [42 USCS §§ 1751 et seq.], the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.], and title III of the Older Americans Act of 1965 [42 USCS §§ 3021 et seq.]; 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) Products included in food donations.
   (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) Authorization of appropriations for purchase of products or for cash payments in lieu of donations. 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)) or for cash payments in lieu of such donations under section 311(b)(1) of such Act (42 U.S.C. 3030(b)(1)) There are hereby authorized to be appropriated such sums as are necessary to carry out the purposes of this subsection.

(d) Assistance procedures; cost and benefits, review; technical assistance; report to Congress; food quality standards contracting procedures. In providing assistance under this Act [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.] 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 [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.]. Within eighteen months after the date of the enactment of this subsection, the Secretary shall report to Congress on the impact of procedures established under this subsection, including the nutritional, economic, and administrative benefits of such procedures. In purchasing commodities for programs carried out under this Act [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.], the Secretary shall establish procedures to ensure that contracts for the purchase of such commodities shall not be entered into unless the previous history and current patterns of the contracting party with respect to compliance with applicable meat inspection laws and with other appropriate standards relating to the wholesomeness of food for human consumption are taken into account.

(e) State advisory councils; establishment; membership; function. 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. 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 [42 USCS § 1755(c)] and the national average payment established under section 4 of this Act [42 USCS § 1753]. 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 [42 USCS § 1758(a)], and shall represent the four basic food groups, including a serving of fluid milk.

(g) Extension of alternative means of assistance.
   (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 [unclassified].
   (2) In accordance with the terms and conditions of section 1581 of such Act [unclassified], 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.
   (3) [Deleted]

(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 [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.] 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.

§ 1763.  [Repealed]
§ 1764.  [Repealed]
§ 1765.  Cash payment in lieu of donated foods; election, payment, disbursement and use

(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 [42 USCS §§ 1771 et seq.] 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 [42 USCS § 1755(c)].

(b) When such payments are made, the State educational 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.

§ 1766.  Child and adult care food program

(a) Grant authority and institution eligibility.
   (1) 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--
         (i) at least 25 percent of the children served by the organization meet the income eligibility criteria established under section 9(b) [42 USCS § 1758(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 [42 USCS §§ 1396 et seq. or 1397 et seq.] 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)).
   (3) Age limit. Except as provided in subsection (r), 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 [42 USCS §§ 1751 et seq.] or the Child Nutrition Act of 1966 [42 USCS §§ 1771 et seq.], 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.

(b) Limitations on cash assistance. For the fiscal year ending September 30, 1979, and for each subsequent fiscal year, 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 [42 USCS § 1779].

(c) Formula for computation of payments; national average payment rate.
   (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 [42 USCS §§ 1753 and 1759a] as appropriate (as adjusted pursuant to section 11(a) of this Act [42 USCS § 1759a(a)]).
   (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 [42 USCS § 1773(b)] (as adjusted pursuant to section 11(a) of this Act [42 USCS § 1759a(a)]).
   (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 [42 USCS § 1759a(a)]).
   (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 [42 USCS § 1758].
   (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 is a member of a family that meets the low-income criteria prescribed under section 645(a)(1)(A) of the Head Start Act (42 U.S.C. 9840(a)(1)(A)).
   (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 [26 USCS §§ 1 et seq.];
               (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.
   (2) (A) The Secretary shall develop a policy that--
         (i) allows institutions providing child care that participate in the program under this section, at the option of the State agency, to reapply for assistance under this section at 3-year intervals;
         (ii) (I) requires periodic unannounced site visits at not less than 3-year intervals to sponsored child care centers and family or group day care homes to identify and prevent management deficiencies and fraud and abuse under the program;
            (II) requires at least one scheduled site visit each year to sponsored child 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; and
            (III) requires at least one scheduled site visit at not less than 3-year intervals to sponsoring organizations and nonsponsored child care centers to identify and prevent management deficiencies and fraud and abuse under the program and to improve program operations; and
         (iii) requires periodic site visits to private institutions that the State agency determines have a high probability of program abuse.
      (B) Each State agency that exercises the option authorized by subparagraph (A) shall confirm on an annual basis that each such institution is in compliance with the licensing or approval provisions of subsection (a)(5).
   (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 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.
   (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.

(e) Hearing; Federal audit determination.
   (1) Except as provided in paragraph (2), the State shall provide, in accordance with regulations issued by the Secretary, a fair hearing and a prompt determination to any institution aggrieved by the action of the State as it affects the participation of such institution in the program authorized by this section, or its claim for reimbursement under this section.
   (2) 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.
   (3) 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.
   (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 [42 USCS § 1758];
               (bb) a family or group day care home that is located in an area served by a school enrolling elementary students in which at least 50 percent of the total number of children enrolled are certified eligible to receive free or reduced price school meals under this Act [42 USCS §§ 1751 et seq.] 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 [42 USCS § 1758] 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 [42 USCS § 1758].
            (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 [42 USCS § 1758].
            (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 [42 USCS § 1758], 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 [42 USCS § 1758] to be a child who is a member of a household whose income meets the income eligibility guidelines under section 9 [42 USCS § 1758].
               (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.
            (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 [42 USCS § 1758], 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) Family or group day care home sponsoring organizations shall also receive reimbursement for their administrative expenses in amounts not exceeding the maximum allowable levels prescribed by the Secretary. Such levels shall be adjusted July 1 of each year to reflect changes in the Consumer Price Index for all items for the most recent 12-month period for which such data are available.
      (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 to assist unlicensed family or group day care homes in becoming licensed.
      (D) 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) 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 [42 USCS §§ 1751 et seq.] 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) Meals served by participating institutions.
   (1) (A) Meals served by institutions 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) The Secretary shall provide technical assistance to those institutions participating in the program under this section to assist the institutions and family or group day care home sponsoring organizations in complying with the nutritional requirements prescribed by the Secretary pursuant to subparagraph (A).
   (2) No physical segregation or other discrimination against any child shall be made because of his or her inability to pay, nor shall there be any overt identification of any such child by special tokens or tickets, different meals or meal service, announced or published lists of names, or other means.
   (3) Each institution shall, insofar as practicable, use in its food service foods designated from time to time by the Secretary as being in abundance, either nationally or in the food service area, or foods donated by the Secretary.

(h) Donation of agricultural commodities by Secretary; measurement of value; cash in lieu of commodities; Department of Defense child feeding program.
   (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) [42 USCS § 1755(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.
   (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 [7 USCS § 1431], 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 [42 USCS §§ 1751 et seq.] 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. The Secretary shall make available for each fiscal year to States administering the child care food program, for the purpose of conducting audits of participating institutions, an amount up to 1.5 percent (except, in the case of each of fiscal years 2005 through 2007, 1 percent) of the funds used by each State in the program under this section, during the second preceding fiscal year.

(j) Agreements.
   (1) In general. The Secretary may issue regulations directing States to develop and provide for the use of a standard form of agreement between each family or group day care sponsoring organization and the family or group day care homes participating in the program under such organization, for the purpose of specifying the rights and responsibilities of each party.
   (2) Duration. An agreement under paragraph (1) shall remain in effect until terminated by either party to the agreement.

(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) Non-diminishment of State and local funds. 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) Accounts and records. 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) Authorization of appropriations. 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) Adult day care centers.
   (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 [42 USCS §§ 1396 et seq. or 1397 et seq.] 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 [consultation] with the Assistant Secretary for Aging, shall establish, within 6 months of enactment [enacted Oct. 1, 1988], 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. Assistant Secretary for Aging, may establish separate guidelines for reimbursement of institutions described in this subsection.
      (B) The guidelines shall contain provisions designed to assure that reimbursement under this subsection shall not duplicate reimbursement under part C of title III [42 USCS §§ 3030e et seq.] of the Older Americans Act of 1965 [42 USCS §§ 3030e et seq.], 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 Stamp Act of 1977 (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.) [42 USCS §§ 1381 et seq. or 1396 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.

(p) Rural area eligibility determination for day care homes.
   (1) Definition of selected tier I family or group day care home. In this subsection, the term "selected tier I family or group day care home" means a family or group day home that meets the definition of tier I family or group day care home under subclause (I) of subsection (f)(3)(A)(ii) except that items (aa) and (bb) of that subclause shall be applied by substituting "40 percent" for "50 percent".
   (2) Eligibility. For each of fiscal years 2006 and 2007, in rural areas of the State of Nebraska (as determined by the Secretary), the Secretary shall provide reimbursement to selected tier I family or group day care homes (as defined in paragraph (1)) under subsection (f)(3) in the same manner as tier I family or group day care homes (as defined in subsection (f)(3)(A)(ii)(I)).
   (3) Evaluation.
      (A) In general. The Secretary, acting through the Administrator of the Food and Nutrition Service, shall evaluate the impact of the eligibility criteria described in paragraph (2) as compared to the eligibility criteria described in subsection (f)(3)(A)(ii)(I).
      (B) Impact. The evaluation shall assess the impact of the change in eligibility requirements on--
         (i) the number of family or group day care homes offering meals under this section;
         (ii) the number of family or group day care homes offering meals under this section that are defined as tier I family or group day care homes as a result of paragraph (1) that otherwise would be defined as tier II family or group day care homes under subsection (f)(3)(A)(iii);
         (iii) the geographic location of the family or group day care homes;
         (iv) services provided to eligible children; and
         (v) other factors determined by the Secretary.
      (C) Report. Not later than March 31, 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 subsection.
      (D) Funding.
         (i) In general. On October 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 paragraph $ 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 paragraph the funds transferred under clause (i), without further appropriation.

(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 [42 USCS §§ 1751 et seq.] 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.
   (3) Funding. For each of fiscal years 2005 and 2006, the Secretary shall reserve to carry out paragraph (1) $ 1,000,000 of the amounts made available to carry out this section.

(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) [42 USCS § 1760(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 [42 USCS §§ 1751 et seq.] 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. The Secretary shall limit reimbursement under this subsection for meals served under a program to institutions located in seven States, of which five States shall be Illinois, Pennsylvania, Missouri, Delaware, and Michigan and two States shall be approved by the Secretary through a competitive application process.

(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.

(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 [McKinney-Vento 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.

§ 1766a.  Meal supplements for children in afterschool care

(a) General authority.
   (1) Grants to States. The Secretary shall carry out a program to assist States through grants-in-aid and other means to provide meal supplements under a program organized primarily to provide care for children in afterschool care in eligible elementary and secondary schools.
   (2) Eligible schools. For the purposes of this section, the term "eligible elementary and secondary schools" means schools that--
      (A) operate school lunch programs under this Act;
      (B) sponsor afterschool care programs; and
      (C) operate afterschool programs with an educational or enrichment purpose.

(b) Eligible children. Reimbursement may be provided under this section only for supplements served to school children who are not more than 18 years of age, except that the age limitation provided by this subsection shall not apply to a child described in section 12(d)(1)(A) [42 USCS § 1760(d)(1)(A)].

(c) Reimbursement.
   (1) At-risk school children. In the case of an eligible child who is participating 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.), a supplement provided under this section to the child shall be--
      (A) reimbursed at the rate at which free supplements are reimbursed under section 17(c)(3) [42 USCS § 1766(c)(3)]; and
      (B) served without charge.
   (2) Other school children. In the case of an eligible child who is participating in a program authorized under this section at a site that is not described in paragraph (1), for the purposes of this section, the national average payment rate for supplements shall be equal to those established under section 17(c)(3) [42 USCS § 1766(c)(3)] (as adjusted pursuant to section 11(a)(3) [42 USCS § 1759a(a)(3)]).

(d) Contents of supplements. The requirements that apply to the content of meal supplements served under child care food programs operated with assistance under this Act shall apply to the content of meal supplements served under programs operated with assistance under this section.
§ 1766b.  [Repealed]
§ 1767.  [Repealed]
§ 1768.  [Pilot Projects]
§ 1769.  [Repealed]
§ 1769a.  [Repealed]
§ 1769b.  Department of Defense overseas dependents' schools

(a) Purpose of program; availability of payments and commodities. For the purpose of obtaining Federal payments and commodities in conjunction with the provision of lunches to students attending Department of Defense dependents' schools which are located outside the United States, its territories or possessions, the Secretary of Agriculture shall make available to the Department of Defense, from funds appropriated for such purpose, the same payments and commodities as are provided to States for schools participating in the National School Lunch Program in the United States.

(b) Administration of program; eligibility determinations and regulations. The Secretary of Defense shall administer lunch programs authorized by this section and shall determine eligibility for free and reduced price lunches under the criteria published by the Secretary of Agriculture, except that the Secretary of Defense shall prescribe regulations governing computation of income eligibility standards for families of students participating in the National School Lunch Program under this section.

(c) Nutritional standards for meals; non-compliance with standards. The Secretary of Defense shall be required to offer meals meeting nutritional standards prescribed by the Secretary of Agriculture; however, the Secretary of Defense may authorize deviations from Department of Agriculture prescribed meal patterns and fluid milk requirements when local conditions preclude strict compliance or when such compliance is impracticable.

(d) Authorization of appropriations. Funds are hereby authorized to be appropriated for any fiscal year in such amounts as may be necessary for the administrative expenses of the Department of Defense under this section.

(e) Technical assistance for administration of program. The Secretary of Agriculture shall provide the Secretary of Defense with the technical assistance in the administration of the school lunch programs authorized by this section.

§ 1769b-1.  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 [42 USCS §§ 1751 et seq.] 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 [42 USCS §§ 1751 et seq.] and section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773), if the school or school food authority submits to the State agency an infrastructure development plan that--
         (i) addresses the cost savings and improvements in program integrity and operations that would result from the use of new or upgraded technology;
         (ii) ensures that there is not any overt identification of any child by special tokens or tickets, announced or published list of names, or by any other means;
         (iii) provides for processing and verifying applications for free and reduced price school meals;
         (iv) integrates menu planning, production, and serving data to monitor compliance with section 9(f)(1) [42 USCS § 1758(f)(1)]; and
         (v) establishes compatibility with statewide reporting systems;
      (C) assistance, on a competitive basis, to State agencies with low proportions of schools or students that--
         (i) participate in the school breakfast program under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773); and
         (ii) demonstrate the greatest need, for the purpose of aiding schools in meeting costs associated with initiating or expanding a school breakfast program under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773), including outreach and informational activities; and
   (2) from amounts appropriated pursuant to subsection (e)(2), is authorized to provide financial and other assistance to the University of Mississippi, in cooperation with the University of Southern Mississippi, to establish and maintain a food service management institute.

(b) Minimum requirements. The activities conducted and assistance provided as required by subsection (a)(1) shall at least include activities and assistance with respect to--
   (1) menu planning;
   (2) implementation of regulations and appropriate guidelines; and
   (3) compliance with program requirements and accountability for program operations.

(c) Duties of food service management institute.
   (1) In general. Any food service management institute established as authorized by subsection (a)(2) shall carry out activities to improve the general operation and quality of--
      (A) food service programs assisted under this Act [42 USCS §§ 1751 et seq.];
      (B) school breakfast programs assisted under section 4 of the Child Nutrition Act of 1966 [42 USCS § 1773]; and
      (C) as appropriate, other federally assisted feeding programs.
   (2) Required activities. Activities carried out under paragraph (1) shall include--
      (A) conducting research necessary to assist schools and other organizations that participate in such programs in providing high quality, nutritious, cost-effective meal service to the children served;
      (B) providing training and technical assistance with respect to--
         (i) efficient use of physical resources;
         (ii) financial management;
         (iii) efficient use of computers;
         (iv) procurement;
         (v) sanitation;
         (vi) safety, including food handling, hazard analysis and critical control point plan implementation, emergency readiness, responding to a food recall, and food biosecurity training;
         (vii) meal planning and related nutrition activities;
         (viii) culinary skills; and
         (ix) other appropriate activities;
         (x) [Redesignated]
      (C) establishing a national network of trained professionals to present training programs and workshops for food service personnel;
      (D) developing training materials for use in the programs and workshops described in subparagraph (C);
      (E) acting as a clearinghouse for research, studies, and findings concerning all aspects of the operation of food service programs;
      (F) training food service personnel to comply with the nutrition guidance and objectives established by the Secretary through a national network of instructors or other means;
      (G) preparing informational materials, such as video instruction tapes and menu planners, to promote healthier food preparation; and
      (H) assisting State educational agencies in providing additional nutrition and health instructions and instructors, including training personnel to comply with the nutrition guidance and objectives established by the Secretary.

(d) Coordination.
   (1) In general. The Secretary shall coordinate activities carried out and assistance provided as required by subsection (b) with activities carried out by any food service management institute established as authorized by subsection (a)(2).
   (2) Use of institute for dietary and nutrition activities. The Secretary shall use any food service management institute established under subsection (a)(2) to assist in carrying out dietary and nutrition activities of the Secretary.

(e) Authorization of appropriations.
   (1) Training activities and technical assistance. There are authorized to be appropriated to carry out subsection (a)(1) $ 3,000,000 for fiscal year 1990, $ 2,000,000 for fiscal year 1991, and $ 1,000,000 for each of fiscal years 1992 through 2009.
   (2) Food service management institute.
      (A) Funding. In addition to any amounts otherwise made available for fiscal year 1995, out of any moneys in the Treasury not otherwise appropriated, the Secretary of the Treasury shall provide to the Secretary $ 3,000,000 for fiscal year 2004 and $ 4,000,000 for fiscal year 2005 and each subsequent fiscal year, to carry out subsection (a)(2). The Secretary shall be entitled to receive the funds and shall accept the funds, without further appropriation.
      (B) Additional funding. In addition to amounts made available under subparagraph (A), there are authorized to be appropriated to carry out subsection (a)(2) such sums as are necessary for fiscal year 1995 and each subsequent fiscal year. The Secretary shall carry out activities under subsection (a)(2), in addition to the activities funded under subparagraph (A), to the extent provided for, and in such amounts as are provided for, in advance in appropriations Acts.
      (C) Funding for education, training, or applied research or studies. In addition to amounts made available under subparagraphs (A) and (B), from amounts otherwise appropriated to the Secretary in discretionary appropriations, the Secretary may provide funds to any food service management institute established under subsection (a)(2) for projects specified by the Secretary that will contribute to implementing dietary or nutrition initiatives. Any additional funding under this subparagraph shall be provided noncompetitively in a separate cooperative agreement.

(f) Administrative training and technical assistance material. In collaboration with State educational agencies, local educational agencies, and school food authorities of varying sizes, the Secretary shall develop and distribute training and technical assistance material relating to the administration of school meals programs that are representative of the best management and administrative practices.

(g) Federal administrative support.
   (1) Funding.
      (A) In general. Out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this subsection--
         (i) on October 1, 2004, and October 1, 2005, $ 3,000,000; and
         (ii) on October 1, 2006, October 1, 2007, and October 1, 2008, $ 2,000,000.
      (B) Receipt and acceptance. The Secretary shall be entitled to receive, shall accept, and shall use to carry out this subsection the funds transferred under subparagraph (A), without further appropriation.
      (C) Availability of funds. Funds transferred under subparagraph (A) shall remain available until expended.
   (2) Use of funds. The Secretary may use funds provided under this subsection--
      (A) to provide training and technical assistance and material related to improving program integrity and administrative accuracy in school meals programs; and
      (B) to assist State educational agencies in reviewing the administrative practices of local educational agencies, to the extent determined by the Secretary.
§ 1769c.  Compliance and accountability

(a) Unified accountability system. There shall be a unified system prescribed and administered by the Secretary for ensuring that local food service authorities that participate in the school lunch program under this Act [42 USCS §§ 1751 et seq.] comply with the provisions of this Act [42 USCS §§ 1751 et seq.]. Such system shall be established through the publication of regulations and the provision of an opportunity for public comment, consistent with the provisions of section 553 of title 5, United States Code.

(b) Functions of system.
   (1) In general. Under the system described in subsection (a), each State educational agency shall--
      (A) require that local food service authorities comply with the provisions of this Act [42 USCS §§ 1751 et seq.]; and
      (B) ensure such compliance through reasonable audits and supervisory assistance reviews.
   (2) Minimization of additional duties. Each State educational agency shall coordinate the compliance and accountability activities described in paragraph (1) in a manner that minimizes the imposition of additional duties on local food service authorities.
   (3) Additional review requirement for selected local educational agencies.
      (A) Definition of selected local educational agencies. In this paragraph, the term "selected local educational agency" means a local educational agency that has a demonstrated high level of, or a high risk for, administrative error, as determined by the Secretary.
      (B) Additional administrative review. In addition to any review required by subsection (a) or paragraph (1), each State educational agency shall conduct an administrative review of each selected local educational agency during the review cycle established under subsection (a).
      (C) Scope of review. In carrying out a review under subparagraph (B), a State educational agency shall only review the administrative processes of a selected local educational agency, including application, certification, verification, meal counting, and meal claiming procedures.
      (D) Results of review. If the State educational agency determines (on the basis of a review conducted under subparagraph (B)) that a selected local educational agency fails to meet performance criteria established by the Secretary, the State educational agency shall--
         (i) require the selected local educational agency to develop and carry out an approved plan of corrective action;
         (ii) except to the extent technical assistance is provided directly by the Secretary, provide technical assistance to assist the selected local educational agency in carrying out the corrective action plan; and
         (iii) conduct a followup review of the selected local educational agency under standards established by the Secretary.
   (4) Retaining funds after administrative reviews.
      (A) In general. Subject to subparagraphs (B) and (C), if the local educational agency fails to meet administrative performance criteria established by the Secretary in both an initial review and a followup review under paragraph (1) or (3) or subsection (a), the Secretary may require the State educational agency to retain funds that would otherwise be paid to the local educational agency for school meals programs under procedures prescribed by the Secretary.
      (B) Amount. The amount of funds retained under subparagraph (A) shall equal the value of any overpayment made to the local educational agency or school food authority as a result of an erroneous claim during the time period described in subparagraph (C).
      (C) Time period. The period for determining the value of any overpayment under subparagraph (B) shall be the period--
         (i) beginning on the date the erroneous claim was made; and
         (ii) ending on the earlier of the date the erroneous claim is corrected or--
            (I) in the case of the first followup review conducted by the State educational agency of the local educational agency under this section after July 1, 2005, the date that is 60 days after the beginning of the period under clause (i); or
            (II) in the case of any subsequent followup review conducted by the State educational agency of the local educational agency under this section, the date that is 90 days after the beginning of the period under clause (i).
   (5) Use of retained funds.
      (A) In general. Subject to subparagraph (B), funds retained under paragraph (4) shall--
         (i) be returned to the Secretary, and may be used--
            (I) to provide training and technical assistance related to administrative practices designed to improve program integrity and administrative accuracy in school meals programs to State educational agencies and, to the extent determined by the Secretary, to local educational agencies and school food authorities;
            (II) to assist State educational agencies in reviewing the administrative practices of local educational agencies in carrying out school meals programs; and
            (III) to carry out section 21(f) [42 USCS § 1769b-1(f)]; or
         (ii) be credited to the child nutrition programs appropriation account.
      (B) State share. A State educational agency may retain not more than 25 percent of an amount recovered under paragraph (4), to carry out school meals program integrity initiatives to assist local educational agencies and school food authorities that have repeatedly failed, as determined by the Secretary, to meet administrative performance criteria.
      (C) Requirement. To be eligible to retain funds under subparagraph (B), a State educational agency shall--
         (i) submit to the Secretary a plan describing how the State educational agency will use the funds to improve school meals program integrity, including measures to give priority to local educational agencies from which funds were retained under paragraph (4);
         (ii) consider using individuals who administer exemplary local food service programs in the provision of training and technical assistance; and
         (iii) obtain the approval of the Secretary for the plan.

(c) Role of Secretary. In carrying out this section, the Secretary shall--
   (1) assist the State educational agency in the monitoring of programs conducted by local food service authorities; and
   (2) through management evaluations, review the compliance of the State educational agency and the local school food service authorities with regulations issued under this Act [42 USCS §§ 1751 et seq.].

(d) Authorization of appropriations. There is authorized to be appropriated for purposes of carrying out the compliance and accountability activities referred to in subsection (c) $ 6,000,000 for each of fiscal years 2004 through 2009.

§ 1769d.  [Repealed]
§ 1769e.  [Repealed]
§ 1769f.  Duties of the Secretary relating to nonprocurement debarment

(a) Purposes. The purposes of this section are to promote the prevention and deterrence of instances of fraud, bid rigging, and other anticompetitive activities encountered in the procurement of products for child nutrition programs by--
   (1) establishing guidelines and a timetable for the Secretary to initiate debarment proceedings, as well as establishing mandatory debarment periods; and
   (2) providing training, technical advice, and guidance in identifying and preventing the activities.

(b) Definitions. As used in this section:
   (1) Child nutrition program. The term "child nutrition program" means--
      (A) the school lunch program established under this Act;
      (B) the summer food service program for children established under section 13 [42 USCS § 1761];
      (C) the child and adult care food program established under section 17 [42 USCS § 1766];
      (D) the special milk program established under section 3 of the Child Nutrition Act of 1966 (42 U.S.C. 1772);
      (E) the school breakfast program established under section 4 of such Act (42 U.S.C. 1773); and
      (F) the special supplemental nutrition program for women, infants, and children authorized under section 17 of such Act (42 U.S.C. 1786).
      (G) [Redesignated]
   (2) Contractor. The term "contractor" means a person that contracts with a State, an agency of a State, or a local agency to provide goods or services in relation to the participation of a local agency in a child nutrition program.
   (3) Local agency. The term "local agency" means a school, school food authority, child care center, sponsoring organization, or other entity authorized to operate a child nutrition program at the local level.
   (4) Nonprocurement debarment. The term "nonprocurement debarment" means an action to bar a person from programs and activities involving Federal financial and nonfinancial assistance, but not including Federal procurement programs and activities.
   (5) Person. The term "person" means any individual, corporation, partnership, association, cooperative, or other legal entity, however organized.

(c) Assistance to identify and prevent fraud and anticompetitive activities. The Secretary shall--
   (1) in cooperation with any other appropriate individual, organization, or agency, provide advice, training, technical assistance, and guidance (which may include awareness training, training films, and troubleshooting advice) to representatives of States and local agencies regarding means of identifying and preventing fraud and anticompetitive activities relating to the provision of goods or services in conjunction with the participation of a local agency in a child nutrition program; and
   (2) provide information to, and fully cooperate with, the Attorney General and State attorneys general regarding investigations of fraud and anticompetitive activities relating to the provision of goods or services in conjunction with the participation of a local agency in a child nutrition program.

(d) Nonprocurement debarment.
   (1) In general. Except as provided in paragraph (3) and subsection (e), not later than 180 days after notification of the occurrence of a cause for debarment described in paragraph (2), the Secretary shall initiate nonprocurement debarment proceedings against the contractor who has committed the cause for debarment.
   (2) Causes for debarment. Actions requiring initiation of nonprocurement debarment pursuant to paragraph (1) shall include a situation in which a contractor is found guilty in any criminal proceeding, or found liable in any civil or administrative proceeding, in connection with the supplying, providing, or selling of goods or services to any local agency in connection with a child nutrition program, of--
      (A) an anticompetitive activity, including bid-rigging, price-fixing, the allocation of customers between competitors, or other violation of Federal or State antitrust laws;
      (B) fraud, bribery, theft, forgery, or embezzlement;
      (C) knowingly receiving stolen property;
      (D) making a false claim or statement; or
      (E) any other obstruction of justice.
   (3) Exception. If the Secretary determines that a decision on initiating nonprocurement debarment proceedings cannot be made within 180 days after notification of the occurrence of a cause for debarment described in paragraph (2) because of the need to further investigate matters relating to the possible debarment, the Secretary may have such additional time as the Secretary considers necessary to make a decision, but not to exceed an additional 180 days.
   (4) Mandatory child nutrition program debarment periods.--
      (A) In general. Subject to the other provisions of this paragraph and notwithstanding any other provision of law except subsection (e), if, after deciding to initiate nonprocurement debarment proceedings pursuant to paragraph (1), the Secretary decides to debar a contractor, the debarment shall be for a period of not less than 3 years.
      (B) Previous debarment. If the contractor has been previously debarred pursuant to nonprocurement debarment proceedings initiated pursuant to paragraph (1), and the cause for debarment is described in paragraph (2) based on activities that occurred subsequent to the initial debarment, the debarment shall be for a period of not less than 5 years.
      (C) Scope. At a minimum, a debarment under this subsection shall serve to bar the contractor for the specified period from contracting to provide goods or services in conjunction with the participation of a local agency in a child nutrition program.
      (D) Reversal, reduction, or exception. Nothing in this section shall restrict the ability of the Secretary to--
         (i) reverse a debarment decision;
         (ii) reduce the period or scope of a debarment;
         (iii) grant an exception permitting a debarred contractor to participate in a particular contract to provide goods or services; or
         (iv) otherwise settle a debarment action at any time;
      in conjunction with the participation of a local agency in a child nutrition program, if the Secretary determines there is good cause for the action, after taking into account factors set forth in paragraphs (1) through (6) of subsection (e).
   (5) Information. On request, the Secretary shall present to the Committee on Education and Labor, and the Committee on Agriculture, of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate information regarding the decisions required by this subsection.
   (6) Relationship to other authorities. A debarment imposed under this section shall not reduce or diminish the authority of a Federal, State, or local government agency or court to penalize, imprison, fine, suspend, debar, or take other adverse action against a person in a civil, criminal, or administrative proceeding.
   (7) Regulations. The Secretary shall issue such regulations as are necessary to carry out this subsection.

(e) Mandatory debarment. Notwithstanding any other provision of this section, the Secretary shall initiate nonprocurement debarment proceedings against the contractor (including any cooperative) who has committed the cause for debarment (as determined under subsection (d)(2)), unless the action--
   (1) is likely to have a significant adverse effect on competition or prices in the relevant market or nationally;
   (2) will interfere with the ability of a local agency to procure a needed product for a child nutrition program;
   (3) is unfair to a person, subsidiary corporation, affiliate, parent company, or local division of a corporation that is not involved in the improper activity that would otherwise result in the debarment;
   (4) is likely to have significant adverse economic impacts on the local economy in a manner that is unfair to innocent parties;
   (5) is not justified in light of the penalties already imposed on the contractor for violations relevant to the proposed debarment, including any suspension or debarment arising out of the same matter that is imposed by any Federal or State agency; or
   (6) is not in the public interest, or otherwise is not in the interests of justice, as determined by the Secretary.

(f) Exhaustion of administrative remedies. Prior to seeking judicial review in a court of competent jurisdiction, a contractor against whom a nonprocurement debarment proceeding has been initiated shall--
   (1) exhaust all administrative procedures prescribed by the Secretary; and
   (2) receive notice of the final determination of the Secretary.

(g) Information relating to prevention and control of anticompetitive activities. On request, the Secretary shall present to the Committee on Education and Labor, and the Committee on Agriculture, of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate information regarding the activities of the Secretary relating to anticompetitive activities, fraud, nonprocurement debarment, and any waiver granted by the Secretary under this section.
§ 1769g.  Information clearinghouse

(a) In general. The Secretary shall enter into a contract with a nongovernmental organization described in subsection (b) to establish and maintain a clearinghouse to provide information to nongovernmental groups located throughout the United States that assist low-income individuals or communities regarding food assistance, self-help activities to aid individuals in becoming self-reliant, and other activities that empower low-income individuals or communities to improve the lives of low-income individuals and reduce reliance on Federal, State, or local governmental agencies for food or other assistance.

(b) Nongovernmental organization. The nongovernmental organization referred to in subsection (a) shall be selected on a competitive basis and shall--
   (1) be experienced in the gathering of first-hand information in all the States through onsite visits to grassroots organizations in each State that fight hunger and poverty or that assist individuals in becoming self-reliant;
   (2) be experienced in the establishment of a clearinghouse similar to the clearinghouse described in subsection (a);
   (3) agree to contribute in-kind resources towards the establishment and maintenance of the clearinghouse and agree to provide clearinghouse information, free of charge, to the Secretary, States, counties, cities, antihunger groups, and grassroots organizations that assist individuals in becoming self-sufficient and self-reliant;
   (4) be sponsored by an organization, or be an organization, that--
      (A) has helped combat hunger for at least 10 years;
      (B) is committed to reinvesting in the United States; and
      (C) is knowledgeable regarding Federal nutrition programs;
   (5) be experienced in communicating the purpose of the clearinghouse through the media, including the radio and print media, and be able to provide access to the clearinghouse information through computer or telecommunications technology, as well as through the mails; and
   (6) be able to provide examples, advice, and guidance to States, counties, cities, communities, antihunger groups, and local organizations regarding means of assisting individuals and communities to reduce reliance on government programs, reduce hunger, improve nutrition, and otherwise assist low-income individuals and communities become more self-sufficient.

(c) Audits. The Secretary shall establish fair and reasonable auditing procedures regarding the expenditures of funds to carry out this section.

(d) Funding. Out of any moneys in the Treasury not otherwise appropriated, the Secretary of the Treasury shall pay to the Secretary to provide to the organization selected under this section, to establish and maintain the information clearinghouse, $ 200,000 for each of fiscal years 1995 and 1996, $ 150,000 for fiscal year 1997, $ 100,000 for fiscal year 1998, $ 166,000 for each of fiscal years 1999 through 2004, and $ 250,000 for each of fiscal years 2005 through 2009. The Secretary shall be entitled to receive the funds and shall accept the funds, without further appropriation.

§ 1769h.  Accommodation of the special dietary needs of individuals with disabilities

(a) Definitions. In this section:
   (1) Covered program. The term "covered program" means--
      (A) the school lunch program authorized under this Act;
      (B) the school breakfast program authorized under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773); and
      (C) any other program authorized under this Act or the Child Nutrition Act of 1966 (except for section 17 [42 USCS § 1786]) that the Secretary determines is appropriate.
   (2) Eligible entity. The term "eligible entity" means a school food authority, institution, or service institution that participates in a covered program.

(b) Activities. The Secretary may carry out activities to help accommodate the special dietary needs of individuals with disabilities who are participating in a covered program. The activities may include--
   (1) developing and disseminating to State agencies guidance and technical assistance materials;
   (2) conducting training of State agencies and eligible entities; and
   (3) providing grants to State agencies and eligible entities.

(c) Authorization of appropriations. There are authorized to be appropriated such sums as are necessary to carry out this section for each of fiscal years 1999 through 2003.

§ 1769i.  Program evaluation

(a) Performance assessments.
   (1) In general. Subject to the availability of funds made available under paragraph (3), the Secretary, acting through the Administrator of the Food and Nutrition Service, may conduct annual national performance assessments of the meal programs under this Act [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).
   (2) Components. In conducting an assessment, the Secretary may assess--
      (A) the cost of producing meals and meal supplements under the programs described in paragraph (1); and
      (B) the nutrient profile of meals, and status of menu planning practices, under the programs.
   (3) Authorization of appropriations. There is authorized to be appropriated to carry out this subsection $ 5,000,000 for fiscal year 2004 and each subsequent fiscal year.
(b) Certification improvements.
   (1) In general. Subject to the availability of funds made available under paragraph (5), the Secretary, acting through the Administrator of the Food and Nutrition Service, shall conduct a study of the feasibility of improving the certification process used for the school lunch program established under this Act [42 USCS §§ 1751 et seq.].
   (2) Pilot projects. In carrying out this subsection, the Secretary may conduct pilot projects to improve the certification process used for the school lunch program.
   (3) Components. In carrying out this subsection, the Secretary shall examine the use of--
      (A) other income reporting systems;
      (B) an integrated benefit eligibility determination process managed by a single agency;
      (C) income or program participation data gathered by State or local agencies; and
      (D) other options determined by the Secretary.
   (4) Waivers.
      (A) In general. Subject to subparagraph (B), the Secretary may waive such provisions of this Act [42 USCS §§ 1751 et seq.] and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) as are necessary to carry out this subsection.
      (B) Provisions. The protections of section 9(b)(6) [42 USCS § 1958(b)(6)] shall apply to any study or pilot project carried out under this subsection.
   (5) Authorization of appropriations. There is authorized to be appropriated to carry out this subsection such sums as are necessary.

42 U.S.C. 1771 et seq. Child Nutrition

§ 1772.  Special program to encourage the consumption of fluid milk by children; authorization of appropriations; eligibility for special milk program; minimum rate of reimbursement; ineligibility of commodity only schools

(a) (1) There is hereby authorized to be appropriated for the fiscal year ending June 30, 1970, and for each succeeding fiscal year such sums as may be necessary to enable the Secretary of Agriculture, under such rules and regulations as the Secretary may deem in the public interest, to encourage consumption of fluid milk by children in the United States in
      (A) nonprofit schools of high school grade and under, except as provided in paragraph (2), which do not participate in a meal service program authorized under this Act [42 USCS §§ 1771 et seq.] or the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] and
      (B) nonprofit nursery schools, child-care centers, settlement houses, summer camps, and similar nonprofit institutions devoted to the care and training of children, which do not participate in a meal service program authorized under this Act [42 USCS §§ 1771 et seq.] or the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.].
   (2) The limitation imposed under paragraph (1)(A) for participation of nonprofit schools in the special milk program shall not apply to split-session kindergarten programs conducted in schools in which children do not have access to the meal service program operating in schools the children attend as authorized under this Act [42 USCS §§ 1771 et seq.] or the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.].
   (3) For the purposes of this section "United States" means the fifty States, Guam, the Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, the Commonwealth of the Northern Mariana Islands.
   (4) The Secretary shall administer the special milk program provided for by this section to the maximum extent practicable in the same manner as the Secretary administered the special milk program provided for by Public Law 89-642, as amended for by Public Law 89-642, as amended [this section], during the fiscal year ending June 30, 1969.
   (5) Any school or nonprofit child care institution which does not participate in a meal service program authorized under this Act [42 USCS §§ 1771 et seq.] or the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] shall receive the special milk program upon its request.
   (6) Children who qualify for free lunches under guidelines established by the Secretary shall, at the option of the school involved (or of the local educational agency involved in the case of a public school) be eligible for free milk upon their request.
   (7) For the fiscal year ending June 30, 1975, and for subsequent school years, the minimum rate of reimbursement for a half-pint of milk served in schools and other eligible institutions shall not be less than 5 cents per half-pint served to eligible children, and such minimum rate of reimbursement shall be adjusted on an annual basis each school year to reflect changes in the Producer Price Index for Fresh Processed Milk published by the Bureau of Labor Statistics of the Department of Labor.
   (8) Such adjustment shall be computed to the nearest one-fourth cent.
   (9) Notwithstanding any other provision of this section, in no event shall the minimum rate of reimbursement exceed the cost to the school or institution of milk served to children.
   (10) The State educational agency shall disburse funds paid to the State during any fiscal year for purposes of carrying out the program under this section in accordance with such agreements approved by the Secretary as may be entered into by such State agency and the schools in the State. The agreements described in the preceding sentence shall be permanent agreements that may be amended as necessary. Nothing in the preceding sentence shall be construed to limit the ability of the State educational agency to suspend or terminate any such agreement in accordance with regulations prescribed by the Secretary.

(b) Commodity only schools shall not be eligible to participate in the special milk program under this section. For the purposes of the preceding sentence, the term "commodity only schools" means schools that do not participate in the school lunch program under the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.], but which receive commodities made available by the Secretary for use by such schools in nonprofit lunch programs.

§ 1772.  Special program to encourage the consumption of fluid milk by children; authorization of appropriations; eligibility for special milk program; minimum rate of reimbursement; ineligibility of commodity only schools

(a) (1) There is hereby authorized to be appropriated for the fiscal year ending June 30, 1970, and for each succeeding fiscal year such sums as may be necessary to enable the Secretary of Agriculture, under such rules and regulations as the Secretary may deem in the public interest, to encourage consumption of fluid milk by children in the United States in
      (A) nonprofit schools of high school grade and under, except as provided in paragraph (2), which do not participate in a meal service program authorized under this Act [42 USCS §§ 1771 et seq.] or the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] and
      (B) nonprofit nursery schools, child-care centers, settlement houses, summer camps, and similar nonprofit institutions devoted to the care and training of children, which do not participate in a meal service program authorized under this Act [42 USCS §§ 1771 et seq.] or the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.].
   (2) The limitation imposed under paragraph (1)(A) for participation of nonprofit schools in the special milk program shall not apply to split-session kindergarten programs conducted in schools in which children do not have access to the meal service program operating in schools the children attend as authorized under this Act [42 USCS §§ 1771 et seq.] or the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.].
   (3) For the purposes of this section "United States" means the fifty States, Guam, the Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, the Commonwealth of the Northern Mariana Islands.
   (4) The Secretary shall administer the special milk program provided for by this section to the maximum extent practicable in the same manner as the Secretary administered the special milk program provided for by Public Law 89-642, as amended for by Public Law 89-642, as amended [this section], during the fiscal year ending June 30, 1969.
   (5) Any school or nonprofit child care institution which does not participate in a meal service program authorized under this Act [42 USCS §§ 1771 et seq.] or the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] shall receive the special milk program upon its request.
   (6) Children who qualify for free lunches under guidelines established by the Secretary shall, at the option of the school involved (or of the local educational agency involved in the case of a public school) be eligible for free milk upon their request.
   (7) For the fiscal year ending June 30, 1975, and for subsequent school years, the minimum rate of reimbursement for a half-pint of milk served in schools and other eligible institutions shall not be less than 5 cents per half-pint served to eligible children, and such minimum rate of reimbursement shall be adjusted on an annual basis each school year to reflect changes in the Producer Price Index for Fresh Processed Milk published by the Bureau of Labor Statistics of the Department of Labor.
   (8) Such adjustment shall be computed to the nearest one-fourth cent.
   (9) Notwithstanding any other provision of this section, in no event shall the minimum rate of reimbursement exceed the cost to the school or institution of milk served to children.
   (10) The State educational agency shall disburse funds paid to the State during any fiscal year for purposes of carrying out the program under this section in accordance with such agreements approved by the Secretary as may be entered into by such State agency and the schools in the State. The agreements described in the preceding sentence shall be permanent agreements that may be amended as necessary. Nothing in the preceding sentence shall be construed to limit the ability of the State educational agency to suspend or terminate any such agreement in accordance with regulations prescribed by the Secretary.

(b) Commodity only schools shall not be eligible to participate in the special milk program under this section. For the purposes of the preceding sentence, the term "commodity only schools" means schools that do not participate in the school lunch program under the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.], but which receive commodities made available by the Secretary for use by such schools in nonprofit lunch programs.

§ 1773.  School breakfast program authorization

(a) Establishment; authorization of appropriations. There is hereby authorized to be appropriated such sums as are necessary to enable the Secretary to carry out a program to assist the States and the Department of Defense through grants-in-aid and other means to initiate, maintain, or expand nonprofit breakfast programs in all schools which make application for assistance and agree to carry out a nonprofit breakfast program in accordance with this Act [42 USCS §§ 1771 et seq.]. Appropriations and expenditures for this Act [42 USCS §§ 1771 et seq.] shall be considered Health and Human Services functions for budget purposes rather than functions of Agriculture.

(b) Breakfast assistance payments to State educational agencies; calculation; national average payments for breakfasts, free breakfasts and reduced price breakfasts; maximum price for reduced cost breakfasts; minimum daily nutrition requirements criteria; additional payments for severe need schools; maximum severe need payments.
   (1) (A)
         (i) The Secretary shall make breakfast assistance payments to each State educational agency each fiscal year, at such times as the Secretary may determine, from the sums appropriated for such purpose, in an amount equal to the product obtained by multiplying--
            (I) the number of breakfasts served during such fiscal year to children in schools in such States which participate in the school breakfast program under agreements with such State educational agency; by
            (II) the national average breakfast payment for free breakfasts, for reduced price breakfasts, or for breakfasts served to children not eligible for free or reduced price meals, as appropriate, as prescribed in clause (B) of this paragraph.
         (ii) The agreements described in clause (i)(I) shall be permanent agreements that may be amended as necessary. Nothing in the preceding sentence shall be construed to limit the ability of the State educational agency to suspend or terminate any such agreement in accordance with regulations prescribed by the Secretary.
      (B) The national average payment for each free breakfast shall be 57 cents (as adjusted pursuant to section 11(a) of the Richard B. Russell National School Lunch Act [42 USCS § 1759a(a)]). The national average payment for each reduced price breakfast shall be one-half of the national average payment for each free breakfast, except that in no case shall the difference between the amount of the national average payment for a free breakfast and the national average payment for a reduced price breakfast exceed 30 cents. The national average payment for each breakfast served to a child not eligible for free or reduced price meals shall be 8.25 cents (as adjusted pursuant to section 11(a) of the Richard B. Russell National School Lunch Act [42 USCS § 1759a(a)]).
      (C) No school which receives breakfast assistance payments under this section may charge a price of more than 30 cents for a reduced price breakfast.
      (D) No breakfast assistance payment may be made under this subsection for any breakfast served by a school unless such breakfast consists of a combination of foods which meets the minimum nutritional requirements prescribed by the Secretary under subsection (e) of this section.
      (E) Free and reduced price policy statement. After the initial submission, a local educational agency shall not be required to submit a free and reduced price policy statement to a State educational agency under this Act [42 USCS §§ 1771 et seq.] unless there is a substantive change in the free and reduced price policy of the local educational agency. A routine change in the policy of a local educational agency, such as an annual adjustment of the income eligibility guidelines for free and reduced price meals, shall not be sufficient cause for requiring the local educational agency to submit a policy statement.
   (2)
      (A) The Secretary shall make additional payments for breakfasts served to children qualifying for a free or reduced price meal at schools that are in severe need.
      (B) The maximum payment for each such free breakfast shall be the higher of--
         (i) the national average payment established by the Secretary for free breakfasts plus 10 cents, or
         (ii) 45 cents (as adjusted pursuant to section 11(a)(3)(B) of the Richard B. Russell National School Lunch Act (42 U.S.C 1759a(a)(3)(B))).
      (C) The maximum payment for each such reduced price breakfast shall be thirty cents less than the maximum payment for each free breakfast as determined under clause (B) of this paragraph.
   (3) The Secretary shall increase by 6 cents the annually adjusted payment for each breakfast served under this Act [42 USCS §§ 1771 et seq.] and section 17 of the Richard B. Russell National School Lunch Act [42 USCS § 1766]. These funds shall be used to assist States, to the extent feasible, in improving the nutritional quality of the breakfasts.
   (4) Notwithstanding any other provision of law, whenever stocks of agricultural commodities are acquired by the Secretary or the Commodity Credit Corporation and are not likely to be sold by the Secretary or the Commodity Credit Corporation or otherwise used in programs of commodity sale or distribution, the Secretary shall make such commodities available to school food authorities and eligible institutions serving breakfasts under this Act in a quantity equal in value to not less than 3 cents for each breakfast served under this Act [42 USCS §§ 1771 et seq.] and section 17 of the Richard B. Russell National School Lunch Act [42 USCS § 1766].
   (5) Expenditures of funds from State and local sources for the maintenance of the breakfast program shall not be diminished as a result of funds or commodities received under paragraph (3) or (4).

(c) Disbursement of apportioned funds by State; preference for schools in poor economic areas, for students traveling long distances daily, and for schools for improvement of nutrition and dietary practices of children of working mothers and from low-income families. Funds apportioned and paid to any State for the purpose of this section shall be disbursed by the State educational agency to schools selected by the State educational agency to assist such schools in operating a breakfast program and for the purpose of subsection (d). Disbursement to schools shall be made at such rates per meal or on such other basis as the Secretary shall prescribe. In selecting schools for participation, the State educational agency shall, to the extent practicable, give first consideration to those schools drawing attendance from areas in which poor economic conditions exist, to those schools in which a substantial proportion of the children enrolled must travel long distances daily, and to those schools in which there is a special need for improving the nutrition and dietary practices of children of working mothers and children from low-income families. Breakfast assistance disbursements to schools under this section may be made in advance or by way of reimbursement in accordance with procedures prescribed by the Secretary.

(d) Severe need assistance.
   (1) In general. Each State educational agency shall provide additional assistance to schools in severe need, which shall include only those schools (having a breakfast program or desiring to initiate a breakfast program) in which--
      (A) during the most recent second preceding school year for which lunches were served, 40 percent or more of the lunches served to students at the school were served free or at a reduced price; or
      (B) in the case of a school in which lunches were not served during the most recent second preceding school year, the Secretary otherwise determines that the requirements of subparagraph (A) would have been met.
   (2) Additional assistance. A school, on the submission of appropriate documentation about the need circumstances in that school and the eligibility of the school for additional assistance, shall be entitled to receive the meal reimbursement rate specified in subsection (b)(2).

(e) Nutritional requirements; service free or at reduced price.
   (1) (A) Breakfasts served by schools participating in the school breakfast program under this section shall consist of a combination of foods and shall meet minimum nutritional requirements prescribed by the Secretary on the basis of tested nutritional research, except that the minimum nutritional requirements shall be measured by not less than the weekly average of the nutrient content of school breakfasts. Such breakfasts shall be served free or at a reduced price to children in school under the same terms and conditions as are set forth with respect to the service of lunches free or at a reduced price in section 9 of the Richard B. Russell National School Lunch Act [42 USCS § 1758].
      (B) The Secretary shall provide through State educational agencies technical assistance and training, including technical assistance and training in the preparation of foods high in complex carbohydrates and lower-fat versions of foods commonly used in the school breakfast program established under this section, to schools participating in the school breakfast program to assist the schools in complying with the nutritional requirements prescribed by the Secretary pursuant to subparagraph (A) and in providing appropriate meals to children with medically certified special dietary needs.
   (2) At the option of a local school food authority, a student in a school under the authority that participates in the school breakfast program under this Act [42 USCS §§ 1771 et seq.] may be allowed to refuse not more than one item of a breakfast that the student does not intend to consume. A refusal of an offered food item shall not affect the full charge to the student for a breakfast meeting the requirements of this section or the amount of payments made under this Act [42 USCS §§ 1771 et seq.] to a school for the breakfast.

(f), (g) [Deleted]
§ 1774.  Disbursement directly to schools or institutions

(a) The Secretary shall withhold funds payable to a State under this Act [42 USCS §§ 1771 et seq.] and disburse the funds directly to schools or institutions within the State for the purposes authorized by this Act [42 USCS §§ 1771 et seq.] 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 [42 USCS §§ 1771 et seq.]. If the Secretary is administering (in whole or in part) any program authorized under this Act [42 USCS §§ 1771 et seq.], 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 is not permitted by law to disburse the funds paid to it under this Act [42 USCS §§ 1771 et seq.] 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.
§ 1775.  Certification to Secretary of the Treasury of amounts to be paid to States

The Secretary shall certify to the Secretary of the Treasury from time to time the amounts to be paid to any State under sections 3 through 7 of this Act [42 USCS §§ 1772-1776] and the time or times such amounts are to be paid; and the Secretary of the Treasury shall pay to the State at the time or times fixed by the Secretary the amounts so certified.

§ 1776.  State administrative expenses

(a) Amount and allocation of funds.
   (1) Amount available.
      (A) In general. Except as provided in subparagraph (B), each fiscal year, the Secretary shall make available to the States for their administrative costs an amount equal to not less than 1 1/2 percent of the Federal funds expended under sections 4, 11, and 17 of the Richard B. Russell National School Lunch Act [42 USCS §§ 1753, 1759a, and 1766] and 3 and 4 of this Act [42 USCS §§ 1772, 1773] during the second preceding fiscal year.
      (B) Minimum amount. In the case of each of fiscal years 2005 through 2007, the Secretary shall make available to each State for administrative costs not less than the initial allocation made to the State under this subsection for fiscal year 2004.
      (C) Allocation. The Secretary shall allocate the funds so provided in accordance with paragraphs (2), (3), and (4) of this subsection.
   (2) Expense grants.
      (A) In general. Subject to subparagraph (B), the Secretary shall allocate to each State for administrative costs incurred in any fiscal year in connection with the programs authorized under the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] or under this Act, except for the programs authorized under section 13 or 17 of the Richard B. Russell National School Lunch Act [42 USCS § 1761 or 1766], or under section 17 of this Act [42 USCS § 1786], an amount equal to not less than 1 percent and not more than 1 1/2 percent of the funds expended by each State under sections 4 and 11 of the Richard B. Russell National School Lunch Act [42 USCS §§ 1753 and 1759a] and sections 3 and 4 of this Act [42 USCS §§ 1772, 1773] during the second preceding fiscal year.
      (B) Minimum amount.
         (i) In general. In no case shall the grant available to any State under this paragraph be less than the amount such State was allocated in the fiscal year ending September 30, 1981, or $ 200,000 (as adjusted under clause (ii), whichever is larger.
         (ii) Adjustment. On October 1, 2008, and each October 1 thereafter, the minimum dollar amount for a fiscal year specified in clause (i) shall be adjusted to reflect the percentage change between--
            (I) the value of the index for State and local government purchases, as published by the Bureau of Economic Analysis of the Department of Commerce, for the 12-month period ending June 30 of the second preceding fiscal year; and
            (II) the value of that index for the 12-month period ending June 30 of the preceding fiscal year.
   (3) The Secretary shall allocate to each State for its administrative costs incurred under the program authorized by section 17 of the Richard B. Russell National School Lunch Act [42 USCS § 1766] in any fiscal year an amount, based upon funds expended under that program in the second preceding fiscal year, equal to (A) 20 percent of the first $ 50,000, (B) 10 percent of the next $ 100,000, (C) 5 percent of the next $ 250,000, and (D) 2 1/2 percent of any remaining funds. If an agency in the State other than the State educational agency administers such program, the State shall ensure that an amount equal to no less than the funds due the State under this paragraph is provided to such agency for costs incurred by such agency in administering the program, except as provided in paragraph (5). The Secretary may adjust any State's allocation to reflect changes in the size of its program.
   (4) The remaining funds appropriated under this section shall be allocated among the States by the Secretary in amounts the Secretary determines necessary for the improvement in the States of the administration of the programs authorized under the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] and this Act [42 USCS §§ 1771 et seq.], except for section 17 of this Act [42 USCS § 1786], including, but not limited to, improved program integrity and the quality of meals served to children.
   (5)
      (A) Not more than 25 percent of the amounts made available to each State under this section for the fiscal year 1991 and 20 percent of the amounts made available to each State under this section for the fiscal year 1992 and for each succeeding fiscal year may remain available for obligation or expenditure in the fiscal year succeeding the fiscal year for which such amounts were appropriated.
      (B) Reallocation of funds.
         (i) Return to Secretary. For each fiscal year, any amounts appropriated that are not obligated or expended during the fiscal year and are not carried over for the succeeding fiscal year under subparagraph (A) shall be returned to the Secretary.
         (ii) Reallocation by Secretary. The Secretary shall allocate, for purposes of administrative costs, any remaining amounts among States that demonstrate a need for the amounts.
   (6) Use of administrative funds. Funds available to a State under this subsection and under section 13(k)(1) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1761(k)(1)) may be used by the State for the costs of administration of the programs authorized under this Act (except for the programs authorized under sections 17 and 21 [42 USCS §§ 1786, 1790]) and the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.) without regard to the basis on which the funds were earned and allocated.
   (7) Where the Secretary is responsible for the administration of programs under this Act or the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] the amount of funds that would be allocated to the State agency under this section and under section 13(k)(1) of the Richard B. Russell National School Lunch Act [42 USCS § 1761(k)(1)] shall be retained by the Secretary for the Secretary's use in the administration of such programs.
   (8) In the fiscal year 1991 and each succeeding fiscal year, in accordance with regulations issued by the Secretary, each State shall ensure that the State agency administering the distribution of commodities under programs authorized under this Act [42 USCS §§ 1771 et seq.] and under the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] is provided, from funds made available to the State under this subsection, an appropriate amount of funds for administrative costs incurred in distributing such commodities. In developing such regulations, the Secretary may consider the value of commodities provided to the State under this Act [42 USCS §§ 1771 et seq.] and under the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.].
   (9) (A) If the Secretary determines that the administration of any program by a State under this Act [42 USCS §§ 1771 et seq.] (other than section 17 [42 USCS § 1786]) or under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.) (including any requirement to provide sufficient training, technical assistance, and monitoring of the child and adult care food program under section 17 of that Act (42 U.S.C. 1766)), or compliance with a regulation issued pursuant to either of such Acts, is seriously deficient, and the State fails to correct the deficiency within a specified period of time, the Secretary may withhold from the State some or all of the funds allocated to the State under this section or under section 13(k)(1) or 17 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1761(k)(1) or 1766).
      (B) In a subsequent determination by the Secretary that the administration of any program referred to in subparagraph (A), or compliance with the regulations issued to carry out the program, is no longer seriously deficient and is operated in an acceptable manner, the Secretary may allocate some or all of the funds withheld under such subparagraph.

(b) Funds, usage: compensation, benefits, and travel expenses of personnel; support services; office equipment; staff development. Funds paid to a State under subsection (a) of this section may be used to pay salaries, including employee benefits and travel expenses, for administrative and supervisory personnel; for support services; for office equipment; and for staff development.

(c) Fund adjustment; State administered programs. If any State agency agrees to assume responsibility for the administration of food service programs in nonprofit private schools or child care institutions that were previously administered by the Secretary, an appropriate adjustment shall be made in the administrative funds paid under this section to the State not later than the succeeding fiscal year.

(d) Unused funds; availability for obligation and expenditure, and reallocation to other States. Notwithstanding any other provision of law, funds made available to each State under this section shall remain available for obligation and expenditure by that State during the fiscal year immediately following the fiscal year for which such funds were made available. For each fiscal year the Secretary shall establish a date by which each State shall submit to the Secretary a plan for the disbursement of funds provided under this section for each such year, and the Secretary shall reallocate any unused funds, as evidenced by such plans, to other States as the Secretary considers appropriate.

(e) Plans for use of administrative expense funds.
   (1) In general. Each State shall submit to the Secretary for approval by October 1 of the initial fiscal year a plan for the use of State administrative expense funds, including a staff formula for State personnel, system level supervisory and operating personnel, and school level personnel.
   (2) Updates and information management systems.
      (A) In general. After submitting the initial plan, a State shall be required to submit to the Secretary for approval only a substantive change in the plan.
      (B) Plan contents. Each State plan shall, at a minimum, include a description of how technology and information management systems will be used to improve program integrity by--
         (i) monitoring the nutrient content of meals served;
         (ii) training local educational agencies, school food authorities, and schools in how to use technology and information management systems (including verifying eligibility for free or reduced price meals using program participation or income data gathered by State or local agencies); and
         (iii) using electronic data to establish benchmarks to compare and monitor program integrity, program participation, and financial data.
   (3) Training and technical assistance. Each State shall submit to the Secretary for approval a plan describing the manner in which the State intends to implement subsection (g) and section 22(b)(3) of the Richard B. Russell National School Lunch Act [42 USCS § 1769c(b)(3)].

(f) State funding requirement. Payments of funds under this section shall be made only to States that agree to maintain a level of funding out of State revenues, for administrative costs in connection with programs under this Act [42 USCS §§ 1771 et seq.] (except section 17 of this Act [42 USCS § 1786]) and the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] (except section 13 of that Act [42 USCS § 1761]), not less than the amount expended or obligated in fiscal year 1977, and that agree to participate fully in any studies authorized by the Secretary.

(g) State training.
   (1) In general. At least annually, each State shall provide training in administrative practices (including training in application, certification, verification, meal counting, and meal claiming procedures) to local educational agency and school food authority administrative personnel and other appropriate personnel, with emphasis on the requirements established by the Child Nutrition and WIC Reauthorization Act of 2004 and the amendments made by that Act.
   (2) Federal role. The Secretary shall--
      (A) provide training and technical assistance to a State; or
      (B) at the option of the Secretary, directly provide training and technical assistance described in paragraph (1).
   (3) Required participation. In accordance with procedures established by the Secretary, each local educational agency or school food authority shall ensure that an individual conducting or overseeing administrative procedures described in paragraph (1) receives training at least annually, unless determined otherwise by the Secretary.

(h) Funding for training and administrative reviews.
   (1) Funding.
      (A) In general. On October 1, 2004, and on each October 1 thereafter, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this subsection $ 4,000,000, to remain available until expended.
      (B) Receipt and acceptance. The Secretary shall be entitled to receive, shall accept, and shall use to carry out this subsection the funds transferred under subparagraph (A), without further appropriation.
   (2) Use of funds.
      (A) In general. Except as provided in subparagraph (B), the Secretary shall use funds provided under this subsection to assist States in carrying out subsection (g) and administrative reviews of selected local educational agencies carried out under section 22 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1769c).
      (B) Exception. The Secretary may retain a portion of the amount provided to cover costs of activities carried out by the Secretary in lieu of the State.
   (3) Allocation. The Secretary shall allocate funds provided under this subsection to States based on the number of local educational agencies that have demonstrated a high level of, or a high risk for, administrative error, as determined by the Secretary, taking into account the requirements established by the Child Nutrition and WIC Reauthorization Act of 2004 and the amendments made by that Act.
   (4) Reallocation. The Secretary may reallocate, to carry out this section, any amounts made available to carry out this subsection that are not obligated or expended, as determined by the Secretary.

(i) Technology infrastructure improvement.
   (1) In general. Each State shall submit to the Secretary, for approval by the Secretary, an amendment to the plan required by subsection (e) that describes the manner in which funds provided under this section will be used for technology and information management systems.
   (2) Requirements. The amendment shall, at a minimum, describe the manner in which the State will improve program integrity by--
      (A) monitoring the nutrient content of meals served;
      (B) providing training to local educational agencies, school food authorities, and schools on the use of technology and information management systems for activities including--
         (i) menu planning;
         (ii) collection of point-of-sale data; and
         (iii) the processing of applications for free and reduced price meals; and
      (C) using electronic data to establish benchmarks to compare and monitor program integrity, program participation, and financial data across schools and school food authorities.
   (3) Technology infrastructure grants.
      (A) In general. Subject to the availability of funds made available under paragraph (4) to carry out this paragraph, the Secretary shall, on a competitive basis, provide funds to States to be used to provide grants to local educational agencies, school food authorities, and schools to defray the cost of purchasing or upgrading technology and information management systems for use in programs authorized by this Act [42 USCS §§ 1771 et seq.] (other than section 17 [42 USCS § 1786]) and the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.).
      (B) Infrastructure development plan. To be eligible to receive a grant under this paragraph, a school or school food authority shall submit to the State a plan to purchase or upgrade technology and information management systems that addresses potential cost savings and methods to improve program integrity, including--
         (i) processing and verification of applications for free and reduced price meals;
         (ii) integration of menu planning, production, and serving data to monitor compliance with section 9(f)(1) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1758(f)(1)); and
         (iii) compatibility with statewide reporting systems.
   (4) Authorization of appropriations. There are authorized to be appropriated to carry out this subsection such sums as are necessary for each of fiscal years 2005 through 2009, to remain available until expended.

(j) Authorization of appropriations. For the fiscal year beginning October 1, 1977, and each succeeding fiscal year ending before October 1, 2009, there are hereby authorized to be appropriated such sums as may be necessary for the purposes of this section.

§ 1776a.  Allocation of funds; State participation in studies and surveys

Funds appropriated for the purpose of section 7 of the Child Nutrition Act of 1966 [42 USCS § 1776] shall be allocated among the States but the distribution of such funds to an individual State is contingent upon that State's agreement to participate in studies and surveys of programs authorized under the National School Lunch Act and the Child Nutrition Act of 1966 [42 USCS §§ 1751 et seq., 1771 et seq.], when such studies and surveys have been directed by the Congress and requested by the Secretary of Agriculture.

§ 1777.  Use in school breakfast program of food designated as being in abundance or food donated by the Secretary of Agriculture

Each school participating under section 4 of this Act [42 USCS § 1773] shall, insofar as practicable, utilize in its program foods designated from time to time by the Secretary as being in abundance, either nationally or in the school area, or foods donated by the Secretary. Foods available under section 416 of the Agricultural Act of 1949 ( 63 Stat. 1058), as amended [7 USCS § 1431], or purchased under section 32 of the Act of August 24, 1935 ( 49 Stat. 774), as amended [7 USCS § 612c], or section 709 of the Food and Agriculture Act of 1965 (79 Stat. 1212) [7 USCS § 1446a-1], may be donated by the Secretary to schools, in accordance with the needs as determined by local school authorities, for utilization in their feeding programs under this Act [42 USCS §§ 1771 et seq.].

§ 1778.  Nonprofit programs

The food and milk service programs in schools and nonprofit institutions receiving assistance under this Act [42 USCS §§ 1771 et seq.] shall be conducted on a nonprofit basis.
§ 1779.  Rules and regulations; transfer of funds from one program to another; special projects

(a) The Secretary shall prescribe such regulations as the Secretary may deem necessary to carry out this Act [42 USCS §§ 1771 et seq.] and the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.], including regulations relating to the service of food in participating schools and service institutions in competition with the programs authorized under this Act [42 USCS §§ 1771 et seq.] and the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.].

(b) The regulations shall not prohibit the sale of competitive foods approved by the Secretary in food service facilities or areas during the time of service of food under this Act [42 USCS §§ 1771 et seq.] or the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] if the proceeds from the sales of such foods will inure to the benefit of the schools or of organizations of students approved by the schools.

(c) In such regulations the Secretary may provide for the transfer of funds by any State between the programs authorized under this Act [42 USCS §§ 1771 et seq.] and the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.] on the basis of an approved State plan of operation for the use of the funds and may provide for the reserve of up to 1 per centum of the funds available for apportionment to any State to carry out special developmental projects.


§ 1780.  Prohibition against interference with school personnel, curriculum, or instruction; prohibition against inclusion of assistance in determining income or resources for purposes of taxation, welfare, or public assistance programs

(a) In carrying out the provisions of sections 3 and 4 of this Act [42 USCS §§ 1772, 1773], the Secretary shall not impose any requirements with respect to teaching personnel, curriculum, instruction, methods of instruction, and materials of instruction.

(b) The value of assistance to children under this Act [42 USCS §§ 1771 et seq.] shall not be considered to be income or resources for any purpose under any Federal or State laws including, but not limited to, laws relating to taxation, welfare, and public assistance programs. 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 Act [42 USCS §§ 1771 et seq.].

§ 1781.  Preschool programs

The Secretary may extend the benefits of all school feeding programs conducted and supervised by the Department of Agriculture to include preschool programs operated as part of the school system.

§ 1782.  Centralization in Department of Agriculture of administration of food service programs for children

Authority for the conduct and supervision of Federal programs to assist schools in providing food service programs for children is assigned to the Department of Agriculture. To the extent practicable, other Federal agencies administering programs under which funds are to be provided to schools for such assistance shall transfer such funds to the Department of Agriculture for distribution through the administrative channels and in accordance with the standards established under this Act [42 USCS §§ 1771 et seq.] and the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.].

§ 1783.  Authorization of appropriations to the Secretary of Agriculture for administrative expenses

There are hereby authorized to be appropriated for any fiscal year such sums as may be necessary to the Secretary for the Secretary's administrative expense under this Act [42 USCS §§ 1771 et seq.].

§ 1784.  Definitions

For the purposes of this Act [42 USCS §§ 1771 et seq.]--
   (1) "State" means any of the fifty States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands.
   (2) "State educational agency" means as the State legislature may determine, (A) the chief State school officer (such as the State superintendent of public instruction, commissioner of education, or similar officer), or (B) a board of education controlling the State department of education.
   (3) "School" means (A) any public or nonprofit private school of high school grade or under, including kindergarten and preschool programs operated by such school, and (B) any public or licensed nonprofit private residential child care institution (including, but not limited to, orphanages and homes for the mentally retarded, but excluding Job Corps Centers funded by the Department of Labor). For purposes of clauses (A) and (B) of this paragraph, the term "nonprofit", when applied to any such private school or institution means any such school or institution which is exempt from tax under section 501(c)(3) of the Internal Revenue Code of 1986 [26 USCS § 501(c)(3)]. On July 1, 1988, and each July 1 thereafter, the Secretary shall adjust the tuition limitation amount prescribed in clause (A) of the first sentence of this paragraph to reflect changes in the Consumer Price Index for All Urban Consumers during the most recent 12-month period for which the data is available.
   (4) "Secretary" means the Secretary of Agriculture.
   (5) "School year" means the annual period from July 1 through June 30.
   (6) Except as used in section 17 of this Act [42 USCS § 1786], the terms "child" and "children" as used in this Act [42 USCS §§ 1771 et seq.] shall be deemed to include persons regardless of age who are determined by the State educational agency, in accordance with regulations prescribed by the Secretary, to have 1 or more disabilities and who are attending any nonresidential public or nonprofit private school of high school grade or under for the purpose of participating in a school program established for individuals with disabilities.
   (7) Disability. The term "disability" has the meaning given the term in the Rehabilitation Act of 1973 for purposes of title II of that Act (29 U.S.C 760 et seq.).
§ 1785.  Accounts and records; availability for inspection; authority to settle, adjust or waive claims

(a) States, State educational agencies, schools, and nonprofit institutions participating in programs under this Act [42 USCS §§ 1771 et seq.] shall keep such accounts and records as may be necessary to enable the Secretary to determine whether there has been compliance with this Act [42 USCS §§ 1771 et seq.] and the regulations hereunder. Such accounts and records shall be available at any reasonable time for inspection and audit by representatives of the Secretary and shall be preserved for such period of time, not in excess of three years, as the Secretary determines is necessary.

(b) With regard to any claim arising under this Act [42 USCS §§ 1771 et seq.] or under the Richard B. Russell National School Lunch Act [42 USCS §§ 1751 et seq.], the Secretary shall have the authority to determine the amount of, to settle and to adjust any such claim, and to compromise or deny such claim or any part thereof. The Secretary shall also have the authority to waive such claims if the Secretary determines that to do so would serve the purposes of either such Act. Nothing contained in this subsection shall be construed to diminish the authority of the Attorney General of the United States under section 516 of title 28, United States Code, to conduct litigation on behalf of the United States.

§ 1786.  Special supplemental nutrition program for women, infants, and children

(a) Congressional findings and declaration of purpose. Congress finds that substantial numbers of pregnant, postpartum, and breastfeeding women, infants, and young children from families with inadequate income are at special risk with respect to their physical and mental health by reason of inadequate nutrition or health care, or both. It is, therefore, the purpose of the program authorized by this section to provide, up to the authorization levels set forth in subsection (g) of this section, supplemental foods and nutrition education through any eligible local agency that applies for participation in the program. The program shall serve as an adjunct to good health care, during critical times of growth and development, to prevent the occurrence of health problems, including drug abuse, and improve the health status of these persons.

(b) Definitions. As used in this section--
   (1) "Breastfeeding women" means women up to one year postpartum who are breastfeeding their infants.
   (2) "Children" means persons who have had their first birthday but have not yet attained their fifth birthday.
   (3) "Competent professional authority" means physicians, nutritionists, registered nurses, dietitians, or State or local medically trained health officials, or persons designated by physicians or State or local medically trained health officials, in accordance with standards prescribed by the Secretary, as being competent professionally to evaluate nutritional risk.
   (4) "Costs of nutrition services and administration" or "nutrition services and administration" means costs that shall include, but not be limited to, costs for certification of eligibility of persons for participation in the program (including centrifuges, measuring boards, spectrophotometers, and scales used for the certification), food delivery, monitoring, nutrition education, outreach, startup costs, and general administration applicable to implementation of the program under this section, such as the cost of staff, transportation, insurance, developing and printing food instruments, and administration of State and local agency offices.
   (5) "Infants" means persons under one year of age.
   (6) "Local agency" means a public health or welfare agency or a private nonprofit health or welfare agency, which, directly or through an agency or physician with which it has contracted, provides health services. The term shall include an Indian tribe, band, or group recognized by the Department of the Interior, the Indian Health Service of the Department of Health and Human Services, or an intertribal council or group that is an authorized representative of Indian tribes, bands, or groups recognized by the Department of the Interior.
   (7) Nutrition education. The term "nutrition education" means individual and group sessions and the provision of material that are designed to improve health status and achieve positive change in dietary and physical activity habits, and that emphasize the relationship between nutrition, physical activity, and health, all in keeping with the personal and cultural preferences of the individual.
   (8) "Nutritional risk" means (A) detrimental or abnormal nutritional conditions detectable by biochemical or anthropometric measurements, (B) other documented nutritionally related medical conditions, (C) dietary deficiencies that impair or endanger health, (D) conditions that directly affect the nutritional health of a person, such as alcoholism or drug abuse, or (E) conditions that predispose persons to inadequate nutritional patterns or nutritionally related medical conditions, including, but not limited to, homelessness and migrancy.
   (9) "Plan of operation and administration" means a document that describes the manner in which the State agency intends to implement and operate the program.
   (10) "Postpartum women" means women up to six months after termination of pregnancy.
   (11) "Pregnant women" means women determined to have one or more fetuses in utero.
   (12) "Secretary" means the Secretary of Agriculture.
   (13) "State agency" means the health department or comparable agency of each State; an Indian tribe, band, or group recognized by the Department of the Interior; an intertribal council or group that is the authorized representative of Indian tribes, bands, or groups recognized by the Department of the Interior; or the Indian Health Service of the Department of Health and Human Services.
   (14) "Supplemental foods" means those foods containing nutrients determined by nutritional research to be lacking in the diets of pregnant, breastfeeding, and postpartum women, infants, and children and foods that promote the health of the population served by the program authorized by this section, as indicated by relevant nutrition science, public health concerns, and cultural eating patterns, as prescribed by the Secretary. State agencies may, with the approval of the Secretary, substitute different foods providing the nutritional equivalent of foods prescribed by the Secretary, to allow for different cultural eating patterns.
   (15) "Homeless individual" means--
      (A) an individual who lacks a fixed and regular nighttime residence; or
      (B) an individual whose primary nighttime residence is--
         (i) a supervised publicly or privately operated shelter (including a welfare hotel or congregate shelter) designed to provide temporary living accommodations;
         (ii) an institution that provides a temporary residence for individuals intended to be institutionalized;
         (iii) a temporary accommodation of not more than 365 days in the residence of another individual; or
         (iv) a public or private place not designed for, or ordinarily used as a regular sleeping accommodation for human beings.
   (16) "Drug abuse education" means--
      (A) the provision of information concerning the dangers of drug abuse; and
      (B) the referral of participants who are suspected drug abusers to drug abuse clinics, treatment programs, counselors, or other drug abuse professionals.
      (C) [Deleted]
   (17) "Competitive bidding" means a procurement process under which the Secretary or a State agency selects a single source (a single infant formula manufacturer) offering the lowest price, as determined by the submission of sealed bids, for a product for which bids are sought for use in the program authorized by this section.
   (18) "Rebate" means the amount of money refunded under cost containment procedures to any State agency from the manufacturer or other supplier of the particular food product as the result of the purchase of the supplemental food with a voucher or other purchase instrument by a participant in each such agency's program established under this section.
   (19) "Discount" means, with respect to a State agency that provides program foods to participants without the use of retail grocery stores (such as a State that provides for the home delivery or direct distribution of supplemental food), the amount of the price reduction or other price concession provided to any State agency by the manufacturer or other supplier of the particular food product as the result of the purchase of program food by each such State agency, or its representative, from the supplier.
   (20) "Net price" means the difference between the manufacturer's wholesale price for infant formula and the rebate level or the discount offered or provided by the manufacturer under a cost containment contract entered into with the pertinent State agency.
   (21) Remote Indian or Native village. The term "remote Indian or Native village" means an Indian or Native village that--
      (A) is located in a rural area;
      (B) has a population of less than 5,000 inhabitants; and
      (C) is not accessible year-around by means of a public road (as defined in section 101 of title 23, United States Code).
   (22) Primary contract infant formula. The term "primary contract infant formula" means the specific infant formula for which manufacturers submit a bid to a State agency in response to a rebate solicitation under this section and for which a contract is awarded by the State agency as a result of that bid.
   (23) State alliance. The term "State alliance" means 2 or more State agencies that join together for the purpose of procuring infant formula under the program by soliciting competitive bids for infant formula.

(c) Grants-in-aid; cash grants; ratable reduction of amount an agency may distribute; affirmative action; regulations relating to dual receipt of benefits under commodity supplemental food program.
   (1) The Secretary may carry out a special supplemental nutrition program to assist State agencies through grants-in-aid and other means to provide, through local agencies, at no cost, supplemental foods and nutrition education to low-income pregnant, postpartum, and breastfeeding women, infants, and children who satisfy the eligibility requirements specified in subsection (d) of this section. The program shall be supplementary to--
      (A) the food stamp program;
      (B) any program under which foods are distributed to needy families in lieu of food stamps; and
      (C) receipt of food or meals from soup kitchens, or shelters, or other forms of emergency food assistance.
   (2) Subject to amounts appropriated to carry out this section under subsection (g)--
      (A) the Secretary shall make cash grants to State agencies for the purpose of administering the program, and
      (B) any State agency approved eligible local agency that applies to participate in or expand the program under this section shall immediately be provided with the necessary funds to carry out the program.
   (3) Nothing in this subsection shall be construed to permit the Secretary to reduce ratably the amount of foods that an eligible local agency shall distribute under the program to participants. The Secretary shall take affirmative action to ensure that the program is instituted in areas most in need of supplemental foods. The existence of a commodity supplemental food program under section 4 of the Agriculture and Consumer Protection Act of 1973 [7 USCS § 612c note] shall not preclude the approval of an application from an eligible local agency to participate in the program under this section nor the operation of such program within the same geographic area as that of the commodity supplemental food program, but the Secretary shall issue such regulations as are necessary to prevent dual receipt of benefits under the commodity supplemental food program and the program under this section.
   (4) A State shall be ineligible to participate in programs authorized under this section if the Secretary determines that State or local sales taxes are collected within the State on purchases of food made to carry out this section.
   (5) [Deleted]

(d) Eligible participants.
   (1) Participation in the program under this section shall be limited to pregnant, postpartum, and breastfeeding women, infants, and children from low-income families who are determined by a competent professional authority to be at nutritional risk.
   (2) (A) The Secretary shall establish income eligibility standards to be used in conjunction with the nutritional risk criteria in determining eligibility of individuals for participation in the program. Any individual at nutritional risk shall be eligible for the program under this section only if such individual--
         (i) is a member of a family with an income that is less than the maximum income limit prescribed under section 9(b) of the Richard B. Russell National School Lunch Act [42 USCS § 1758(b)] for free and reduced price meals;
         (ii) (I) receives food stamps under the Food Stamp Act of 1977 [7 USCS §§ 2011 et seq.]; or
            (II) is a member of a family that receives assistance under the State program funded under part A of title IV of the Social Security Act [42 USCS §§ 601 et seq.] that the Secretary determines complies with standards established by the Secretary that ensure that the standards under the State program are comparable to or more restrictive than those in effect on June 1, 1995; or
         (iii)
            (I) receives medical assistance under title XIX of the Social Security Act [42 USCS §§ 1396 et seq.]; or
            (II) is a member of a family in which a pregnant woman or an infant receives such assistance.
      (B) For the purpose of determining income eligibility under this section, any State agency may choose to exclude from income--
         (i) any basic allowance--
            (I) for housing received by military service personnel residing off military installations; or
            (II) provided under section 403 of title 37, United States Code, for housing that is acquired or constructed under subchapter IV of chapter 169 of title 10, United States Code [10 USCS §§ 2871 et seq.], or any related provision of law; and
         (ii) any cost-of-living allowance provided under section 405 of title 37, United States Code, to a member of a uniformed service who is on duty outside the contiguous States of the United States.
      (C) In the case of a pregnant woman who is otherwise ineligible for participation in the program because the family of the woman is of insufficient size to meet the income eligibility standards of the program, the pregnant woman shall be considered to have satisfied the income eligibility standards if, by increasing the number of individuals in the family of the woman by 1 individual, the income eligibility standards would be met.
   (3) Certification.
      (A) Procedures.
         (i) In general. Subject to clause (ii), a person shall be certified for participation in accordance with general procedures prescribed by the Secretary.
         (ii) Breastfeeding women. A State may elect to certify a breastfeeding woman for a period of 1 year postpartum or until a woman discontinues breastfeeding, whichever is earlier.
      (B) A State may consider pregnant women who meet the income eligibility standards to be presumptively eligible to participate in the program and may certify the women for participation immediately, without delaying certification until an evaluation is made concerning nutritional risk. A nutritional risk evaluation of such a woman shall be completed not later than 60 days after the woman is certified for participation. If it is subsequently determined that the woman does not meet nutritional risk criteria, the certification of the woman shall terminate on the date of the determination.
      (C) Physical presence.
         (i) In general. Except as provided in clause (ii) and subject to the requirements of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) and section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), each individual seeking certification or recertification for participation in the program shall be physically present at each certification or recertification determination in order to determine eligibility under the program.
         (ii) Waivers. If the agency determines that the requirement of clause (i) would present an unreasonable barrier to participation, a local agency may waive the requirement of clause (i) with respect to--
            (I) an infant or child who--
               (aa) was present at the initial certification visit; and
               (bb) is receiving ongoing health care;
            (II) an infant or child who--
               (aa) was present at the initial certification visit;
               (bb) was present at a certification or recertification determination within the 1-year period ending on the date of the certification or recertification determination described in clause (i); and
               (cc) has one or more parents who work; and
            (III) an infant under 8 weeks of age--
               (aa) who cannot be present at certification for a reason determined appropriate by the local agency; and
               (bb) for whom all necessary certification information is provided.
      (D) Income documentation.
         (i) In general. Except as provided in clause (ii), in order to participate in the program pursuant to clause (i) of paragraph (2)(A), an individual seeking certification or recertification for participation in the program shall provide documentation of family income.
         (ii) Waivers. A State agency may waive the documentation requirement of clause (i), in accordance with criteria established by the Secretary, with respect to--
            (I) an individual for whom the necessary documentation is not available; or
            (II) an individual, such as a homeless woman or child, for whom the agency determines the requirement of clause (i) would present an unreasonable barrier to participation.
      (E) Adjunct documentation. In order to participate in the program pursuant to clause (ii) or (iii) of paragraph (2)(A), an individual seeking certification or recertification for participation in the program shall provide documentation of receipt of assistance described in that clause.
      (F) Proof of residency. An individual residing in a remote Indian or Native village or an individual served by an Indian tribal organization and residing on a reservation or pueblo may, under standards established by the Secretary, establish proof of residency under this section by providing to the State agency the mailing address of the individual and the name of the remote Indian or Native village.
   (4) [Deleted]

(e) Nutrition education.
   (1) The State agency shall ensure that nutrition education and drug abuse education is provided to all pregnant, postpartum, and breastfeeding participants in the program and to parents or caretakers of infant and child participants in the program. The State agency may also provide nutrition education and drug abuse education to pregnant, postpartum, and breastfeeding women and to parents or caretakers of infants and children enrolled at local agencies operating the program under this section who do not participate in the program. A local agency participating in the program shall provide education or educational materials relating to the effects of drug and alcohol use by a pregnant, postpartum, or breastfeeding woman on the developing child of the woman.
   (2) The Secretary shall prescribe standards to ensure that adequate nutrition education services and breastfeeding promotion and support are provided. The State agency shall provide training to persons providing nutrition education under this section.
   (3) Nutrition education materials.
      (A) In general. The Secretary shall, after submitting proposed nutrition education materials to the Secretary of Health and Human Services for comment, issue such materials for use in the program under this section.
      (B) Sharing of materials. The Secretary may provide, in bulk quantity, nutrition education materials (including materials promoting breastfeeding) developed with funds made available for the program authorized under this section to State agencies administering the commodity supplemental food program authorized under sections 4(a) and 5 of the Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c note; Public Law 93-86) at no cost to that program.
   (4) The State agency--
      (A) shall provide each local agency with materials showing the maximum income limits, according to family size, applicable to pregnant women, infants, and children up to age 5 under the medical assistance program established under title XIX of the Social Security Act [42 USCS §§ 1396 et seq.] (in this section referred to as the "medicaid program");
      (B) shall provide to individuals applying for the program under this section, or reapplying at the end of their certification period, written information about the medicaid program and referral to such program or to agencies authorized to determine presumptive eligibility for such program, if such individuals are not participating in such program and appear to have family income below the applicable maximum income limits for such program; and
      (C) may provide a local agency with materials describing other programs for which a participant in the program may be eligible.
   (5) Each local agency shall maintain and make available for distribution a list of local resources for substance abuse counseling and treatment.
   (6) [Deleted]

(f) State operation and administration plan; public hearings; eligible migrants; monthly reports; recordkeeping; notification of applicant agency by State; notification of individual by agency; publication of program benefits; State fair hearing; validity of certification of eligibility following change of area; effective administration standards; withholding of administrative funds; prescribed supplemental food regulations; responsibility of professional authority; use of foreign language.
   (1) (A) Each State agency shall submit to the Secretary, by a date specified by the Secretary, an initial plan of operation and administration for a fiscal year. After submitting the initial plan, a State shall be required to submit to the Secretary for approval only a substantive change in the plan.
      (B) To be eligible to receive funds under this section for a fiscal year, a State agency must receive the approval of the Secretary for the plan submitted for the fiscal year.
      (C) The plan shall include--
         (i) a description of the food delivery system of the State agency and the method of enabling participants to receive supplemental foods under the program at any of the authorized retail stores under the program, to be administered in accordance with standards developed by the Secretary, including a description of the State agency's vendor peer group system, competitive price criteria, and allowable reimbursement levels that demonstrate that the State is in compliance with the cost-containment provisions in subsection (h)(11);
         (ii) procedures for accepting and processing vendor applications outside of the established timeframes if the State agency determines there will be inadequate access to the program, including in a case in which a previously authorized vendor sells a store under circumstances that do not permit timely notification to the State agency of the change in ownership;
         (iii) a description of the financial management system of the State agency;
         (iv) a plan to coordinate operations under the program with other services or programs that may benefit participants in, and applicants for, the program;
         (v) a plan to provide program benefits under this section to, and to meet the special nutrition education needs of, eligible migrants, homeless individuals, and Indians;
         (vi) a plan to expend funds to carry out the program during the relevant fiscal year;
         (vii) a plan to provide program benefits under this section to unserved and underserved areas in the State (including a plan to improve access to the program for participants and prospective applicants who are employed, or who reside in rural areas), if sufficient funds are available to carry out this clause;
         (viii) a plan for reaching and enrolling eligible women in the early months of pregnancy, including provisions to reach and enroll eligible migrants;
         (ix) a plan to provide program benefits under this section to unserved infants and children under the care of foster parents, protective services, or child welfare authorities, including infants exposed to drugs perinatally;
         (x) a plan to provide nutrition education and promote breastfeeding; and
         (xi) such other information as the Secretary may reasonably require.
         (xii) [Deleted]
         (xiii) [Redesignated]
      (D) The Secretary may not approve any plan that permits a person to participate simultaneously in both the program authorized under this section and the commodity supplemental food program authorized under sections 4 and 5 of the Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c note).
      (E) [Redesignated]
   (2) A State agency shall establish a procedure under which members of the general public are provided an opportunity to comment on the development of the State agency plan.
   (3) The Secretary shall establish procedures under which eligible migrants may, to the maximum extent feasible, continue to participate in the program under this section when they are present in States other than the State in which they were originally certified for participation in the program. Each State agency shall be responsible for administering the program for migrant populations within its jurisdiction and shall ensure that local programs provide priority consideration to serving migrant participants who are residing in the State for a limited period of time.
   (4) State agencies shall submit monthly financial reports and participation data to the Secretary.
   (5) State and local agencies operating under the program shall keep such accounts and records, including medical records, as may be necessary to enable the Secretary to determine whether there has been compliance with this section and to determine and evaluate the benefits of the nutritional assistance provided under this section. Such accounts and records shall be available at any reasonable time for inspection and audit by representatives of the Secretary and shall be preserved for such period of time, not in excess of five years, as the Secretary determines necessary.
   (6) (A) Local agencies participating in the program under this section shall notify persons of their eligibility or ineligibility for the program within twenty days of the date that the household, during office hours of a local agency, personally makes an oral or written request to participate in the program. The Secretary shall establish a shorter notification period for categories of persons who, due to special nutritional risk conditions, must receive benefits more expeditiously.
      (B) State agencies may provide for the delivery of vouchers to any participant who is not scheduled for nutrition education counseling or a recertification interview through means, such as mailing, that do not require the participant to travel to the local agency to obtain vouchers. The State agency shall describe any plans for issuance of vouchers by mail in its plan submitted under paragraph (1). The Secretary may disapprove a State plan with respect to the issuance of vouchers by mail in any specified jurisdiction or part of a jurisdiction within a State only if the Secretary finds that such issuance would pose a significant threat to the integrity of the program under this section in such jurisdiction or part of a jurisdiction.
   (7) (A) The State agency shall, in cooperation with participating local agencies, publicly announce and distribute information on the availability of program benefits (including the eligibility criteria for participation and the location of local agencies operating the program) to offices and organizations that deal with significant numbers of potentially eligible individuals (including health and medical organizations, hospitals and clinics, welfare and unemployment offices, social service agencies, farmworker organizations, Indian tribal organizations, organizations and agencies serving homeless individuals and shelters for victims of domestic violence, and religious and community organizations in low income areas).
      (B) The information shall be publicly announced by the State agency and by local agencies at least annually.
      (C) The State agency and local agencies shall distribute the information in a manner designed to provide the information to potentially eligible individuals who are most in need of the benefits, including pregnant women in the early months of pregnancy.
      (D) Each local agency operating the program within a hospital and each local agency operating the program that has a cooperative arrangement with a hospital shall--
         (i) advise potentially eligible individuals that receive inpatient or outpatient prenatal, maternity, or postpartum services, or accompany a child under the age of 5 who receives wellchild services, of the availability of program benefits; and
         (ii) to the extent feasible, provide an opportunity for individuals who may be eligible to be certified within the hospital for participation in such program.
   (8) (A) The State agency shall grant a fair hearing, and a prompt determination thereafter, in accordance with regulations issued by the Secretary, to any applicant, participant, or local agency aggrieved by the action of a State or local agency as it affects participation.
      (B) Any State agency that must suspend or terminate benefits to any participant during the participant's certification period due to a shortage of funds for the program shall first issue a notice to such participant.
   (9) If an individual certified as eligible for participation in the program under this section in one area moves to another area in which the program is operating, that individual's certification of eligibility shall remain valid for the period for which the individual was originally certified.
   (10) The Secretary, shall establish standards for the proper, efficient, and effective administration of the program. If the Secretary determines that a State agency has failed without good cause to administer the program in a manner consistent with this section or to implement the approved plan of operation and administration under this subsection, the Secretary may withhold such amounts of the State agency's funds for nutrition services and administration as the Secretary deems appropriate. Upon correction of such failure during a fiscal year by a State agency, any funds so withheld for such fiscal year shall be provided the State agency.
   (11) Supplemental foods.
      (A) In general. The Secretary shall prescribe by regulation the supplemental foods to be made available in the program under this section.
      (B) Appropriate content. To the degree possible, the Secretary shall assure that the fat, sugar, and salt content of the prescribed foods is appropriate.
      (C) Allowable use of funds. Subject to the availability of funds, the Secretary shall award grants to not more than 10 local sites determined by the Secretary to be geographically and culturally representative of State, local, and Indian agencies, to evaluate the feasibility of including fresh, frozen, or canned fruits and vegetables (to be made available through private funds) as an addition to the supplemental foods prescribed under this section.
      (D) Review of available supplemental foods. As frequently as determined by the Secretary to be necessary to reflect the most recent scientific knowledge, the Secretary shall--
         (i) conduct a scientific review of the supplemental foods available under the program; and
         (ii) amend the supplemental foods available, as necessary, to reflect nutrition science, public health concerns, and cultural eating patterns.
   (12) A competent professional authority shall be responsible for prescribing the appropriate supplemental foods, taking into account medical and nutritional conditions and cultural eating patterns, and, in the case of homeless individuals, the special needs and problems of such individuals.
   (13) The State agency may (A) provide nutrition education, breastfeeding promotion, and drug abuse education materials and instruction in languages other than English and (B) use appropriate foreign language materials in the administration of the program, in areas in which a substantial number of low-income households speak a language other than English.
   (14) If a State agency determines that a member of a family has received an overissuance of food benefits under the program authorized by this section as the result of such member intentionally making a false or misleading statement or intentionally misrepresenting, concealing, or withholding facts, the State agency shall recover, in cash, from such member an amount that the State agency determines is equal to the value of the overissued food benefits, unless the State agency determines that the recovery of the benefits would not be cost effective.
   (15) To be eligible to participate in the program authorized by this section, a manufacturer of infant formula that supplies formula for the program shall--
      (A) register with the Secretary of Health and Human Services under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321 et seq.); and
      (B) before bidding for a State contract to supply infant formula for the program, certify with the State health department that the formula complies with such Act and regulations issued pursuant to such Act.
   (16) The State agency may adopt methods of delivering benefits to accommodate the special needs and problems of homeless individuals.
   (17) Notwithstanding subsection (d)(2)(A)(i), not later than July 1 of each year, a State agency may implement income eligibility guidelines under this section concurrently with the implementation of income eligibility guidelines under the medicaid program established under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
   (18) Each local agency participating in the program under this section may provide information about other potential sources of food assistance in the local area to individuals who apply in person to participate in the program under this section, but who cannot be served because the program is operating at capacity in the local area.
   (19) The State agency shall adopt policies that--
      (A) require each local agency to attempt to contact each pregnant woman who misses an appointment to apply for participation in the program under this section, in order to reschedule the appointment, unless the phone number and the address of the woman are unavailable to such local agency; and
      (B) in the case of local agencies that do not routinely schedule appointments for individuals seeking to apply or be recertified for participation in the program under this section, require each such local agency to schedule appointments for each employed individual seeking to apply or be recertified for participation in such program so as to minimize the time each such individual is absent from the workplace due to such application or request for recertification.
   (20) Each State agency shall conduct monitoring reviews of each local agency at least biennially.
   (21) Use of claims from local agencies, vendors, and participants. A State agency may use funds recovered from local agencies, vendors, and participants, as a result of a claim arising under the program, to carry out the program during--
      (A) the fiscal year in which the claim arises;
      (B) the fiscal year in which the funds are collected; and
      (C) the fiscal year following the fiscal year in which the funds are collected.
   (22) The Secretary and the Secretary of Health and Human Services shall carry out an initiative to assure that, in a case in which a State medicaid program uses coordinated care providers under a contract entered into under section 1903(m), or a waiver granted under section 1915(b), of the Social Security Act (42 U.S.C. 1396b(m) or 1396n(b)), coordination between the program authorized by this section and the medicaid program is continued, including--
      (A) the referral of potentially eligible women, infants, and children between the 2 programs; and
      (B) the timely provision of medical information related to the program authorized by this section to agencies carrying out the program.
   (23) Individuals participating at more than one site. Each State agency shall implement a system designed by the State agency to identify individuals who are participating at more than one site under the program.
   (24) High risk vendors. Each State agency shall--
      (A) identify vendors that have a high probability of program abuse; and
      (B) conduct compliance investigations of the vendors.
   (25) Infant formula benefits. A State agency may round up to the next whole can of infant formula to allow all participants under the program to receive the full-authorized nutritional benefit specified by regulation.
   (26) Notification of violations. If a State agency finds that a vendor has committed a violation that requires a pattern of occurrences in order to impose a penalty or sanction, the State agency shall notify the vendor of the initial violation in writing prior to documentation of another violation, unless the State agency determines that notifying the vendor would compromise an investigation.

(g) Authorization of appropriations.
   (1) In general.
      (A) Authorization. There are authorized to be appropriated to carry out this section such sums as are necessary for each of fiscal years 2004 through 2009.
      (B) Advance appropriations; availability. As authorized by section 3 of the Richard B. Russell National School Lunch Act [42 USCS § 1752], appropriations to carry out the provisions of this section may be made not more than 1 year in advance of the beginning of the fiscal year in which the funds will become available for disbursement to the States, and shall remain available for the purposes for which appropriated until expended.
   (2)
      (A) Notwithstanding any other provision of law, unless enacted in express limitation of this subparagraph, the Secretary--
         (i) in the case of legislation providing funds through the end of a fiscal year, shall issue--
            (I) an initial allocation of funds provided by the enactment of such legislation not later than the expiration of the 15-day period beginning on the date of the enactment of such legislation; and
            (II) subsequent allocations of funds provided by the enactment of such legislation not later than the beginning of each of the second, third, and fourth quarters of the fiscal year; and
         (ii) in the case of legislation providing funds for a period that ends prior to the end of a fiscal year, shall issue an initial allocation of funds provided by the enactment of such legislation not later than the expiration of the 10-day period beginning on the date of the enactment of such legislation.
      (B) In any fiscal year--
         (i) unused amounts from a prior fiscal year that are identified by the end of the first quarter of the fiscal year shall be recovered and reallocated not later than the beginning of the second quarter of the fiscal year; and
         (ii) unused amounts from a prior fiscal year that are identified after the end of the first quarter of the fiscal year shall be recovered and reallocated on a timely basis.
   (3) Notwithstanding any other provision of law, unless enacted in express limitation of this paragraph--
      (A) the allocation of funds required by paragraph (2)(A)(i)(I) shall include not less than 1/3 of the amounts appropriated by the legislation described in such paragraph;
      (B) the allocations of funds required by paragraph (2)(A)(i)(II) to be made not later than the beginning of the second and third quarters of the fiscal year shall each include not less than 1/4 of the amounts appropriated by the legislation described in such paragraph; and
      (C) in the case of the enactment of legislation providing appropriations for a period of not more than 4 months, the allocation of funds required by paragraph (2)(A)(ii) shall include all amounts appropriated by such legislation except amounts reserved by the Secretary for purposes of carrying out paragraph (5).
   (4) Of the sums appropriated for any fiscal year for programs authorized under this section, not less than nine-tenths of 1 percent shall be available first for services to eligible members of migrant populations. The migrant services shall be provided in a manner consistent with the priority system of a State for program participation.
   (5) Of the sums appropriated for any fiscal year for the program under this section, one-half of 1 percent, not to exceed $ 5,000,000, shall be available to the Secretary for the purpose of evaluating program performance, evaluating health benefits, preparing reports on program participant characteristics, providing technical assistance to improve State agency administrative systems, administration of pilot projects, including projects designed to meet the special needs of migrants, Indians, and rural populations, and carrying out technical assistance and research evaluation projects of the programs under this section.
   (6) [Deleted]

(h) Funds for nutrition services and administration.
   (1)
      (A) Each fiscal year, the Secretary shall make available, from amounts appropriated for such fiscal year under subsection (g)(1) and amounts remaining from amounts appropriated under such subsection for the preceding fiscal year, an amount sufficient to guarantee a national average per participant grant to be allocated among State agencies for costs of nutrition services and administration incurred by State and local agencies for such year.
      (B) (i) The amount of the national average per participant grant for nutrition services and administration for any fiscal year shall be an amount equal to the amount of the national average per participant grant for nutrition services and administration issued for the preceding fiscal year, as adjusted.
         (ii) Such adjustment, for any fiscal year, shall be made by revising the national average per participant grant for nutrition services and administration for the preceding fiscal year to reflect the percentage change between--
            (I) the value of the index for State and local government purchases, as published by the Bureau of Economic Analysis of the Department of Commerce, for the 12-month period ending June 30 of the second preceding fiscal year; and
            (II) the best estimate that is available as of the start of the fiscal year of the value of such index for the 12-month period ending June 30 of the previous fiscal year.
      (C) Remaining amounts.
         (i) In general. Except as provided in clause (ii), in any fiscal year, amounts remaining from amounts appropriated for such fiscal year under subsection (g)(1) and from amounts appropriated under such section for the preceding fiscal year, after carrying out subparagraph (A), shall be made available for food benefits under this section, except to the extent that such amounts are needed to carry out the purposes of subsections (g)(4) and (g)(5).
         (ii) Breast pumps. A State agency may use amounts made available under clause (i) for the purchase of breast pumps.
   (2) (A) The Secretary shall allocate to each State agency from the amount described in paragraph (1)(A) an amount for costs of nutrition services and administration on the basis of a formula prescribed by the Secretary. Such formula--
         (i) shall be designed to take into account--
            (I) the varying needs of each State;
            (II) the number of individuals participating in each State; and
            (III) other factors which serve to promote the proper, efficient, and effective administration of the program under this section;
         (ii) shall provide for each State agency--
            (I) an estimate of the number of participants for the fiscal year involved; and
            (II) a per participant grant for nutrition services and administration for such year;
         (iii) shallprovide for a minimum grant amount for State agencies; and
         (iv) may provide funds to help defray reasonable anticipated expenses associated with innovations in cost containment or associated with procedures that tend to enhance competition.
      (B) (i) Except as provided in clause (ii) and subparagraph (C), in any fiscal year, the total amount allocated to a State agency for costs of nutrition services and administration under the formula prescribed by the Secretary under subparagraph (A) shall constitute the State agency's operational level for such costs for such year even if the number of participants in the program at such agency is lower than the estimate provided under subparagraph (A)(ii)(I).
         (ii) If a State agency's per participant expenditure for nutrition services and administration is more than 10 percent (except that the Secretary may establish a higher percentage for State agencies that are small) higher than its per participant grant for nutrition services and administration without good cause, the Secretary may reduce such State agency's operational level for costs of nutrition services and administration.
      (C) In any fiscal year, the Secretary may reallocate amounts provided to State agencies under subparagraph (A) for such fiscal year. When reallocating amounts under the preceding sentence, the Secretary may provide additional amounts to, or recover amounts from, any State agency.
   (3) (A) Except as provided in subparagraphs (B) and (C), in each fiscal year, each State agency shall expend--
         (i) for nutrition education activities and breastfeeding promotion and support activities, an aggregate amount that is not less than the sum of--
            (I) 1/6 of the amounts expended by the State for costs of nutrition services and administration; and
            (II) except as otherwise provided in subparagraphs (F) and (G), an amount equal to a proportionate share of the national minimum breastfeeding promotion expenditure, as described in subparagraph (E), with each State's share determined on the basis of the number of pregnant women and breastfeeding women in the program in the State as a percentage of the number of pregnant women and breastfeeding women in the program in all States; and
         (ii) for breastfeeding promotion and support activities an amount that is not less than the amount determined for such State under clause (i)(II).
      (B) The Secretary may authorize a State agency to expend an amount less than the amount described in subparagraph (A)(ii) for purposes of breastfeeding promotion and support activities if--
         (i) the State agency so requests; and
         (ii) the request is accompanied by documentation that other funds will be used to conduct nutrition education activities at a level commensurate with the level at which such activities would be conducted if the amount described in subparagraph (A)(ii) were expended for such activities.
      (C) The Secretary may authorize a State agency to expend for purposes of nutrition education an amount that is less than the difference between the aggregate amount described in subparagraph (A) and the amount expended by the State for breastfeeding promotion and support programs if--
         (i) the State agency so requests; and
         (ii) the request is accompanied by documentation that other funds will be used to conduct such activities.
      (D) The Secretary shall limit to a minimal level any documentation required under this paragraph.
      (E) For each fiscal year, the national minimum breastfeeding promotion expenditure means an amount that is--
         (i) equal to $ 21 multiplied by the number of pregnant women and breastfeeding women participating in the program nationwide, based on the average number of pregnant women and breastfeeding women so participating during the last 3 months for which the Secretary has final data; and
         (ii) adjusted for inflation on October 1, 1996, and each October 1 thereafter, in accordance with paragraph (1)(B)(ii).
      (F), (G) [Deleted]
   (4) The Secretary shall--
      (A) in consultation with the Secretary of Health and Human Services, develop a definition of breastfeeding for the purposes of the program under this section;
      (B) authorize the purchase of breastfeeding aids by State and local agencies as an allowable expense under nutrition services and administration;
      (C) require each State agency to designate an agency staff member to coordinate breastfeeding promotion efforts identified in the State plan of operation and administration;
      (D) require the State agency to provide training on the promotion and management of breastfeeding to staff members of local agencies who are responsible for counseling participants in the program under this section concerning breastfeeding;
      (E) not later than 1 year after the date of enactment of this subparagraph [enacted Nov. 2, 1994], develop uniform requirements for the collection of data regarding the incidence and duration of breastfeeding among participants in the program; and
      (F) partner with communities, State and local agencies, employers, health care professionals, and other entities in the private sector to build a supportive breastfeeding environment for women participating in the program under this section to support the breastfeeding goals of the Healthy People 2010 initiative.
   (5) (A) Subject to subparagraph (B), in any fiscal year that a State agency submits a plan to reduce average food costs per participant and to increase participation above the level estimated for the State agency, the State agency may, with the approval of the Secretary, convert amounts allocated for food benefits for such fiscal year for costs of nutrition services and administration to the extent that such conversion is necessary--
         (i) to cover allowable expenditures in such fiscal year; and
         (ii) to ensure that the State agency maintains the level established for the per participant grant for nutrition services and administration for such fiscal year.
      (B) If a State agency increases its participation level through measures that are not in the nutritional interests of participants or not otherwise allowable (such as reducing the quantities of foods provided for reasons not related to nutritional need), the Secretary may refuse to allow the State agency to convert amounts allocated for food benefits to defray costs of nutrition services and administration.
      (C) For the purposes of this paragraph, the term "acceptable measures" includes use of cost containment measures, curtailment of vendor abuse, and breastfeeding promotion activities.
      (D) Remote Indian or Native villages. For noncontiguous States containing a significant number of remote Indian or Native villages, a State agency may convert amounts allocated for food benefits for a fiscal year to the costs of nutrition services and administration to the extent that the conversion is necessary to cover expenditures incurred in providing services (including the full cost of air transportation and other transportation) to remote Indian or Native villages and to provide breastfeeding support in remote Indian or Native villages.
   (6) In each fiscal year, each State agency shall provide, from the amounts allocated to such agency for such year for costs of nutrition services and administration, an amount to each local agency for its costs of nutrition services and administration. The amount to be provided to each local agency under the preceding sentence shall be determined under allocation standards developed by the State agency in cooperation with the several local agencies, taking into account factors deemed appropriate to further proper, efficient, and effective administration of the program, such as--
      (A) local agency staffing needs;
      (B) density of population;
      (C) number of individuals served; and
      (D) availability of administrative support from other sources.
   (7) The State agency may provide in advance to any local agency any amounts for nutrition services and administration deemed necessary for successful commencement or significant expansion of program operations during a reasonable period following approval of--
      (A) a new local agency;
      (B) a new cost containment measure; or
      (C) a significant change in an existing cost containment measure.
   (8) (A) (i) Except as provided in subparagraphs (B) and (C)(iii), any State that provides for the purchase of foods under the program at retail grocery stores shall, with respect to the procurement of infant formula, use--
            (I) a competitive bidding system; or
            (II) any other cost containment measure that yields savings equal to or greater than savings generated by a competitive bidding system when such savings are determined by comparing the amounts of savings that would be provided over the full term of contracts offered in response to a single invitation to submit both competitive bids and bids for other cost containment systems for the sale of infant formula.
         (ii) In determining whether a cost containment measure other than competitive bidding yields equal or greater savings, the State, in accordance with regulations issued by the Secretary, may take into account other cost factors (in addition to rebate levels and procedures for adjusting rebate levels when wholesale price levels change), such as--
            (I) the number of infants who would not be expected to receive the primary contract infant formula under a competitive bidding system;
            (II) the number of cans of infant formula for which no rebate would be provided under another rebate system; and
            (III) differences in administrative costs relating to the implementation of the various cost containment systems (such as costs of converting a computer system for the purpose of operating a cost containment system and costs of preparing participants for conversion to a new or alternate cost containment system).
         (iii) Competitive bidding system. A State agency using a competitive bidding system for infant formula shall award contracts to bidders offering the lowest net price for a specific infant formula for which manufacturers submit a bid unless the State agency demonstrates to the satisfaction of the Secretary that the weighted average retail price for different brands of infant formula in the State does not vary by more than 5 percent.
         (iv) Size of State alliances.
            (I) In general. Except as provided in subclauses (II) through (IV), no State alliance may exist among States if the total number of infants served by States participating in the alliance as of October 1, 2003, or such subsequent date determined by the Secretary for which data is available, would exceed 100,000.
            (II) Addition of infant participants. In the case of a State alliance that exists on the date of enactment of this clause, the alliance may continue and may expand to serve more than 100,000 infants but, except as provided in subclause (III), may not expand to include any additional State agency.
            (III) Addition of small state agencies and indian state agencies. Any State alliance may expand to include any State agency that served less than 5,000 infant participants as of October 1, 2003, or such subsequent date determined by the Secretary for which data is available, or any Indian State agency, if the State agency or Indian State agency requests to join the State alliance.
            (IV) Secretarial waiver. The Secretary may waive the requirements of this clause not earlier than 30 days after submitting to the Committee on Education and the Workforce of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a written report that describes the cost-containment and competitive benefits of the proposed waiver.
         (v) First choice of issuance. The State agency shall use the primary contract infant formula as the first choice of issuance (by formula type), with all other infant formulas issued as an alternative to the primary contract infant formula.
         (vi) Rebate invoices. Effective beginning October 1, 2004, each State agency shall have a system to ensure that infant formula rebate invoices, under competitive bidding, provide a reasonable estimate or an actual count of the number of units sold to participants in the program under this section.
         (vii) Separate solicitations. In soliciting bids for infant formula under a competitive bidding system, any State agency, or State alliance, that served under the program a monthly average of more than 100,000 infants during the preceding 12-month period shall solicit bids from infant formula manufacturers under procedures that require that bids for rebates or discounts are solicited for milk-based and soy-based infant formula separately.
         (viii) Cent-for-cent adjustments. A bid solicitation for infant formula under the program shall require the manufacturer to adjust for price changes subsequent to the opening of the bidding process in a manner that requires--
            (I) a cent-for-cent increase in the rebate amounts if there is an increase in the lowest national wholesale price for a full truckload of the particular infant formula; and
            (II) a cent-for-cent decrease in the rebate amounts if there is a decrease in the lowest national wholesale price for a full truckload of the particular infant formula.
         (ix) List of infant formula wholesalers, distributors, retailers, and manufacturers. The State agency shall maintain a list of--
            (I) infant formula wholesalers, distributors, and retailers licensed in the State in accordance with State law (including regulations); and
            (II) infant formula manufacturers registered with the Food and Drug Administration that provide infant formula.
         (x) Purchase requirement. A vendor authorized to participate in the program under this section shall only purchase infant formula from the list described in clause (ix).
      (B) (i) The Secretary shall waive the requirement of subparagraph (A) in the case of any State that demonstrates to the Secretary that--
            (I) compliance with subparagraph (A) would be inconsistent with efficient or effective operation of the program operated by such State under this section; or
            (II) the amount by which the savings yielded by an alternative cost containment system would be less than the savings yielded by a competitive bidding system is sufficiently minimal that the difference is not significant.
         (ii) The Secretary shall prescribe criteria under which a waiver may be granted pursuant to clause (i).
         (iii) The Secretary shall provide information on a timely basis to the Committee on Education and Labor of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on waivers that have been granted under clause (i).
      (C) (i) The Secretary shall provide technical assistance to small Indian State agencies carrying out this paragraph in order to assist such agencies to achieve the maximum cost containment savings feasible.
         (ii) The Secretary shall also provide technical assistance, on request, to State agencies that desire to consider a cost containment system that covers more than 1 State agency.
         (iii) The Secretary may waive the requirement of subparagraph (A) in the case of any Indian State agency that has not more than 1,000 participants.
      (D) No State may enter into a cost containment contract (in this subparagraph referred to as the "original contract") that prescribes conditions that would void, reduce the savings under, or otherwise limit the original contract if the State solicited or secured bids for, or entered into, a subsequent cost containment contract to take effect after the expiration of the original contract.
      (E) The Secretary shall offer to solicit bids on behalf of State agencies regarding cost-containment contracts to be entered into by infant formula manufacturers and State agencies. The Secretary shall make the offer to State agencies once every 12 months. Each such bid solicitation shall only take place if two or more State agencies request the Secretary to perform the solicitation. For such State agencies, the Secretary shall solicit bids and select the winning bidder for a cost containment contract to be entered into by State agencies and infant formula manufacturers or suppliers.
      (F) In soliciting bids for contracts for infant formula for the program authorized by this section, the Secretary shall solicit bids from infant formula manufacturers under procedures in which bids for rebates or discounts are solicited for milk-based and soy-based infant formula, separately, except where the Secretary determines that such solicitation procedures are not in the best interest of the program.
      (G) To reduce the costs of any supplemental foods, the Secretary may make available additional funds to State agencies out of the funds otherwise available under paragraph (1)(A) for nutrition services and administration in an amount not exceeding one half of 1 percent of the amounts to help defray reasonable anticipated expenses associated with innovations in cost containment or associated with procedures that tend to enhance competition.
      (H) (i) Any person, company, corporation, or other legal entity that submits a bid to supply infant formula to carry out the program authorized by this section and announces or otherwise discloses the amount of the bid, or the rebate or discount practices of such entities, in advance of the time the bids are opened by the Secretary or the State agency, or any person, company, corporation, or other legal entity that makes a statement (prior to the opening of bids) relating to levels of rebates or discounts, for the purpose of influencing a bid submitted by any other person, shall be ineligible to submit bids to supply infant formula to the program for the bidding in progress for up to 2 years from the date the bids are opened and shall be subject to a civil penalty of up to $ 100,000,000, as determined by the Secretary to provide restitution to the program for harm done to the program. The Secretary shall issue regulations providing such person, company, corporation, or other legal entity appropriate notice, and an opportunity to be heard and to respond to charges.
         (ii) The Secretary shall determine the length of the disqualification, and the amount of the civil penalty referred to in clause (i) based on such factors as the Secretary by regulation determines appropriate.
         (iii) Any person, company, corporation, or other legal entity disqualified under clause (i) shall remain obligated to perform any requirements under any contract to supply infant formula existing at the time of the disqualification and until each such contract expires by its terms.
      (I) Not later than the expiration of the 180-day period beginning on the date of enactment of this subparagraph [enacted Oct. 24, 1992], the Secretary shall prescribe regulations to carry out this paragraph.
      (J) A State shall not incur any interest liability to the Federal Government on rebate funds for infant formula and other foods if all interest earned by the State on the funds is used for program purposes.
      (K), (L) [Redesignated]
   (9) For purposes of this subsection, the term "cost containment measure" means a competitive bidding, rebate, direct distribution, or home delivery system implemented by a State agency as described in its approved plan of operation and administration.
   (10) Funds for infrastructure, management information systems, and special nutrition education.
      (A) In general. For each of fiscal years 2006 through 2009, the Secretary shall use for the purposes specified in subparagraph (B), $ 64,000,000 or the amount of nutrition services and administration funds and supplemental food funds for the prior fiscal year that have not been obligated, whichever is less.
      (B) Purposes. Of the amount made available under subparagraph (A) for a fiscal year, not more than--
         (i) $ 14,000,000 shall be used for--
            (I) infrastructure for the program under this section;
            (II) special projects to promote breastfeeding, including projects to assess the effectiveness of particular breastfeeding promotion strategies; and
            (III) special State projects of regional or national significance to improve the services of the program;
         (ii) $ 30,000,000 shall be used to establish, improve, or administer management information systems for the program, including changes necessary to meet new legislative or regulatory requirements of the program; and
         (iii) $ 20,000,000 shall be used for special nutrition education such as breast feeding peer counselors and other related activities.
      (C) Proportional distribution. In a case in which less than $ 64,000,000 is available to carry out this paragraph, the Secretary shall make a proportional distribution of funds allocated under subparagraph (B).
   (11) Vendor cost containment.
      (A) Peer groups.
         (i) In general. The State agency shall--
            (I) establish a vendor peer group system;
            (II) in accordance with subparagraphs (B) and (C), establish competitive price criteria and allowable reimbursement levels for each vendor peer group; and
            (III) if the State agency elects to authorize any types of vendors described in subparagraph (D)(ii)(I)--
               (aa) distinguish between vendors described in subparagraph (D)(ii)(I) and other vendors by establishing--
                  (AA) separate peer groups for vendors described in subparagraph (D)(ii)(I);or
                  (BB) distinct competitive price criteria and allowable reimbursement levels for vendors described in subparagraph (D)(ii)(I) within a peer group that contains both vendors described in subparagraph (D)(ii)(I) and other vendors; and
               (bb) establish competitive price criteria and allowable reimbursement levels that comply with subparagraphs (B) and (C), respectively, and that do not result in higher food costs if program participants redeem supplemental food vouchers at vendors described in subparagraph (D)(ii)(I) rather than at vendors other than vendors described in subparagraph (D)(ii)(I).
      Nothing in this paragraph shall be construed to compel a State agency to achieve lower food costs if program participants redeem supplemental food vouchers at vendors described in subparagraph (D)(ii)(I) rather than at vendors other than vendors described in subparagraph (D)(ii)(I).
         (ii) Exemptions. The Secretary may exempt from the requirements of clause (i)--
            (I) a State agency that elects not to authorize any types of vendors described in subparagraph (D)(ii)(I) and that demonstrates to the Secretary that--
               (aa) compliance with clause (i) would be inconsistent with efficient and effective operation of the program administered by the State under this section; or
               (bb) an alternative cost-containment system would be as effective as a vendor peer group system; or
            (II) a State agency--
               (aa) in which the sale of supplemental foods that are obtained with food instruments from vendors described in subparagraph (D)(ii)(I) constituted less than 5 percent of total sales of supplemental foods that were obtained with food instruments in the State in the year preceding a year in which the exemption is effective; and
               (bb) that demonstrates to the Secretary that an alternative cost-containment system would be as effective as the vendor peer group system and would not result in higher food costs if program participants redeem supplemental food vouchers at vendors described in subparagraph (D)(ii)(I) rather than at vendors other than vendors described in subparagraph (D)(ii)(I).
      (B) Competitive pricing.
         (i) In general. The State agency shall establish competitive price criteria for each peer group for the selection of vendors for participation in the program that--
            (I) ensure that the retail prices charged by vendor applicants for the program are competitive with the prices charged by other vendors; and
            (II) consider--
               (aa) the shelf prices of the vendor for all buyers; or
               (bb) the prices that the vendor bid for supplemental foods, which shall not exceed the shelf prices of the vendor for all buyers.
         (ii) Participant access. In establishing competitive price criteria, the State agency shall consider participant access by geographic area.
         (iii) Subsequent price increases. The State agency shall establish procedures to ensure that a retail store selected for participation in the program does not, subsequent to selection, increase prices to levels that would make the store ineligible for selection to participate in the program.
      (C) Allowable reimbursement levels.
         (i) In general. The State agency shall establish allowable reimbursement levels for supplemental foods for each vendor peer group that ensure--
            (I) that payments to vendors in the vendor peer group reflect competitive retail prices; and
            (II) that the State agency does not reimburse a vendor for supplemental foods at a level that would make the vendor ineligible for authorization under the criteria established under subparagraph (B).
         (ii) Price fluctuations. The allowable reimbursement levels may include a factor to reflect fluctuations in wholesale prices.
         (iii) Participant access. In establishing allowable reimbursement levels, the State agency shall consider participant access in a geographic area.
      (D) Exemptions. The State agency may exempt from competitive price criteria and allowable reimbursement levels established under this paragraph--
         (i) pharmacy vendors that supply only exempt infant formula or medical foods that are eligible under the program; and
         (ii) vendors--
            (I) (aa) for which more than 50 percent of the annual revenue of the vendor from the sale of food items consists of revenue from the sale of supplemental foods that are obtained with food instruments; or
               (bb) who are new applicants likely to meet the criteria of item (aa) under criteria approved by the Secretary; and
            (II) that are nonprofit.
      (E) Cost containment. If a State agency elects to authorize any types of vendors described in subparagraph (D)(ii)(I), the State agency shall demonstrate to the Secretary, and the Secretary shall certify, that the competitive price criteria and allowable reimbursement levels established under this paragraph for vendors described in subparagraph (D)(ii)(I) do not result in average payments per voucher to vendors described in subparagraph (D)(ii)(I) that are higher than average payments per voucher to comparable vendors other than vendors described in subparagraph (D)(ii)(I).
      (F) Limitation on private rights of action. Nothing in this paragraph may be construed as creating a private right of action.
      (G) Implementation. A State agency shall comply with this paragraph not later than 18 months after the date of enactment of this paragraph [enacted June 30, 2004].
   (12) Imposition of costs on retail stores. The Secretary may not impose, or allow a State agency to impose, the costs of any equipment, system, or processing required for electronic benefit transfers on any retail store authorized to transact food instruments, as a condition for authorization or participation in the program.
   (13) Universal product codes database. The Secretary shall--
      (A) establish a national universal product code database for use by all State agencies in carrying out the program; and
      (B) make available from appropriated funds such sums as are required for hosting, hardware and software configuration, and support of the database.
   (14) Incentive items. A State agency shall not authorize or make payments to a vendor described in paragraph (11)(D)(ii)(I) that provides incentive items or other free merchandise, except food or merchandise of nominal value (as determined by the Secretary), to program participants unless the vendor provides to the State agency proof that the vendor obtained the incentive items or merchandise at no cost.

(i) Allocation of funds to State agencies.
   (1) By the beginning of each fiscal year, the Secretary shall divide, among the State agencies, the amounts made available for food benefits under subsection (h)(1)(C) on the basis of a formula determined by the Secretary.
   (2) Each State agency's allocation, as so determined, shall constitute the State agency's authorized operational level for that year, except that the Secretary shall reallocate funds periodically if the Secretary determines that a State agency is unable to spend its allocation.
   (3) (A) Notwithstanding paragraph (2) and subject to subparagraph (B)--
         (i) (I) not more than 1 percent (except as provided in subparagraph (C)) of the amount of funds allocated to a State agency under this section for supplemental foods for a fiscal year may be expended by the State agency for allowable expenses incurred under this section for supplemental foods during the preceding fiscal year; and
            (II) not more than 1 percent of the amount of funds allocated to a State agency under this section for nutrition services and administration for a fiscal year may be expended by the State agency for allowable expenses incurred under this section for supplemental foods and nutrition services and administration during the preceding fiscal year; and
         (ii) (I) for each fiscal year, of the amounts allocated to a State agency for nutrition services and administration, an amount equal to not more than 3 percent of the amount allocated to the State agency under this section for the fiscal year may be expended by the State agency for allowable expenses incurred under this section for nutrition services and administration during the subsequent fiscal year; and
            (II) for each fiscal year, of the amounts allocated to a State agency for nutrition services and administration, an amount equal to not more than 1/2 of 1 percent of the amount allocated to the State agency under this section for the fiscal year may be expended by the State agency, with the prior approval of the Secretary, for the development of a management information system, including an electronic benefit transfer system, during the subsequent fiscal year.
      (B) Any funds made available to a State agency in accordance with subparagraph (A)(ii) for a fiscal year shall not affect the amount of funds allocated to the State agency for such year.
      (C) The Secretary may authorize a State agency to expend not more than 3 percent of the amount of funds allocated to a State under this section for supplemental foods for a fiscal year for expenses incurred under this section for supplemental foods during the preceding fiscal year, if the Secretary determines that there has been a significant reduction in infant formula cost containment savings provided to the State agency that would affect the ability of the State agency to at least maintain the level of participation by eligible participants served by the State agency.
      (D)--(G) [Deleted]
      (H) [Redesignated]
   (4) For purposes of the formula, if Indians are served by the health department of a State, the formula shall be based on the State population inclusive of the Indians within the State boundaries.
   (5) If Indians residing in the state are served by a State agency other than the health department of the State, the population of the tribes within the jurisdiction of the State being so served shall not be included in the formula for such State, and shall instead be included in the formula for the State agency serving the Indians.
   (6) Notwithstanding any other provision of this section, the Secretary may use a portion of a State agency's allocation to purchase supplemental foods for donation to the State agency under this section.
   (7) In addition to any amounts expended under paragraph (3)(A)(i), any State agency using cost containment measures as defined in subsection (h)(9) may temporarily use amounts made available to such agency for the first quarter of a fiscal year to defray expenses for costs incurred during the final quarter of the preceding fiscal year. In any fiscal year, any State agency that uses amounts made available for a succeeding fiscal year under the authority of the preceding sentence shall restore or reimburse such amounts when such agency receives payment as a result of its cost containment measures for such expenses.

(j) Provisions for supplemental foods and nutrition education at community health centers and migrant health centers.
   (1) The Secretary and the Secretary of Health and Human Services (referred to in this subsection as the "Secretaries") shall jointly establish and carry out an initiative for the purpose of providing both supplemental foods and nutrition education under the special supplemental nutrition program and health care services to low-income pregnant, postpartum, and breastfeeding women, infants, and children at substantially more community health centers and migrant health centers.
   (2) The initiative shall also include--
      (A) activities to improve the coordination of the provision of supplemental foods and nutrition education under the special supplemental nutrition program and health care services at facilities funded by the Indian Health Service; and
      (B) the development and implementation of strategies to ensure that, to the maximum extent feasible, new community health centers, migrant health centers, and other federally supported health care facilities established in medically underserved areas provide supplemental foods and nutrition education under the special supplemental nutrition program.
   (3) The initiative may include--
      (A) outreach and technical assistance for State and local agencies and the facilities described in paragraph (2)(A) and the health centers and facilities described in paragraph (2)(B);
      (B) demonstration projects in selected State or local areas; and
      (C) such other activities as the Secretaries find are appropriate.
   (4) As used in this subsection:
      (A) The term "community health center" has the meaning given the term in section 330(a) of the Public Health Service Act (42 U.S.C. 254c(a)).
      (B) The term "migrant health center" has the meaning given the term in section 329(a)(1) of such Act (42 U.S.C. 254b(a)(1)).
   (5) [Redesignated]

(k) National Advisory Council on Maternal, Infant, and Fetal Nutrition; establishment; membership; term; officers; meetings; quorum; study on program improvement; report to President and Congress; technical assistance by Secretary.
   (1) There is hereby established a National Advisory Council on Maternal, Infant, and Fetal Nutrition (referred to in this subsection as the "Council") composed of 24 members appointed by the Secretary. One member shall be a State director of a program under this section; one member shall be a State official responsible for a commodity supplemental food program under section 1304 of the Food and Agriculture Act of 1977 [7 USCS § 612c note one member shall be a State fiscal officer of a program under this section (or the equivalent thereof); one member shall be a State health officer (or the equivalent thereof); one member shall be a local agency director of a program under this section in an urban area; one member shall be a local agency director of a program under this section in a rural area; one member shall be a project director of a commodity supplemental food program; one member shall be a State public health nutrition director (or the equivalent thereof); one member shall be a representative of an organization serving migrants; one member shall be an official from a State agency predominantly serving Indians; three members shall be parent participants of a program under this section or of a commodity supplemental food program; one member shall be a pediatrician; one member shall be an obstetrician; one member shall be a representative of a nonprofit public interest organization that has experience with and knowledge of the special supplemental nutrition program; one member shall be a person involved at the retail sales level of food in the special supplemental nutrition program; two members shall be officials of the Department of Health, Education, and Welfare appointed by the Secretary of Health and Human Services; two members shall be officials of the Department of Agriculture appointed by the Secretary; 1 member shall be an expert in the promotion of breast feeding; one member shall be an expert in drug abuse education and prevention; and one member shall be an expert in alcohol abuse education and prevention.
   (2) Members of the Council appointed from outside the Department of Agriculture and the Department of Health and Human Services shall be appointed for terms not exceeding three years. State and local officials shall serve only during their official tenure, and the tenure of parent participants shall not exceed two years. Persons appointed to complete an unexpired term shall serve only for the remainder of such term.
   (3) The Council shall elect a Chairman and a Vice Chairman. The Council shall meet at the call of the Chairman, but shall meet at least once a year. Eleven members shall constitute a quorum.
   (4) The Secretary shall provide the Council with such technical and other assistance, including secretarial and clerical assistance, as may be required to carry out its functions.
   (5) Members of the Council shall serve without compensation but shall be reimbursed for necessary travel and subsistence expenses incurred by them in the performance of the duties of the Council. Parent participant members of the Council, in addition to reimbursement for necessary travel and subsistence, shall, at the discretion of the Secretary, be compensated in advance for other personal expenses related to participation on the Council, such as child care expenses and lost wages during scheduled Council meetings.
   (6) [Redesignated]

(l) Donation of foods by Secretary. Foods available under section 416 of the Agriculture Act of 1949 [7 USCS § 1431], including, but not limited to, dry milk, or purchased under section 32 of the Act of August 24, 1935 [7 USCS § 612c], may be donated by the Secretary, at the request of a State agency, for distribution to programs conducted under this section. The Secretary may purchase and distribute, at the request of a State agency, supplemental foods for donation to programs conducted under this section, with appropriated funds, including funds appropriated under this section.

(m) WIC Farmers' market nutrition program.
   (1) Subject to the availability of funds appropriated for the purposes of this subsection, and as specified in this subsection, the Secretary shall award grants to States that submit State plans that are approved for the establishment or maintenance of programs designed to provide recipients of assistance under subsection (c), or those who are on the waiting list to receive the assistance, with coupons that may be exchanged for fresh, nutritious, unprepared foods at farmers' markets and (at the option of a State) roadside stands, as defined in the State plans submitted under this subsection.
   (2) A grant provided to any State under this subsection shall be provided to the chief executive officer of the State, who shall--
      (A) designate the appropriate State agency or agencies to administer the program in conjunction with the appropriate nonprofit organizations; and
      (B) ensure coordination of the program among the appropriate agencies and organizations.
   (3) The Secretary shall not make a grant to any State under this subsection unless the State agrees to provide State, local, or private funds for the program in an amount that is equal to not less than 30 percent of the administrative cost of the program, which may be satisfied from program income or State contributions that are made for similar programs. The Secretary may negotiate with an Indian State agency a lower percentage of matching funds than is required under the preceding sentence, but not lower than 10 percent of the administrative cost of the program, if the Indian State agency demonstrates to the Secretary financial hardship for the affected Indian tribe, band, group, or council.
   (4) Subject to paragraph (6), the Secretary shall establish a formula for determining the amount of the grant to be awarded under this subsection to each State for which a State plan is approved under paragraph (6), according to the number of recipients proposed to participate as specified in the State plan. In determining the amount to be awarded to new States, the Secretary shall rank order the State plans according to the criteria of operation set forth in this subsection, and award grants accordingly. The Secretary shall take into consideration the minimum amount needed to fund each approved State plan, and need not award grants to each State that submits a State plan.
   (5) Each State that receives a grant under this subsection shall ensure that the program for which the grant is received complies with the following requirements:
      (A) Individuals who are eligible to receive Federal benefits under the program shall only be individuals who are receiving assistance under subsection (c), or who are on the waiting list to receive the assistance.
      (B) Construction or operation of a farmers' market may not be carried out using funds--
         (i) provided under the grant; or
         (ii) required to be provided by the State under paragraph (3).
      (C) The value of the Federal share of the benefits received by any recipient under the program may not be--
         (i) less than $ 10 per year; or
         (ii) more than $ 30 per year.
      (D) The coupon issuance process under the program shall be designed to ensure that coupons are targeted to areas with--
         (i) the highest concentration of eligible individuals;
         (ii) the greatest access to farmers' markets; and
         (iii) certain characteristics, in addition to those described in clauses (i) and (ii), that are determined to be relevant by the Secretary and that maximize the availability of benefits to eligible individuals.
      (E) The coupon redemption process under the program shall be designed to ensure that the coupons may be--
         (i) redeemed only by producers authorized by the State to participate in the program; and
         (ii) redeemed only to purchase fresh nutritious unprepared food for human consumption.
      (F) (i) Except as provided in clauses (ii) and (iii), the State may use for administration of the program in any fiscal year not more than 17 percent of the total amount of program funds.
         (ii) During any fiscal year for which a State receives assistance under this subsection, the Secretary shall permit the State to use not more than 2 percent of total program funds for market development or technical assistance to farmers' markets if the Secretary determines that the State intends to promote the development of farmers' markets in socially or economically disadvantaged areas, or remote rural areas, where individuals eligible for participation in the program have limited access to locally grown fruits and vegetables.
         (iii) The provisions of clauses (i) and (ii) with respect to the use of program funds shall not apply to any funds that a State may contribute in excess of the funds used by the State to meet the requirements of paragraph (3).
      (G) The State shall ensure that no State or local taxes are collected within the State on purchases of food with coupons distributed under the program.
   (6) (A) The Secretary shall give the same preference for funding under this subsection to eligible States that participated in the program under this subsection in a prior fiscal year as to States that participated in the program in the most recent fiscal year. The Secretary shall inform each State of the award of funds as prescribed by subparagraph (G) by February 15 of each year.
      (B) (i) Subject to the availability of appropriations, if a State provides the amount of matching funds required under paragraph (3), the State shall receive assistance under this subsection in an amount that is not less than the amount of such assistance that the State received in the most recent fiscal year in which it received such assistance.
         (ii) If amounts appropriated for any fiscal year pursuant to the authorization contained in paragraph (10) for grants under this subsection are not sufficient to pay to each State for which a State plan is approved under paragraph (6) the amount that the Secretary determines each such State is entitled to under this subsection, each State's grant shall be ratably reduced, except that (if sufficient funds are available) each State shall receive at least $ 75,000 or the amount that the State received for the prior fiscal year if that amount is less than $ 75,000.
      (C) In providing funds to a State that received assistance under this subsection in the previous fiscal year, the Secretary shall consider--
         (i) the availability of any such assistance not spent by the State during the program year for which the assistance was received;
         (ii) documentation that demonstrates that--
            (I) there is a need for an increase in funds; and
            (II) the use of the increased funding will be consistent with serving nutritionally at-risk persons and expanding the awareness and use of farmers' markets;
         (iii) demonstrated ability to satisfactorily operate the existing program; and
         (iv) whether, in the case of a State that intends to use any funding provided under subparagraph (G)(i) to increase the value of the Federal share of the benefits received by a recipient, the funding provided under subparagraph (G)(i) will increase the rate of coupon redemption.
      (D) (i) A State that desires to receive a grant under this subsection shall submit, for each fiscal year, a State plan to the Secretary by November 15 of each year.
         (ii) Each State plan submitted under this paragraph shall contain--
            (I) the estimated cost of the program and the estimated number of individuals to be served by the program;
            (II) a description of the State plan for complying with the requirements established in paragraph (5); and
            (III) criteria developed by the State with respect to authorization of producers to participate in the program.
         (iii) The criteria developed by the State as required by clause (ii)(III) shall require any authorized producer to sell fresh nutritious unprepared foods (such as fruits and vegetables) to recipients, in exchange for coupons distributed under the program.
      (E) The Secretary shall establish objective criteria for the approval and ranking of State plans submitted under this paragraph.
      (F) (i) An amount equal to 75 percent of the funds available after satisfying the requirements of subparagraph (B) shall be made available to States participating in the program whose State plan is approved by the Secretary. If this amount is greater than that necessary to satisfy the approved State plans, the unallocated amount shall be applied toward satisfying any unmet need of States that have not participated in the program in the prior fiscal year, and whose State plans have been approved.
         (ii) An amount equal to 25 percent of the funds available after satisfying the requirements of subparagraph (B) shall be made available to States that have not participated in the program in the prior fiscal year, and whose State plans have been approved by the Secretary. If this amount is greater than that necessary to satisfy the approved State plans for new States, the unallocated amount shall be applied toward satisfying any unmet need of States whose State plans have been approved.
         (iii) In any fiscal year, any funds that remain unallocated after satisfying the requirements of clauses (i) and (ii) shall be reallocated in the following fiscal year according to procedures established pursuant to paragraph (10)(B)(ii).
   (7) (A) The value of the benefit received by any recipient under any program for which a grant is received under this subsection may not affect the eligibility or benefit levels for assistance under other Federal or State programs.
      (B) Any programs for which a grant is received under this subsection shall be supplementary to the food stamp program carried out under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) and to any other Federal or State program under which foods are distributed to needy families in lieu of food stamps.
   (8) For each fiscal year, the Secretary shall collect from each State that receives a grant under this subsection information relating to--
      (A) the number and type of recipients served by both Federal and non-Federal benefits under the program for which the grant is received;
      (B) the rate of redemption of coupons distributed under the program;
      (C) the average amount distributed in coupons to each recipient;
      (D) the change in consumption of fresh fruits and vegetables by recipients, if the information is available;
      (E) the effects of the program on farmers' markets, if the information is available; and
      (F) any other information determined to be necessary by the Secretary.
   (9) Funding.
      (A) In general.
         (i) Authorization of appropriations. There are authorized to be appropriated to carry out this subsection such sums as are necessary for each of fiscal years 2004 through 2009.
         (ii) Mandatory funding. Not later than 30 days after the date of enactment of the Food Stamp Reauthorization Act of 2002 [enacted May 13, 2002], of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this subsection $ 15,000,000, to remain available until expended.
      (B) (i) (I) Each State shall return to the Secretary any funds made available to the State that are unobligated at the end of the fiscal year for which the funds were originally allocated. The unexpended funds shall be returned to the Secretary by February 1st of the following fiscal year.
            (II) Notwithstanding any other provision of this subsection, a total of not more than 5 percent of funds made available to a State for any fiscal year may be expended by the State to reimburse expenses incurred for a program assisted under this subsection during the preceding fiscal year.
         (ii) The Secretary shall establish procedures to reallocate funds that are returned under clause (i).
   (10) For purposes of this subsection:
      (A) The term "coupon" means a coupon, voucher, or other negotiable financial instrument by which benefits under this section are transferred.
      (B) The term "program" means--
         (i) the State farmers' market coupon nutrition program authorized by this subsection (as it existed on September 30, 1991); or
         (ii) the farmers' market nutrition program authorized by this subsection.
      (C) The term "recipient" means a person or household, as determined by the State, who is chosen by a State to receive benefits under this subsection, or who is on a waiting list to receive such benefits.
      (D) The term "State agency" has the meaning provided in subsection (b)(13), except that the term also includes the agriculture department of each State and any other agency approved by the chief executive officer of the State.
   (11) [Redesignated]

(n) Disqualification of vendors who are disqualified under the food stamp program.
   (1) In general. The Secretary shall issue regulations providing criteria for the disqualification under this section of an approved vendor that is disqualified from accepting benefits under the food stamp program established under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).
   (2) Terms. A disqualification under paragraph (1)--
      (A) shall be for the same period as the disqualification from the program referred to in paragraph (1);
      (B) may begin at a later date than the disqualification from the program referred to in paragraph (1); and
      (C) shall not be subject to judicial or administrative review.

(o) Disqualification of vendors convicted of trafficking or illegal sales.
   (1) In general. Except as provided in paragraph (4), a State agency shall permanently disqualify from participation in the program authorized under this section a vendor convicted of--
      (A) trafficking in food instruments (including any voucher, draft, check, or access device (including an electronic benefit transfer card or personal identification number) issued in lieu of a food instrument under this section); or
      (B) selling firearms, ammunition, explosives, or controlled substances (as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802)) in exchange for food instruments (including any item described in subparagraph (A) issued in lieu of a food instrument under this section).
   (2) Notice of disqualification. The State agency shall--
      (A) provide the vendor with notification of the disqualification; and
      (B) make the disqualification effective on the date of receipt of the notice of disqualification.
   (3) Prohibition of receipt of lost revenues. A vendor shall not be entitled to receive any compensation for revenues lost as a result of disqualification under this subsection.
   (4) Exceptions in lieu of disqualification.
      (A) In general. A State agency may permit a vendor that, but for this paragraph, would be disqualified under paragraph (1), to continue to participate in the program if the State agency determines, in its sole discretion according to criteria established by the Secretary, that--
         (i) disqualification of the vendor would cause hardship to participants in the program authorized under this section; or
         (ii) (I) the vendor had, at the time of the violation under paragraph (1), an effective policy and program in effect to prevent violations described in paragraph (1); and
            (II) the ownership of the vendor was not aware of, did not approve of, and was not involved in the conduct of the violation.
      (B) Civil penalty. If a State agency under subparagraph (A) permits a vendor to continue to participate in the program in lieu of disqualification, the State agency shall assess the vendor a civil penalty in an amount determined by the State agency, in accordance with criteria established by the Secretary, except that--
         (i) the amount of the civil penalty shall not exceed $ 10,000 for each violation; and
         (ii) the amount of civil penalties imposed for violations investigated as part of a single investigation may not exceed $ 40,000.

(p) Criminal forfeiture.
   (1) In general. Notwithstanding any provision of State law and in addition to any other penalty authorized by law, a court may order a person that is convicted of a violation of a provision of law described in paragraph (2), with respect to food instruments (including any item described in subsection (o)(1)(A) issued in lieu of a food instrument under this section), funds, assets, or property that have a value of $ 100 or more and that are the subject of a grant or other form of assistance under this section, to forfeit to the United States all property described in paragraph (3).
   (2) Applicable laws. A provision of law described in this paragraph is--
      (A) section 12(g) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1760(g)); and
      (B) any other Federal law imposing a penalty for embezzlement, willful misapplication, stealing, obtaining by fraud, or trafficking in food instruments (including any item described in subsection (o)(1)(A) issued in lieu of a food instrument under this section), funds, assets, or property.
   (3) Property subject to forfeiture. The following property shall be subject to forfeiture under paragraph (1):
      (A) All property, real and personal, used in a transaction or attempted transaction, to commit, or to facilitate the commission of, a violation described in paragraph (1).
      (B) All property, real and personal, constituting, derived from, or traceable to any proceeds a person obtained directly or indirectly as a result of a violation described in paragraph (1).
   (4) Procedures; interest of owner. Except as provided in paragraph (5), all property subject to forfeiture under this subsection, any seizure or disposition of the property, and any proceeding relating to the forfeiture, seizure, or disposition shall be subject to section 413 of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 853), other than subsection (d) of that section.
   (5) Proceeds. The proceeds from any sale of forfeited property and any amounts forfeited under this subsection shall be used--
      (A) first, to reimburse the Department of Justice, the Department of the Treasury, and the United States Postal Service for the costs incurred by the Departments or Service to initiate and complete the forfeiture proceeding;
      (B) second, to reimburse the Office of Inspector General of the Department of Agriculture for any costs incurred by the Office in the law enforcement effort resulting in the forfeiture;
      (C) third, to reimburse any Federal, State, or local law enforcement agency for any costs incurred in the law enforcement effort resulting in the forfeiture; and
      (D) fourth, by the State agency to carry out approval, reauthorization, and compliance investigations of vendors.

(q) Overseas special supplemental food program. The Secretary of Agriculture shall provide technical assistance to the Secretary of Defense, if so requested by the Secretary of Defense, for the purpose of carrying out the overseas special supplemental food program established under section 1060a(a) of title 10, United States Code.

(r) [Deleted]

§ 1787.  [Repealed]

§ 1788.  Team nutrition network

(a) Purposes. The purposes of the team nutrition network are--
   (1) to establish State systems to promote the nutritional health of school children of the United States through nutrition education and the use of team nutrition messages and material developed by the Secretary, and to encourage regular physical activity and other activities that support healthy lifestyles for children, including those based on the most recent Dietary Guidelines for Americans published under section 301 of the National Nutrition Monitoring and Related Research Act of 1990 (7 U.S.C. 5341);
   (2) to provide assistance to States for the development of comprehensive and integrated nutrition education and active living programs in schools and facilities that participate in child nutrition programs;
   (3) to provide training and technical assistance and disseminate team nutrition messages to States, school and community nutrition programs, and child nutrition food service professionals;
   (4) to coordinate and collaborate with other nutrition education and active living programs that share similar goals and purposes; and
   (5) to identify and share innovative programs with demonstrated effectiveness in helping children to maintain a healthy weight by enhancing student understanding of healthful eating patterns and the importance of regular physical activity.

(b) Definition of team nutrition network. In this section, the term "team nutrition network" means a statewide multidisciplinary program for children to promote healthy eating and physical activity based on scientifically valid information and sound educational, social, and marketing principles.

(c) Grants.
   (1) In general. Subject to the availability of funds for use in carrying out this section, in addition to any other funds made available to the Secretary for team nutrition purposes, the Secretary, in consultation with the Secretary of Education, may make grants to State agencies for each fiscal year, in accordance with this section, to establish team nutrition networks to promote nutrition education through--
      (A) the use of team nutrition network messages and other scientifically based information; and
      (B) the promotion of active lifestyles.
   (2) Form. A portion of the grants provided under this subsection may be in the form of competitive grants.
   (3) Funds from nongovernmental sources. In carrying out this subsection, the Secretary may accept cash contributions from nongovernmental organizations made expressly to further the purposes of this section, to be managed by the Food and Nutrition Service, for use by the Secretary and the States in carrying out this section.

(d) Allocation. Subject to the availability of funds for use in carrying out this section, the total amount of funds made available for a fiscal year for grants under this section shall equal not more than the sum of--
   (1) the product obtained by multiplying 1/2 cent by the number of lunches reimbursed through food service programs under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.) during the second preceding fiscal year in schools, institutions, and service institutions that participate in the food service programs; and
   (2) the total value of funds received by the Secretary in support of this section from nongovernmental sources.

(e) Requirements for State participation. To be eligible to receive a grant under this section, a State agency shall submit to the Secretary a plan that--
   (1) is subject to approval by the Secretary; and
   (2) is submitted at such time and in such manner, and that contains such information, as the Secretary may require, including--
      (A) a description of the goals and proposed State plan for addressing the health and other consequences of children who are at risk of becoming overweight or obese;
      (B) an analysis of the means by which the State agency will use and disseminate the team nutrition messages and material developed by the Secretary;
      (C) an explanation of the ways in which the State agency will use the funds from the grant to work toward the goals required under subparagraph (A), and to promote healthy eating and physical activity and fitness in schools throughout the State;
      (D) a description of the ways in which the State team nutrition network messages and activities will be coordinated at the State level with other health promotion and education activities;
      (E) a description of the consultative process that the State agency employed in the development of the model nutrition and physical activity programs, including consultations with individuals and organizations with expertise in promoting public health, nutrition, or physical activity;
      (F) a description of how the State agency will evaluate the effectiveness of each program developed by the State agency;
      (G) an annual summary of the team nutrition network activities;
      (H) a description of the ways in which the total school environment will support healthy eating and physical activity; and
      (I) a description of how all communications to parents and legal guardians of students who are members of a household receiving or applying for assistance under the program shall be in an understandable and uniform format and, to the maximum extent practicable, in a language that parents and legal guardians can understand.

(f) State coordinator. Each State that receives a grant under this section shall appoint a team nutrition network coordinator who shall--
   (1) administer and coordinate the team nutrition network within and across schools, school food authorities, and other child nutrition program providers in the State; and
   (2) coordinate activities of the Secretary, acting through the Food and Nutrition Service, and State agencies responsible for other children's health, education, and wellness programs to implement a comprehensive, coordinated team nutrition network program.

(g) Authorized activities. A State agency that receives a grant under this section may use funds from the grant--
   (1) (A) to collect, analyze, and disseminate data regarding the extent to which children and youths in the State are overweight, physically inactive, or otherwise suffering from nutrition-related deficiencies or disease conditions; and
      (B) to identify the programs and services available to meet those needs;
   (2) to implement model elementary and secondary education curricula using team nutrition network messages and material developed by the Secretary to create a comprehensive, coordinated nutrition and physical fitness awareness and obesity prevention program;
   (3) to implement pilot projects in schools to promote physical activity and to enhance the nutritional status of students;
   (4) to improve access to local foods through farm-to-cafeteria activities that may include the acquisition of food and the provision of training and education;
   (5) to implement State guidelines in health (including nutrition education and physical education guidelines) and to emphasize regular physical activity during school hours;
   (6) to establish healthy eating and lifestyle policies in schools;
   (7) to provide training and technical assistance to teachers and school food service professionals consistent with the purposes of this section;
   (8) to collaborate with public and private organizations, including community-based organizations, State medical associations, and public health groups, to develop and implement nutrition and physical education programs targeting lower income children, ethnic minorities, and youth at a greater risk for obesity.

(h) Local nutrition and physical activity grants.
   (1) In general. Subject to the availability of funds to carry out this subsection, the Secretary, in consultation with the Secretary of Education, shall provide assistance to selected local educational agencies to create healthy school nutrition environments, promote healthy eating habits, and increase physical activity, consistent with the Dietary Guidelines for Americans published under section 301 of the National Nutrition Monitoring and Related Research Act of 1990 (7 U.S.C. 5341), among elementary and secondary education students.
   (2) Selection of schools. In selecting local educational agencies for grants under this subsection, the Secretary shall--
      (A) provide for the equitable distribution of grants among--
         (i) urban, suburban, and rural schools; and
         (ii) schools with varying family income levels;
      (B) consider factors that affect need, including local educational agencies with significant minority or low-income student populations; and
      (C) establish a process that allows the Secretary to conduct an evaluation of how funds were used.
   (3) Requirement for participation. To be eligible to receive assistance under this subsection, a local educational agency shall, in consultation with individuals who possess education or experience appropriate for representing the general field of public health, including nutrition and fitness professionals, submit to the Secretary an application that shall include--
      (A) a description of the need of the local educational agency for a nutrition and physical activity program, including an assessment of the nutritional environment of the school;
      (B) a description of how the proposed project will improve health and nutrition through education and increased access to physical activity;
      (C) a description of how the proposed project will be aligned with the local wellness policy required under section 204 of the Child Nutrition and WIC Reauthorization Act of 2004 [42 USCS § 1751 note];
      (D) a description of how funds under this subsection will be coordinated with other programs under this Act [42 USCS §§ 1771 et seq.], the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.), or other Acts, as appropriate, to improve student health and nutrition;
      (E) a statement of the measurable goals of the local educational agency for nutrition and physical education programs and promotion;
      (F) a description of the procedures the agency will use to assess and publicly report progress toward meeting those goals; and
      (G) a description of how communications to parents and guardians of participating students regarding the activities under this subsection shall be in an understandable and uniform format, and, to the extent maximum practicable, in a language that parents can understand.
   (4) Duration. Subject to the availability of funds made available to carry out this subsection, a local educational agency receiving assistance under this subsection shall conduct the project during a period of 3 successive school years beginning with the initial fiscal year for which the local educational agency receives funds.
   (5) Authorized activities. An eligible applicant that receives assistance under this subsection--
      (A) shall use funds provided to--
         (i) promote healthy eating through the development and implementation of nutrition education programs and curricula based on the Dietary Guidelines for Americans published under section 301 of the National Nutrition Monitoring and Related Research Act of 1990 (7 U.S.C. 5341); and
         (ii) increase opportunities for physical activity through after school programs, athletics, intramural activities, and recess; and
      (B) may use funds provided to--
         (i) educate parents and students about the relationship of a poor diet and inactivity to obesity and other health problems;
         (ii) develop and implement physical education programs that promote fitness and lifelong activity;
         (iii) provide training and technical assistance to food service professionals to develop more appealing, nutritious menus and recipes;
         (iv) incorporate nutrition education into physical education, health education, and after school programs, including athletics;
         (v) involve parents, nutrition professionals, food service staff, educators, community leaders, and other interested parties in assessing the food options in the school environment and developing and implementing an action plan to promote a balanced and healthy diet;
         (vi) provide nutrient content or nutrition information on meals served through the school lunch program established under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.) and the school breakfast program established by section 4 of this Act [42 USCS § 1773] and items sold a la carte during meal times;
         (vii) encourage the increased consumption of a variety of healthy foods, including fruits, vegetables, whole grains, and low-fat dairy products, through new initiatives to creatively market healthful foods, such as salad bars and fruit bars;
         (viii) offer healthy food choices outside program meals, including by making low-fat and nutrient dense options available in vending machines, school stores, and other venues; and
         (ix) provide nutrition education, including sports nutrition education, for teachers, coaches, food service staff, athletic trainers, and school nurses.
   (6) Report. Not later than 18 months after completion of the projects and evaluations under this subsection, the Secretary shall--
      (A) submit to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions and the Committee on Agriculture, Nutrition and Forestry of the Senate a report describing the results of the evaluation under this subsection; and
      (B) make the report available to the public, including through the Internet.

(i) Nutrition education support. In carrying out the purpose of this section to support nutrition education, the Secretary may provide for technical assistance and grants to improve the quality of school meals and access to local foods in schools and institutions.

(j) Limitation. Material prepared under this section regarding agricultural commodities, food, or beverages, must be factual and without bias.

(k) Team nutrition network independent evaluation.
   (1) In general. Subject to the availability of funds to carry out this subsection, the Secretary shall offer to enter into an agreement with an independent, nonpartisan, science-based research organization--
      (A) to conduct a comprehensive independent evaluation of the effectiveness of the team nutrition initiative and the team nutrition network under this section; and
      (B) to identify best practices by schools in--
         (i) improving student understanding of healthful eating patterns;
         (ii) engaging students in regular physical activity and improving physical fitness;
         (iii) reducing diabetes and obesity rates in school children;
         (iv) improving student nutrition behaviors on the school campus, including by increasing healthier meal choices by students, as evidenced by greater inclusion of fruits, vegetables, whole grains, and lean dairy and protein in meal and snack selections;
         (v) providing training and technical assistance for food service professionals resulting in the availability of healthy meals that appeal to ethnic and cultural taste preferences;
         (vi) linking meals programs to nutrition education activities;
         (vii) successfully involving parents, school administrators, the private sector, public health agencies, nonprofit organizations, and other community partners;
         (viii) ensuring the adequacy of time to eat during school meal periods; and
         (ix) successfully generating revenue through the sale of food items, while providing healthy options to students through vending, student stores, and other venues.
   (2) Report. Not later than 3 years after funds are made available to carry out this subsection, the Secretary shall submit to the Committee on Education and the Workforce of the House of Representatives, the Committee on Health, Education, Labor, and Pensions and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing the findings of the independent evaluation.

(l) Authorization of appropriations. There are authorized to be appropriated such sums as are necessary to carry out this section.
§ 1789.  Department of Defense overseas dependents' schools

(a) Purpose of program; availability of payments and commodities. For the purpose of obtaining Federal payments and commodities in conjunction with the provision of breakfasts to students attending Department of Defense dependents' schools which are located outside the United States, its territories or possessions, the Secretary of Agriculture shall make available to the Department of Defense, from funds appropriated for such purpose, the same payments and commodities as are provided to States for schools participating in the school breakfast program in the United States.

(b) Administration of program; eligibility determinations and regulations. The Secretary of Defense shall administer breakfast programs authorized by this section and shall determine eligibility for free and reduced-price breakfasts under the criteria published by the Secretary of Agriculture, except that the Secretary of Defense shall prescribe regulations governing computation of income eligibility standards for families of students participating in the school breakfast program under this section.

(c) Nutritional standards for meals; noncompliance with standards. The Secretary of Defense shall be required to offer meals meeting nutritional standards prescribed by the Secretary of Agriculture; however, the Secretary of Defense may authorize deviations from Department of Agriculture prescribed meal patterns and fluid milk requirements when local conditions preclude strict compliance or when such compliance is highly impracticable.

(d) Authorization of appropriations. Funds are hereby authorized to be appropriated for any fiscal year in such amounts as may be necessary for the administrative expenses of the Department of Defense under this section.

(e) Technical assistance for administration of program. The Secretary of Agriculture shall provide the Secretary of Defense with technical assistance in the administration of the school breakfast programs authorized by this section.

§ 1790.  Breastfeeding promotion program

(a) In general. The Secretary, from amounts received under subsection (d), shall establish a breastfeeding promotion program to promote breastfeeding as the best method of infant nutrition, foster wider public acceptance of breastfeeding in the United States, and assist in the distribution of breastfeeding equipment to breastfeeding women.

(b) Conduct of program. In carrying out the program described in subsection (a), the Secretary may--
   (1) develop or assist others to develop appropriate educational materials, including public service announcements, promotional publications, and press kits for the purpose of promoting breastfeeding;
   (2) distribute or assist others to distribute such materials to appropriate public and private individuals and entities; and
   (3) provide funds to public and private individuals and entities, including physicians, health professional organizations, hospitals, community based health organizations, and employers, for the purpose of assisting such entities in the distribution of breastpumps and similar equipment to breastfeeding women.

(c) Cooperative agreements. The Secretary is authorized to enter into cooperative agreements with Federal agencies, State and local governments, and other entities to carry out the program described in subsection (a).

(d) Gifts, bequests, and devises.
   (1) In general. The Secretary is authorized to solicit, accept, use, and dispose of gifts, bequests, or devises of services or property, both real and personal, for the purpose of establishing and carrying out the program described in subsection (a). Gifts, bequests, or devises of money and proceeds from the sales of other property received as gifts, bequests, or devises shall be deposited in the Treasury and shall be available for disbursement upon order of the Secretary.
   (2) Criteria for acceptance. The Secretary shall establish criteria for determining whether to solicit and accept gifts, bequests, or devises under paragraph (1), including criteria that ensure that the acceptance of any gifts, bequests, or devises would not--
      (A) reflect unfavorably on the ability of the Secretary to carry out the Secretary's responsibilities in a fair and objective manner; or
      (B) compromise, or appear to compromise, the integrity of any governmental program or any officer or employee involved in the program.

§ 1791.  Bill Emerson Good Samaritan Food Donation Act

(a) Short title. This section may be cited as the "Bill Emerson Good Samaritan Food Donation Act".

(b) Definitions. As used in this section:
   (1) Apparently fit grocery product. The term "apparently fit grocery product" means a grocery product that meets all quality and labeling standards imposed by Federal, State, and local laws and regulations even though the product may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions.
   (2) Apparently wholesome food. The term "apparently wholesome food" means food that meets all quality and labeling standards imposed by Federal, State, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions.
   (3) Donate. The term "donate" means to give without requiring anything of monetary value from the recipient, except that the term shall include giving by a nonprofit organization to another nonprofit organization, notwithstanding that the donor organization has charged a nominal fee to the donee organization, if the ultimate recipient or user is not required to give anything of monetary value.
   (4) Food. The term "food" means any raw, cooked, processed, or prepared edible substance, ice, beverage, or ingredient used or intended for use in whole or in part for human consumption.
   (5) Gleaner. The term "gleaner" means a person who harvests for free distribution to the needy, or for donation to a nonprofit organization for ultimate distribution to the needy, an agricultural crop that has been donated by the owner.
   (6) Grocery product. The term "grocery product" means a nonfood grocery product, including a disposable paper or plastic product, household cleaning product, laundry detergent, cleaning product, or miscellaneous household item.
   (7) Gross negligence. The term "gross negligence" means voluntary and conscious conduct (including a failure to act) by a person who, at the time of the conduct, knew that the conduct was likely to be harmful to the health or well-being of another person.
   (8) Intentional misconduct. The term "intentional misconduct" means conduct by a person with knowledge (at the time of the conduct) that the conduct is harmful to the health or well-being of another person.
   (9) Nonprofit organization. The term "nonprofit organization" means an incorporated or unincorporated entity that--
      (A) is operating for religious, charitable, or educational purposes; and
      (B) does not provide net earnings to, or operate in any other manner that inures to the benefit of, any officer, employee, or shareholder of the entity.
   (10) Person. The term "person" means an individual, corporation, partnership, organization, association, or governmental entity, including a retail grocer, wholesaler, hotel, motel, manufacturer, restaurant, caterer, farmer, and nonprofit food distributor or hospital. In the case of a corporation, partnership, organization, association, or governmental entity, the term includes an officer, director, partner, deacon, trustee, council member, or other elected or appointed individual responsible for the governance of the entity.

(c) Liability for damages from donated food and grocery products.
   (1) Liability of person or gleaner. A person or gleaner shall not be subject to civil or criminal liability arising from the nature, age, packaging, or condition of apparently wholesome food or an apparently fit grocery product that the person or gleaner donates in good faith to a nonprofit organization for ultimate distribution to needy individuals.
   (2) Liability of nonprofit organization. A nonprofit organization shall not be subject to civil or criminal liability arising from the nature, age, packaging, or condition of apparently wholesome food or an apparently fit grocery product that the nonprofit organization received as a donation in good faith from a person or gleaner for ultimate distribution to needy individuals.
   (3) Exception. Paragraphs (1) and (2) shall not apply to an injury to or death of an ultimate user or recipient of the food or grocery product that results from an act or omission of the person, gleaner, or nonprofit organization, as applicable, constituting gross negligence or intentional misconduct.

(d) Collection or gleaning of donations. A person who allows the collection or gleaning of donations on property owned or occupied by the person by gleaners, or paid or unpaid representatives of a nonprofit organization, for ultimate distribution to needy individuals shall not be subject to civil or criminal liability that arises due to the injury or death of the gleaner or representative, except that this paragraph shall not apply to an injury or death that results from an act or omission of the person constituting gross negligence or intentional misconduct.

(e) Partial compliance. If some or all of the donated food and grocery products do not meet all quality and labeling standards imposed by Federal, State, and local laws and regulations, the person or gleaner who donates the food and grocery products shall not be subject to civil or criminal liability in accordance with this section if the nonprofit organization that receives the donated food or grocery products--
   (1) is informed by the donor of the distressed or defective condition of the donated food or grocery products;
   (2) agrees to recondition the donated food or grocery products to comply with all the quality and labeling standards prior to distribution; and
   (3) is knowledgeable of the standards to properly recondition the donated food or grocery product.

(f) Construction. This section shall not be construed to create any liability. Nothing in this section shall be construed to supercede State or local health regulations.

42 U.S.C. 1981.  Civil Rights Acts of 1866, 1870.

42 U.S.C. 1981: Title 42. The Public Health and Welfare, Chapter 21. Civil Rights, Generally.

42 U.S.C. 1981.  Equal rights under the law.

(a) Statement of equal rights. All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.

(b) "Make and enforce contracts" defined. For purposes of this section, the term "make and enforce contracts" includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.

(c) Protection against impairment. The rights protected by this section are protected against impairment by nongovernmental discrimination and impairment under color of State law.

42 U.S.C. 1983.  Civil Rights Act of 1871.

42 U.S.C. 1983:  Title 42. The Public Health and Welfare, Chapter 21. Civil Rights, Generally.

42 U.S.C. 1983.  Civil action for deprivation of rights.

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought against a judicial officer for an act or omission taken in such officer's judicial capacity, injunctive relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable. For the purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia.

42 U.S.C. 1985.  Conspiracy to Interfere with Civil Rights.

42 U.S.C. 1985 and 1986.  Civil Rights Act of 1871.

42 U.S.C. 1985:  Title 42. The Public Health and Welfare, Chapter 21. Civil Rights, Generally.

42 U.S.C. 1985.  Conspiracy to interfere with civil rights.

(1) Preventing officer from performing duties. If two or more persons in any State or Territory conspire to prevent, by force, intimidation, or threat, any person from accepting or holding any office, trust, or place of confidence under the United States, or from discharging any duties thereof; or to induce by like means any officer of the United States to leave any State, district or place, where his duties as an officer are required to be performed, or to injure him in his person or property on account of his lawful discharge of the duties of his office, or while engaged in the lawful discharge thereof, or to injure his property so as to molest, interrupt, hinder, or impede him in the discharge of his official duties;

(2) Obstructing justice; intimidating party, witness, or juror. If two or more persons in any State or Territory conspire to deter, by force, intimidation, or threat, any party or witness in any court of the United States from attending such court, or from testifying to any matter pending therein, freely, fully, and truthfully, or to injure such party or witness in his person or property on account of his having so attended or testified, or to influence the verdict, presentment, or indictment of any grand or petit juror in any such court, or to injure such juror in his person or property on account of any verdict, presentment, or indictment lawfully assented to by him, or of his being or having been such juror; or if two or more persons conspire for the purpose of impeding, hindering, obstructing, or defeating, in any manner, the due course of justice in any State or Territory, with intent to deny to any citizen the equal protection of the laws, or to injure him or his property for lawfully enforcing, or attempting to enforce, the right of any person, or class of persons, to the equal protection of the laws;

(3) Depriving persons of rights or privileges. If two or more persons in any State or Territory conspire, or go in disguise on the highway or on the premises of another, for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws, or for the purpose of preventing or hindering the constituted authorities of any State or Territory from giving or securing to all persons within such State or Territory the equal protection of the laws; or if two or more persons conspire to prevent by force, intimidation, or threat, any citizen who is lawfully entitled to vote, from giving his support or advocacy in a legal manner, toward or in favor of the election of any lawfully qualified person as an elector for President or Vice-President, or as a member of Congress of the United States; or to injure any citizen in person or property on account of such support or advocacy; in any case of conspiracy set forth in this section, if one or more persons engaged therein do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any right or privilege of a citizen of the United States, the party so injured or deprived may have an action for the recovery of damages, occasioned by such injury or deprivation, against any one or more of the conspirators.

42 U.S.C.  1986.  Action for Neglect.

42 U.S.C. 1985 and 1986.  Civil Rights Act of 1871.

42 U.S.C. 1986:  Title 42. The Public Health and Welfare, Chapter 21. Civil Rights, Generally.

42 U.S.C.  1986.  Action for neglect to prevent conspiracy.

Every person who, having knowledge that any of the wrongs conspired to be done, and mentioned in the preceding section [42 USCS § 1985], are about to be committed, and having power to prevent or aid in preventing the commission of the same, neglects or refuses so to do, if such wrongful act be committed, shall be liable to the party injured, or his legal representatives, for all damages caused by such wrongful act, which such person by reasonable diligence could have prevented; and such damages may be recovered in an action on the case; and any number of persons guilty of such wrongful neglect or refusal may be joined as defendants in the action, and if the death of any party be caused by any such wrongful act and neglect, the legal representatives of the deceased shall have such action therefor, and may recover not exceeding five thousand dollars damages therein, for the benefit of the widow of the deceased, if there be one, and if there be no widow, then for the benefit of the next of kin of the deceased. But no action under the provisions of this section shall be sustained which is not commenced within one year after the cause of action has accrued.

42 U.S.C. 1988.  Civil Rights Acts of 1866, 1870.

42 U.S.C. 1988: Title 42. The Public Health and Welfare, Chapter 21. Civil Rights, Generally.

42 U.S.C. 1988.  Proceedings in vindication of civil rights.

(a) Applicability of statutory and common law. The jurisdiction in civil and criminal matters conferred on the district and circuit courts [district courts] by the provisions of this Title, and of Title "CIVIL RIGHTS," and of Title "CRIMES," for the protection of all persons in the United States in their civil rights, and for their vindication, shall be exercised and enforced in conformity with the laws of the United States, so far as such laws are suitable to carry the same into effect; but in all cases where they are not adapted to the object, or are deficient in the provisions necessary to furnish suitable remedies and punish offenses against law, the common law, as modified and changed by the constitution and statutes of the State wherein the court having jurisdiction of such civil or criminal cause is held, so far as the same is not inconsistent with the Constitution and laws of the United States, shall be extended to and govern the said courts in the trial and disposition of the cause, and, if it is of a criminal nature, in the infliction of punishment on the party found guilty.

(b) Attorney's fees. In any action or proceeding to enforce a provision of sections 1977, 1977A, 1978, 1979, 1980, and 1981 of the Revised Statutes [42 USCS §§ 1981-1983, 1985, 1986], title IX of Public Law 92-318 [20 USCS §§ 1681 et seq.], the Religious Freedom Restoration Act of 1993, the Religious Land Use and Institutionalized Persons Act of 2000, title VI of the Civil Rights Act of 1964 [42 USCS §§ 2000d et seq.], or section 40302 of the Violence Against Women Act of 1994, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs, except that in any action brought against a judicial officer for an act or omission taken in such officer's judicial capacity such officer shall not be held liable for any costs, including attorney's fees, unless such action was clearly in excess of such officer's jurisdiction.

(c) Expert fees. In awarding an attorney's fee under subsection (b) in any action or proceeding to enforce a provision of sections 1977 or 1977A of the Revised Statutes [42 USCS §§ 1981 or 1981a], the court, in its discretion, may include expert fees as part of the attorney's fee.

42 U.S.C. 2000(d).  Civil Rights Act of 1964, Title VI.

42 U.S.C. 2000(d).  Title VI of the Civil Rights Act.

42 U.S.C. 2000(d): Title 42. The Public Health and Welfare, Chapter 21. Civil Rights, Federally Assisted Programs.

42 U.S.C. 2000(d).  Prohibition against exclusion from participation in, denial of benefits of, and discrimination under federally assisted programs on ground of race, color, or national origin.

No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.

42 U.S.C. 2000(e).  The Equal Employment Opportunities Act.

42 U.S.C. 2000(e): Title 42. The Public Health and Welfare, Chapter 21. Civil Rights, Equal Employment Opportunities.

42 U.S.C. 2000(e).  Definitions.

For the purposes of this title [42 USCS §§ 2000e et seq.]--

(a) The term "person" includes one or more individuals, governments, governmental agencies, political subdivisions, labor unions, partnerships, associations, corporations, legal representatives, mutual companies, joint-stock companies, trusts, unincorporated organizations, trustees, trustees in cases under title 11, United States Code, or receivers.

(b) The term "employer" means a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year, and any agent of such a person, but such term does not include

(1) the United States, a corporation wholly owned by the Government of the United States, an Indian tribe, or any department or agency of the District of Columbia subject by statute to procedures of the competitive service (as defined in section 2102 of title 5 of the United States Code), or

(2) a bona fide private membership club (other than a labor organization) which is exempt from taxation under section 501(c) of the Internal Revenue Code of 1954 [26 USCS § 501(c)] except that during the first year after the date of enactment of the Equal Employment Opportunity Act of 1972 [enacted March 24, 1972], persons having fewer than twenty-five employees (and their agents) shall not be considered employers.

(c) The term "employment agency" means any person regularly undertaking with or without compensation to procure employees for an employer or to procure for employees opportunities to work for an employer and includes an agent of such a person.

(d) The term "labor organization" means a labor organization engaged in an industry affecting commerce, and any agent of such an organization, and includes any organization of any kind, any agency, or employee representation committee, group, association, or plan so engaged in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours, or other terms or conditions of employment, and any conference, general committee, joint or system board, or joint council so engaged which is subordinate to a national or international labor organization.

(e) A labor organization shall be deemed to be engaged in an industry affecting commerce if (1) it maintains or operates a hiring hall or hiring office which procures employees for an employer or procures for employees opportunities to work for an employer, or (2) the number of its members (or, where it is a labor organization composed of other labor organizations or their representatives, if the aggregate number of the members of such other labor organization) is (A) twenty-five or more during the first year after the date of enactment of the Equal Employment Opportunity Act of 1972 [enacted March 24, 1972], or (B) fifteen or more thereafter, and such labor organization--

(1) is the certified representative of employees under the provisions of the National Labor Relations Act, as amended, or the Railway Labor Act, as amended;

(2) although not certified, is a national or international labor organization or a local labor organization recognized or acting as the representative of employees of an employer or employers engaged in an industry affecting commerce; or

(3) has chartered a local labor organization or subsidiary body which is representing or actively seeking to represent employees of employers within the meaning of paragraph (1) or (2); or

(4) has been chartered by a labor organization representing or actively seeking to represent employees within the meaning of paragraph (1) or (2) has the local or subordinate body through which such employees may enjoy membership or become affiliated with such labor organization; or

(5) is a conference, general committee, joint or system board, or joint council subordinate to a national or international labor organization, which includes a labor organization engaged in an industry affecting commerce within the meaning of any of the preceding paragraphs of this subsection.

(f) The term "employee" means an individual employed by an employer, except that the term "employee" shall not include any person elected to public office in any State or political subdivision of any State by the qualified voters thereof, or any person chosen by such officer to be on such officer's personal staff, or an appointee on the policy making level or an immediate adviser with respect to the exercise of the constitutional or legal powers of the office. The exemption set forth in the preceding sentence shall not include employees subject to the civil service laws of a State government, governmental agency or political subdivision. With respect to employment in a foreign country, such term includes an individual who is a citizen of the United States.

(g) The term "commerce" means trade, traffic, commerce, transportation, transmission, or communication among the several States; or between a State and any place outside thereof; or within the District of Columbia, or a possession of the United States; or between points in the same State but through a point outside thereof.

(h) The term "industry affecting commerce" means any activity, business, or industry in commerce or in which a labor dispute would hinder or obstruct commerce or the free flow of commerce and includes any activity or industry "affecting commerce" within the meaning of the Labor-Management Reporting and Disclosure Act of 1959 [29 USCS §§ 401 et seq.], and further includes any governmental industry, business, or activity.

(i) The term "State" includes a State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, Wake Island, the Canal Zone, and Outer Continental Shelf lands defined in the Outer Continental Shelf Lands Act [43 USCS §§ 1331 et seq.].

(j) The term "religion" includes all aspects of religious observance and practice, as well as belief, unless an employer demonstrates that he is unable to reasonably accommodate to an employee's or prospective employee's religious observance or practice without undue hardship on the conduct of the employer's business.

(k) The terms "because of sex" or "on the basis of sex" include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions; and women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work, and nothing in section 703(h) of this title [42 USCS § 2000e-2(h)] shall be interpreted to permit otherwise. This subsection shall not require an employer to pay for health insurance benefits for abortion, except where the life of the mother would be endangered if the fetus were carried to term, or except where medical complications have arisen from an abortion: Provided, That nothing herein shall preclude an employer from providing abortion benefits or otherwise affect bargaining agreements in regard to abortion.

(l) The term "complaining party" means the Commission, the Attorney General, or a person who may bring an action or proceeding under this title.

(m) The term "demonstrates" means meets the burdens of production and persuasion.

(n) The term "respondent" means an employer, employment agency, labor organization, joint labor-management committee controlling apprenticeship or other training or retraining program, including an on-the-job training program, or Federal entity subject to section 717.

42 U.S.C. 2000e-2(1), section 703(i), Civil Rights Act of 1964, as amended.

42 U.S.C. 2000e-2:  Title 42. The Public Health and Welfare, Chapter 21. Civil Rights, Equal Employment Opportunites.

42 U.S.C. 2000e-2.  Unlawful employment practices.

(a) Employer practices. It shall be an unlawful employment practice for an employer--

(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or

(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin.

(b) Employment agency practices. It shall be an unlawful employment practice for an employment agency to fail or refuse to refer for employment, or otherwise to discriminate against, any individual because of his race, color, religion, sex, or national origin, or to classify or refer for employment any individual on the basis of his race, color, religion, sex, or national origin.

(c) Labor organization practices. It shall be an unlawful employment practice for a labor organization--

(1) to exclude or to expel from its membership, or otherwise to discriminate against, any individual because of his race, color, religion, sex, or national origin;

(2) to limit, segregate, or classify its membership or applicants for membership, or to classify or fail or refuse to refer for employment any individual, in any way which would deprive or tend to deprive any individual of employment opportunities, or would limit such employment opportunities or otherwise adversely affect his status as an employee or as an applicant for employment, because of such individual's race, color, religion, sex, or national origin; or

(3) to cause or attempt to cause an employer to discriminate against an individual in violation of this section.

(d) Training programs. It shall be an unlawful employment practice for any employer, labor organization, or joint labor-management committee controlling apprenticeship or other training or retraining, including on-the-job training programs to discriminate against any individual because of his race, color, religion, sex, or national origin in admission to, or employment in, any program established to provide apprenticeship or other training.

(e) Businesses or enterprises with personnel qualified on basis of religion, sex, or national origin; educational institutions with personnel of particular religions. Notwithstanding any other provision of this title [42 USCS §§ 2000e et seq.],

(1) it shall not be an unlawful employment practice for an employer to hire and employ employees, for an employment agency to classify, or refer for employment any individual, for a labor organization to classify its membership or to classify or refer for employment any individual, or for an employer, labor organization, or joint labor-management committee controlling apprenticeship or other training or retraining programs to admit or employ any individual in any such program, on the basis of his religion, sex, or national origin in those certain instances where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise, and

(2) it shall not be an unlawful employment practice for a school, college, university, or other educational institution or institution of learning to hire and employ employees of a particular religion if such school, college, university, or other educational institution or institution of learning is, in whole or in substantial part, owned, supported, controlled, or managed by a particular religion or by a particular religious corporation, association, or society, or if the curriculum of such school, college, university, or other educational institution or institution of learning is directed toward the propagation of a particular religion.

(f) Members of Communist Party or Communist-action or Communist-front organizations. As used in this title [42 USCS §§ 2000e et seq.], the phrase "unlawful employment practice" shall not be deemed to include any action or measure taken by an employer, labor organization, joint labor-management committee, or employment agency with respect to an individual who is a member of the Communist Party of the United States or of any other organization required to register as a Communist-action or Communist-front organization by final order of the Subversive Activities Control Board pursuant to the Subversive Activities Control Act of 1950.

(g) National security. Notwithstanding any other provision of this title [42 USCS §§ 2000e et seq.], it shall not be an unlawful employment practice for an employer to fail or refuse to hire and employ any individual for any position, for an employer to discharge any individual from any position, or for an employment agency to fail or refuse to refer any individual for employment in any position, or for a labor organization to fail or refuse to refer any individual for employment in any position, if--

(1) the occupancy of such position, or access to the premises in or upon which any part of the duties of such position is performed or is to be performed, is subject to any requirement imposed in the interest of the national security of the United States under any security program in effect pursuant to or administered under any statute of the United States or any Executive order of the President; and

(2) such individual has not fulfilled or has ceased to fulfill that requirement.

(h) Seniority or merit system; quantity or quality of production; ability tests; compensation based on sex and authorized by minimum wage provisions. Notwithstanding any other provision of this title [42 USCS §§ 2000e et seq.], it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority or merit system, or a system which measures earnings by quantity or quality of production or to employees who work in different locations, provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin, nor shall it be an unlawful employment practice for an employer to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race, color, religion, sex or national origin. It shall not be an unlawful employment practice under this title [42 USCS §§ 2000e et seq.] for any employer to differentiate upon the basis of sex in determining the amount of the wages or compensation paid or to be paid to employees of such employer if such differentiation is authorized by the provisions of section 6(d) of the Fair Labor Standards Act of 1938, as amended (29 U.S.C. 206(d)).

(i) Businesses or enterprises extending preferential treatment to Indians. Nothing contained in this title [42 USCS §§ 2000e et seq.] shall apply to any business or enterprise on or near an Indian reservation with respect to any publicly announced employment practice of such business or enterprise under which a preferential treatment is given to any individual because he is an Indian living on or near a reservation.

(j) Preferential treatment not to be granted on account of existing number or percentage imbalance. Nothing contained in this title [42 USCS §§ 2000e et seq.] shall be interpreted to require any employer, employment agency, labor organization, or joint labor-management committee subject to this title [42 USCS §§ 2000e et seq.] to grant preferential treatment to any individual or to any group because of the race, color, religion, sex, or national origin of such individual or group on account of an imbalance which may exist with respect to the total number or percentage of persons of any race, color, religion, sex, or national origin employed by an employer, referred or classified for employment by any employment agency or labor organization, admitted to membership or classified by any labor organization, or admitted to, or employed in, any apprenticeship or other training program, in comparison with the total number or percentage of persons of such race, color, religion, sex, or national origin in any community, State, section, or other area, or in the available work force in any community, State, section, or other area.

(k) Burden of proof in disparate impact cases.

(1) (A) An unlawful employment practice based on disparate impact is established under this title only if--

(i) a complaining party demonstrates that a respondent uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity; or

(ii) the complaining party makes the demonstration described in subparagraph (C) with respect to an alternative employment practice and the respondent refuses to adopt such alternative employment practice.

(B) (i) With respect to demonstrating that a particular employment practice causes a disparate impact as described in subparagraph (A)(i), the complaining party shall demonstrate that each particular challenged employment practice causes a disparate impact, except that if the complaining party can demonstrate to the court that the elements of a respondent's decisionmaking process are not capable of separation for analysis, the decisionmaking process may be analyzed as one employment practice.

(ii) If the respondent demonstrates that a specific employment practice does not cause the disparate impact, the respondent shall not be required to demonstrate that such practice is required by business necessity.

(C) The demonstration referred to by subparagraph (A)(ii) shall be in accordance with the law as it existed on June 4, 1989, with respect to the concept of "alternative employment practice".

(2) A demonstration that an employment practice is required by business necessity may not be used as a defense against a claim of intentional discrimination under this title.

(3) Notwithstanding any other provision of this title [42 USCS §§ 2000e et seq.], a rule barring the employment of an individual who currently and knowingly uses or possesses a controlled substance, as defined in schedules I and II of section 102(6) of the Controlled Substances Act (21 U.S.C. 802(6)), other than the use or possession of a drug taken under the supervision of a licensed health care professional, or any other use or possession authorized by the Controlled Substances Act or any other provision of Federal law, shall be considered an unlawful employment practice under this title only if such rule is adopted or applied with an intent to discriminate because of race, color, religion, sex, or national origin.

(l) Prohibition of discriminatory use of test scores. It shall be an unlawful employment practice for a respondent, in connection with the selection or referral of applicants or candidates for employment or promotion, to adjust the scores of, use different cutoff scores for, or otherwise alter the results of, employment related tests on the basis of race, color, religion, sex, or national origin.

(m) Impermissible consideration of race, color, religion, sex, or national origin in employment practices. Except as otherwise provided in this title [42 USCS §§ 2000e et seq.], an unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice.

(n) Resolution of challenges to employment practices implementing litigated or consent judgments or orders.

(1) (A) Notwithstanding any other provision of law, and except as provided in paragraph (2), an employment practice that implements and is within the scope of a litigated or consent judgment or order that resolves a claim of employment discrimination under the Constitution or Federal civil rights laws may not be challenged under the circumstances described in subparagraph (B).

(B) A practice described in subparagraph (A) may not be challenged in a claim under the Constitution or Federal civil rights laws--

(i) by a person who, prior to the entry of the judgment or order described in subparagraph (A), had--