To amend the National School Lunch Act to provide increased flexibility relating to the use of information submitted to determine eligibility under programs under that Act and the Child Nutrition Act of 1966, to provide for the establishment of commodity letter of credit (CLOC) demonstration programs in certain States, and to establish a program to assist schools in offering greater quantities of fresh fruits and vegetables under the school lunch program.

Summary: Amends the National School Lunch Act to permit eligibility information submitted under such Act or under the Child Nutrition Act of 1966 to be used for similar purposes under other nutrition programs with comparable standards. 
Amends commodity letter of credit (CLOC) demonstration program provisions to:  (1) make permanent the cash-CLOC program; and (2) require the creation of one statewide demonstration program if 80 percent of a State's schools agree to participate. 
Provides for the increased offering of fresh fruits and vegetables under the school lunch program.

SECTION 1. INCREASED FLEXIBILITY RELATING TO USE OF INFORMATION 
              SUBMITTED TO DETERMINE ELIGIBILITY UNDER PROGRAMS UNDER 
              THE NATIONAL SCHOOL LUNCH ACT AND THE CHILD NUTRITION ACT 
              OF 1966.

    Section 9(b)(5) of the National School Lunch Act (42 U.S.C. 
1758(b)(5)) is amended by adding at the end the following new 
sentences: ``Except as provided in the next sentence, a local agency 
responsible for administering programs under this Act or the Child 
Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) shall use information 
submitted for the purpose of receiving benefits under such programs 
only for the purpose of determining eligibility for such benefits. Such 
local agency may use such eligibility determination to demonstrate the 
eligibility for benefits under other Federal, State, or local means-
tested nutrition programs with comparable eligibility standards.''.

SEC. 2. CLOC PROGRAMS UNDER THE NATIONAL SCHOOL LUNCH ACT.

    Section 18(b) of the National School Lunch Act (42 U.S.C. 1769(b)) 
is amended--
            (1) in paragraph (1)--
                    (A) in the 1st sentence, by striking ``, and ending 
                September 30, 1994''; and
                    (B) in the 2nd sentence, by striking ``under this 
                subsection'' and inserting ``under this paragraph''; 
                and
            (2) by adding at the end the following new paragraphs:
    ``(3)(A) The Secretary shall, upon the request of a school district 
located in a State in which no commodity letter of credit (hereafter in 
this paragraph referred to as `CLOC') programs exist, establish and 
carry out a CLOC demonstration program for such school district under 
which the Secretary provides commodity letters of credit in lieu of all 
entitlement commodities for the school lunch program of such school 
district.
    ``(B) The Secretary may establish and carry out not more than 1 
CLOC demonstration program for any State.
    ``(C) A CLOC demonstration program established and carried out 
under this paragraph shall begin on the first July 1st which occurs 
after the date of the enactment of this paragraph.
    ``(D) The Secretary shall establish eligibility requirements for 
school districts that desire to participate in a CLOC demonstration 
program under this paragraph.
    ``(4)(A) The Secretary shall establish and carry out a statewide 
commodity letter of credit (hereafter in this paragraph referred to as 
`CLOC') demonstration program in 1 State under which the Secretary 
provides all school districts in such State commodity letters of credit 
in lieu of all entitlement commodities for the school lunch programs of 
such school districts.
    ``(B) The Secretary may establish and carry out the statewide CLOC 
demonstration program under this paragraph only in a State in which, on 
the date of the application by such State to the Secretary to establish 
such program, 80 percent or more of the school districts participating 
in the school lunch program under this Act have elected to participate 
in the statewide CLOC demonstration program.
    ``(C) In carrying out the statewide CLOC demonstration program, the 
Secretary shall provide that--
            ``(i) all commodity letters of credit be issued to all 
        school districts in the State in lieu of entitlement 
        commodities for the school lunch program beginning on the first 
        July 1st which occurs after the date of the enactment of this 
        paragraph;
            ``(ii) child care agencies and nutrition programs for the 
        elderly in the State shall be allowed to participate in the 
        program; and
            ``(iii) the State agencies responsible for commodity 
        distribution to child and elderly nutrition programs shall 
        administer the program.''.

SEC. 3. PROGRAM TO INCREASE OFFERINGS OF FRESH FRUITS AND VEGETABLES 
              UNDER THE NATIONAL SCHOOL LUNCH ACT.

    Section 18 of the National School Lunch Act (42 U.S.C. 1769) is 
amended by adding at the end the following new subsection:
    ``(e)(1) The Secretary shall establish a program beginning on the 
first July 1st which occurs after the date of the enactment of this 
subsection to assist schools in offering greater quantities of fresh 
fruits and vegetables to students in order to improve the overall 
nutritional quality of meals served under the school lunch program 
established under this Act.
    ``(2) The Secretary shall establish procedures under which all 
schools currently participating in the school lunch program established 
under this Act may apply to participate in the program.
    ``(3)(A) Subject to subparagraph (B), the Secretary shall, for each 
fiscal year in which a school participates in the program, provide 
commodity letters of credit to such school in an amount equal to 10 
percent of the total commodity entitlement of such school under section 
6 for each such fiscal year to be used for the purchase of fresh fruits 
and vegetables under the program.
    ``(B) The Secretary shall, for each fiscal year described in 
subparagraph (A), reduce the amount of the total commodity entitlement 
of such school under section 6 by the amount described in such 
subparagraph.
    ``(4) Not later than 2 years after the date of the establishment of 
the program, the Secretary shall report to the appropriate committees 
of the Congress on the impact of the program on participating schools, 
including--
            ``(A) the extent to which children at such schools 
        increased consumption of fresh fruits and vegetables; and
            ``(B) the effectiveness of the program in removing desired 
        commodities from the market place and the timeliness of such 
        removal.''.