School Food Modernization Act

Summary: School Food Modernization Act This bill amends the Richard B. Russell National School Lunch Act to direct the Department of Agriculture (USDA) to issue loan guarantees to local educational agencies (LEAs), school food authorities, tribal organizations, and other eligible entities to finance infrastructure improvements or equipment purchases to facilitate their provision of healthy meals through the school lunch program. USDA must give preference to applicants that demonstrate a substantial or disproportionate need for food service infrastructure or durable equipment, and shall establish fees for the loan guarantee program that are sufficient to cover the federal government's administrative costs in operating the program. USDA must also&nbsp;award competitive matching grants to assist LEAs, school food authorities, tribal organizations, and other eligible entities&nbsp;in purchasing the durable equipment and infrastructure they need to serve healthier meals and improve food safety. In doing so, USDA must give grant priority to applicants that: (1) have identified and are reasonably expected to meet an unmet local or community need, and (2) are located in states that have enacted funding measures to assist them with such purchases.  In addition,&nbsp;USDA must award competitive matching grants to experienced third-party training institutions to provide school food service personnel with the training and technical assistance they need to: (1) meet school lunch program nutrition standards, and (2) improve the efficacy and efficiency of the school lunch and breakfast programs.  The bill authorizes these grant and loan programs through FY2022. USDA&nbsp;must complete a study on the use of state administrative expense funds. The bill also &nbsp;rescinds $35 million of the Department of Education's unobligated balance available for administrative expenses. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``School Food Modernization Act''.

SEC. 2. LOAN GUARANTEES AND GRANTS TO FINANCE CERTAIN IMPROVEMENTS TO 
              SCHOOL LUNCH FACILITIES.

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

``SEC. 27. LOAN GUARANTEES AND GRANTS TO FINANCE CERTAIN IMPROVEMENTS 
              TO SCHOOL LUNCH FACILITIES.

    ``(a) Definitions.--In this section:
            ``(1) Durable equipment.--The term `durable equipment' 
        means durable food preparation, handling, cooking, serving, and 
        storage equipment greater than $500 in value.
            ``(2) Eligible entity.--The term `eligible entity' means--
                    ``(A) a local educational agency or a school food 
                authority administering or operating a school lunch 
                program;
                    ``(B) a tribal organization; or
                    ``(C) a consortium that includes a local 
                educational agency or school food authority described 
                in subparagraph (A), a tribal organization, or both.
            ``(3) Infrastructure.--The term `infrastructure' means a 
        food storage facility, kitchen, food service facility, 
        cafeteria, dining room, or food preparation facility.
            ``(4) Local educational agency.--The term `local 
        educational agency' has the meaning given the term in section 
        8101 of the Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 7801).
            ``(5) School food authority.--The term `school food 
        authority' has the meaning given the term in section 210.2 of 
        title 7, Code of Federal Regulations (or any successor 
        regulation).
            ``(6) Tribal organization.--The term `tribal organization' 
        has the meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 5304).
    ``(b) Loan Guarantees for Assistance to Schools for Infrastructure 
Improvements and Durable Equipment Necessary To Provide Healthy Meals 
Through School Lunch Programs.--
            ``(1) Authority to guarantee loans.--The Secretary shall 
        issue a loan guarantee to an eligible entity for purposes of 
        financing the construction, remodeling, or expansion of 
        infrastructure or the purchase of durable equipment that the 
        Secretary determines will assist the eligible entity in 
        providing healthy meals through a school lunch program.
            ``(2) Competitive basis.--Subject to paragraph (3), the 
        Secretary shall select eligible entities to receive a loan 
        guarantee under this subsection on a competitive basis.
            ``(3) Preferences.--In issuing a loan guarantee under this 
        subsection, the Secretary shall give a preference to an 
        eligible entity that, as compared with other eligible entities 
        seeking a loan guarantee under this subsection, the Secretary 
        determines demonstrates substantial or disproportionate--
                    ``(A) need for infrastructure improvement; or
                    ``(B) durable equipment need or impairment.
            ``(4) Oversight.--The Secretary shall establish procedures 
        to enable the Secretary to oversee the construction, 
        remodeling, or expansion of infrastructure or the purchase of 
        durable equipment for which a loan guarantee is issued under 
        this subsection.
            ``(5) Guarantee amount.--A loan guarantee issued under this 
        subsection may not guarantee more than 80 percent of the 
        principal amount of the loan.
            ``(6) Fees.--The Secretary shall establish fees with 
        respect to loan guarantees under this subsection that, as 
        determined by the Secretary--
                    ``(A) are sufficient to cover all the 
                administrative costs to the Federal Government for the 
                operation of the program;
                    ``(B) may be in the form of an application or 
                transaction fee, or interest rate adjustment; and
                    ``(C) may be based on the risk premium associated 
                with the loan or loan guarantee, taking into 
                consideration--
                            ``(i) the price of Treasury obligations of 
                        a similar maturity;
                            ``(ii) prevailing market conditions;
                            ``(iii) the ability of the eligible 
                        infrastructure project to support the loan 
                        guarantee; and
                            ``(iv) the total amount of the loan 
                        guarantee.
            ``(7) Funding.--
                    ``(A) In general.--To provide loan guarantees under 
                this subsection, the Secretary shall reserve 
                $300,000,000 of the loan guarantee authority remaining 
                and unobligated as of the date of enactment of the 
                School Food Modernization Act under the program of 
                community facility guaranteed loans under section 
                306(a) of the Consolidated Farm and Rural Development 
                Act (7 U.S.C. 1926(a)).
                    ``(B) Technical assistance.--The Secretary may use 
                not more than 5 percent of the amount made available to 
                carry out this subsection for each fiscal year to 
                provide technical assistance to applicants and 
                prospective applicants in preparing applications and 
                creating financing packages that leverage a mix of 
                public and private funding sources.
    ``(c) Equipment Grants.--
            ``(1) Authority to make grants.--Beginning in fiscal year 
        2017 and subject to the availability of appropriations, the 
        Secretary shall make grants, on a competitive basis, to 
        eligible entities to assist the eligible entities in purchasing 
        the durable equipment and infrastructure needed to serve 
        healthier meals and improve food safety.
            ``(2) Priority.--In awarding grants under this subsection, 
        the Secretary shall give priority to--
                    ``(A) eligible entities in States that have enacted 
                comparable statutory grant funding mechanisms or that 
                have otherwise appropriated funds to assist eligible 
                entities in purchasing the durable equipment and 
                infrastructure needed to serve healthier meals and 
                improve food safety, as determined by the Secretary; 
                and
                    ``(B) eligible entities that have identified and 
                are reasonably expected to meet an unmet local or 
                community need, including through--
                            ``(i) a public-private partnership or 
                        partnership with a food pantry or other low-
                        income assistance agency; or
                            ``(ii) the provision for or allowance of 
                        kitchen or cafeteria usage by related or 
                        outside community organizations.
            ``(3) Federal share.--
                    ``(A) In general.--The Federal share of costs for 
                assistance funded through a grant awarded under this 
                subsection shall not exceed 80 percent of the total 
                cost of the durable equipment or infrastructure.
                    ``(B) Matching.--As a condition on receiving a 
                grant under this subsection, an eligible entity shall 
                provide matching support in the form of cash or in-kind 
                contributions.
                    ``(C) Waiver.--The Secretary may waive or vary the 
                requirements of subparagraphs (A) and (B) if the 
                Secretary determines that undue hardship or effective 
                exclusion from participation in the grant program under 
                this subsection would otherwise result.
            ``(4) Authorization of appropriations.--
                    ``(A) In general.--There are authorized to be 
                appropriated $25,000,000 to carry out this subsection 
                for each of fiscal years 2017 through 2022.
                    ``(B) Technical assistance.--The Secretary may use 
                not more than 5 percent of the amount made available to 
                carry out this subsection for each fiscal year to 
                provide technical assistance to applicants and 
                prospective applicants in preparing applications and 
                creating financing packages that leverage a mix of 
                public and private funding sources.''.

SEC. 3. TRAINING AND TECHNICAL ASSISTANCE FOR SCHOOL FOOD SERVICE 
              PERSONNEL.

    The Richard B. Russell National School Lunch Act is amended by 
inserting after section 21 (42 U.S.C. 1769b-1) the following:

``SEC. 21A. TRAINING AND TECHNICAL ASSISTANCE FOR SCHOOL FOOD SERVICE 
              PERSONNEL.

    ``(a) In General.--The Secretary shall carry out a grant program 
under which the Secretary shall award grants, on a competitive basis, 
to provide support to eligible third-party training institutions 
described in subsection (b) to develop and administer training and 
technical assistance for school food service personnel to meet 
nutrition standards under section 4(b)(3) and improve efficacy and 
efficiency of the school lunch program under this Act and the school 
breakfast program established by section 4 of the Child Nutrition Act 
of 1966 (42 U.S.C. 1773).
    ``(b) Eligible Third-Party Institutions Defined.--For purposes of 
this section, the term `eligible third-party institution' means--
            ``(1) a nonprofit organization with demonstrated experience 
        in food or nutrition services training and technical 
        assistance;
            ``(2) an institution of higher education as defined in 
        section 102 of the Higher Education Act of 1965 (20 U.S.C. 
        1002);
            ``(3) an area career and technical education school as 
        defined in section 3 of the Carl D. Perkins Career and 
        Technical Education Act of 2006 (20 U.S.C. 2302); or
            ``(4) a consortium of entities described in paragraphs (1), 
        (2), and (3).
    ``(c) Criteria for Eligible Third-Party Institutions.--The 
Secretary shall establish specific criteria that eligible third-party 
training institutions shall meet to qualify to receive grants under 
this section, which shall include--
            ``(1) a demonstrated capacity to administer effective 
        training and technical assistance programming to school food 
        service personnel;
            ``(2) prior, successful experience in providing or engaging 
        in training and technical assistance programming or applied 
        research activities involving eligible entities, school food 
        service administrators, or directors;
            ``(3) prior, successful experience in developing relevant 
        educational training tools or course materials or curricula on 
        topics addressing child and school nutrition or the updated 
        nutrition standards under section 4(b)(3); and
            ``(4) the ability to deliver effective and cost-efficient 
        training and technical assistance programming to school food 
        service personnel--
                    ``(A) at training sites that are located within a 
                proximate geographic distance to schools, central 
                kitchens, or other worksites; or
                    ``(B) through an online training and assistance 
                program on topics that do not require in-person 
                attendance.
    ``(d) Program Assistance.--The Secretary shall assist the 
institutions receiving grants under this section in publicizing and 
disseminating training and other project materials and online tools to 
the maximum extent practicable.
    ``(e) Federal Share.--
            ``(1) In general.--The Federal share of costs for training 
        and technical assistance funded through a grant awarded under 
        this section shall not exceed 80 percent of the total cost of 
        the training and technical assistance.
            ``(2) Matching.--As a condition of receiving a grant under 
        this section, the eligible third-party training institution 
        shall provide matching support in the form of cash or in-kind 
        contributions.
    ``(f) Oversight.--The Secretary shall establish procedures to 
enable the Secretary--
            ``(1) to oversee the administration and operation of 
        training and technical assistance funded through grants awarded 
        under this section; and
            ``(2) to ensure that the training and assistance is 
        operated consistent with the goals and requirements of this 
        Act.
    ``(g) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        $10,000,000 to carry out this section for each of fiscal years 
        2017 through 2022.
            ``(2) Technical assistance.--The Secretary may use not more 
        than 5 percent of the amount made available to carry out this 
        section for each fiscal year to provide technical assistance to 
        applicants and prospective applicants in preparing applications 
        and creating financing packages that leverage a mix of public 
        and private funding sources.''.

SEC. 4. REPORT TO CONGRESS.

    Not later than 1 year after funds are made available to carry out 
sections 21A and 27 of the Richard B. Russell National School Lunch Act 
(as added by this Act), and annually thereafter, the Secretary of 
Agriculture shall submit to Congress a report on the progress of the 
Secretary in implementing such sections.

SEC. 5. STUDY AND REPORT TO CONGRESS ON THE USE OF STATE ADMINISTRATIVE 
              EXPENSE FUNDS.

    (a) Study.--The Secretary of Agriculture shall conduct a study on--
            (1) the use of State administrative expense funds by State 
        agencies;
            (2) innovative, effective, replicable, model policies, 
        practices, and training methods that may be implemented using 
        State administrative expense funds;
            (3) factors that interfere with the ability of State 
        agencies to use State administrative expense funds effectively; 
        and
            (4) how State administrative expense funds may be used to 
        encourage the implementation of effective and consistent school 
        nutrition workforce training, with particular emphasis on 
        training and technical assistance to improve the implementation 
        of nutrition standards for all foods sold in schools 
        including--
                    (A) nutrition standards for foods sold in schools 
                other than foods provided under the Child Nutrition Act 
                of 1966 and the Richard B. Russell National School 
                Lunch Act;
                    (B) local school wellness policies;
                    (C) updated professional standards for school 
                nutrition professionals; and
                    (D) other school food service practices, standards, 
                and operational requirements as the Secretary may 
                identify as requiring additional assistance.
    (b) Development and Use of Assessment Tool.--
            (1) In general.--The Secretary of Agriculture shall develop 
        an assessment tool for the purpose of carrying out the study 
        under subsection (a). Such tool shall include a general 
        methodology for evaluating effectiveness of State agencies in 
        providing training and technical assistance using State 
        administrative expense funds.
            (2) Coordination with other entities.--In developing the 
        assessment tool under paragraph (1), the Secretary shall 
        consider public research, stakeholder input, and direct 
        feedback from school nutrition personnel.
    (c) Report to Congress.--Not later than 18 months after the date of 
enactment of this Act, the Secretary shall prepare and submit to the 
Committee on Agriculture, Nutrition, and Forestry of the Senate and the 
Committee on Education and the Workforce of the House of 
Representatives a report containing--
            (1) a summary of the study conducted under subsection (a);
            (2) any findings and recommendations resulting from such 
        study;
            (3) a plan for disseminating to State agencies best 
        practices on the use of State administrative expense funds for 
        training and technical assistance; and
            (4) recommendations, if any, for the ongoing monitoring and 
        improvement of training and technical assistance carried out by 
        State agencies using State administrative expense funds.
    (d) Definitions.--In this section:
            (1) State administrative expense funds.--The term ``State 
        administrative expense funds'' means the State administrative 
        expense funds described in part 235 of title 7, Code of Federal 
        Regulations (or any successor regulation).
            (2) State agency.--The term ``State agency'' has the 
        meaning given the term in section 235.2 of title 7, Code of 
        Federal Regulations (or any successor regulation).

SEC. 6. OFFSET.

    Of the unobligated balance available for administrative expenses of 
the Department of Education, $35,000,000 is rescinded.