SECTION 1. SHORT TITLE.

    This Act may be cited as the ``School Breakfast Improvement Act of 
2003''.

SEC. 2. SEVERE NEED ASSISTANCE.

    Section 4(d)(2) of the Child Nutrition Act of 1966 (42 U.S.C. 
1773(d)(2)) is amended--
            (1) by striking ``100 percent'' and all that follows 
        through ``food, or''; and
            (2) by striking ``, whichever is less''.

SEC. 3. STARTUP AND EXPANSION GRANTS FOR SCHOOL BREAKFAST PROGRAMS.

    Section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) is 
amended by adding at the end the following:
    ``(f) Startup and Expansion Grants for School Breakfast Programs.--
            ``(1) Definition of eligible school.--In this subsection, 
        the term `eligible school' means--
                    ``(A) in the case of a startup grant, a school that 
                agrees to operate the school breakfast program 
                established with the assistance provided under this 
                subsection for a period of not less than 3 years; and
                    ``(B) in the case of an expansion grant, a school 
                that has operated a school breakfast program 
                established for a period of not less than 3 consecutive 
                years.
            ``(2) Grants.--The Secretary shall make grants, on a 
        competitive basis, to State educational agencies, in a total 
        amount of not more than $10,000,000 for each fiscal year from 
        funds made available to the Secretary, to assist eligible 
        schools in initiating and expanding school breakfast programs, 
        of which not less than $7,000,000 for each fiscal year shall be 
        used for expansion grants.
            ``(3) Uses.--A State educational agency shall use grants 
        made available under this subsection to assist eligible 
        schools, during the first school year eligible schools initiate 
        or expand school breakfast programs, with expenses incurred in 
        initiating or expanding school breakfast programs.
            ``(4) Supplementary funds.--A grant under this subsection 
        shall supplement any payment to which a State educational 
        agency is entitled under subsection (b).
            ``(5) Plan.--To be eligible to receive a grant under this 
        subsection, a State educational agency shall submit to the 
        Secretary a plan to initiate or expand school breakfast 
        programs conducted in the State, including a description of the 
        manner in which the State educational agency shall provide 
        technical assistance and funding to eligible schools in the 
        State to initiate or expand the programs.
            ``(6) State educational agency preferences for startup 
        grants.--In making a grant under this subsection for a fiscal 
        year to initiate a school breakfast program, the Secretary 
        shall give preference to a State educational agency that--
                    ``(A) has not more than 60 percent of schools in 
                the State that are participating in the school lunch 
                program also participating in the school breakfast 
                program; or
                    ``(B) has not more than 35 percent of the students 
                in the State receiving free or reduced price lunch also 
                receiving free or reduced price breakfasts.
            ``(7) Reallocation.--The Secretary shall act in a timely 
        manner to recover and reallocate to other State educational 
        agencies or States any amount made available to a State 
        educational agency or State under this subsection that is not 
        used by the agency or State within a reasonable period (as 
        determined by the Secretary).
            ``(8) Application.--The Secretary shall allow application 
        by State educational agencies on an annual basis for grants 
        under this subsection.
            ``(9) Preferences by state educational agencies and 
        states.--In allocating funds within the State, each State 
        educational agency shall give preference for assistance under 
        this subsection to an eligible school that demonstrates the 
        greatest need for assistance to initiate or expand a school 
        breakfast program, as determined by the State educational 
        agency.
            ``(10) Maintenance of effort.--The expenditure of funds 
        from State and local sources for the maintenance of the school 
        breakfast program shall not be diminished as a result of grants 
        made available under this subsection.''.

SEC. 4. COMMODITY ASSISTANCE FOR SCHOOL BREAKFAST PROGRAM.

    Section 6 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1755) is amended--
            (1) by striking subsection (b) and inserting the following:
    ``(b) Commodity Assistance for School Lunch and Breakfast 
Programs.--Not later than September 30 of the following school year, 
the Secretary shall deliver to each State participating in--
            ``(1) the school lunch program established under this Act, 
        commodities valued at the total level of assistance authorized 
        under subsection (c) for each school year for the school lunch 
        program in the State; and
            ``(2) the school breakfast program established under the 
        Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), 
        commodities valued at the total level of assistance authorized 
        under subsection (d) for each school year for the school 
        breakfast program in the State.''; and
            (2) by striking subsection (d) and inserting the following:
    ``(d) Value of Donated Foods for School Breakfast Program.--
            ``(1) In general.--Subject to paragraph (2), in the case of 
        the school breakfast program established under the Child 
        Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), the value of 
        donated foods shall be 5 cents.
            ``(2) Adjustment.--
                    ``(A) In general.--The value of donated foods under 
                paragraph (1) shall be adjusted on July 1, 2004, and 
                each July 1 thereafter, to reflect changes in the Price 
                Index for Food Used in Schools and Institutions.
                    ``(B) Food components.--
                            ``(i) In general.--The Index shall be 
                        computed using 5 major food components of the 
                        Producer Price Index of the Bureau of Labor 
                        Statistics (cereal and bakery products, meats, 
                        poultry and fish, dairy products, processed 
                        fruits and vegetables, and fats and oils).
                            ``(ii) Weighting.--Each component shall be 
                        weighed using the same relative weight as 
                        determined by the Bureau of Labor Statistics.
                    ``(C) Time period.--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.
                    ``(D) Rounding.--The adjustment shall be computed 
                to the nearest \1/4\ cent.
            ``(3) Calculation.--
                    ``(A) In general.--Subject to subparagraph (B), for 
                each school year, the total amount of commodity 
                assistance, or cash in lieu of commodity assistance, 
                available to a State for the school breakfast program 
                shall be the product obtained by multiplying--
                            ``(i) the number of breakfasts served in 
                        the preceding school year; by
                            ``(ii) the rate established under 
                        paragraphs (1) and (2).
                    ``(B) Reconciliation.--After the end of each school 
                year, the Secretary shall--
                            ``(i) reconcile the number of breakfasts 
                        served by schools in each State with the number 
                        of breakfasts served by schools in each State 
                        during the preceding school year; and
                            ``(ii) increase or reduce subsequent 
                        commodity assistance, or cash in lieu of 
                        commodity assistance, provided to each State 
                        based on the reconciliation.''.

SEC. 5. UNIVERSAL SCHOOL BREAKFAST PILOT PROJECTS.

    Section 18 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1769) is amended by added at the end the following:
    ``(h) Universal School Breakfast Pilot Projects.--
            ``(1) In general.--The Secretary shall make grants to State 
        agencies to conduct pilot projects in high schools under the 
        jurisdiction of not more than 6 school food authorities 
        approved by the Secretary to provide free breakfasts to high 
        school students, without regard to family income.
            ``(2) Nominations.--A State agency that seeks a grant under 
        this subsection shall submit to the Secretary nominations of 
        school food authorities to participate in a pilot project under 
        this subsection.
            ``(3) Approval.--The Secretary shall approve for 
        participation in pilot projects under this subsection high 
        schools under the jurisdiction of not more than 6 nominated 
        school food authorities selected so as to--
                    ``(A) target the pilot projects toward school food 
                authorities that have--
                            ``(i) the highest percentage of students 
                        eligible for free or reduced price meals under 
                        the school lunch or breakfast program; and
                            ``(ii) the lowest percentage of students 
                        that receive free or reduced price meals under 
                        the school lunch or breakfast program; and
                    ``(B) provide for an equitable distribution of 
                pilot projects among urban and rural high schools.
            ``(4) Grants to school food authorities.--A State agency 
        receiving a grant under paragraph (1) shall make grants to 
        school food authorities to conduct the pilot projects described 
        in paragraph (1).
            ``(5) Duration of pilot projects.--Subject to the 
        availability of funds made available to carry out this 
        subsection, a school food authority receiving amounts under a 
        grant to conduct a pilot project described in paragraph (1) 
        shall conduct the project during a period of 3 successive 
        school years.
            ``(6) Waiver authority.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary may waive the 
                requirements of this Act and the Child Nutrition Act of 
                1966 (42 U.S.C. 1771 et seq.) relating to counting of 
                meals, applications for eligibility, and related 
                requirements that would preclude the Secretary from 
                making a grant to conduct a pilot project under 
                paragraph (1).
                    ``(B) Nonwaivable requirements.--The Secretary may 
                not waive a requirement under subparagraph (A) if the 
                waiver would prevent a program participant, a potential 
                program participant, or a school from receiving all of 
                the benefits and protections of this Act, the Child 
                Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), or a 
                Federal law (including a regulation) that protects an 
individual constitutional right or a statutory civil right.
            ``(7) Requirements for participation in pilot project.--To 
        be eligible to participate in a pilot project under this 
        subsection--
                    ``(A) a State agency--
                            ``(i) shall submit an application to the 
                        Secretary at such time and in such manner as 
                        the Secretary shall establish to meet criteria 
                        the Secretary has established to enable a valid 
                        evaluation to be conducted; and
                            ``(ii) shall provide such information 
                        relating to the operation and results of the 
                        pilot project as the Secretary may reasonably 
                        require; and
                    ``(B) a school food authority--
                            ``(i) shall agree to serve all breakfasts 
                        at no charge to all high school students 
                        enrolled in participating high schools;
                            ``(ii) shall not have a history of 
                        violations of this Act or the Child Nutrition 
                        Act of 1966 (42 U.S.C. 1771 et seq.);
                            ``(iii) shall agree to use innovative 
                        methods for making breakfasts available to 
                        eligible students, such as making breakfasts 
                        available to students after the beginning of 
                        the academic day or using alternative breakfast 
                        delivery and marketing methods; and
                            ``(iv) shall meet all other requirements 
                        that the Secretary may reasonably require.
            ``(8) Reports.--The Secretary, acting through the 
        Administrator of the Food and Nutrition Service, shall submit 
        to Congress an interim and final report on the status of the 
        pilot projects.
            ``(9) Reimbursement.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a school conducting a pilot project 
                under this subsection shall receive a total Federal 
                reimbursement under the school breakfast program in an 
                amount that is equal to the total Federal reimbursement 
                for the school for the prior year under the program 
                (adjusted to reflect changes 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 and adjusted for 
                fluctuations in enrollment).
                    ``(B) Excess needs.--Funds required for the pilot 
                project in excess of the level of reimbursement 
                received by the school for the prior year (adjusted to 
                reflect changes described in subparagraph (A) and 
                adjusted for fluctuations in enrollment) may be taken 
                from any non-Federal source or from amounts provided 
                under this subsection.
            ``(10) Funding.--
                    ``(A) In general.--On October 1, 2003, and on each 
                October 1 thereafter through 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 funds to carry out this 
                subsection.
                    ``(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.''.

SEC. 6. EFFECTIVE DATE.

    This Act and the amendments made by this Act take effect on October 
1, 2003.
School Breakfast Improvement Act of 2003 - Amends the Child Nutrition Act of 1966 (CNA) and the Richard B. Russell National School Lunch Act (NLSA) to revise requirements for the school breakfast program.

Revises severe need assistance under CNA to provide that eligible schools are entitled to receive a specified meal reimbursement rate (eliminating an alternative lesser payment of the operating costs of the breakfast program).

Directs the Secretary of Agriculture, under CNA, to make competitive startup and expansion grants to State educational agencies to assist eligible schools in initiating and expanding school breakfast programs.

Provides for commodity assistance for the school breakfast program (in addition to current provisions for commodity assistance for the school lunch program under NLSA).

Directs the Secretary, under NLSA, to make grants to State agencies for pilot projects to provide free breakfasts to high school students, without regard to family income. Requires the Secretary to approve for project participation high schools under the jurisdiction of up to six nominated school food authorities selected so as to: (1) target projects toward such authorities that have the highest percentage of students eligible for free or reduced price meals under the school lunch or breakfast program and the lowest percentage of students that receive such meals; and (2) equitably distribute projects among urban and rural high schools.
A bill to amend the Child Nutrition Act of 1966 and the Richard B. Russell National School Lunch Act to improve the school breakfast program.