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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1269 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                S. 1269

To amend the National School Lunch Act to protect school districts and 
   the Department of Agriculture from anti-competitive activities of 
  suppliers that sell commodities to schools that participate in the 
 school lunch program, the school breakfast program, the special milk 
  program, and the summer food service program for children, and for 
                            other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                July 20 (legislative day, June 30), 1993

 Mr. Leahy (for himself and Mr. Harkin) introduced the following bill; 
  which was read twice and referred to the Committee on Agriculture, 
                        Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL

 
To amend the National School Lunch Act to protect school districts and 
   the Department of Agriculture from anti-competitive activities of 
  suppliers that sell commodities to schools that participate in the 
 school lunch program, the school breakfast program, the special milk 
  program, and the summer food service program for children, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``School Lunch Protection Act of 
1993''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) in recent years, there has been an alarming number of 
        instances of price-fixing and bid-rigging regarding foods 
        purchased for--
                    (A) the school lunch program established under the 
                National School Lunch Act (42 U.S.C. 1751 et seq.); and
                    (B) the school breakfast program established under 
                the Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
                seq.);
            (2) during the past several years, the Antitrust Division 
        of the Department of Justice has filed over 95 criminal cases 
        against persons accused of bid-rigging conspiracies, false 
        statements, mail fraud, price-fixing, and similar activities 
        involving dairy products sold to schools or the Department of 
        Defense;
            (3) over 30 grand juries in States are investigating 
        similar activities, especially in connection with activities 
        involving the dairy industry;
            (4) 45 corporations and 48 individuals have been convicted 
        by Federal courts of similar activities, and total fines and 
        civil damages of approximately $100,000,000 have been assessed 
        in Federal and State actions for similar activities;
            (5) a report of the Comptroller General of the United 
        States noted that, as of March 1992, the Secretary of 
        Agriculture had neither suspended nor debarred any of the 13 
        dairy companies or 28 individuals convicted, as of March 1992, 
        of milk contract bid-rigging from participating in the school 
        lunch and breakfast programs;
            (6) effective educational and monitoring programs can 
        greatly reduce the incidence of price-fixing and bid-rigging by 
        companies that sell products to schools;
            (7) reducing the incidence of price-fixing and bid-rigging 
        in connection with the school lunch and breakfast programs 
        could save school districts, parents, and taxpayers millions of 
        dollars per year;
            (8) the Comptroller General of the United States has noted 
        that bid-rigging awareness training is an effective means of 
        deterring improper collusion and bid-rigging; and
            (9) the Comptroller General of the United States in a 
        General Accounting Office report addressed many of the concerns 
        described in this section with respect to bid rigging in the 
        school lunch program.

SEC. 3. DUTIES OF THE SECRETARY RELATING TO ANTICOMPETITIVE ACTIVITIES.

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

``SEC. 25. DUTIES OF THE SECRETARY RELATING TO ANTICOMPETITIVE 
              ACTIVITIES.

    ``(a) In General.--The Secretary shall--
            ``(1) provide advice, training, technical assistance, and 
        guidance to representatives of States, contracting entities, 
        and school food service authorities regarding means of 
        identifying and preventing anticompetitive activities relating 
        to the acquisition of commodities for--
                    ``(A) the school lunch program established under 
                this Act;
                    ``(B) the school breakfast program established 
                under the Child Nutrition Act of 1966 (42 U.S.C. 1771 
                et seq.);
                    ``(C) the special milk program established under 
                section 3 of the Child Nutrition Act of 1966 (42 U.S.C. 
                1772); and
                    ``(D) the summer food service program for children 
                established under section 13 of this Act;
            ``(2) provide information to, and fully cooperate with, the 
        Attorney General and State attorneys general regarding 
        investigations of anticompetitive activities relating to the 
        acquisition of commodities for the programs referred to in 
        paragraph (1);
            ``(3) provide awareness training, training films, technical 
        advice, troubleshooting advice, and other guidance related to 
        avoiding or detecting bid-rigging, price-fixing, or other 
        anticompetitive activities concerning the acquisition of 
        commodities for the programs; and
            ``(4) debar or suspend a person under section 12A, 
        applicable regulations issued by the Secretary (such as part 
        3017 of chapter XXX of subtitle B of title 7, Code of Federal 
        Regulations), and other applicable Federal laws (including 
        regulations).
    ``(b) Food Service Management Institute.--The Secretary may request 
assistance from the food service management institute authorized under 
section 21 in carrying out this section. The Secretary may contract 
with the institute to carry out all or part of the duties described in 
paragraphs (1) and (3) of subsection (a).
    ``(c) Funding.--The Secretary shall make available to carry out 
this section not less than \1/2\ of 1 percent of the funds made 
available for the salaries and expenses of the Food and Nutrition 
Service for each fiscal year.
    ``(d) Termination.--The authority provided by this section shall 
terminate on September 30, 1999.''.

SEC. 4. NONPROCUREMENT DEBARMENT.

    (a) In General.--The National School Lunch Act is amended by 
inserting after section 12 (42 U.S.C. 1760) the following new section:

``SEC. 12A. NONPROCUREMENT DEBARMENT.

    ``(a) In General.--Except as provided in subsections (b) and (c), 
the Secretary shall debar a person, and each principal and affiliate of 
the person, for at least 1 year from supplying, providing, or selling a 
product or commodity to a school, school district, school food service 
authority, or school district consortium participating in the school 
lunch program established under this Act, the school breakfast program 
established under the Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
seq.), the special milk program established under section 3 of the 
Child Nutrition Act of 1966 (42 U.S.C. 1772), or the summer food 
service program for children established under section 13 of this Act 
if the person, or a principal or affiliate of the person, is convicted, 
in connection with supplying, providing, or selling a product or 
commodity to any school, school district, school food service 
authority, or school district consortium participating in any of the 
programs, or to any Federal agency, of--
            ``(1) an anticompetitive activity, including bid-rigging, 
        price-fixing, the allocation of customers between competitors, 
        or other violation of Federal or State law related to 
        protecting competition;
            ``(2) mail fraud, bribery, theft, or embezzlement;
            ``(3) making a false statement or claim;
            ``(4) making a false declaration before a grand jury; or
            ``(5) other obstruction of justice.
    ``(b) Subsequent Convictions.--Except as provided in subsection 
(c), if a person, or a principal or affiliate of the person, is 
convicted of an activity described in subsection (a) after having been 
previously debarred under this section, the person, and each principal 
and affiliate of the person, shall be debarred for at least 3 years 
from supplying, providing, or selling a product or commodity to any 
school, school district, school food service authority, or school 
district consortium participating in a program described in subsection 
(a) or to any Federal agency.
    ``(c) Waivers.--The Secretary may waive a debarment imposed under 
subsection (a) or (b) if the Secretary determines that debarment 
would--
            ``(1) likely have a significant adverse effect on 
        competition or prices in the relevant market or nationally;
            ``(2) seriously interfere with the ability of a school, 
        school district, school food service authority, or school 
        district consortium to procure a needed product or commodity 
        for a program described in subsection (a);
            ``(3) be 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; or
            ``(4) not be in the public interest.
    ``(d) Relationship to Other Authority.--A debarment imposed under 
this section shall not reduce or diminish the authority of a Federal, 
State, or local government agency or court to--
            ``(1) penalize, fine, suspend, debar, or otherwise punish, 
        in a civil or criminal action, a person or a principal or 
        affiliate of the person; or
            ``(2) imprison, debar, suspend, fine, or otherwise punish a 
        person or a principal or affiliate of the person.
    ``(e) Regulations.--The Secretary shall issue such regulations as 
are necessary to carry out this section.''.
    (b) Implementation.--
            (1) Application.--The amendment made by subsection (a) 
        shall not apply to a conviction that is based on an activity 
        that took place prior to the date of enactment of this Act.
            (2) Regulations.--Not later than July 1, 1994, the 
        Secretary of Agriculture shall amend the nonprocurement 
        regulations established under part 3017 of chapter XXX of 
        subtitle B of title 7, Code of Federal Regulations, to conform 
        with section 12A of the National School Lunch Act (as added by 
        subsection (a)).
            (3) Consistent debarment policy.--Not later than 90 days 
        after the date of enactment of this Act, the Secretary of 
        Agriculture, in consultation with the Director of the Office of 
        Management and Budget, the Secretary of Defense, and such other 
        officials as the Secretary of Agriculture determines are 
        appropriate, shall advise the appropriate committees of 
        Congress and the Comptroller General of the United States as to 
        the appropriateness and usefulness of a consistent debarment 
        policy under--
                    (A) the Federal acquisition regulations issued 
                under title 48, Code of Federal Regulations; and
                    (B) Federal nonprocurement regulations.
            (4) No reduction in authority.--
                    (A) In general.--The authority of the Secretary of 
                Agriculture that exists on the date of enactment of 
                this Act to debar or suspend a person, or a principal 
                or affiliate of the person, from Federal financial and 
                nonfinancial assistance and benefits under Federal 
                programs and activities, on a government-wide basis, 
                shall not be diminished or reduced by this section or 
                the amendment made by this section.
                    (B) Debarment or suspension.--The Secretary may 
                continue, after the date of enactment of this Act, to 
                debar or suspend a person (or a principal or affiliate 
                of the person), on a government-wide basis, from 
                Federal financial and nonfinancial assistance and 
                benefits for any cause for debarment or suspension that 
                is specified in part 3017 of chapter XXX of subtitle B 
                of title 7, Code of Federal Regulations, or as 
                otherwise permitted by law (including regulations).

SEC. 5. PREVENTION AND CONTROL OF ANTICOMPETITIVE ACTIVITIES.

    The National School Lunch Act (as amended by section 3) is further 
amended by adding at the end the following new section:

``SEC. 26. PREVENTION AND CONTROL OF ANTICOMPETITIVE ACTIVITIES.

    ``(a) Assistance.--The Secretary shall provide financial assistance 
and other support to States, State attorneys general, law enforcement 
organizations, school food contracting agents, and school food service 
authorities to assist in the prevention and control of anticompetitive 
activities relating to--
            ``(1) the school lunch program established under this Act;
            ``(2) the school breakfast program established under the 
        Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.);
            ``(3) the special milk program established under section 3 
        of the Child Nutrition Act of 1966 (42 U.S.C. 1772); and
            ``(4) the summer food service program for children 
        established under section 13 of this Act.
    ``(b) Information.--On request, the Secretary shall present to the 
appropriate committees of Congress information regarding the 
administration of sections 12A and 25 and this section, any waiver 
granted under section 12A(c), and efforts to reduce the incidence of 
anticompetitive activity (such as price-fixing and bid-rigging), in 
connection with the programs referred to in subsection (a).
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out subsection (a) $4,000,000 for each fiscal 
year.''.

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