I 

111TH CONGRESS 

2D SESSION H. R. 5202 

To direct the Secretary of Agriculture to issue guidance to school food 

authorities on indirect costs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 4, 2010 

Ms. CHU (for herself, Mr. TONKO, and Mr. POLIS of Colorado) introduced the 

following bill; which was referred to the Committee on Education and 

Labor, and in addition to the Committee on the Budget, for a period to 

be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee 

concerned 

A BILL 

To direct the Secretary of Agriculture to issue guidance 

to school food authorities on indirect costs, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘National School Lunch 

5 Protection Act of 2010’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress finds the following: 


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1 (1) Through the National School Lunch Pro2 gram (NSLP) and the School Breakfast Program 

3 (SBP), school food service has played an integral 

4 role in the health and nutrition of American chil5 dren, and remains one of the key safety-nets in place 

6 to alleviate childhood hunger and malnutrition do7 mestically. In 2009, the NSLP served more than 

8 31,000,000 students every day, while the SBP fed 

9 over 11,000,000 students. 

10 (2) The NSLP and SBP are shared responsibil11 ities between the Federal, State, and local govern12 ments. 

13 (3) In 2009 the Federal Government spent 

14 more than $12,000,000,000 to support the NSLP 

15 and the SBP, to ensure students across the country 

16 received at least one healthy meal every school day. 

17 (4) Faced with growing student participation 

18 and increased costs, school food service programs 

19 across the country are facing unprecedented budget 

20 crises. 

21 (5) According to a recent study by the School 

22 Nutrition Association, 52 percent of school food 

23 service programs are charged indirect costs by local 

24 educational agencies. Indirect costs are costs inVerDate Mar 15 2010 04:35 May 05, 2010 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5202.IH H5202

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1 curred for a common purpose that benefit more than 

2 one programmatic objective. 

3 (6) According to the study, there is an overall 

4 lack of consistency amongst local educational agen5 cies nationwide about what method should be used 

6 to identify and calculate indirect costs, and what 

7 constitute appropriate direct cost charges to school 

8 food authorities. 

9 (7) School food service must operate on a non10 profit basis, balance cost with revenue, and ensure 

11 all revenue generated is used to support or improve 

12 the food service. 

13 (b) PURPOSES.—The purposes of this Act are to— 

14 (1) ensure Federal funds are being appro15 priately spent to benefit the health and nutrition of 

16 American children; 

17 (2) study the impact of indirect and direct costs 

18 charged to the NSLP and SBP programs; 

19 (3) study the types and amounts of indirect and 

20 direct costs charged and recovered by local edu21 cational agencies; and 

22 (4) encourage the Secretary to issue regulations 

23 to ensure the effectiveness of Federal support for 

24 the NSLP and SBP. 


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1 SEC. 3. COST STUDY AND FUNDING. 

2 (a) GUIDANCE ON ALLOWABLE COSTS TO SCHOOL

3 FOOD AUTHORITIES.—Not later than 180 days after the 

4 date of enactment of this Act, the Secretary of Agriculture 

5 shall issue guidance to school food authorities partici6 pating in the school lunch program established under the 

7 Richard B. Russell National School Lunch Act (42 U.S.C. 

8 1751 et seq.) and the school breakfast program estab9 lished under section 4 of the Child Nutrition Act of 1966 

10 (42 U.S.C. 1773) covering program rules pertaining to al11 lowable costs that may be charged to the nonprofit school 

12 food service accounts of such authorities including, indi13 rect and direct costs. 

14 (b) INDIRECT AND DIRECT COSTS STUDY.—The Sec15 retary of Agriculture shall— 

16 (1) conduct a study to assess the extent to 

17 which school food authorities participating in the 

18 school lunch program established under the Richard 

19 B. Russell National School Lunch Act (42 U.S.C. 

20 1751 et seq.) and the school breakfast program es21 tablished by section 4 of the Child Nutrition Act of 

22 1966 (42 U.S.C. 1773) pay indirect and direct costs, 

23 including assessments of— 

24 (A) the allocation of indirect and direct 

25 costs to such school food authorities; 


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1 (B) the methodologies used to establish in2 direct cost rates for such school food authori3 ties; 

4 (C) the types and amounts of indirect and 

5 direct costs charged and recovered by local edu6 cational agencies; 

7 (D) the impact of indirect and direct costs 

8 charged to the nonprofit school food service ac9 counts of such school food authorities; 

10 (E) whether the indirect and direct costs 

11 charged or recovered are consistent with re12 quirements for the allocation of costs and 

13 school food service operations; and 

14 (F) the types and amounts of indirect and 

15 direct costs that could be charged or recovered 

16 under requirements for the allocation of costs 

17 and school food service operations but are not 

18 charged or recovered; and 

19 (2) after completing the study required under 

20 paragraph (1), issue additional guidance relating to 

21 the types of costs that are reasonable and necessary 

22 to provide meals under the Richard B. Russell Na23 tional School Lunch Act (42 U.S.C. 1751 et seq.) 

24 and section 4 of the Child Nutrition Act of 1966 (42 

25 U.S.C. 1773). 


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1 (c) REGULATIONS.—After conducting the study 

2 under subsection (b)(1) and identifying costs under sub3 section (b)(2), the Secretary of Agriculture may promul4 gate regulations to address— 

5 (1) any identified deficiencies in the allocation 

6 of indirect and direct costs charged to school food 

7 authorities participating in the lunch program under 

8 the Richard B. Russell National School Lunch Act 

9 (42 U.S.C. 1751 et seq.) and the breakfast program 

10 under the Child Nutrition Act of 1966 (42 U.S.C. 

11 1773); and 

12 (2) the authority of school food authorities to 

13 reimburse only those costs identified by the Sec14 retary as reasonable and necessary under subsection 

15 (b)(2). 

16 (d) REPORT.—Not later than October 1, 2013, the 

17 Secretary of Agriculture shall submit to the Committee on 

18 Education and Labor of the House of Representatives and 

19 the Committee on Agriculture, Nutrition, and Forestry of 

20 the Senate a report that describes the results of the study 

21 conducted under subsection (b)(2). 

22 (e) FUNDING.— 

23 (1) IN GENERAL.—On October 1, 2010, out of 

24 any funds in the Treasury not otherwise appro25 priated, the Secretary of the Treasury shall transfer 


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1 to the Secretary to carry out this section 

2 $2,000,000, to remain available until expended. 

3 (2) RECEIPT AND ACCEPTANCE.—The Sec4 retary shall be entitled to receive, shall accept, and 

5 shall use to carry out this section the funds trans6 ferred under paragraph (1), without further appro7 priation. 

8 (f) BUDGETARY EFFECTS.—The budgetary effects of 

9 this Act, for the purpose of complying with the Statutory 

10 Pay-As-You-Go-Act of 2010, shall be determined by ref11 erence to the latest statement titled ‘‘Budgetary Effects 

12 of PAYGO Legislation’’ for this Act, submitted for print13 ing in the Congressional Record by the Chairman of the 

14 House Budget Committee, provided that such statement 

15 has been submitted prior to the vote on passage. 

Æ 


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