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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3873 Reported in House (RH)]

                                                 Union Calendar No. 258
108th CONGRESS
  2d Session
                                H. R. 3873

                          [Report No. 108-445]

To amend the Richard B. Russell National School Lunch Act and the Child 
   Nutrition Act of 1966 to provide children with access to food and 
   nutrition assistance, to simplify program operations, to improve 
 children's nutritional health, and to restore the integrity of child 
              nutrition programs, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 2, 2004

   Mr. Castle (for himself, Mr. Boehner, Mr. McKeon, Mr. Upton, Mr. 
   Ehlers, Mr. Keller, Mr. Wilson of South Carolina, Mr. Porter, Mr. 
Carter, Mr. Case, Mr. Pearce, Mr. Simmons, Ms. Watson, Mr. Peterson of 
Minnesota, and Ms. Kilpatrick) introduced the following bill; which was 
        referred to the Committee on Education and the Workforce

                             March 23, 2004

    Additional sponsors: Mr. Osborne, Ms. Majette, Mr. Hastings of 
  Washington, Mr. Wexler, Ms. Woolsey, Mr. Filner, Mr. Greenwood, Mr. 
   Platts, Mr. Marshall, Mrs. Davis of California, Mr. Andrews, Mr. 
Norwood, Mr. George Miller of California, Mr. Crowley, Mr. Van Hollen, 
Mr. Hoeffel, Mr. Jefferson, Ms. Norton, Ms. Lofgren, Ms. Bordallo, Mr. 
    McGovern, Mr. Petri, Mr. Isakson, Mr. Kind, Mr. Price of North 
   Carolina, Mrs. Biggert, Mr. Holt, Mrs. McCarthy of New York, Mr. 
    Hinojosa, Mr. Kildee, Mr. Grijalva, Ms. Millender-McDonald, Mr. 
                Tierney, Mr. Turner of Ohio, and Ms. Lee

                             March 23, 2004

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on March 
                                2, 2004]

_______________________________________________________________________

                                 A BILL

 
To amend the Richard B. Russell National School Lunch Act and the Child 
   Nutrition Act of 1966 to provide children with access to food and 
   nutrition assistance, to simplify program operations, to improve 
 children's nutritional health, and to restore the integrity of child 
              nutrition programs, 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 ``Child Nutrition Improvement and 
Integrity Act''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

          TITLE I--ENSURING ACCESS TO CHILD NUTRITION PROGRAMS

Sec. 101. Exclusion of military housing allowances.
Sec. 102. Homeless children and runaway youth eligibility.
Sec. 103. Eligibility for severe need assistance.
Sec. 104. Reauthorization of summer food programs.
Sec. 105. Child and adult care food program.
Sec. 106. Review of best practices in the breakfast program.
Sec. 107. Area eligibility demonstration.
Sec. 108. Seamless Summer administration.
Sec. 109. Year round community child nutrition program pilot.

           TITLE II--IMPROVING PROGRAM QUALITY AND INTEGRITY

Sec. 201. Eligibility and certification for free and reduced price 
                            lunches.
Sec. 202. Duration of eligibility for free and reduced price lunches.
Sec. 203. Certification by local educational agencies.
Sec. 204. Compliance and accountability.
Sec. 205. Technology Improvement.
Sec. 206. Minimum State administrative expense grants.
Sec. 207. District-wide eligibility for special assistance.
Sec. 208. Administrative error reduction.

TITLE III--PROMOTING NUTRITION QUALITY AND PREVENTING CHILDHOOD OBESITY

Sec. 301. Local school wellness policy.
Sec. 302. Supporting nutrition education, improving meal quality, and 
                            access to local foods.
Sec. 303. Fruits and vegetable commodities.
Sec. 304. Fluid milk.
Sec. 305. Waiver of requirements for weighted averages for nutrient 
                            analysis.
Sec. 306. Whole grains.

      TITLE IV--IMPROVING THE WOMEN, INFANTS, AND CHILDREN PROGRAM

Sec. 401. Definition of nutrition education.
Sec. 402. Definition of supplemental foods.
Sec. 403. Improving certification.
Sec. 404. Reviews of available supplemental foods.
Sec. 405. Notification of violations and infant formula benefits.
Sec. 406. Healthy People 2010 initiative.
Sec. 407. Competitive bidding.
Sec. 408. Fruit and vegetable projects.
Sec. 409. Price levels of retail stores.
Sec. 410. Management information systems.
Sec. 411. Infant formula fraud prevention.
Sec. 412. State alliances.
Sec. 413. Limits on expenditures.
Sec. 414. Migrant and community health centers initiative.
Sec. 415. Demonstration projects.
Sec. 416. Authorization of appropriations.

 TITLE V--REAUTHORIZATION, MISCELLANEOUS PROVISIONS, AND EFFECTIVE DATE

Sec. 501. Training, technical, and other assistance.
Sec. 502. Notice of irradiated food.
Sec. 503. Sense of Congress.
Sec. 504. Reauthorization of programs.
Sec. 505. Effective dates.

          TITLE I--ENSURING ACCESS TO CHILD NUTRITION PROGRAMS

SEC. 101. EXCLUSION OF MILITARY HOUSING ALLOWANCES.

    Section 9(b)(7) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1758(b)) is amended by striking ``For each of fiscal years 
2002'' and all that follows through ``the amount'' and inserting ``The 
amount''.

SEC. 102. HOMELESS CHILDREN, RUNAWAY YOUTH, AND MIGRATORY CHILD 
              ELIGIBILITY.

    (a) In General.--Section 9(b)(6)(A) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1758(b)(6)(A)) is amended--
            (1) in clause (ii), by striking ``or'';
            (2) in clause (iii), by striking the period and inserting a 
        semicolon; and
            (3) by inserting after clause (iii) the following:
            ``(iv) a homeless child or youth (as defined in section 
        725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
        11434a));
            ``(v) a youth served by programs under the Runaway and 
        Homeless Youth Act (42 U.S.C. 5701 et seq.); or
            ``(vi) a migratory child, as such term is defined in 
        section 1309(2) of the Elementary and Secondary Education Act 
        of 1965 (20 U.S.C. 6399(2)).''.
    (b) Documentation.--Section 9(d)(2) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1758(d)(2)) is amended--
            (1) in subparagraph (B), by striking ``or'';
            (2) in subparagraph (C), by striking the period at the end 
        and inserting a semicolon; and
            (3) by inserting after subparagraph (C) the following:
            ``(D) documentation has been provided to the appropriate 
        local educational agency showing that the child meets the 
        criteria specified in clauses (iv) or (v) of subsection (b)(6); 
        or
            ``(E) documentation has been provided to the appropriate 
        local educational agency showing the child's status as a 
        migratory child, as such term is defined in section 1309(2) of 
        the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        6399(2)).''.

SEC. 103. ELIGIBILITY FOR SEVERE NEED ASSISTANCE.

    Section 4(d) of the Child Nutrition Act of 1966 (42 U.S.C. 1773(d)) 
is amended--
            (1) by striking the heading and all that follows through 
        paragraph (1), and inserting:
    ``(d) Severe Need Assistance.--
            ``(1) In general.--Each State educational agency shall 
        provide additional assistance to schools in severe need, which 
        shall include only those schools (having a breakfast program or 
        desiring to initiate a breakfast program) in which, during the 
        most recent second preceding school year for which lunches were 
        served, 40 percent or more of the lunches served to students at 
        the school were served free or at a reduced price (or those new 
        schools drawing their attendance from schools receiving severe 
        need assistance).''; and
            (2) in paragraph (2)--
                    (A) by striking ``100 percent'' and all that 
                follows through ``food, or''; and
                    (B) by striking ``, whichever is less''.

SEC. 104. REAUTHORIZATION OF SUMMER FOOD PROGRAMS.

    (a) Summer Food Pilot Projects.--Section 18(f) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1769(f)) is amended--
            (1) by redesignating paragraphs (2) through (6) as 
        paragraphs (3) through (7), respectively;
            (2) by inserting after paragraph (1) the following:
            ``(2) Additional states eligible.--In addition to the 
        States meeting the criteria set forth in paragraph (1), the 3 
        States with the highest percentage of households that are 
        determined to be food insecure with hunger, as determined 
        annually by the Secretary, shall be `eligible States' for 
        purposes of this subsection.'';
            (3) in paragraph (3) (as so redesignated), by striking 
        ``March 31, 2004'' and inserting ``September 30, 2008''; and
            (4) in paragraph (4) (as so redesignated), by striking 
        ``(other than a service institution described in section 
        13(a)(7))'' both places it appears.
    (b) Summer Food Service Program for Children.--Section 13(q) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1761(q)) is 
amended by striking ``March 31, 2004'' and inserting ``September 30, 
2008''.

SEC. 105. CHILD AND ADULT CARE FOOD PROGRAM.

    (a) Eligibility of Private Child Care Centers.--Section 17 of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1766) is 
amended--
            (1) in subsection (a)(2)(B)(i), by striking ``during the 
        period'' and all that follows through ``March 31, 2004''; and
            (2) by striking subsection (p).
    (b) Duration of Determination as Tier 1 Family or Group Day Care 
Home.--Section 17(f)(3)(E)(iii) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1766(f)(3)(E)(iii)) is amended by striking 
``3 years'' and inserting ``5 years''.
    (c) Duration of Agreements.--Section 17(j) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1766(j)) is amended to 
read as follows:
    ``(j) Agreements.--
            ``(1) In general.--The Secretary may issue regulations 
        directing States to develop and provide for the use of a 
        standard form of agreement between each family or group day 
        care sponsoring organization and the family or group day care 
        homes participating in the program under such organization, for 
        the purpose of specifying the rights and responsibilities of 
        each party.
            ``(2) Duration.--An agreement under paragraph (1) shall 
        remain in effect until terminated by either party to the 
        agreement.''.
    (d) Management Improvement Initiative.--Section 17(q)(3) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1766(q)(3)) is 
amended by striking ``1999 through 2003'' and inserting ``2005 and 
2006''.
    (e) Audits.--Section 17(i) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1766(i)) is amended to read as follows:
    ``(i) Audits.--
            ``(1) Funds for audits.--The Secretary shall make available 
        for each fiscal year to a State administering the child and 
        adult care food program, for the purpose of conducting audits 
        of participating institutions, an amount up to 1.5 percent 
        (except in the case of fiscal years 2005 through 2007, 1 
        percent) of the funds used by the State in the program under 
        this section during the second preceding fiscal year.
            ``(2) Audit procedures.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                conducting management evaluations, reviews, or audits 
                of the program under this subsection, the Secretary or 
                a State agency may disregard any overpayment to an 
                institution if the total overpayment for any fiscal 
                year does not exceed an amount, consistent with the 
                disregards allowed in other programs under this Act, 
                which recognizes the cost of collecting small claims.
                    ``(B) Criminal or fraud violations.--In carrying 
                out this subsection, the Secretary and a State agency 
                shall not disregard any overpayment for which there is 
                evidence of a violation of a criminal law or civil 
                fraud law.''.
    (f) Emergency Shelters.--Section 17(t)(5)(A)(i) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1766(t)(5)(A)(i) is 
amended--
            (1) in subclause (I)--
                    (A) by striking ``12'' and inserting ``18''; and
                    (B) by inserting ``or'' after the semicolon; and
            (2) by striking subclause (II) and redesignating subclause 
        (III) as subclause (II).
    (g) Paperwork Reduction.--The Secretary of Agriculture, in 
conjunction with States and participating institutions, shall examine 
the feasibility of reducing paper work resulting from regulations and 
record-keeping requirements for State agencies, family child care 
homes, child care centers, and sponsoring organizations participating 
in the child and adult care food program established under section 17 
of the Richard B. Russell National School Lunch Act (42 U.S.C. 1766).

SEC. 106. REVIEW OF BEST PRACTICES IN THE BREAKFAST PROGRAM.

    (a) Review.--Subject to the availability of funds, the Secretary of 
Agriculture shall enter into an agreement with a research organization 
to collect and disseminate a review of best practices to assist schools 
in addressing existing impediments at the State and local level that 
hinder the growth of the school breakfast program under section 4 of 
the Child Nutrition Act of 1966 (42 U.S.C. 1773). The review shall 
describe model breakfast programs and offer recommendations for schools 
to overcome obstacles, such as:
            (1) the length of the school day;
            (2) bus schedules; and
            (3) potential increases in costs at the State and local 
        level.
    (b) Dissemination.--Not later than 12 months after the date of 
enactment of this Act, the Secretary shall make the review required 
under subsection (a) available to local educational agencies via the 
Internet, including recommendations to improve participation in the 
school breakfast program. Not later than 12 months after the date 
of enactment of this Act, the review shall also be transmitted to the 
Committee on Education of the House of Representatives and the 
Committee on Agriculture of the Senate.

SEC. 107. AREA ELIGIBILITY DEMONSTRATION.

    Section 13 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1761) is amended by adding at the end the following:
    ``(r) Demonstration Program.--The Secretary shall support a 
demonstration program in rural areas of the State of Pennsylvania under 
the same terms and conditions as contained in this section, except that 
the threshold for determining `areas in which poor economic conditions 
exist' under subsection (a)(1)(C) for such program shall be 40 percent 
of children enrolled are eligible for free or reduced price school 
meals and the State agency shall report to the Secretary on the effect 
of the demonstration on program participation in rural areas.''.

SEC. 108. SEAMLESS SUMMER ADMINISTRATION.

    (a) Seamless Summer Waiver.--Section 13(a) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1761(a)) is amended by 
inserting after paragraph (7) the following:
            ``(8) Service institutions that are public or private 
        nonprofit school food authorities may administer summer or 
        school vacation food service under the provisions of the school 
        lunch program established under this Act and the school 
        breakfast program established under the Child Nutrition Act of 
        1966 (42 U.S.C. 1771 et seq.), except as determined by the 
        Secretary.''.
    (b) Payments.--Section 13(b)(1) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1761(b)(1)) is amended by inserting after 
subparagraph (C) the following:
                    ``(D) Service institutions described in paragraph 
                (a)(8) of this section shall be reimbursed for meals 
                and meal supplements in accordance with the applicable 
                provisions under this Act (other than subparagraphs 
                (A), (B), and (C) of this paragraph) and the Child 
                Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), as 
                determined by the Secretary.''.

SEC. 109. YEAR ROUND COMMUNITY CHILD NUTRITION PROGRAM PILOT.

    Section 13(a) of the Richard B. Russell National School Lunch Act 
is further amended by adding at the end the following:
            ``(9) Year round community child nutrition program pilot.--
                    ``(A) In general.--A service institution as defined 
                in paragraph (7) may be reimbursed for up to 3 meals 
                and 2 supplements for any day for which services are 
                being offered at such institution. Such service 
                institution shall be reimbursed for costs consistent 
                with section 13(b).
                    ``(B) Maximum reimbursement.--No reimbursement may 
                be made to any institution under this paragraph for 
                more than 3 meals and 2 supplements per child per day.
                    ``(C) Limitation.--The Secretary shall limit 
                reimbursement under this paragraph for meals and 
                supplements served under a program to service 
                institutions defined paragraph (7) located in 
                California.''.

           TITLE II--IMPROVING PROGRAM QUALITY AND INTEGRITY

SEC. 201. ELIGIBILITY AND CERTIFICATION FOR FREE AND REDUCED PRICE 
              LUNCHES.

    (a) In General.--Section 9(b) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1758) is amended by striking ``(b)(1)(A) 
Not later'' and all that follows through paragraph (2) and inserting 
the following:
    ``(b) Eligibility for Free and Reduced Price Lunches.--
            ``(1) Income guidelines.--
                    ``(A) In general.--Not later than June 1 of each 
                fiscal year, the Secretary shall prescribe income 
                guidelines for determining eligibility for free and 
                reduced price lunches during the 12-month period 
                beginning July 1 of such fiscal year and ending June 30 
                of the following fiscal year. The income guidelines for 
                determining eligibility for free lunches shall be 130 
                percent of the applicable family size income levels 
                contained in the nonfarm income poverty guidelines 
                issued by the Secretary of Health and Human Services, 
                as adjusted annually in accordance with subparagraph 
                (B). The income guidelines for determining eligibility 
                for reduced price lunches for any school year shall be 
                185 percent of the applicable family size income levels 
                contained in the nonfarm income poverty guidelines 
                issued by the Secretary of Health and Human Services, 
                as adjusted annually in accordance with subparagraph 
                (B). Such guidelines shall be revised at annual 
                intervals, or at any shorter interval deemed feasible 
                and desirable.
                    ``(B) Formula for revision.--The revision required 
                by subparagraph (A) of this paragraph shall be made by 
                multiplying--
                            ``(i) the official poverty line (as defined 
                        by the Secretary of Health and Human Services); 
                        by
                            ``(ii) the percentage change in the 
                        Consumer Price Index during the annual or other 
                        interval immediately preceding the time at 
                        which the adjustment is made.
                Revisions under this subparagraph shall be made not 
                more than 30 days after the date on which the Consumer 
                Price Index data required to compute the adjustment 
                becomes available.
            ``(2) Certification of eligibility.--
                    ``(A) Announcement by state educational agency.--
                Following the determination by the Secretary under 
                paragraph (1) of this subsection of the income 
                eligibility guidelines for each school year, each State 
                educational agency shall announce the income 
                eligibility guidelines, by family size, to be used by 
                schools in the State in making determinations of 
                eligibility for free and reduced price lunches. Local 
                educational agencies shall, each year, publicly 
                announce the income eligibility guidelines for free and 
                reduced price lunches on or before the opening of 
                school.
                    ``(B) Applications.--
                            ``(i) In general.--Applications for free 
                        and reduced price lunches, in such form as the 
                        Secretary may prescribe or approve, and any 
                        descriptive material, in an understandable and 
                        uniform format, and to the extent practicable, 
                        in a language that parents can understand, 
                        shall be distributed at least annually to the 
                        parents or guardians of children in attendance 
                        at the school.
                            ``(ii) Income levels.--Applications and 
                        descriptive material shall contain only the 
                        family size income eligibility guidelines for 
                        reduced price meal eligibility, with the 
                        explanation that households with incomes less 
                        than or equal to these values would be eligible 
                        for free or reduced price lunches. Such 
                        applications and descriptive material may not 
                        contain the income eligibility guidelines for 
                        free lunches.
                            ``(iii) Notification.--Descriptive 
                        materials shall contain a notification that 
                        participants in the Special Supplemental 
                        Nutrition Program for Women, Infants, and 
                        Children authorized under Section 17 of the 
                        Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
                        seq.), the food stamp program established under 
                        the Food Stamp Act of 1977 (7 U.S.C. 2011 et 
                        seq.), the Food Distribution Program on Indian 
                        Reservations (FDPIR) authorized under section 
                        4(b) of the Food Stamp Act of 1977 (7 U.S.C. 
                        2013(b)), or a State program funded under part 
                        A of title IV of the Social Security Act (if 
                        the Secretary determines the State program 
                        complies with standards established by the 
                        Secretary that ensure that the standards under 
                        the State program are comparable to or more 
                        restrictive than those in effect on June 1, 
                        1995) are eligible for free or reduced price 
                        lunches. Such descriptive materials shall also 
                        contain a notice to parents that documentation 
                        may be requested for verification.
                            ``(iv) Electronic availability.--In 
                        addition to the distribution of such 
                        applications and descriptive material in paper 
                        form as provided for in this paragraph, such 
                        applications and material may be made available 
                        electronically via the Internet.
                    ``(C) Eligibility.--
                            ``(i) Household applications.--
                                    ``(I) In general.--If an 
                                eligibility determination for a child 
                                is not made under clause (ii) or (iii), 
                                an eligibility determination shall be 
                                made on the basis of a complete 
                                household application executed by an 
                                adult member of the household, or in 
                                accordance with other guidance issued 
                                by the Secretary.
                                    ``(II) Additional bases.--
                                Eligibility may be determined by the 
                                local educational agency on the basis 
                                of a complete application executed by 
                                an adult member of the household, or in 
                                accordance with other guidance issued 
                                by the Secretary, including an 
                                electronic signature when the 
                                application is submitted 
                                electronically, and if the application 
                                filing system meets confidentiality 
                                standards established by the Secretary.
                                    ``(III) Children in household.--
                                            ``(aa) In general.--The 
                                        application shall identify the 
                                        names of each child in the 
                                        household for whom meal 
                                        benefits are requested.
                                            ``(bb) Separate 
                                        applications.--A State 
                                        educational agency or local 
                                        educational agency may not 
                                        request a separate application 
                                        for each child in the 
                                        household.
                                    ``(IV) Verification.--The 
                                Secretary, State, or local educational 
                                agency may verify any data contained in 
                                such application. In accordance with 
                                guidance issued by the Secretary, each 
                                local educational agency shall verify a 
                                sample of approved free and reduced 
                                price applications and shall make 
                                appropriate changes in the eligibility 
                                determination with respect to such 
                                applications on the basis of such 
                                verification. The sample selected for 
                                verification shall be as follows:
                                            ``(aa) For local 
                                        educational agencies able to 
                                        obtain verification information 
                                        for at least 75 percent of all 
                                        applications selected for 
                                        verification in the prior year, 
                                        or local educational agencies 
                                        receiving more than 20,000 
                                        applications and that in the 
                                        prior year had a verification 
                                        non-response rate that was 10 
                                        percent below the verification 
                                        non-response rate of the second 
                                        prior year, the sample selected 
                                        shall be either--

                                                    ``(AA) the lesser 
                                                of 3,000 or 3 percent 
                                                of approved 
                                                applications selected 
                                                at random by the local 
                                                educational agencies 
                                                from all approved 
                                                applications; or

                                                    ``(BB) the lesser 
                                                of 1,000 or 1 percent 
                                                of all approved 
                                                applications selected 
                                                from applications that 
                                                indicate monthly income 
                                                that is within $100, or 
                                                annual income that is 
                                                within $1,200, of the 
                                                income eligibility 
                                                limits for free or 
                                                reduced price meals, 
                                                plus the lesser of 500 
                                                or \1/2\ of 1 percent 
                                                of approved 
                                                applications that 
                                                provided a case number 
                                                in lieu of income 
                                                information showing 
                                                participation in the 
                                                food stamp program or 
                                                Temporary Assistance 
                                                for Needy Families 
                                                program selected from 
                                                those approved 
                                                applications that 
                                                provided a case number 
                                                in lieu of income 
                                                information verifying 
                                                such participation.

                                            ``(bb) For all other local 
                                        educational agencies, the 
                                        sample selected shall be the 
                                        lesser of 3,000 or 3 percent of 
                                        all approved applications 
                                        selected from applications that 
                                        indicate monthly income that is 
                                        within $100, or annual income 
                                        that is within $1,200, of the 
                                        income eligibility limits for 
free or reduced price meals. If, for any local educational agency, the 
total number of such applications is less than 3,000 or 3 percent of 
all approved applications, the local educational agency shall select 
additional applications at random from all approved applications in 
order to obtain a total sample for verification of 3,000 or 3 percent 
of all approved applications.
                                    ``(V) Substitutions.--
                                            ``(aa) In general.--In 
                                        accordance with the regulations 
                                        prescribed by the Secretary, 
                                        the local educational agency 
                                        may, upon individual review, 
                                        decline to verify any 
                                        application selected under 
                                        subclause (IV) and replace it 
                                        with another application to be 
                                        verified. Such agency may 
                                        decline to verify no more than 
                                        2 percent of the applications 
                                        selected for verification under 
                                        this subclause.
                                            ``(bb) Substitute criteria 
                                        in cases of emergencies.--The 
                                        Secretary may substitute 
                                        alternative criteria for the 
                                        sample size and sample 
                                        selection criteria in subclause 
                                        (IV) to address a natural 
                                        disaster, civil disorder, 
                                        strike, or other local 
                                        condition.
                                    ``(VI) Direct verification.--
                                            ``(aa) In general.--In 
                                        accordance with regulations 
                                        promulgated by the Secretary, 
                                        in verifying the sample 
                                        selected in accordance with 
                                        subclause (IV), the local 
                                        educational agency may first 
                                        obtain from certain public 
                                        agencies administering the 
                                        programs identified in item 
                                        (bb) of this subclause, and 
                                        similar income-tested programs, 
                                        information to verify 
                                        eligibility for free or reduced 
                                        price meals.
                                            ``(bb) Public agency 
                                        records.--Public agency records 
                                        that may be used to verify 
                                        eligibility for free meals 
                                        shall include income 
                                        information relied upon within 
                                        12 months prior to verification 
                                        under subclause (IV) in the 
                                        administration of the following 
                                        programs: the food stamp 
                                        program established under the 
                                        Food Stamp Act of 1977 (7 
                                        U.S.C. 2011 et seq.); the State 
                                        program funded under part A of 
                                        title IV of the Social Security 
                                        Act; the Food Distribution 
                                        Program on Indian Reservations 
                                        (FDPIR) authorized under 
                                        section 4(b) of the Food Stamp 
                                        Act of 1977 (7 U.S.C. 2013(b)); 
                                        and the State Medicaid program 
                                        under title XIX of the Social 
                                        Security Act (42 U.S.C. 1396 et 
                                        seq.) in a State in which the 
                                        income eligibility limit 
                                        described in section 
                                        1902(l)(2)(C) of the Social 
                                        Security Act is no higher than 
                                        133 percent of the income 
                                        official poverty line as 
                                        specified in section 
                                        1902(l)(2)(A) of such Act, in 
                                        the case of eligibility for 
                                        free meals, and 185 percent of 
                                        the income official poverty 
                                        line as specified in such 
                                        section in the case of reduced 
                                        price meals.
                                    ``(VII) Plain, understandable 
                                language.--Any and all communications 
                                to parents regarding verification under 
                                subclause (IV) shall be in an 
                                understandable and uniform format, and, 
                                to the extent practicable, in a 
                                language that parents can understand.
                            ``(ii) Direct certification for children in 
                        food stamp households.--
                                    ``(I) In general.--Each State 
                                agency shall, to the extent 
                                practicable, enter into an agreement 
                                with the State agency conducting 
                                eligibility determinations for the food 
                                stamp program established under the 
                                Food Stamp Act of 1977 (7 U.S.C. 2011 
                                et seq.).
                                    ``(II) Procedures.--Subject to 
                                clause (iv), the agreement shall 
                                establish procedures under which a 
                                child who is a member of a household 
                                receiving assistance under the program 
                                referred to in subclause (I) shall be 
                                certified as eligible for free meals 
                                under this Act, without further 
                                application.
                                    ``(III) Direct certification.--
                                Subject to clause (iv), under the 
                                agreement, the local educational agency 
                                conducting eligibility determinations 
                                for a school meal program conducted 
                                under this Act shall certify a child 
                                who is a member of a household 
                                receiving assistance under the program 
                                referred to in subclause (I) as 
                                eligible for free meals under this Act 
                                without further application.
                                    ``(IV) Notice.--The appropriate 
                                local educational agency shall provide 
                                annually to the parents or guardians of 
                                all students who are members of a 
                                household receiving assistance under 
                                the program referred to in subclause 
                                (I), notification, in an understandable 
                                and uniform format, and, to the extent 
                                practicable, in a language that parents 
                                can understand, that any school-aged 
                                child in that household is eligible for 
                                free lunches or breakfasts.
                            ``(iii) Direct certification of children in 
                        other households.--Subject to clause (iv), any 
                        local educational agency may certify any child 
                        as eligible for free lunches or breakfasts, 
                        without further application, by directly 
                        communicating with the appropriate State or 
                        local agency to obtain documentation of such 
                        child's status as a migratory child, as such 
                        term is defined in section 1309(2) of the 
                        Elementary and Secondary Education Act of 1965 
                        (20 U.S.C. 6399(2)), or a member of a family 
                        that is receiving assistance under a State 
                        program funded under part A of title IV of the 
                        Social Security Act if the Secretary determines 
                        the State program complies with standards 
                        established by the Secretary that ensure that 
                        the standards under the State program are 
                        comparable to or more restrictive than those in 
                        effect on June 1, 1995.
                            ``(iv) Disclosure of information.--The use 
                        or disclosure of any information obtained from 
                        an application for free or reduced price meals, 
                        or from a State or local agency referred to in 
                        clauses (ii) and (iii), shall be limited to--
                                    ``(I) a person directly connected 
                                with the administration or enforcement 
                                of this Act or the Child Nutrition Act 
                                of 1966 (42 U.S.C. 1771 et seq.), or a 
                                regulation issued pursuant to either 
                                Act;
                                    ``(II) a person directly connected 
                                with the administration or enforcement 
                                of--
                                            ``(aa) a Federal education 
                                        program;
                                            ``(bb) a State health or 
                                        education program administered 
                                        by the State or local 
                                        educational agency (other than 
                                        a program carried out under 
                                        title XIX of the Social 
                                        Security Act (42 U.S.C. 1396 et 
                                        seq.); or
                                            ``(cc) a Federal, State, or 
                                        local means-tested nutrition 
                                        program with eligibility 
                                        standards comparable to the 
program under this section;
                                    ``(III)(aa) the Comptroller General 
                                of the United States for audit and 
                                examination authorized by any other 
                                provision of law; and
                                    ``(bb) notwithstanding any other 
                                provision of law, a Federal, State, or 
                                local law enforcement official for the 
                                purpose of investigating an alleged 
                                violation of any program requirements 
                                under paragraph (1) or this paragraph; 
                                and
                                    ``(IV) a person directly connected 
                                with the administration of the State 
                                Medicaid program under title XIX of the 
                                Social Security Act (42 U.S.C. 1396 et 
                                seq.) or the State children's health 
                                insurance program under title XXI of 
                                that Act (42 U.S.C. 1397aa et seq.) 
                                solely for the purpose of identifying 
                                children eligible for benefits under, 
                                and enrolling children in, such 
                                programs, except that this subclause 
                                shall apply only to the extent that the 
                                State and the local educational agency 
                                so elect.
                            ``(v) Limitation.--Information provided 
                        under clause (iv)(II) shall be limited to the 
                        income eligibility status of the child for whom 
                        application for free or reduced price meal 
                        benefits was made or for whom eligibility 
                        information was provided under clause (ii) or 
                        (iii), unless the consent of the parent or 
                        guardian of the child for whom application for 
                        benefits was made is obtained.
                            ``(vi) Penalty for unauthorized 
                        disclosure.--A person described in clause (iv) 
                        who publishes, divulges, discloses, or makes 
                        known in any manner, or to any extent not 
                        authorized by Federal law (including a 
                        regulation), any information obtained under 
                        this subsection shall be fined not more than 
                        $1,000 or imprisoned not more than 1 year, or 
                        both.
                            ``(vii) Requirements for waiver of 
                        confidentiality.--A State that elects to 
                        exercise the option described in clause 
                        (iv)(IV) shall ensure that any local 
                        educational agency acting in accordance with 
                        that option--
                                    ``(I) has a written agreement with 
                                the State or local agency or agencies 
                                administering health insurance programs 
                                for children under titles XIX and XXI 
                                of the Social Security Act (42 U.S.C. 
                                1396 et seq. and 1397aa et seq.) that 
                                requires the health agencies to use the 
                                information obtained under clause (iv) 
                                to seek to enroll children in those 
                                health insurance programs; and
                                    ``(II)(aa) notifies each household, 
                                the information of which shall be 
                                disclosed under clause (iv), that the 
                                information disclosed will be used only 
                                to enroll children in health programs 
                                referred to in clause (iv)(IV); and
                                    ``(bb) provides each parent or 
                                guardian of a child in the household 
                                with an opportunity to elect not to 
                                have the information disclosed.
                            ``(viii) Use of disclosed information.--A 
                        person to which information is disclosed under 
                        clause (iv)(IV) shall use or disclose the 
                        information only as necessary for the purpose 
                        of enrolling children in health programs 
                        referred to in clause (iv)(IV).
                    ``(D) Free and reduced price policy statement.--
                After the initial submission, a local educational 
                agency shall not be required to submit a free and 
                reduced price policy statement to a State educational 
                agency under this Act unless there is a substantive 
                change in the free and reduced price policy of the 
                local educational agency. A routine change in the 
                policy of a local educational agency, such as an annual 
                adjustment of the income eligibility guidelines for 
                free and reduced price meals, shall not be sufficient 
                cause for requiring the local educational agency to 
                submit a policy statement.''.
    (b) Conforming Amendment.--Section 9(b)(6)(B) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1758(b)(6)(B) is amended 
by inserting ``, or documentation showing the child's status as a 
migratory child, as such term is defined in section 1309(2) of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6399(2))'' 
after ``subparagraph (A)(iii)''.

SEC. 202. DURATION OF ELIGIBILITY FOR FREE AND REDUCED PRICE LUNCHES.

    Section 9(b)(3) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1758(b)(3)) is amended to read as follows:
            ``(3) Eligibility for free and reduced price lunches.--
                    ``(A) Free lunches.--Any child who is a member of a 
                household whose income, at the time the application is 
                submitted, is at an annual rate which does not exceed 
                the applicable family size income level of the income 
                eligibility guidelines for free lunches, as determined 
                under paragraph (1), shall be served a free lunch.
                    ``(B) Reduced price lunches.--
                            ``(i) In general.--Any child who is a 
                        member of a household whose income, at the time 
                        the application is submitted, is at an annual 
                        rate greater than the applicable family size 
                        income level of the income eligibility 
                        guidelines for free lunches, as determined 
                        under paragraph (1), but less than or equal to 
                        the applicable family size income level of the 
                        income eligibility guidelines for reduced price 
                        lunches, as determined under paragraph (1), 
                        shall be served a reduced price lunch.
                            ``(ii) Maximum price.--The price charged 
                        for a reduced price lunch shall not exceed 40 
                        cents.
                    ``(C) Duration.--Except as otherwise specified in 
                section 11(a) or section 9(b)(2)(C)(i)(IV), eligibility 
                for free or reduced price meals for any school year 
                shall remain in effect--
                            ``(i) beginning on the date of eligibility 
                        approval for the current school year; and
                            ``(ii) ending on the date of the beginning 
                        of school in the subsequent school year or as 
                        otherwise specified by the Secretary.''.

SEC. 203. CERTIFICATION BY LOCAL EDUCATIONAL AGENCIES.

    (a) Certification by Local Educational Agency.--Section 9 of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1758) is 
further amended--
            (1) in subsection (b)(5), by striking ``Local school 
        authorities'' and inserting ``Local educational agencies''; and
            (2) in subsection (d)(2)--
                    (A) by striking ``local school food authority'' 
                each place it appears and inserting ``local educational 
                agency''; and
                    (B) in subparagraph (A), by striking ``such 
                authority'' and inserting ``the local educational 
                agency''.
    (b) Definition of Local Educational Agency.--Section 12(d) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1760(d)) is 
amended--
            (1) by redesignating paragraphs (3) through (8) as 
        paragraphs (4) through (9), respectively; and
            (2) by inserting after paragraph (2) the following:
            ``(3) Local educational agency.--
                    ``(A) In general.--The term `local educational 
                agency' has the meaning given the term in section 9101 
                of the Elementary and Secondary Education Act of 1965 
                (20 U.S.C. 7801).
                    ``(B) Inclusion.--The term `local educational 
                agency' includes, in the case of a private nonprofit 
                school food authority, an appropriate entity determined 
                by the Secretary.''.
    (c) School Breakfast Program.--Section 4(b)(1)(E) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1773(b)(1)(E)) is amended by striking 
``school food authority'' each place it appears and inserting ``local 
educational agency''.

SEC. 204. COMPLIANCE AND ACCOUNTABILITY.

    Section 22 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1769c) is amended by inserting ``and local educational 
agencies'' after ``food service authorities'' each place it appears.

SEC. 205. TECHNOLOGY IMPROVEMENT.

    (a) Priority for Reallocated Funds.--Section 7(a)(5)(B)(ii) of the 
Child Nutrition Act of 1966 (42 U.S.C. 1776(a)(5)(B)(ii)) is amended by 
inserting the following new sentence at the end: ``The Secretary shall 
give priority consideration to States that will use the funds for 
improvements in technology and information management systems described 
in subsection (e)(2).''.
    (b) Conforming Amendment.--Section 7(b) of the Child Nutrition Act 
of 1966 (42 U.S.C. 1776(b)) is amended by striking ``and for staff 
development'' and inserting ``for staff development; and technology and 
information management systems''.

SEC. 206. MINIMUM STATE ADMINISTRATIVE EXPENSE GRANTS.

     Section 7(a) of the Child Nutrition Act (42 U.S.C. 1776(a)(1)) is 
further amended--
            (1) by striking the heading and all that follows through 
        paragraph (1), and inserting the following:

``SEC. 7. STATE ADMINISTRATIVE EXPENSES.

    ``(a) Amount and Allocation of Funds.--
            ``(1) Amount available.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), each fiscal year the Secretary shall 
                make available to the States for their administrative 
                costs an amount equal to not less than 1\1/2\ percent 
                of the Federal funds expended under sections 4, 11, 17, 
                and 17A of the Richard B. Russell National School Lunch 
                Act (42 U.S.C. 1753, 1759a, 1766, and 1766a)) and 
                sections 3 and 4 of this Act during the second 
                preceding fiscal year.
                    ``(B) Minimum amount.--In the case of each of 
                fiscal years 2005 through 2007, the Secretary shall 
                make available to each State for their administrative 
                costs not less than the initial allocation made to the 
                State under this subsection for fiscal year 2004.
                    ``(C) Allocation.--The Secretary shall allocate the 
                funds so provided in accordance with paragraphs (2), 
                (3), and (4) of this subsection.
                    ``(D) Authorization of appropriations.--There is 
                authorized to be appropriated such sums as may be 
                necessary to carry out the purposes of this section.''; 
                and
            (2) in paragraph (2), by striking ``$100,000'' and 
        inserting ``$200,000''.

SEC. 207. DISTRICT-WIDE ELIGIBILITY FOR SPECIAL ASSISTANCE.

    Section 11(a)(1) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1759a(a)(1)) is amended--
            (1) in subparagraph (C)--
                    (A) in clause (i)--
                            (i) by inserting ``or school district'' 
                        after ``in the case of any school'';
                            (ii) by inserting ``or school district'' 
                        after ``in the school'' both times it appears;
                            (iii) by inserting ``or school district'' 
                        after ``in the case of a school''; and
                            (iv) by inserting ``or school district'' 
                        after ``with respect to the school'';
                    (B) in clause (ii)--
                            (i) by inserting ``or school district'' 
                        after ``served by a school''; and
                            (ii) by inserting ``or school district'' 
                        after ``served by the school''; and
                    (C) in clause (iii) by inserting ``or school 
                district'' after ``a school'';
            (2) in subparagraph (D)--
                    (A) in clause (i)--
                            (i) by inserting ``or school district'' 
                        after ``any school''; and
                            (ii) by inserting ``or school district'' 
                        after ``the school'';
                    (B) in clause (ii)--
                            (i) by inserting ``or school district'' 
                        after ``A school''; and
                            (ii) by inserting ``or school district'' 
                        after ``the school'';
                    (C) in clause (iii)--
                            (i) by inserting ``or school district'' 
                        after ``a school''; and
                            (ii) by inserting ``or school district'' 
                        after ``the school''; and
                    (D) in clause (iv) by inserting ``or school 
                district'' after ``levels, a school''; and
            (3) in subparagraph (E)--
                    (A) in clause (i)--
                            (i) by inserting ``or school district'' 
                        after ``In the case of any school'';
                            (ii) by inserting ``or school district'' 
                        after ``in the school'' both times it appears;
                            (iii) by inserting ``or school district'' 
                        after ``in the case of a school'';
                            (iv) by inserting ``or school district'' 
                        after ``with respect to the school'';
                            (v) by inserting ``or school district'' 
                        after ``received by the school''; and
                            (vi) by inserting ``or school district'' 
                        after ``for which the school''; and
                    (B) in clause (ii)--
                            (i) by inserting ``or school district'' 
                        after ``A school'';
                            (ii) by inserting ``or school district'' 
                        after ``for which the school'' both times it 
                        appears; and
                            (iii) by inserting ``or school district'' 
                        after ``population of the school'' both times 
                        it appears.

SEC. 208. ADMINISTRATIVE ERROR REDUCTION.

    (a) Federal Support for Training and Technical Assistance.--Section 
21 of the Richard B. Russell National School Lunch Act (42 U.S.C. 
1769b-1) is amended--
            (1) by redesignating subsection (e) as subsection (g); and
            (2) by inserting after subsection (d) the following:
    ``(e) Administrative Training and Technical Assistance Materials.--
In collaboration with State educational agencies, school food 
authorities, and local educational agencies of varying sizes, the 
Secretary shall develop and distribute training and technical 
assistance materials relating to the administration of school meal 
programs that are--
            ``(1) prepared by the Secretary (based on research or other 
        sources), a State educational agency, a school food authority, 
        or a local educational agency; and
            ``(2) representative of the best management and 
        administrative practices of State agencies, school food 
        authorities, and local educational agencies as determined by 
        the Secretary.
    ``(f) Federal Administrative Support.--
            ``(1) Funding.--
                    ``(A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, the Secretary of the 
                Treasury shall transfer to the Secretary of Agriculture 
                to carry out this subsection--
                            ``(i) on October 1, 2004 and October 1, 
                        2005, $3,000,000; and
                            ``(ii) on October 1, 2006, and October 1, 
                        2007, $2,000,000.
                    ``(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.
                    ``(C) Availability of funds.--Funds transferred 
                under subparagraph (A) shall remain available until 
                expended.
            ``(2) Use of funds.--The Secretary may use funds provided 
        under this subsection--
                    ``(A) to provide training and technical assistance 
                related to administrative practices designed to improve 
                program integrity and administrative accuracy in school 
                meals programs (including administrative requirements 
                established by the Child Nutrition Improvement and 
                Integrity Act and amendments made by that Act) to State 
                educational agencies and, to the extent determined by 
                the Secretary, to school food authorities and local 
                educational agencies;
                    ``(B) to assist State educational agencies in 
                reviewing the administrative practices of school food 
                authorities, to the extent determined by the Secretary; 
                and
                    ``(C) to carry out the activities described in 
                subsection (e).''.
    (b) Selected Administrative Reviews.--Section 22(b) of the Richard 
B. Russell National School Lunch Act (42 U.S.C. 1769c(b)) is amended by 
adding at the end the following:
            ``(3) Additional review requirement for selected local 
        educational agencies.--
                    ``(A) Definition of selected local educational 
                agency.--In this paragraph, the term `selected local 
                educational agency' means a local educational agency 
                that has demonstrated a high level of, or a high risk 
                for, administrative error, as determined by the 
                Secretary.
                    ``(B) Additional administrative review.--In 
                addition to any review required by subsection (a) or 
                paragraph (1), each State educational agency shall 
                conduct an administrative review of each selected local 
                educational agency during the review cycle established 
                under subsection (a).
                    ``(C) Scope of review.--In carrying out a review 
                under subparagraph (B), a State educational agency 
                shall only review the administrative processes of a 
                selected local educational agency, including 
                application, certification, verification, meal 
                counting, and meal claiming procedures.
                    ``(D) Results of review.--If the State educational 
                agency determines (on the basis of a review conducted 
                under subparagraph (B)) that a selected local 
                educational agency fails to meet performance criteria 
                established by the Secretary, the State educational 
                agency shall--
                            ``(i) require the selected local 
                        educational agency to develop and carry out an 
                        approved plan of corrective action;
                            ``(ii) except to the extent technical 
                        assistance is provided directly by the 
                        Secretary, provide technical assistance to 
                        assist the selected local educational agency in 
                        carrying out the corrective action plan; and
                            ``(iii) conduct a follow-up review of the 
                        selected local educational agency under 
                        standards established by the Secretary.
            ``(4) Recovering funds after administrative reviews.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), if the local educational agency fails to meet 
                administrative performance criteria established by the 
                Secretary in both an initial review and a follow-up 
                review under paragraph (1) or (3) or subsection (a), 
                the Secretary may require the State educational agency 
                to recover funds from the local educational agency that 
                would otherwise be paid to the school food authority or 
                local educational agency for school meals programs 
                under procedures prescribed by the Secretary.
                    ``(B) Amount.--The amount of funds recovered under 
                subparagraph (A) shall equal the value of any 
                overpayments made to the school food authority or local 
                educational agency as a result of an erroneous claim 
                during the time period described in subparagraph (C).
                    ``(C) Time period.--The period for determining the 
                value of any such overpayments under subparagraph (B) 
                shall be the period--
                            ``(i) beginning on the date the erroneous 
                        claim was made; and
                            ``(ii) ending on the earlier of the date 
                        the erroneous claim is corrected or--
                                    ``(I) in the case of the first 
                                review conducted by the State 
                                educational agency of the local 
                                educational agency under this section 
                                after July 1, 2005, the date that is 60 
                                days after the beginning of the period 
                                under clause (i); or
                                    ``(II) in the case of any 
                                subsequent review conducted by the 
                                State educational agency of the local 
                                educational agency under this section, 
                                the date that is 90 days after the 
                                beginning of the period under clause 
                                (i).
            ``(5) Use of recovered funds.--
                    ``(A) In general.--Subject to subparagraph (B), 
                funds recovered under paragraph (4) shall--
                            ``(i) be returned to the Secretary under 
                        procedures established by the Secretary, and 
                        may be used--
                                    ``(I) to provide training and 
                                technical assistance related to 
                                administrative practices designed to 
                                improve program integrity and 
                                administrative accuracy in school meals 
                                programs (including administrative 
                                requirements established by the Child 
                                Nutrition Improvement and Integrity Act 
                                and amendments made by that Act) to 
                                State educational agencies and, to the 
                                extent determined by the Secretary, to 
                                school food authorities and local 
                                educational agencies;
                                    ``(II) to assist State educational 
                                agencies in reviewing the 
                                administrative practices of school food 
                                authorities, to the extent determined 
                                by the Secretary; and
                                    ``(III) to carry out section 21(e); 
                                or
                            ``(ii) be credited to the child nutrition 
                        programs appropriation account.
                    ``(B) State share.--Subject to subparagraph (C), a 
                State educational agency may retain not more than 25 
                percent of an amount recovered under paragraph (4), to 
                carry out school meals program integrity initiatives to 
                assist school food authorities and local educational 
                agencies that have repeatedly failed (as determined by 
                the Secretary) to meet administrative performance 
                criteria.
                    ``(C) Requirement.--To be eligible to retain funds 
                under subparagraph (B), a State educational agency 
                shall--
                            ``(i) submit to the Secretary a plan 
                        describing how the State educational agency 
                        will use the funds to improve school meals 
                        program integrity, including measures to give 
                        priority to school food authorities and local 
                        educational agencies from which funds were 
                        retained under paragraph (4); and
                            ``(ii) obtain the approval of the Secretary 
                        for the plan.''.
    (c) Training and Technical Assistance.--Section 7 of the Child 
Nutrition Act of 1966 (42 U.S.C. 1776) is amended--
            (1) in subsection (e)--
                    (A) by striking ``(e) Each'' and inserting the 
                following:
    ``(e) Plans for Use of Administrative Expense Funds.--
            ``(1) In general.--Each''; and
                    (B) by striking ``After submitting'' and all that 
                follows through ``change in the plan.'', and inserting 
                the following:
            ``(2) Updates and information management systems.--After 
        submitting the initial plan, a State shall be required to 
        submit to the Secretary for approval only a substantive change 
        in the plan. Each State plan shall at a minimum include a 
        description of how technology and information management 
        systems will be used to improve program integrity by--
                    ``(A) monitoring the nutrient content of meals 
                served;
                    ``(B) training schools and school food authorities 
                how to utilize technology and information management 
                systems for activities such as menu planning, 
                collecting point of sale data, processing applications 
                for free and reduced price meals and verifying 
                eligibility for free and reduced price meals using 
                existing databases to access program participation or 
                income data collected by State or local educational 
                agencies; and
                    ``(C) using electronic data to establish benchmarks 
                to compare and monitor program integrity, program 
                participation, and financial data across schools and 
                school food authorities.
            ``(3) Training and technical assistance.--Each State shall 
        submit to the Secretary for approval a plan describing the 
        manner in which the State intends to implement subsection (g) 
        and section 22(b)(3) of the Richard B. Russell National School 
        Lunch Act (as added by section 208 of the Child Nutrition 
        Improvement and Integrity Act).'';
            (2) by redesignating subsection (g) as subsection (i); and
            (3) by inserting after subsection (f) the following:
    ``(g) State Training.--
            ``(1) In general.--At least annually, each State shall 
        provide training in administrative practices (including 
        training in application, certification, verification, meal 
        counting, and meal claiming procedures) to school food 
        authority administrative personnel and other appropriate 
        personnel, with emphasis on the requirements established by the 
        Child Nutrition Improvement and Integrity Act and the 
        amendments made by that Act.
            ``(2) Federal role.--The Secretary shall--
                    ``(A) provide training and technical assistance 
                (including training materials and information developed 
                under subsections (e) and (f) of section 21 of the 
                Richard B. Russell National School Lunch Act (42 U.S.C. 
                1769b-1)) to a State to assist the State in carrying 
                out paragraph (1); or
                    ``(B) at the option of the Secretary, directly 
                provide training and technical assistance described in 
                paragraph (1).
            ``(3) Third-party contracting.--In carrying out this 
        subsection, the Secretary or a State may contract with a third 
        party under procedures established by the Secretary.
            ``(4) Required participation.--Under procedures established 
        by the Secretary that consider the various needs and 
        circumstances of school food authorities, each school food 
        authority or local educational agency shall ensure that an 
        individual conducting or overseeing administrative procedures 
        described in paragraph (1) receives training at least annually, 
        unless determined otherwise by the Secretary.
    ``(h) Funding for Training and Administrative Reviews.--
            ``(1) Funding.--
                    ``(A) In general.--On October 1, 2004, and on each 
                October 1 thereafter, out of any funds in the Treasury 
                not otherwise appropriated, the Secretary of the 
                Treasury shall transfer to the Secretary of Agriculture 
                to carry out this subsection $4,000,000, to remain 
                available until expended.
                    ``(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.
            ``(2) Use of funds.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall use funds 
                provided under this subsection to assist States in 
                carrying out subsection (g) and administrative reviews 
                of selected school food authorities and local 
                educational agencies under section 22(b)(3) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1769c(b)(3)).
                    ``(B) Exception.--The Secretary may retain a 
                portion of the amount provided to cover costs of 
                activities carried out by the Secretary in lieu of the 
                State.
            ``(3) Allocation.--The Secretary shall allocate funds 
        provided in this subsection to States based on the number of 
        local educational agencies that have demonstrated a high level 
        of or a high risk for administrative error, as determined by 
        the Secretary, taking into account the requirements established 
        by the Child Nutrition Improvement and Integrity Act and the 
        amendments made by that Act.
            ``(4) Reallocation.--The Secretary may reallocate, to carry 
        out this section, any amounts made available to carry out this 
        subsection that are not obligated or expended, as determined by 
        the Secretary.''.

TITLE III--PROMOTING NUTRITION QUALITY AND PREVENTING CHILDHOOD OBESITY

SEC. 301. LOCAL SCHOOL WELLNESS POLICY.

    Not later than the first day of the school year beginning after 
June 30, 2006, local educational agencies participating in the programs 
authorized by the Richard B. Russell National School Lunch Act (42 
U.S.C. 1751 et seq.) and the Child Nutrition Act of 1966 (42 U.S.C. 
1771 et seq.) shall establish a local school wellness policy for such 
local agency that at a minimum--
            (1) includes goals for nutrition education, physical 
        activity and other school-based activities designed to promote 
        student wellness that the local educational agency determines 
        are appropriate;
            (2) includes nutrition guidelines selected by the local 
        educational agencies for all foods available on school campus 
        during the school day with the objective of promoting student 
        health and reducing childhood obesity;
            (3) provides an assurance that guidelines for reimbursable 
        school meals shall not be less restrictive than regulations and 
        guidance issued by the Secretary pursuant to section 10(a) and 
        (b) of the Child Nutrition Act (42 U.S.C. 1779(a) and (b)) and 
        section 9(f)(1) and section 17(a) of the Richard B. Russell 
        National School Lunch Act (42 U.S.C. 1758(f)(1) and 1766(a)), 
        as those regulations and guidance apply to schools;
            (4) establishes a plan for ensuring implementation of the 
        local wellness policy, including designation of a person or 
        persons within the local educational agency, or at each school 
        as appropriate, charged with operational responsibility for 
        ensuring that such school meets the local wellness policy; and
            (5) involves parents, students, representatives of the 
        school food authority, the school board, school administrators, 
        and public in the development of the school wellness policy.

SEC. 302. SUPPORTING NUTRITION EDUCATION, IMPROVING MEAL QUALITY, AND 
              ACCESS TO LOCAL FOODS.

    Section 19 of the Child Nutrition Act of 1966 (42 U.S.C. 1788) is 
amended--
            (1) by amending subsection (b) to read as follows:
    ``(b) Purpose.--It is the purpose of this section to support 
effective nutrition education through assistance to State agencies, 
schools, and nonprofit entities for Team Nutrition and other nutrition 
education projects that improve student understanding of healthful 
eating patterns, including an awareness and understanding of the 
Dietary Guidelines for Americans, the quality of school meals and 
access to local foods in schools and institutions operating programs 
under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 
et seq.) and section 4 of this Act.'';
            (2) by striking subsections (c) through (h) and inserting 
        after subsection (b) the following:
    ``(c) Team Nutrition Network.--
            ``(1) Purpose.--The purpose of the Team Nutrition Network 
        is to--
                    ``(A) promote the nutritional health of the 
                Nation's school children through nutrition education, 
                physical activity and other activities that support 
                healthy lifestyles for children based on the Dietary 
                Guidelines for Americans, issued jointly by the 
                Secretary of Agriculture and the Secretary of Health 
                and Human Services, and the physical fitness guidelines 
                issued by the Secretary of Health and Human Services;
                    ``(B) provide assistance to States for the 
                development of State-wide, comprehensive, and 
                integrated nutrition education and physical fitness 
                programs; and
                    ``(C) provide training and technical assistance to 
                States, school and community nutrition programs, and 
                child nutrition food service professionals.
            ``(2) State coordinator.--The State Team Nutrition Network 
        Coordinator shall--
                    ``(A) administer and coordinate a comprehensive 
                integrated statewide nutrition education program; and
                    ``(B) coordinate efforts with the Food and 
                Nutrition Service and State agencies responsible for 
                children's health programs.
            ``(3) Team nutrition network.--Subject to the availability 
        or appropriations to carry out this subsection, the Secretary, 
        in consultation with the Secretary of Education, shall, on a 
        competitive basis, provide assistance to States for the purpose 
        of creating model nutrition education and physical activity 
        programs, consistent with current dietary and fitness 
        guidelines, for students in elementary schools and secondary 
        schools.
            ``(4) Requirements for state participation.--To be eligible 
        to receive assistance under this subsection, a State 
        Coordinator shall submit an application to the Secretary at 
        such time, and in such manner, and containing such information 
        as the Secretary may require, including--
                    ``(A) a description of how the proposed nutrition 
                and physical activity program will promote healthy 
                eating and physical activity and fitness and address 
                the health and social consequences of children who are 
                at risk of becoming overweight or obese;
                    ``(B) information describing how nutrition 
                activities are to be coordinated at the State level 
                with other health activities conducted by education, 
                health and agriculture agencies;
                    ``(C) information describing how initiatives to 
                promote physical activity are to be coordinated at the 
                State level with other initiatives to promote physical 
                activity conducted by education, health, and parks and 
                recreation agencies;
                    ``(D) a description of the consultative process 
                that the State Coordinator employed in the development 
                of the model nutrition and physical activity programs, 
                including consultations with individuals and 
                organizations with expertise in promoting public 
                health, nutrition, or physical activity, and 
                organizations representing the agriculture, food and 
                beverage, fitness, and sports and recreation 
                industries;
                    ``(E) a description of how the State Coordinator 
                will evaluate the effectiveness of its program; and
                    ``(F) a description of how any and all 
                communications to parents and guardians of all students 
                who are members of a household receiving or applying 
                for assistance under the program shall be in an 
                understandable and uniform format, and, to the extent 
                practicable, in a language that parents can understand.
            ``(5) Duration.--Subject to the availability of funds made 
        available to carry out this subsection, a State Coordinator 
        shall conduct the project for a period of 3 successive school 
        years.
            ``(6) Authorized activities.--An eligible applicant that 
        receives assistance under this subsection may use funds to 
        carry out one or more of the following activities--
                    ``(A) collecting, analyzing, and disseminating data 
                regarding the extent to which children and youth in the 
                State are overweight or physically inactive and the 
                programs and services available to meet those needs;
                    ``(B) developing and implementing model elementary 
                and secondary education curricula to create a 
                comprehensive, coordinated nutrition and physical 
                fitness awareness and obesity prevention program;
                    ``(C) developing and implementing pilot programs in 
                schools to increase physical activity and to enhance 
                the nutritional status of students, including through 
                the increased consumption of fruits and vegetables, 
                whole grains, and lowfat dairy products;
                    ``(D) developing and implementing State guidelines 
                in health, which include nutrition education, and 
                physical education and emphasize regular physical 
                activity during school hours;
                    ``(E) collaborating with community based 
                organizations, volunteer organizations, State medical 
                associations, and public health groups to develop and 
                implement nutrition and physical education programs 
                targeting lower income children, ethnic minorities, and 
                youth at a greater risk for obesity;
                    ``(F) collaborating with public or private 
                organizations that have as a mission the raising of 
                public awareness of the importance of a balanced diet 
                and an active lifestyle; and
                    ``(G) providing training and technical assistance 
                to teachers and school food service professionals 
                consistent with the purpose of this section.
            ``(7) Limitation.--Materials prepared under this subsection 
        regarding agricultural commodities, food, or beverages must be 
        factual and without bias.
            ``(8) Report.--Within 18 months of completion of the 
        projects and the evaluations, the Secretary shall submit to the 
        Committee on Education and the Workforce of the House of 
        Representatives and the Committee on Health, Education, Labor, 
        and Pensions of the Senate and the Committee on Agriculture, 
        Nutrition and Forestry of the Senate a report describing the 
        results of the evaluation of the demonstration programs and 
        shall make such reports available to the public, including 
        through the Internet.
            ``(9) Independent evaluation.--
                    ``(A) In general.--The Secretary shall enter into 
                an agreement with an independent, non-partisan science-
                based research organization to conduct a comprehensive 
                independent evaluation of the effectiveness of the Team 
                Nutrition initiative and the Team Nutrition Network 
                authorized by this subsection and to identify best 
                practices in--
                            ``(i) improving student understanding of 
                        healthful eating patterns;
                            ``(ii) engaging students in regular 
                        physical activity and improving physical 
                        fitness;
                            ``(iii) reducing diabetes and obesity rates 
                        in school children;
                            ``(iv) improving student nutrition 
                        behaviors on the school campus including 
                        healthier meal choices evidenced by greater 
                        inclusion of fruits, vegetables, whole grains, 
                        and lean dairy and protein in meal and snack 
                        selections;
                            ``(v) providing training and technical 
                        assistance for food service professionals 
                        resulting in the availability of healthy meals 
                        that appeal to ethnic and cultural taste 
                        preferences;
                            ``(vi) linking meals programs to nutrition 
                        education activities; and
                            ``(vii) successfully involving school 
                        administrators, the private sector, public 
                        health agencies, non-profit organizations, and 
                        other community partners.
                    ``(B) Report.--Not later than October 1, 2007, the 
                Secretary shall transmit the findings of the 
                independent evaluation to the Committee on Education 
                and the Workforce of the House of Representatives, the 
                Committee on Health, Education, Labor, and Pensions and 
                the Committee on Agriculture, Nutrition, and Forestry 
                of the Senate.
    ``(d) Local Nutrition and Physical Activity Project.--
            ``(1) In general.--Subject to the availability of 
        appropriations to carry out this subsection, the Secretary, in 
        consultation with the Secretary of Education, shall provide 
        assistance to not more than 100 local educational agencies, at 
        least one per State, for the establishment of pilot projects 
        for purposes of promoting healthy eating habits and increasing 
        physical activity, consistent with the Dietary Guidelines for 
        Americans issued jointly by the Secretary of Agriculture and 
        the Secretary of Health and Human Services, among elementary 
        and secondary education students.
            ``(2) Requirement for participation in pilot project.--To 
        be eligible to receive assistance under this subsection, a 
        local educational agency shall, in consultation with 
        individuals who possess education or experience appropriate for 
        representing the general field of public health, including 
        nutrition and fitness professionals, submit to the Secretary an 
        application that shall include--
                    ``(A) a description of the local educational 
                agency's need for nutrition and physical activity 
                programs;
                    ``(B) a description of how the proposed project 
                will improve health and nutrition through education and 
                increased access to physical activity;
                    ``(C) a description of how funds under this 
                subsection will be coordinated with other programs 
                under this Act, the Richard B. Russell National School 
                Lunch Act, or other Acts, as appropriate, to improve 
                student health and nutrition;
                    ``(D) a statement of the local educational agency's 
                measurable goals for nutrition and physical education 
                programs and promotion;
                    ``(E) a description of how the proposed project 
                will be aligned with the local wellness policy required 
                under the Act;
                    ``(F) a description of the procedures the agency 
                will use for assessing and publicly reporting progress 
                toward meeting those goals; and
                    ``(G) a description of how communications to 
                parents and guardians of participating students 
                regarding the activities under this subsection shall be 
                in an understandable and uniform format, and, to the 
                extent practicable, in a language that parents can 
                understand.
            ``(3) Duration.--Subject to the availability of funds made 
        available to carry out this subsection, a local educational 
        agency receiving assistance under this subsection shall conduct 
        the project during a period of 3 successive school years.
            ``(4) Authorized activities.--An eligible applicant that 
        receives assistance under this subsection--
                    ``(A) shall use funds provided to--
                            ``(i) promote healthy eating through the 
                        development and implementation of nutrition 
                        education programs and curricula based on the 
                        Dietary Guidelines for Americans; and
                            ``(ii) increase opportunities for physical 
                        activity through after school programs, 
                        athletics, intramural activities, and recess; 
                        and
                    ``(B) may use funds provided to--
                            ``(i) educate parents and students about 
                        the relationship of a poor diet and inactivity 
                        to obesity and other health problems;
                            ``(ii) develop and implement physical 
                        education programs that promote fitness and 
                        lifelong activity;
                            ``(iii) provide training and technical 
                        assistance to food service professionals to 
                        develop nutritious, more appealing menus and 
                        recipes;
                            ``(iv) incorporate nutrition education into 
                        physical education, health education, and after 
                        school programs, including athletics;
                            ``(v) involve parents, nutrition 
                        professionals, food service staff, educators, 
                        community leaders, and other interested parties 
                        in assessing the food options in the school 
                        environment and developing and implementing an 
                        action plan to promote a balanced and healthy 
                        diet;
                            ``(vi) provide nutrient content or 
                        nutrition information on meals served through 
                        the school lunch or school breakfast programs 
                        and items sold a la carte during meal times;
                            ``(vii) encourage the increased consumption 
                        of a variety of healthy foods through new 
                        initiatives such as salad bars and fruit bars; 
                        and
                            ``(viii) provide nutrition education, 
                        including sports nutrition education, for 
                        teachers, coaches, food service staff, athletic 
                        trainers, and school nurses.
            ``(5) Limitation.--Materials prepared under this subsection 
        regarding agricultural commodities, food, or beverages must be 
        factual and without bias.
            ``(6) Report.--Within 18 months of completion of the 
        projects and evaluations, the Secretary shall transmit to the 
        Committee on Education and the Workforce of the House of 
        Representatives and the Committee on Health, Education, Labor, 
        and Pensions and the Committee on Agriculture, Nutrition and 
        Forestry of the Senate a report describing the results of the 
        evaluation of the pilot projects and shall make such reports 
        available to the public, including through the Internet.
    ``(e) Nutrition Education Support.--
            ``(1) In general.--In carrying out the purpose of this 
        section to support nutrition education, the Secretary may 
        provide for technical assistance and grants to improve the 
        quality of school meals and access to local foods in schools 
        and institutions.
            ``(2) School meals initiative.--The Secretary may provide 
        assistance to enable State educational agencies to--
                    ``(A) implement the recommendations of the 
                Secretary's School Meals Initiative for Healthy 
                Children;
                    ``(B) increase the consumption of fruits, 
                vegetables, low-fat dairy products, and whole grains;
                    ``(C) reduce saturated fat and sodium in school 
                meals;
                    ``(D) improve school nutritional environments; and
                    ``(E) conduct other activities that aid schools in 
                carrying out the Secretary's School Meals Initiative 
                for Healthy Children.
            ``(3) Access to local foods.--The Secretary may provide 
        assistance, through competitive matching grants and technical 
        assistance, to schools and nonprofit entities for projects 
        that--
                    ``(A) improve access to local foods in schools and 
                institutions participating in programs under the 
                Richard B. Russell National School Lunch Act (42 U.S.C. 
                1751 et seq.) and Section 4 of this Act through farm-
                to-cafeteria activities that may include the 
                acquisition of food and appropriate equipment and the 
                provision of training and education;
                    ``(B) are, at a minimum, designed to procure local 
                foods from small- and medium-sized farms for school 
                meals;
                    ``(C) support nutrition education activities or 
                curriculum planning that incorporates the participation 
                of schoolchildren in farm and agriculture education 
                activities;
                    ``(D) develop a sustained commitment to farm-to-
                cafeteria projects in the community by linking schools, 
                agricultural producers, parents, and other community 
                stakeholders;
                    ``(E) require $100,000 or less in Federal 
                contributions;
                    ``(F) require a Federal share of costs not to 
                exceed 75 percent;
                    ``(G) provide matching support in the form of cash 
                or in kind contributions (including facilities, 
                equipment, or services provided by State and local 
                governments and private sources); and
                    ``(H) cooperate in an evaluation to be carried out 
                by the Secretary.''; and
            (3) by redesignating subsection (i) as subsection (f), and 
        amending paragraph (1) of such subsection to read as follows:
            ``(1) In general.--There is authorized to be appropriated 
        such sums as may be necessary for carrying out this section for 
        fiscal years 2004 through 2008.''.

SEC. 303. FRUITS AND VEGETABLE COMMODITIES.

    Section 6(c)(1)(D) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1755(c)(1)(D)) is amended by inserting ``, and fruits 
and vegetables'' before the period.

SEC. 304. FLUID MILK.

    Section 9(a)(2) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1758(a)(2)) is amended to read as follows:
            ``(2) Fluid milk.--
                    ``(A) In general.--Lunches served by schools 
                participating in the school lunch program under this 
                Act--
                            ``(i) shall offer students fluid milk in a 
                        variety of fat contents;
                            ``(ii) may offer students flavored and 
                        unflavored fluid milk and lactose-free fluid 
                        milk; and
                            ``(iii) shall provide a substitute for 
                        fluid milk for students whose disability 
                        restricts their diet, upon receipt of a written 
                        statement from a licensed physician that 
                        identifies the disability that restricts the 
                        student's diet and that specifies the 
                        substitute for fluid milk.
                    ``(B) Substitutes.--
                            ``(i) Standards for substitution.--Schools 
                        may substitute for the fluid milk provided 
                        under subparagraph (A), a non-dairy beverage 
                        that is nutritionally equivalent to fluid milk 
                        and meets nutritional standards as established 
                        by the Secretary (which shall, among other 
                        requirements to be determined by the Secretary, 
                        include fortification of calcium, protein, 
                        vitamin A, and vitamin D to levels found in 
                        cow's milk) for students who cannot consume 
                        fluid milk because of a medical or other 
                        special dietary need other than a disability 
                        described in subparagraph (A)(iii).
                            ``(ii) Notice.--Such substitutions may be 
                        made if the school notifies the State agency 
                        that it is implementing a variation allowed 
                        under this subparagraph, and if such 
                        substitution is requested by written statement 
                        of a medical authority or by a student's parent 
                        or legal guardian that identifies the medical 
                        or other special dietary need that restricts 
                        the student's diet, provided that the school 
                        shall not be required to provide beverages 
                        other than those it has identified as 
                        acceptable substitutes.
                            ``(iii) Excess expenses borne by the school 
                        district.--Expenses incurred in providing 
                        substitutions pursuant to this subparagraph 
                        that are in excess of those covered by 
                        reimbursements under this Act shall be paid by 
                        the school district.
                    ``(C) Restrictions on sale of milk prohibited.--A 
                school or institution that participates in the school 
                lunch program under this Act shall not directly or 
                indirectly restrict the sale or marketing of fluid milk 
                products by the school (or by a person approved by the 
                school) at any time or any place--
                            ``(i) on the school premises; or
                            ``(ii) at any school-sponsored event.''.

SEC. 305. WAIVER OF REQUIREMENTS FOR WEIGHTED AVERAGES FOR NUTRIENT 
              ANALYSIS.

    Section 9(f)(5) of the Richard B. Russell National School Lunch Act 
(42 U.S.C 1758(f)(5)) is amended to read as follows:
            ``(5) Waiver of requirements for weighted averages for 
        nutrient analysis.--State educational agencies may grant 
        waivers to school food authorities to the requirement for 
        weighted averages for nutrient analysis of menu items and foods 
        offered or served as part of a meal offered or served under the 
        school lunch program under this Act or the school breakfast 
        program under section 4 of the Child Nutrition Act of 1966 (42 
        U.S.C. 1773) if--
                    ``(A) the school food authority has an equivalent 
                system for conducting a nutrient analysis, subject to 
                State agency approval; and
                    ``(B) the equivalent system adequately documents 
                the extent to which the school food authority is 
                meeting the Dietary Guidelines for Americans and other 
                nutrition standards.
        In addition, the Secretary may waive, on a case by case basis, 
        the requirement for a State agency to use weighted averages 
        when conducting a nutrient analysis as part of a review (of 
        compliance with the Dietary Guidelines and other nutrition 
        standards) of a school food authority not using nutrient 
        standard menu planning, when, in the Secretary's determination, 
        an alternative analysis would yield results that would 
        adequately measure a school food authority's compliance with 
        current nutrition standards for school meals.''.

SEC. 306. WHOLE GRAINS.

    Not later than 18 months after the date of enactment of this Act, 
the Secretary shall promulgate rules, based on Federal nutrition 
guidelines, to increase the presence of whole grains in foods offered 
in school nutrition programs under the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1751 et seq.) and the Child Nutrition Act 
of 1966 (42 U.S.C. 1771 et seq.).

      TITLE IV--IMPROVING THE WOMEN, INFANTS, AND CHILDREN PROGRAM

SEC. 401. DEFINITION OF NUTRITION EDUCATION.

    Section 17(b)(7) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(b)(7)) is amended--
            (1) by inserting ``and physical activity'' after ``dietary 
        habits''; and
            (2) by striking ``nutrition and health'' and inserting 
        ``nutrition, health, and child development''.

SEC. 402. DEFINITION OF SUPPLEMENTAL FOODS.

    Section 17(b)(14) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(b)(14)) is amended by inserting after ``children'' the following: 
``and foods that promote health as indicated in the most recent Dietary 
Guidelines for Americans published under section 301 of the National 
Nutrition Monitoring and Related Research Act of 1990 (7 U.S.C. 
5341)''.

SEC. 403. IMPROVING CERTIFICATION.

    (a) Certification of Women Who Are Breastfeeding.--Section 
17(d)(3)(A) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(d)(3)(A)) is amended by adding at the end the following: ``A State 
may certify breast-feeding women for up to 1 year, or until women stop 
breast-feeding, whichever is earlier.''.
    (b) Physical Presence Requirement.--Section 17(d)(3)(C)(ii) of the 
Child Nutrition Act of 1966 (42 U.S.C. 1786(d)(3)(C)(ii)) is amended--
            (1) in subclause (I)(bb), by striking ``from a provider 
        other than the local agency; or'' and inserting a semicolon;
            (2) in subclause (II)(cc), by striking the period at the 
        end and inserting ``; and''; and
            (3) by inserting after subclause (II) the following:
                                    ``(III) an infant under 8 weeks of 
                                age--
                                            ``(aa) who cannot be 
                                        present at certification for a 
                                        reason determined appropriate 
                                        by the local agency; and
                                            ``(bb) for whom all 
                                        necessary certification 
                                        information is provided.''.
    (c) Processing Applications Under Special Circumstances.--Section 
17(f)(1)(C) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(f)(1)(C)) is amended by--
            (1) redesignating clauses (ix) and (x) as clauses (x) and 
        (xi), respectively; and
            (2) inserting after clause (viii) the following:
                            ``(ix) procedures whereby a State agency 
                        may accept and process vendor applications 
                        outside of the established time-frames, such as 
                        in situations in which a previously authorized 
                        vendor changes ownership under circumstances 
                        that do not permit timely notification to the 
                        State agency of such change in ownership;''.
    (d) Rescheduling Policies.--Section 17(f)(19) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1786(f)(19)) is amended--
            (1) in subparagraph (A), by striking ``; and'' and 
        inserting a semicolon;
            (2) in subparagraph (B), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(C) require local agencies to permit an applicant or 
        participant to reschedule an appointment to apply or be 
        recertified for the program.''.

SEC. 404. REVIEWS OF AVAILABLE SUPPLEMENTAL FOODS.

    (a) Scientific Review.--Section 17(f)(11) of the Child Nutrition 
Act of 1966 (42 U.S.C. 1786(f)(11)) is amended to read as follows:
    ``(11)(A) The Secretary shall prescribe by regulations the 
supplemental foods to be made available in the program under this 
section. To the degree possible the Secretary shall assure that the 
fat, sugar, and salt content of the prescribed foods is appropriate.
    ``(B) Beginning in 2013 and every 10 years thereafter, or more 
frequently if determined by the Secretary to be necessary to reflect 
current scientific knowledge, the Secretary shall conduct a scientific 
review of the supplemental foods available in the program and 
recommend, as necessary, changes to reflect nutrition science, current 
public health concerns, and cultural eating patterns.''.
    (b) Rulemaking.--The Secretary shall promulgate a rule updating the 
prescribed supplemental foods available through the program authorized 
under section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786) 
within 6 months of receiving the review of the food package for such 
program undertaken by the National Academy of Sciences, Institute of 
Medicine in September 2003.

SEC. 405. NOTIFICATION OF VIOLATIONS AND INFANT FORMULA BENEFITS.

    Section 17(f) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(f)) is amended by adding at the end the following:
            ``(25) Notification of violations.--If a State agency finds 
        that a vendor has committed a violation that requires a pattern 
        of occurrences in order to impose a sanction, the State agency 
        shall notify the vendor of the initial violation in writing 
        prior to documentation of another violation, unless the State 
        agency determines that notifying the vendor would compromise 
        its investigation.
            ``(26) Infant formula benefits.--
                    ``(A) In general.--The State agency may round up to 
                the next whole can of infant formula to ensure that all 
                infants receive the full-authorized nutritional benefit 
                specified by regulation.
                    ``(B) Limitation.--Subparagraph (A) applies only to 
                infant formula contracts awarded under bid 
                solicitations made on or after October 1, 2004.''.

SEC. 406. HEALTHY PEOPLE 2010 INITIATIVE.

    Section 17(h)(4) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(4)) is amended--
            (1) in subparagraph (D), by striking ``; and'' and 
        inserting a semicolon;
            (2) in subparagraph (E), by striking the period at the end 
        and inserting ``; and''; and
            (3) by inserting after subparagraph (E) the following:
                    ``(F) partner with communities, State and local 
                agencies, employers, health care professionals, and the 
                private sector to build a supportive breastfeeding 
                environment for women participating in the program 
                under this section to support the breastfeeding goals 
                of the Healthy People 2010 initiative.''.

SEC. 407. COMPETITIVE BIDDING.

    Section 17(h)(8)(A) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(8)(A)) is amended by adding at the end the following:
                            ``(iv) Rebate invoices.--Each State agency 
                        shall have a system to ensure that infant 
                        formula rebate invoices, under competitive 
                        bidding, provide a reasonable estimate or an 
                        actual count of the number of units sold to 
                        participants in the program under this section.
                            ``(v) Cent-for-cent adjustments.--A bid 
                        solicitation for infant formula under the 
                        program made on or after October 1, 2004 shall 
                        require the manufacturer to adjust for price 
                        changes subsequent to the opening of the 
                        bidding process in a manner that requires--
                                    ``(I) a cent-for-cent increase in 
                                the rebate amounts if there is an 
                                increase in the lowest national 
                                wholesale price for a full truckload of 
                                the particular infant formula; or
                                    ``(II) a cent-for-cent decrease in 
                                the rebate amounts if there is a 
                                decrease in the lowest national 
                                wholesale price for a full truckload of 
                                the particular infant formula.''.

SEC. 408. FRUIT AND VEGETABLE PROJECTS.

    Section 17(h)(10)(B)(ii) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(h)(10)(B)(ii)) is amended by inserting after ``under this 
section'' the following: ``, which may include demonstration projects 
in up to 10 local sites, determined to be geographically and culturally 
representative of local States and Indian agencies, to evaluate the 
inclusion of fresh, frozen, or canned fruits and vegetables (to be made 
available through private funds) as an addition to the supplemental 
food provided under this section''.

SEC. 409. PRICE LEVELS OF RETAIL STORES.

    Section 17(h)(11) of the Child Nutrition Act of 1966 is amended by 
adding at the end the following:
                    ``(C) Additional requirements.--
                            ``(i) The State agency shall evaluate a 
                        vendor applicant based on its shelf prices 
or on the prices it bids for supplemental foods, which may not exceed 
its shelf prices.
                            ``(ii) The State agency shall establish 
                        price limitations on the amount that it will 
                        pay vendors for supplemental foods. The State 
                        agency shall ensure that price limitations do 
                        not result in inadequate participant access by 
                        geographic area.
                            ``(iii) In establishing competitive price 
                        and price limitation requirements, the State 
                        agency may exclude pharmacy vendors that supply 
                        only exempt infant formula or medical foods 
                        that are eligible under the program.
                            ``(iv) The State agency shall establish 
                        competitive price requirements and price 
                        limitations for vendor peer groups, as 
                        necessary to ensure that prices paid to vendors 
                        are competitive. Vendor peer group competitive 
                        price requirements and price limitations may 
                        reflect reasonable estimates of varying costs 
                        of acquisition of supplemental foods.
                    ``(D) Incentive items.--The State agency shall not 
                authorize a retail food store that provides incentive 
                items or other free merchandise to program participants 
                if funds available under this program were used to 
                purchase such items or merchandise.
                    ``(E) Rules of construction.--Nothing in this 
                section may be construed to authorize violation of the 
                Sherman Antitrust Act (15 U.S.C. 1 et seq.) or the 
                Robinson-Patman Act (15 U.S.C. 13 et seq.).''.

SEC. 410. MANAGEMENT INFORMATION SYSTEMS.

    Section 17(h)(12) of the Child Nutrition Act of 1996 (42 U.S.C. 
1786(h)(12)) is amended--
            (1) by amending subparagraph (B) to read as follows:
                    ``(B) Electronic benefit transfer systems.--
                            ``(i) In general.--All States that receive 
                        Federal funds for design or implementation of 
                        electronic benefit transfer (EBT) systems for 
                        the program under this section shall use 
                        technical specifications or standards, as 
                        applicable, as determined by the Secretary, 
                        except as provided in clause (ii).
                            ``(ii) Existing systems.--EBT systems for 
                        the program under this section that are in 
                        development or are issuing benefits as of the 
                        date of enactment shall be required to submit 
                        within 6 months after the date of enactment of 
                        this subparagraph a plan for compliance.
                            ``(iii) Waiver.--The Secretary may waive 
                        compliance with this subparagraph for State EBT 
                        systems for the program under this section that 
                        are issuing benefits as of the date of 
                        enactment of this subparagraph until such time 
                        that compliance is feasible.''; and
            (2) by amended subparagraph (C) to read as follows:
            ``(C) Universal product codes database.--The Secretary 
        shall implement a national Universal Product Code Database for 
        use by all State agencies in carrying out the program and shall 
        make available from appropriated funds such sums as may be 
        required for hosting, hardware, and software configuration, and 
        support.''.

SEC. 411. INFANT FORMULA FRAUD PREVENTION.

    Section 17(h) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)) is further amended by adding at the end the following:
    ``(13) Approved providers of infant formula.--
            ``(A) In general.--The State agency shall maintain a list 
        of infant formula manufacturers, wholesalers, distributors, and 
        retailers approved to provide infant formula to vendors.
            ``(B) List.--The list required under subparagraph (A) shall 
        include food manufacturers, wholesalers, distributors, and 
        retailers licensed in the State in accordance with State law 
        and regulations to distribute infant formula and food 
        manufacturers registered with the U.S. Food and Drug 
        Administration that provide infant formula.
            ``(C) Purchase requirement.--Vendors authorized to 
        participate in the program under this section shall purchase 
        infant formula from the list required under subparagraph 
        (A).''.

SEC. 412. STATE ALLIANCES.

    Section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786) is 
further amended--
            (1) in subsection (b) by adding at the end the following:
            ``(22) `State alliance' means 2 or more State agencies that 
        join together for the purpose of procuring infant formula by 
        soliciting competitive bids.''; and
            (2) in subsection (h)(8)(A) by adding at the end the 
        following:
                            ``(vi) Size of state alliances.--No State 
                        alliance may form among States whose infant 
                        participation exceeds 200,000 based on program 
                        participation as of October 2003, except that--
                                    ``(I) an alliance among States with 
                                a combined 200,000 infant participants 
                                as of October 2003 may continue, and 
                                may expand to include more than 200,000 
                                infants, but may not expand to include 
                                any additional State agencies that were 
                                not included in the alliance as of 
                                October 1, 2003, other than as provided 
                                in subclause (II); and
                                    ``(II) any State agency serving 
                                fewer than 5,000 infant participants as 
                                of October 2003, or any Indian Tribal 
                                Organization, may request to join any 
                                State alliance.''.

SEC. 413. LIMITS ON EXPENDITURES.

    Section 17(i)(3)(A)(ii)(I) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(i)(3)(A)(ii)(I)) is amended by striking ``1 percent'' and 
inserting ``3 percent''.

SEC. 414. MIGRANT AND COMMUNITY HEALTH CENTERS INITIATIVE.

    Section 17(j) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(j)) is amended by striking paragraph (4) and redesignating 
paragraph (5) as paragraph (4).

SEC. 415. DEMONSTRATION PROJECTS.

    (a) Child Nutrition Act of 1966.--Section 17 of the Child Nutrition 
Act of 1966 (42 U.S.C. 1786) is amended by striking subsection (r).
    (b) National School Lunch Act.--Section 12 of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1760) is amended by 
striking subsection (p).

SEC. 416. AUTHORIZATION OF APPROPRIATIONS.

    (a) Reauthorization of Program.--Section 17(g) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1786(g)) is amended by striking 
``(g)(1) There are authorized'' and all that follows through ``through 
2003.'' in paragraph (1) and inserting the following:
    ``(g) Authorization of Appropriations.--
            ``(1) In general.--There is authorized to be appropriated 
        to carry out this section such sums as are necessary for each 
        of fiscal years 2004 through 2008.''.
    (b) Nutrition Services and Administration Funds.--Section 17(h) of 
the Child Nutrition Act of 1966 (42 U.S.C. 1786(h)) is amended--
            (1) in paragraph (2)(A), by striking ``1995 through 2003'' 
        and inserting ``2004 through 2008''; and
            (2) in paragraph (10)(A), by striking ``1995 through 2003'' 
        and inserting ``2004 through 2008''.
    (c) Farmers' Market Nutrition Program.--Section 17(m)(9)(A)(i) of 
the Child Nutrition Act of 1966 (42 U.S.C. 1786(m)(9)) is amended to 
read as follows:
                            ``(i) Authorization of appropriations.--
                        There is authorized to be appropriated to carry 
                        out this subsection such sums as are necessary 
                        for each of fiscal years 2004 through 2008.''.

TITLE V--REAUTHORIZATION, MISCELLANEOUS PROVISIONS, AND EFFECTIVE DATE.

SEC. 501. TRAINING, TECHNICAL, AND OTHER ASSISTANCE.

    Section 21(a)(1) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1769b-1(a)(1)) is amended to read as follows:
            ``(1) subject to the availability of and from amounts 
        appropriated pursuant to subsection (e)(1), shall provide--
                    ``(A) training and technical assistance to improve 
                the skills of individuals employed in food service 
                programs carried out under this Act, section 4 of the 
                Child Nutrition Act of 1966 (42 U.S.C. 1773), and, as 
                appropriate, other federally assisted feeding programs;
                    ``(B) training and technical assistance to States, 
                State agencies, schools, and school food authorities in 
                the procurement of goods and services for programs 
                under this Act and the Child Nutrition Act of 1966 (42 
                U.S.C. 1771 et seq.), including training and technical 
                assistance to ensure compliance with section 12(n) of 
                this Act (42 U.S.C. 1760(n));
                    ``(C) assistance, on a competitive basis, to State 
                agencies for the purpose of aiding schools and school 
                food authorities with at least 50 percent of enrolled 
                children certified to receive free or reduced price 
                meals, and, if there are any remaining funds, other 
                schools and school food authorities in meeting the cost 
                of acquiring or upgrading technology and information 
                management systems for use in food service programs 
                carried out under this Act and section 4 of the Child 
                Nutrition Act of 1966 (42 U.S.C. 1773) if the school or 
                school food authority submits to the State agency an 
                infrastructure development plan that addresses the cost 
                savings and improvements in program integrity and 
                operations that would result from the use of new or 
                upgraded technology in--
                            ``(i) methods to ensure that there shall 
                        not be any overt identification of any such 
                        child by special tokens or tickets, announced 
                        or published list of names, or by any other 
                        means;
                            ``(ii) processing and verifying 
                        applications for free and reduced price school 
                        meals;
                            ``(iii) integrating menu planning, 
                        production, and serving data to monitor 
                        compliance with section 9(f)(1); and
                            ``(iv) establishing compatibility with 
                        statewide reporting systems;
                    ``(D) assistance, on a competitive basis, to State 
                agencies with low proportions of schools or students 
                that participate in the school breakfast program under 
                section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 
                1773) and that demonstrate the greatest need, for the 
                purpose of aiding schools in meeting costs associated 
                with initiating or expanding a school breakfast program 
                under section 4 of the Child Nutrition Act of 1966 (42 
                U.S.C. 1773), including outreach and informational 
                activities; and''.

SEC. 502. NOTICE OF IRRADIATED FOOD.

    Section 14 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1762a) is amended by adding at the end the following:
    ``(h) Notice of Irradiated Food.--The Secretary shall develop 
policy and establish procedures for the purchase and distribution of 
irradiated food products in Federal school meals programs. The policies 
and procedures shall ensure at a minimum that--
            ``(1) irradiated food products are made available only at 
        the request of States and school food authorities;
            ``(2) reimbursements to schools for irradiated food 
        products are equal to reimbursements to schools for non-
        irradiated products;
            ``(3) States and school food service authorities are 
        provided factual information on the science and evidence 
regarding irradiation technology, including notice that irradiation is 
not a substitute for safe food handling techniques and any such other 
information necessary to promote food safety in school meal programs;
            ``(4) States and school food service authorities are 
        provided model procedures for providing factual information on 
        the science and evidence regarding irradiation technology and 
        any such other information necessary to promote food safety in 
        school meals to school food service authorities, parents, and 
        students regarding irradiation technology;
            ``(5) irradiated food products distributed to the Federal 
        school meals program are labeled with a symbol or other printed 
        notice indicating that the product was treated with irradiation 
        and is prominently displayed in a clear and understandable 
        format on the container;
            ``(6) irradiated products are not commingled with non-
        irradiated products in containers; and
            ``(7) encourages schools that offer irradiated foods to 
        offer alternatives to irradiated food products as part of the 
        meal plan used by schools.''.

SEC. 503. SENSE OF CONGRESS.

    Section 12 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1760) is further amended by adding at the end the following:
    ``(p) Sense of Congress.--It is the sense of Congress that Federal 
resources provided under this Act and the Child Nutrition Act of 1966 
dedicated to child nutrition should support the most effective programs 
within the Federal agency that is most capable of assisting children in 
nutritional need. Congress encourages the elimination of initiatives 
that are duplicative of other Federal efforts, particularly those that 
are duplicative of programs conducted under this Act and the Child 
Nutrition Act of 1966.''.

SEC. 504. REAUTHORIZATION OF PROGRAMS.

    (a) State Administrative Expenses.--Section 7(i) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1776(g)) (as amended by this Act) is 
amended by striking ``2003'' and inserting ``2008''.
    (b) Commodity Distribution Program.--
            (1) Section 14(a) of the Richard B. Russell National School 
        Lunch Act (42 U.S.C. 1762a(a)) is amended by striking ``March 
        31, 2004'' and inserting ``September 30, 2008''.
            (2) Section 15(e) of the Commodity Distribution Reform Act 
        and WIC Amendments of 1987 (7 U.S.C. 612c note; Public Law 100-
        237) is amended by striking ``April 1, 2004'' and inserting 
        ``October 1, 2008''.
    (c) Purchases of Locally Produced Foods.--Section 9(j)(2)(A) of the 
Richard B. Russell National School Lunch Act (42 U.S.C. 758(j)(2)(A)) 
is amended by striking ``2007'' and inserting ``2008''.
    (d) Training, Technical Assistance, and Food Service Management 
Institute.--Section 21(g)(1) of the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1769b-1(e)(1)) (as amended by this Act) is further 
amended by striking ``for each of fiscal years 1992 through 2003'' and 
inserting ``for fiscal year 2004, and such sums as may be necessary for 
fiscal years 2005 through 2008''.
    (e) Compliance and Accountability.--Section 22(d) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1769c(d)) is amended by 
striking ``2003'' and inserting ``2008''.

SEC. 505. EFFECTIVE DATES.

    The amendments made by sections 101, 104, 105(a), 202, 410, 416, 
and 504 shall take effect on the date of enactment of this Act. The 
amendments made by sections 201 and 208(c) shall take effect on July 1, 
2005. All other amendments made by this Act shall take effect October 
1, 2005.

                                                 Union Calendar No. 258

108th CONGRESS

  2d Session

                               H. R. 3873

                          [Report No. 108-445]

_______________________________________________________________________

                                 A BILL

To amend the Richard B. Russell National School Lunch Act and the Child 
   Nutrition Act of 1966 to provide children with access to food and 
   nutrition assistance, to simplify program operations, to improve 
 children's nutritional health, and to restore the integrity of child 
              nutrition programs, and for other purposes.

_______________________________________________________________________

                             March 23, 2004

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
```