474
(i) in subparagraph (A), by striking
‘‘(B) and (C)’’ and inserting ‘‘(B) through
(D)’’;
(ii) in subparagraph (B)—
(I) by striking ‘‘.—Subject to the
reservation contained in subparagraph
(C), the’’ and inserting ‘‘AND RELAT-
ED ACTIVITIES.—The’’;
(II) in clause (i) by striking ‘‘;
and’’ at the end and inserting a pe-
riod;
(III) by striking ‘‘for—’’ and all
that 
follows 
through 
‘‘section
658E(c)(2)(A)’’ and inserting ‘‘for
child care services on sliding fee scale
basis, activities that improve the qual-
ity or availability of such services, and
any other activity that the State
deems appropriate to realize any of
the goals specified in paragraphs (2)
through (5) of section 658A(b)’’; and
(IV) by striking clause (ii);
(iii) by amending subparagraph (C) to
read as follows:
475
‘‘(C) LIMITATION
ON
ADMINISTRATIVE
COSTS.—Not more than 5 percent of the aggre-
gate amount of funds available to the State to
carry out this subchapter by a State in each fis-
cal year may be expended for administrative
costs incurred by such State to carry out all of
its functions and duties under this subchapter.
As used in the preceding sentence, the term
‘administrative costs’ shall not include the costs
of providing direct services.’’; and
(iv) by adding at the end thereof the
following:
‘‘(D) ASSISTANCE
FOR
CERTAIN
FAMI-
LIES.—A State shall ensure that a substantial
portion of the amounts available (after the
State has complied with the requirement of sec-
tion 417(b)(2) of the Social Security Act with
respect to each of the fiscal years 1997 through
2002) to the State to carry out activities this
subchapter in each fiscal year is used to provide
assistance to low-income working families other
than families described in paragraph (2)(F).’’;
and
(C) in paragraph (4)(A)—
476
(i) by striking ‘‘provide assurances’’
and inserting ‘‘certify’’;
(ii) in the first sentence by inserting
‘‘and shall provide a summary of the facts
relied on by the State to determine that
such rates are sufficient to ensure such ac-
cess’’ before the period; and
(iii) by striking the last sentence.
SEC. 706. LIMITATION ON STATE ALLOTMENTS.
Section 658F(b) (42 U.S.C. 9858d(b)) is amended—
(1) in paragraph (1), by striking ‘‘No’’ and in-
serting 
‘‘Except 
as 
provided 
for 
in 
section
658O(c)(6), no’’; and
(2) in paragraph (2), by striking ‘‘referred to in
section 658E(c)(2)(F)’’.
SEC. 707. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD
CARE.
Section 658G (42 U.S.C. 9858e) is amended to read
as follows:
‘‘SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF
CHILD CARE.
‘‘A State that receives funds to carry out this sub-
chapter for a fiscal year, shall use not less than 4 percent
of the amount of such funds for activities that are de-
signed to provide comprehensive consumer education to
477
parents and the public, activities that increase parental
choice, and activities designed to improve the quality and
availability of child care (such as resource and referral
services).’’.
SEC. 708. REPEAL OF EARLY CHILDHOOD DEVELOPMENT
AND BEFORE- AND AFTER-SCHOOL CARE RE-
QUIREMENT.
Section 658H (42 U.S.C. 9858f) is repealed.
SEC. 709. ADMINISTRATION AND ENFORCEMENT.
Section 658I(b) (42 U.S.C. 9858g(b)) is amended—
(1) in paragraph (1), by striking ‘‘, and shall
have’’ and all that follows through ‘‘(2)’’; and
(2) in the matter following clause (ii) of para-
graph (2)(A), by striking ‘‘finding and that’’ and all
that follows through the period and inserting ‘‘find-
ing and shall require that the State reimburse the
Secretary for any funds that were improperly ex-
pended for purposes prohibited or not authorized by
this subchapter, that the Secretary deduct from the
administrative portion of the State allotment for the
following fiscal year an amount that is less than or
equal to any improperly expended funds, or a com-
bination of such options.’’.
478
SEC. 710. PAYMENTS.
Section 658J(c) (42 U.S.C. 9858h(c)) is amended by
striking ‘‘expended’’ and inserting ‘‘obligated’’.
SEC. 711. ANNUAL REPORT AND AUDITS.
Section 658K (42 U.S.C. 9858i) is amended—
(1) in the section heading by striking ‘‘ANNUAL
REPORT’’ and inserting ‘‘REPORTS’’;
(2) in subsection (a), to read as follows:
‘‘(a) REPORTS.—
‘‘(1) 
COLLECTION
OF
INFORMATION
BY
STATES.—
‘‘(A) IN GENERAL.—A State that receives
funds to carry out this subchapter shall collect
the information described in subparagraph (B)
on a monthly basis.
‘‘(B) REQUIRED
INFORMATION.—The in-
formation required under this subparagraph
shall include, with respect to a family unit re-
ceiving assistance under this subchapter infor-
mation concerning—
‘‘(i) family income;
‘‘(ii) county of residence;
‘‘(iii) the gender, race, and age of
children receiving such assistance;
‘‘(iv) whether the family includes only
1 parent;
479
‘‘(v) the sources of family income, in-
cluding the amount obtained from (and
separately identified)—
‘‘(I) employment, including self-
employment;
‘‘(II) cash or other assistance
under part A of title IV of the Social
Security Act;
‘‘(III) housing assistance;
‘‘(IV) assistance under the Food
Stamp Act of 1977; and
‘‘(V) other assistance programs;
‘‘(vi) the number of months the family
has received benefits;
‘‘(vii) the type of child care in which
the child was enrolled (such as family child
care, home care, or center-based child
care);
‘‘(viii) whether the child care provider
involved was a relative;
‘‘(ix) the cost of child care for such
families; and
‘‘(x) the average hours per week of
such care;
480
during the period for which such information is
required to be submitted.
‘‘(C) 
SUBMISSION
TO
SECRETARY.—A
State described in subparagraph (A) shall, on a
quarterly basis, submit the information required
to be collected under subparagraph (B) to the
Secretary.
‘‘(D) SAMPLING.—The Secretary may dis-
approve the information collected by a State
under this paragraph if the State uses sampling
methods to collect such information.
‘‘(2) BIANNUAL REPORTS.—Not later than De-
cember 31, 1997, and every 6 months thereafter, a
State described in paragraph (1)(A) shall prepare
and submit to the Secretary a report that includes
aggregate data concerning—
‘‘(A) the number of child care providers
that received funding under this subchapter as
separately identified based on the types of pro-
viders listed in section 658P(5);
‘‘(B) the monthly cost of child care serv-
ices, and the portion of such cost that is paid
for with assistance provided under this sub-
chapter, listed by the type of child care services
provided;
481
‘‘(C) the number of payments made by the
State through vouchers, contracts, cash, and
disregards under public benefit programs, listed
by the type of child care services provided;
‘‘(D) the manner in which consumer edu-
cation information was provided to parents and
the number of parents to whom such informa-
tion was provided; and
‘‘(E) the total number (without duplica-
tion) of children and families served under this
subchapter;
during the period for which such report is required
to be submitted.’’; and
(2) in subsection (b)—
(A) in paragraph (1) by striking ‘‘a appli-
cation’’ and inserting ‘‘an application’’;
(B) in paragraph (2) by striking ‘‘any
agency administering activities that receive’’
and inserting ‘‘the State that receives’’; and
(C) in paragraph (4) by striking ‘‘entitles’’
and inserting ‘‘entitled’’.
SEC. 712. REPORT BY THE SECRETARY.
Section 658L (42 U.S.C. 9858j) is amended—
(1) by striking ‘‘1993’’ and inserting ‘‘1997’’;
482
(2) by striking ‘‘annually’’ and inserting ‘‘bien-
nially’’; and
(3) by striking ‘‘Education and Labor’’ and in-
serting ‘‘Economic and Educational Opportunities’’.
SEC. 713. ALLOTMENTS.
Section 658O (42 U.S.C. 9858m) is amended—
(1) in subsection (a)—
(A) in paragraph (1)
(i) by striking ‘‘POSSESSIONS’’ and in-
serting ‘‘POSSESSIONS’’;
(ii) 
by 
inserting 
‘‘and’’ 
after
‘‘States,’’; and
(iii) by striking ‘‘, and the Trust Ter-
ritory of the Pacific Islands’’; and
(B) in paragraph (2), by striking ‘‘3 per-
cent’’ and inserting ‘‘1 percent’’;
(2) in subsection (c)—
(A) in paragraph (5) by striking ‘‘our’’ and
inserting ‘‘out’’; and
(B) by adding at the end thereof the fol-
lowing new paragraph:
‘‘(6) CONSTRUCTION OR RENOVATION OF FA-
CILITIES.—
‘‘(A) REQUEST FOR USE OF FUNDS.—An
Indian tribe or tribal organization may submit
483
to the Secretary a request to use amounts pro-
vided under this subsection for construction or
renovation purposes.
‘‘(B) DETERMINATION.—With respect to a
request submitted under subparagraph (A), and
except as provided in subparagraph (C), upon a
determination by the Secretary that adequate
facilities are not otherwise available to an In-
dian tribe or tribal organization to enable such
tribe or organization to carry out child care
programs in accordance with this subchapter,
and that the lack of such facilities will inhibit
the operation of such programs in the future,
the Secretary may permit the tribe or organiza-
tion to use assistance provided under this sub-
section to make payments for the construction
or renovation of facilities that will be used to
carry out such programs.
‘‘(C) LIMITATION.—The Secretary may not
permit an Indian tribe or tribal organization to
use amounts provided under this subsection for
construction or renovation if such use will re-
sult in a decrease in the level of child care serv-
ices provided by the tribe or organization as
compared to the level of such services provided
484
by the tribe or organization in the fiscal year
preceding the year for which the determination
under subparagraph (A) is being made.
‘‘(D) UNIFORM
PROCEDURES.—The Sec-
retary shall develop and implement uniform
procedures for the solicitation and consideration
of requests under this paragraph.’’; and
(3) in subsection (e), by adding at the end
thereof the following new paragraph:
‘‘(4) INDIAN
TRIBES
OR
TRIBAL
ORGANIZA-
TIONS.—Any portion of a grant or contract made to
an Indian tribe or tribal organization under sub-
section (c) that the Secretary determines is not
being used in a manner consistent with the provision
of this subchapter in the period for which the grant
or contract is made available, shall be allotted by the
Secretary to other tribes or organizations that have
submitted applications under subsection (c) in ac-
cordance with their respective needs.’’.
SEC. 714. DEFINITIONS.
Section 658P (42 U.S.C. 9858n) is amended—
(1) in paragraph (2), in the first sentence by
inserting ‘‘or as a deposit for child care services if
such a deposit is required of other children being
485
cared for by the provider’’ after ‘‘child care serv-
ices’’; and
(2) by striking paragraph (3);
(3) in paragraph (4)(B), by striking ‘‘75 per-
cent’’ and inserting ‘‘85 percent’’;
(4) in paragraph (5)(B)—
(A) by inserting ‘‘great grandchild, sibling
(if such provider lives in a separate residence),’’
after ‘‘grandchild,’’;
(B) by striking ‘‘is registered and’’; and
(C) by striking ‘‘State’’ and inserting ‘‘ap-
plicable’’.
(5) by striking paragraph (10);
(6) in paragraph (13)—
(A) by inserting ‘‘or’’ after ‘‘Samoa,’’; and
(B) by striking ‘‘, and the Trust Territory
of the Pacific Islands’’;
(7) in paragraph (14)—
(A) by striking ‘‘The term’’ and inserting
the following:
‘‘(A) IN GENERAL.—The term’’; and
(B) by adding at the end thereof the fol-
lowing new subparagraph:
‘‘(B) OTHER ORGANIZATIONS.—Such term
includes a Native Hawaiian Organization, as
486
defined in section 4009(4) of the Augustus F.
Hawkins-Robert T. Stafford Elementary and
Secondary School Improvement Amendments of
1988 (20 U.S.C. 4909(4)) and a private non-
profit organization established for the purpose
of serving youth who are Indians or Native Ha-
waiians.’’.
SEC. 715. REPEALS.
(a) CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP
ASSISTANCE ACT OF 1985.—Title VI of the Human Serv-
ices Reauthorization Act of 1986 (42 U.S.C. 10901–
10905) is repealed.
(b) STATE
DEPENDENT
CARE
DEVELOPMENT
GRANTS ACT.—Subchapter E of chapter 8 of subtitle A
of title VI of the Omnibus Budget Reconciliation Act of
1981 (42 U.S.C. 9871–9877) is repealed.
(c) PROGRAMS OF NATIONAL SIGNIFICANCE.—Title
X of the Elementary and Secondary Education Act of
1965, as amended by Public Law 103–382 (108 Stat.
3809 et seq.), is amended—
(1) in section 10413(a) by striking paragraph
(4),
(2) in section 10963(b)(2) by striking subpara-
graph (G), and
487
(3) in section 10974(a)(6) by striking subpara-
graph (G).
(d) NATIVE HAWAIIAN FAMILY-BASED EDUCATION
CENTERS.—Section 9205 of the Native Hawaiian Edu-
cation Act (Public Law 103–382; 108 Stat. 3794) is re-
pealed.
SEC. 716. EFFECTIVE DATE.
(a) IN GENERAL.—Except as provided in subsection
(b), this title and the amendments made by this title shall
take effect on October 1, 1996.
(b) EXCEPTION.—The amendment made by section
803(a) shall take effect on the date of enactment of this
Act.
TITLE VIII—CHILD NUTRITION
PROGRAMS
Subtitle A—National School Lunch
Act
SEC. 801. VALUE OF FOOD ASSISTANCE.
(a) IN GENERAL.—Section 6(e)(1) of the National
School Lunch Act (42 U.S.C. 1755(e)(1)) is amended by
striking subparagraph (B) and inserting the following:
‘‘(B) ADJUSTMENTS.—
‘‘(i) IN GENERAL.—The value of food
assistance for each meal shall be adjusted
each July 1 by the annual percentage
488
change in a 3-month average value of the
Price Index for Foods Used in Schools and
Institutions for March, April, and May
each year.
‘‘(ii) ADJUSTMENTS.—Except as oth-
erwise provided in this subparagraph, in
the case of each school year, the Secretary
shall—
‘‘(I) base the adjustment made
under clause (i) on the amount of the
unrounded adjustment for the preced-
ing school year;
‘‘(II) adjust the resulting amount
in accordance with clause (i); and
‘‘(III) round the result to the
nearest lower cent increment.
‘‘(iii) ADJUSTMENT
FOR
24-MONTH
PERIOD BEGINNING JULY 1, 1996.—In the
case of the 24-month period beginning
July 1, 1996, the value of food assistance
shall be the same as the value of food as-
sistance in effect on June 30, 1996.
‘‘(iv) ADJUSTMENT FOR SCHOOL YEAR
BEGINNING JULY 1, 1998.—In the case of
489
the school year beginning July 1, 1998, the
Secretary shall—
‘‘(I) base the adjustment made
under clause (i) on the amount of the
unrounded adjustment for the value of
food assistance for the school year be-
ginning July 1, 1995;
‘‘(II) adjust the resulting amount
to reflect the annual percentage
change in a 3-month average value of
the Price Index for Foods Used in
Schools and Institutions for March,
April, and May for the most recent
12-month period for which the data
are available; and
‘‘(III) round the result to the
nearest lower cent increment.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall become effective on July 1, 1996.
SEC. 802. COMMODITY ASSISTANCE.
(a) IN GENERAL.—Section 6(g) of the National
School Lunch Act (42 U.S.C. 1755(g)) is amended by
striking ‘‘12 percent’’ and inserting ‘‘8 percent’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall become effective on July 1, 1996.
490
SEC. 803. STATE DISBURSEMENT TO SCHOOLS.
(a) IN GENERAL.—Section 8 of the National School
Lunch Act (42 U.S.C. 1757) is amended—
(1) in the third sentence, by striking ‘‘Nothing’’
and all that follows through ‘‘educational agency to’’
and inserting ‘‘The State educational agency may’’;
(2) by striking the fourth, fifth, and eighth sen-
tences;
(3) by redesignating the first through sixth sen-
tences, as amended by paragraph (1), as subsections
(a) through (f), respectively;
(4) in subsection (b), as redesignated by para-
graph (3), by striking ‘‘the preceding sentence’’ and
inserting ‘‘subsection (a)’’; and
(5) in subsection (d), as redesignated by para-
graph (3), by striking ‘‘Such food costs’’ and insert-
ing ‘‘Use of funds paid to States’’.
(b) DEFINITION OF CHILD.—Section 12(d) of the Act
(42 U.S.C. 1760(d)) is amended by adding at the end the
following:
‘‘(9) ‘child’ includes an individual, regardless of
age, who—
‘‘(A) is determined by a State educational
agency, in accordance with regulations pre-
scribed by the Secretary, to have 1 or more
mental or physical disabilities; and
491
‘‘(B) is attending any institution, as de-
fined in section 17(a), or any nonresidential
public or nonprofit private school of high school
grade or under, for the purpose of participating
in a school program established for individuals
with mental or physical disabilities.
No institution that is not otherwise eligible to par-
ticipate in the program under section 17 shall be
considered eligible because of this paragraph.’’.
SEC. 804. NUTRITIONAL AND OTHER PROGRAM REQUIRE-
MENTS.
(a) NUTRITIONAL STANDARDS.—Section 9(a) of the
National School Lunch Act (42 U.S.C. 1758(a)) is amend-
ed—
(1) in paragraph (2)—
(A) by striking ‘‘(2)(A) Lunches’’ and in-
serting ‘‘(2) Lunches’’;
(B) by striking subparagraph (B); and
(C) by redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively;
(2) by striking paragraph (3); and
(3) by redesignating paragraph (4) as para-
graph (3).
(b) ELIGIBILITY GUIDELINES.—Section 9(b) of the
Act is amended—
492
(1) in paragraph (2)—
(A) by striking subparagraph (A); and
(B) by redesignating subparagraphs (B)
and (C) as subparagraphs (A) and (B), respec-
tively;
(2) in paragraph (5), by striking the third sen-
tence; and
(3) in paragraph (6), by striking ‘‘paragraph
(2)(C)’’ and inserting ‘‘paragraph (2)(B)’’.
(c) UTILIZATION
OF
AGRICULTURAL
COMMOD-
ITIES.—Section 9(c) of the Act is amended by striking the
second, fourth, and sixth sentences.
(d) CONFORMING AMENDMENT.—The last sentence
of section 9(d)(1) of the Act is amended by striking ‘‘sub-
section (b)(2)(C)’’ and inserting ‘‘subsection (b)(2)(B)’’.
(e) NUTRITIONAL INFORMATION.—Section 9(f) of the
Act is amended—
(1) by striking paragraph (1);
(2) by striking ‘‘(2)’’;
(3) by redesignating subparagraphs (A) through
(D) as paragraphs (1) through (4), respectively;
(4) by striking paragraph (1), as redesignated
by paragraph (3), and inserting the following:
‘‘(1) NUTRITIONAL REQUIREMENTS.—Except as
provided in paragraph (2), not later than the first
493
day of the 1996–1997 school year, schools that are
participating in the school lunch or school breakfast
program shall serve lunches and breakfasts under
the program that—
‘‘(A) are consistent with the goals of 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); and
‘‘(B) provide, on the average over each
week, at least—
‘‘(i) with respect to school lunches, 1⁄3
of the daily recommended dietary allow-
ance established by the Food and Nutrition
Board of the National Research Council of
the National Academy of Sciences; and
‘‘(ii) with respect to school breakfasts,
1⁄4 of the daily recommended dietary allow-
ance established by the Food and Nutrition
Board of the National Research Council of
the National Academy of Sciences.’’;
(5) in paragraph (3), as redesignated by para-
graph (3)—
(A) by redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively; and
494
(B) in subparagraph (A), as so redesig-
nated, by redesignating subclauses (I) and (II)
as clauses (i) and (ii), respectively; and
(6) in paragraph (4), as redesignated by para-
graph (3), by striking the first sentence and insert-
ing the following: ‘‘Schools may use any reasonable
approach to meet the requirements of this para-
graph, including any approach described in para-
graph (3).’’.
(f) USE OF RESOURCES.—Section 9 of the Act is
amended by striking subsection (h).
SEC. 805. FREE AND REDUCED PRICE POLICY STATEMENT.
Section 9(b)(2) of the National School Lunch Act (42
U.S.C. 1758(b)(2)), as amended by section 802(b)(1), is
further amended by adding at the end the following:
‘‘(C) FREE AND REDUCED PRICE POLICY
STATEMENT.—After the initial submission, a
school 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 school. A routine change in
the policy of a school, such as an annual adjust-
ment of the income eligibility guidelines for free
and reduced price meals, shall not be sufficient
495
cause for requiring the school to submit a policy
statement.’’.
SEC. 806. SPECIAL ASSISTANCE.
(a) REIMBURSEMENT RATES FOR LUNCHES, BREAK-
FASTS, AND SUPPLEMENTS.—
(1) IN GENERAL.—Section 11(a)(3)(B) of the
National 
School 
Lunch 
Act 
(42 
U.S.C.
1759a(a)(3)(B)) is amended—
(A) by designating the second and third
sentences as subparagraphs (C) and (D), re-
spectively; and
(B) by striking subparagraph (D) (as so
designated) and inserting the following:
‘‘(D) ROUNDING.—Except as otherwise
provided in this paragraph, in the case of each
school year, the Secretary shall—
‘‘(i) base the adjustment made under
this paragraph on the amount of the
unrounded adjustment for the preceding
school year;
‘‘(ii) adjust the resulting amount in
accordance with subparagraphs (B) and
(C); and
‘‘(iii) round the result to the nearest
lower cent increment.
496
‘‘(E) ADJUSTMENT FOR 12-MONTH PERIOD
BEGINNING JULY 1, 1996.—In the case of the
12-month period beginning July 1, 1996, the
national average payment rates for paid
lunches, paid breakfasts, and paid supplements
shall be the same as the national average pay-
ment rate for paid lunches, paid breakfasts, and
paid supplements, respectively, for the school
year beginning July 1, 1995, rounded to the
nearest lower cent increment.
‘‘(F) ADJUSTMENT FOR SCHOOL YEAR BE-
GINNING
JULY
1, 1997.—In the case of the
school year beginning July 1, 1997, the Sec-
retary shall—
‘‘(i) base the adjustments made under
this paragraph for—
‘‘(I) paid lunches and paid break-
fasts on the amount of the unrounded
adjustment for paid lunches for the
school year beginning July 1, 1996;
and
‘‘(II) paid supplements on the
amount of the unrounded adjustment
for paid supplements for the school
year beginning July 1, 1996;
497
‘‘(ii) adjust each resulting amount in
accordance with subparagraph (C); and
‘‘(iii) round each result to the nearest
lower cent increment.’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall become effective on July 1,
1996.
(b) FINANCING BASED ON NEED.—Section 11(b) of
the Act is amended—
(1) in the second sentence, by striking ‘‘, with-
in’’ and all that follows through ‘‘all States,’’; and
(2) by striking the third sentence.
(c) APPLICABILITY OF OTHER PROVISIONS.—Section
11 of the Act is amended—
(1) by striking subsection (d);
(2) in subsection (e)(2)—
(A) by striking ‘‘The’’ and inserting ‘‘On
request of the Secretary, the’’; and
(B) by striking ‘‘each month’’; and
(3) by redesignating subsections (e) and (f), as
so amended, as subsections (d) and (e), respectively.
SEC. 807. MISCELLANEOUS PROVISIONS AND DEFINITIONS.
(a) ACCOUNTS AND RECORDS.—Section 12(a) of the
National School Lunch Act (42 U.S.C. 1760(a)) is amend-