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(j) INFANT
FORMULA
PROCUREMENT.—Section
17(h)(8)(A) of such Act (42 U.S.C. 1786(h)(8)(A)) is
amended by adding at the end the following:
‘‘(iii) A State agency using a competitive bidding sys-
tem for infant formula shall award contracts to the bidder
offering the lowest net price unless the State agency dem-
onstrates to the satisfaction of the Secretary that the
weighted average retail price for different brands of infant
formula in the State does not vary by more than 5 per-
cent.’’.
(k) INFRASTRUCTURE AND BREASTFEEDING PRO-
MOTION/SUPPORT ACTIVITIES.—Section 17(h)(10)(A) of
such Act (42 U.S.C. 1786(h)(10)(A)) is amended by strik-
ing ‘‘For each of fiscal years 1995 through 1998,’’ and
inserting ‘‘For each fiscal year through 2003,’’.
(l) CONSIDERATION OF PRICE LEVELS OF RETAIL
STORES FOR PARTICIPATION IN THE PROGRAM.—
(1) IN GENERAL.—Section 17(h) of such Act
(42 U.S.C. 1786(h)) is amended by adding at the
end the following:
‘‘(11)(A) For the purpose of promoting efficiency and
to contain costs under the program, a State agency shall,
in selecting a retail store for participation in the program,
take into consideration the prices that the store charges
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for foods under the program as compared to the prices
that other stores charge for such foods.
‘‘(B) The State agency shall establish procedures to
insure that a retail store selected for participation in the
program does not subsequently raise prices to levels that
would otherwise make the store ineligible for selection in
the program.’’.
(2) REGULATIONS.—Not later than March 1,
1999, the Secretary of Agriculture shall promulgate
final regulations to carry out section 17(h)(11)(A) of
the Child Nutrition Act of 1966 (42 U.S.C.
1786(h)(11)(A)), as added by paragraph (1).
(m) MANAGEMENT INFORMATION SYSTEM PLAN.—
Section 17(h) of such Act (42 U.S.C. 1786(h)), as amend-
ed by this Act, is further amended by adding at the end
the following:
‘‘(12)(A) In consultation with State agencies, retail-
ers, and other interested persons, the Secretary shall es-
tablish a long range plan for the development and imple-
mentation of management information systems (including
electronic benefit transfers) to be used in carrying out the
program.
‘‘(B) Not later than 2 years after the date of the en-
actment of this paragraph, the Secretary shall submit to
the Committee on Education and the Workforce of the
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House of Representatives and the Committee on Agri-
culture, Nutrition, and Forestry of the Senate a report
on actions taken to carry out subparagraph (A).
‘‘(C) Prior to the date of the submission of the report
of the Secretary required under subparagraph (B), the
cost of systems or equipment that may be required to test
management information systems (including electronic
benefit transfers) for the program may not be imposed on
a retail food store.’’.
(n) USE
OF FUNDS
IN PRECEDING
AND SUBSE-
QUENT FISCAL YEARS.—
(1) IN GENERAL.—Clauses (i) and (ii) of sec-
tion 
17(i)(3)(A) 
of 
such 
Act 
(42 
U.S.C.
1786(i)(3)(A)(i) and (ii)) are amended to read as
follows:
‘‘(i) not more than 1 percent (except as pro-
vided in subparagraph (C)) of the amount of funds
allocated to a State agency under this section for
supplemental foods for a fiscal year, and not more
than 1 percent of the amount of funds allocated to
a State agency under this section for nutrition serv-
ices and administration for a fiscal year, may be ex-
pended by the State agency for allowable expenses
incurred under this section for supplemental foods
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and nutrition services and administration, respec-
tively, during the preceding fiscal year; and
‘‘(ii)(I) a State agency may expend, from
amounts allocated to the agency for nutrition serv-
ices and administration, an amount equal to not
more than 1 percent of the total amount of funds al-
located to the agency under this section for a fiscal
year for allowable expenses incurred under this sec-
tion for nutrition services and administration during
the subsequent fiscal year; and
‘‘(II) with the prior approval of the Secretary,
a State agency may expend, from amounts allocated
to the agency for nutrition services and administra-
tion, an amount equal to not more than one-half of
1 percent of the total amount of funds allocated to
the agency under this section for a fiscal year for
the development of a management information sys-
tem, including an electronic benefit transfer system,
during the subsequent fiscal year.’’.
(2) CONFORMING AMENDMENTS.—Section 17 of
such Act (42 U.S.C. 1786) is amended—
(A) in subsection (h)(10)(A) (as amended
by this Act), by inserting after ‘‘nutrition serv-
ices and administration funds’’ the following:
‘‘and food benefit funds’’; and
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(B) in subsection (i)(3)—
(i) by striking subparagraphs (C)
through (G); and
(ii) by redesignating subparagraph
(H) as subparagraph (C).
(o) FARMERS MARKET NUTRITION PROGRAM.—
(1) MATCHING FUND REQUIREMENT.—Section
17(m)(3) of such Act (42 U.S.C. 1786(m)(3)) is
amended in both the first and second sentences by
striking ‘‘total’’ each place it appears and inserting
‘‘administrative’’.
(2) RANKING CRITERIA FOR STATE PLANS.—
Section 
17(m)(6) 
of 
such 
Act 
(42 
U.S.C.
1786(m)(6)) is amended—
(A) by striking subparagraph (F); and
(B) by redesignating subparagraph (G) as
subparagraph (F).
(3) REAUTHORIZATION OF PROGRAM.—Section
17(m)(9)(A) of such Act (42 U.S.C. 1786(m)(9)(A))
is amended by striking ‘‘1996 through 1998’’ and
inserting ‘‘1999 through 2003’’.
(p) DISQUALIFICATION OF CERTAIN VENDORS.—
(1) IN GENERAL.—Section 17 of such Act (42
U.S.C. 1786) is amended by adding at the end the
following:
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‘‘(o) DISQUALIFICATION OF VENDORS CONVICTED OF
TRAFFICKING OR ILLEGAL SALES.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (5), the State agency shall permanently dis-
qualify a vendor convicted of trafficking in food in-
struments (including any voucher, draft, check, or
access device, including an electronic benefit transfer
card or personal identification number, issued in lieu
of a food instrument pursuant to the provisions of
this section), or selling firearms, ammunition, explo-
sives, or controlled substances (as defined in section
102 of the Controlled Substances Act) in exchange
for food instruments.
‘‘(2) 
NOTICE
OF
DISQUALIFICATION.—The
State agency shall provide the vendor with notifica-
tion of the disqualification and shall make such dis-
qualification effective on the date of receipt of the
notice of disqualification.
‘‘(3) PROHIBITION ON RECEIPT OF LOST REVE-
NUES.—A vendor shall not be entitled to receive any
compensation for revenues lost as a result of the dis-
qualification under this subsection.
‘‘(4) HARDSHIP EXCEPTION IN LIEU OF DIS-
QUALIFICATION.—