142
al organizations, shall develop minimum
child care standards (that appropriately re-
flect tribal needs and available resources)
that shall be applicable to Indian tribes
and tribal organization receiving assistance
under this subchapter.’’;
(vi) in subparagraph (G) by striking
‘‘Provide assurances’’ and inserting ‘‘Cer-
tify’’; and
(vii) by striking subparagraphs (H),
(I), and (J) and inserting the following:
‘‘(H) MEETING THE NEEDS OF CERTAIN
POPULATIONS.—Demonstrate the manner in
which the State will meet the specific child care
needs of families who are receiving assistance
under a State program under part A of title IV
of the Social Security Act, families who are at-
tempting through work activities to transition
off of such assistance program, and families
that are at risk of becoming dependent on such
assistance program.’’;
(B) in paragraph (3)—
(i) in subparagraph (A), by striking
‘‘(B) and (C)’’ and inserting ‘‘(B) through
(D)’’;
143
(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:
‘‘(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-
144
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 418(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 under
this subchapter in each fiscal year is used to
provide assistance to low-income working fami-
lies other than families described in paragraph
(2)(H).’’; and
(C) in paragraph (4)(A)—
(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
145
such rates are sufficient to ensure such ac-
cess’’ before the period; and
(iii) by striking the last sentence.
SEC. 3106. LIMITATION ON STATE ALLOTMENTS.
Section 658F(b)(1) (42 U.S.C. 9858d(b)(1)) is
amended by striking ‘‘No’’ and inserting ‘‘Except as pro-
vided for in section 658O(c)(6), no’’.
SEC. 3107. 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
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. 3108. REPEAL OF EARLY CHILDHOOD DEVELOPMENT
AND BEFORE- AND AFTER-SCHOOL CARE RE-
QUIREMENT.
Section 658H (42 U.S.C. 9858f) is repealed.
146
SEC. 3109. 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.’’.
SEC. 3110. PAYMENTS.
Section 658J(c) (42 U.S.C. 9858h(c)) is amended by
striking ‘‘expended’’ and inserting ‘‘obligated’’.
SEC. 3111. 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.—
147
‘‘(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;
‘‘(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;
148
‘‘(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;
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
150
‘‘(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. 3112. REPORT BY THE SECRETARY.
Section 658L (42 U.S.C. 9858j) is amended—
(1) by striking ‘‘1993’’ and inserting ‘‘1997’’;
(2) by striking ‘‘annually’’ and inserting ‘‘bien-
nially’’; and
(3) by striking ‘‘Education and Labor’’ and in-
serting ‘‘Economic and Educational Opportunities’’.
SEC. 3113. ALLOTMENTS.
Section 658O (42 U.S.C. 9858m) is amended—
(1) in subsection (a)—
(A) in paragraph (1)
151
(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
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-
152
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
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
153
(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. 3114. 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
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)—
154
(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
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
155
of serving youth who are Indians or Native Ha-
waiians.’’.
SEC. 3115. 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
(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.
156
(e) CERTAIN CHILD CARE PROGRAMS UNDER THE
SOCIAL SECURITY ACT.—
(1) AFDC AND
TRANSITIONAL
CHILD
CARE
PROGRAMS.—Section 402 of the Social Security Act
(42 U.S.C. 602) is amended by striking subsection
(g).
(2) AT-RISK CHILD CARE PROGRAM.—
(A) AUTHORIZATION.—Section 402 of the
Social Security Act (42 U.S.C. 602) is amended
by striking subsection (i).
(B) FUNDING
PROVISIONS.—Section 403
of the Social Security Act (42 U.S.C. 603) is
amended by striking subsection (n).
SEC. 3116. EFFECTIVE DATE.
(a) IN GENERAL.—Except as provided in subsection
(b), this subtitle and the amendments made by this sub-
title shall take effect on October 1, 1996.
(b) EXCEPTION.—The amendment made by section
3303(a) shall take effect on the date of enactment of this
Act.
157
Subtitle B—Child Nutrition
Programs
CHAPTER 1—NATIONAL SCHOOL LUNCH
ACT
SEC. 3201. 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 and fifth sentences;
(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—
158
‘‘(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
‘‘(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. 3202. 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
159
(3) by redesignating paragraph (4) as para-
graph (3).
(b) ELIGIBILITY GUIDELINES.—Section 9(b) of the
Act is amended—
(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;
160
(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
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.’’;
161
(5) in paragraph (3), as redesignated by para-
graph (3)—
(A) by redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively; and
(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)—
(A) by redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively;
(B) in subparagraph (A) (as redesignated
by subparagraph (A)), by redesignating sub-
clauses (I) and (II) as clauses (i) and (ii), re-
spectively; and
(C) in subparagraph (A)(ii) (as redesig-
nated by subparagraph (B)), by striking ‘‘sub-
paragraph (C)’’ and inserting ‘‘paragraph (3)’’.
(f) USE OF RESOURCES.—Section 9 of the Act is
amended by striking subsection (h).
SEC. 3203. 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 3202(b)(1), is
further amended by adding at the end the following:
162
‘‘(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
cause for requiring the school to submit a policy
statement.’’.
SEC. 3204. SPECIAL ASSISTANCE.
(a) EXTENSION
OF
PAYMENT
PERIOD.—Section
11(a)(1)(D)(i) of the National School Lunch Act (42
U.S.C. 1759a(a)(1)(D)(i)) is amended by striking ‘‘, on
the date of enactment of this subparagraph,’’.
(b) 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
163
(3) by redesignating subsections (e) and (f), as
so amended, as subsections (d) and (e), respectively.
SEC. 3205. MISCELLANEOUS PROVISIONS AND DEFINI-
TIONS.
(a) ACCOUNTS AND RECORDS.—Section 12(a) of the
National School Lunch Act (42 U.S.C. 1760(a)) is amend-
ed by striking ‘‘at all times be available’’ and inserting
‘‘be available at any reasonable time’’.
(b) RESTRICTION
ON
REQUIREMENTS.—Section
12(c) of the Act is amended by striking ‘‘neither the Sec-
retary nor the State shall’’ and inserting ‘‘the Secretary
shall not’’.
(c) DEFINITIONS.—Section 12(d) of the Act, as
amended by section 3201(b), is further amended—
(1) in paragraph (1), by striking ‘‘the Trust
Territory of the Pacific Islands’’ and inserting ‘‘the
Commonwealth of the Northern Mariana Islands’’;
(2) by striking paragraphs (3) and (4); and
(3) by redesignating paragraphs (1), (2), and
(5) through (9) as paragraphs (6), (7), (3), (4), (2),
(5), and (1), respectively, and rearranging the para-
graphs so as to appear in numerical order.
(d) ADJUSTMENTS
TO NATIONAL AVERAGE PAY-
MENT RATES.—Section 12(f) of the Act is amended by
striking ‘‘the Trust Territory of the Pacific Islands,’’.
164
(e) EXPEDITED RULEMAKING.—Section 12(k) of the
Act is amended—
(1) by striking paragraphs (1), (2), and (5);
and
(2) by redesignating paragraphs (3) and (4) as
paragraphs (1) and (2), respectively.
(f) WAIVER.—Section 12(l) of the Act is amended—
(1) in paragraph (2)(A)—
(A) in clause (iii), by adding ‘‘and’’ at the
end;
(B) in clause (iv), by striking the semi-
colon at the end and inserting a period; and
(C) by striking clauses (v) through (vii);
(2) in paragraph (3)—
(A) by striking ‘‘(A)’’; and
(B) by striking subparagraphs (B) through
(D);
(3) in paragraph (4)—
(A) in the matter preceding subparagraph
(A), by striking ‘‘of any requirement relating’’
and inserting ‘‘that increases Federal costs or
that relates’’;
(B) by striking subparagraph (D);
165
(C) by redesignating subparagraphs (E)
through (N) as subparagraphs (D) through
(M), respectively; and
(D) in subparagraph (L), as redesignated
by subparagraph (C), by striking ‘‘and’’ at the
end and inserting ‘‘or’’; and
(4) in paragraph (6)—
(A) by striking ‘‘(A)(i)’’ and all that fol-
lows through ‘‘(B)’’; and
(B) by redesignating clauses (i) through
(iv) as subparagraphs (A) through (D), respec-
tively.
(g) FOOD AND NUTRITION PROJECTS.—Section 12
of the Act is amended by striking subsection (m).
SEC. 3206. SUMMER FOOD SERVICE PROGRAM FOR CHIL-
DREN.
(a) ESTABLISHMENT OF PROGRAM.—Section 13(a)
of the National School Lunch Act (42 U.S.C. 1761(a))
is amended—
(1) in paragraph (1)—
(A) in the first sentence, by striking ‘‘initi-
ate, maintain, and expand’’ and inserting ‘‘initi-
ate and maintain’’; and
166
(B) in subparagraph (E) of the second
sentence, by striking ‘‘the Trust Territory of
the Pacific Islands,’’; and
(2) in paragraph (7)(A), by striking ‘‘Except as
provided in subparagraph (C), private’’ and inserting
‘‘Private’’.
(b) SERVICE INSTITUTIONS.—Section 13(b) of the
Act is amended by striking ‘‘(b)(1)’’ and all that follows
through the end of paragraph (1) and inserting the follow-
ing:
‘‘(b) SERVICE INSTITUTIONS.—
‘‘(1) PAYMENTS.—
‘‘(A) IN GENERAL.—Except as otherwise
provided in this paragraph, payments to service
institutions shall equal the full cost of food
service operations (which cost shall include the
costs of obtaining, preparing, and serving food,
but shall not include administrative costs).
‘‘(B) MAXIMUM
AMOUNTS.—Subject to
subparagraph (C), payments to any institution
under subparagraph (A) shall not exceed—
‘‘(i) $1.82 for each lunch and supper
served;
‘‘(ii) $1.13 for each breakfast served;
and
167
‘‘(iii) 46 cents for each meal supple-
ment served.
‘‘(C) ADJUSTMENTS.—Amounts specified
in subparagraph (B) shall be adjusted on Janu-
ary 1, 1997, and each January 1 thereafter, to
the nearest lower cent increment in accordance
with the changes for the 12-month period end-
ing the preceding November 30 in the series for
food away from home of the Consumer Price
Index for All Urban Consumers published by
the Bureau of Labor Statistics of the Depart-
ment of Labor. Each adjustment shall be based
on the unrounded adjustment for the prior 12-
month period.’’.
(c) ADMINISTRATION OF SERVICE INSTITUTIONS.—
Section 13(b)(2) of the Act is amended—
(1) in the first sentence, by striking ‘‘four
meals’’ and inserting ‘‘3 meals, or 2 meals and 1
supplement,’’; and
(2) by striking the second sentence.
(d) REIMBURSEMENTS.—Section 13(c)(2) of the Act
is amended—
(1) by striking subparagraph (A);
(2) in subparagraph (B)—
(A) in the first sentence—
168
(i) by striking ‘‘, and such higher edu-
cation institutions,’’; and
(ii) by striking ‘‘without application’’
and inserting ‘‘upon showing residence in
areas in which poor economic conditions
exist or on the basis of income eligibility
statements for children enrolled in the pro-
gram’’; and
(B) by adding at the end the following:
‘‘The higher education institutions referred to
in the preceding sentence shall be eligible to
participate in the program under this para-
graph without application.’’;
(3) in subparagraph (C)(ii), by striking ‘‘severe
need’’; and
(4) 
by 
redesignating 
subparagraphs 
(B)
through (E), as so amended, as subparagraphs (A)
through (D), respectively.
(e) 
ADVANCE
PROGRAM
PAYMENTS.—Section
13(e)(1) of the Act is amended—
(1) by striking ‘‘institution: Provided, That (A)
the’’ and inserting ‘‘institution. The’’;
(2) by inserting ‘‘(excluding a school)’’ after
‘‘any service institution’’; and
169
(3) by striking ‘‘responsibilities, and (B) no’’
and inserting ‘‘responsibilities. No’’.
(f) FOOD REQUIREMENTS.—Section 13(f) of the Act
is amended—
(1) by redesignating the first through seventh
sentences as paragraphs (1) through (7), respec-
tively;
(2) by striking paragraph (3), as redesignated
by paragraph (1);
(3) in paragraph (4), as redesignated by para-
graph (1), by striking ‘‘the first sentence’’ and in-
serting ‘‘paragraph (1)’’;
(4) in paragraph (6), as redesignated by para-
graph (1), by striking ‘‘that bacteria levels’’ and all
that follows through the period at the end and in-
serting ‘‘conformance with standards set by local
health authorities.’’; and
(5) by redesignating paragraphs (4) through
(7), as redesignated by paragraph (1), as para-
graphs (3) through (6), respectively.
(g) PERMITTING OFFER VERSUS SERVE.—Section
13(f) of the Act, as amended by subsection (f), is further
amended by adding at the end the following:
‘‘(7) OFFER VERSUS SERVE.—A school food au-
thority participating as a service institution may
170
permit a child attending a site on school premises
operated directly by the authority to refuse not more
than 1 item of a meal that the child does not intend
to consume. A refusal of an offered food item shall
not affect the amount of payments made under this
section to a school for the meal.’’.
(h) FOOD SERVICE MANAGEMENT COMPANIES.—
Section 13(l) of the Act is amended—
(1) by striking paragraph (4);
(2) in paragraph (5), by striking the first sen-
tence; and
(3) by redesignating paragraph (5), as so
amended, as paragraph (4).
(i) RECORDS.—The second sentence of section 13(m)
of the Act is amended by striking ‘‘at all times be avail-
able’’ and inserting ‘‘be available at any reasonable time’’.
(j) REMOVING MANDATORY NOTICE
TO INSTITU-
TIONS.—Section 13(n)(2) of the Act is amended by strik-
ing ‘‘, and its plans and schedule for informing service
institutions of the availability of the program’’.
(k) PLAN.—Section 13(n) of the Act is amended—
(1) in paragraph (2), by striking ‘‘, including
the State’s methods of assessing need’’;
(2) by striking paragraph (3);
171
(3) in paragraph (4), by striking ‘‘and sched-
ule’’; and
(4) by redesignating paragraphs (4) through
(7), as so amended, as paragraphs (3) through (6),
respectively.
(l) MONITORING AND TRAINING.—Section 13(q) of
the Act is amended—
(1) by striking paragraphs (2) and (4);
(2) in paragraph (3), by striking ‘‘paragraphs
(1) and (2) of this subsection’’ and inserting ‘‘para-
graph (1)’’; and
(3) by redesignating paragraph (3), as so
amended, as paragraph (2).
(m) EXPIRED PROGRAM.—Section 13 of the Act is
amended—
(1) by striking subsection (p); and
(2) by redesignating subsections (q) and (r), as
so amended, as subsections (p) and (q), respectively.
(n) EFFECTIVE DATE.—The amendments made by
subsection (b) shall become effective on January 1, 1997.
SEC. 3207. COMMODITY DISTRIBUTION.
(a) CEREAL AND SHORTENING IN COMMODITY DO-
NATIONS.—Section 14(b) of the National School Lunch
Act (42 U.S.C. 1762a(b)) is amended—
(1) by striking paragraph (1); and
172
(2) by redesignating paragraphs (2) and (3) as
paragraphs (1) and (2), respectively.
(b) IMPACT
STUDY
AND
PURCHASING
PROCE-
DURES.—Section 14(d) of the Act is amended by striking
the second and third sentences.
(c) CASH
COMPENSATION
FOR
PILOT
PROJECT
SCHOOLS.—Section 14(g) of the Act is amended by strik-
ing paragraph (3).
(d) STATE
ADVISORY
COUNCIL.—Section 14 is
amended—
(1) by striking subsection (e); and
(2) by redesignating subsections (f) and (g), as
so amended, as subsections (e) and (f), respectively.
SEC. 3208. CHILD CARE FOOD PROGRAM.
(a) ESTABLISHMENT OF PROGRAM.—Section 17 of
the National School Lunch Act (42 U.S.C. 1766) is
amended—
(1) in the section heading, by striking ‘‘AND
ADULT’’; and
(2) in the first sentence of subsection (a), by
striking ‘‘initiate, maintain, and expand’’ and insert-
ing ‘‘initiate and maintain’’.
(b) PAYMENTS
TO SPONSOR EMPLOYEES.—Para-
graph (2) of the last sentence of section 17(a) of the Act
(42 U.S.C. 1766(a)) is amended—
173
(1) by striking ‘‘and’’ at the end of subpara-
graph (B);
(2) by striking the period at the end of sub-
paragraph (C) and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(D) in the case of a family or group day
care home sponsoring organization that employs
more than 1 employee, the organization does
not base payments to an employee of the orga-
nization on the number of family or group day
care homes recruited.’’.
(c) TECHNICAL ASSISTANCE.—The last sentence of
section 17(d)(1) of the Act is amended by striking ‘‘, and
shall provide technical assistance’’ and all that follows
through ‘‘its application’’.
(d) REIMBURSEMENT
OF CHILD CARE INSTITU-
TIONS.—Section 17(f)(2)(B) of the Act (42 U.S.C.
1766(f)(2)(B)) is amended by striking ‘‘two meals and two
supplements or three meals and one supplement’’ and in-
serting ‘‘two meals and one supplement’’.
(e) IMPROVED TARGETING OF DAY CARE HOME RE-
IMBURSEMENTS.—
(1) RESTRUCTURED
DAY
CARE
HOME
REIM-
BURSEMENTS.—Section 17(f)(3) of the Act is
amended by striking ‘‘(3)(A) Institutions’’ and all
174
that follows through the end of subparagraph (A)
and inserting the following:
‘‘(3) REIMBURSEMENT OF FAMILY OR GROUP
DAY CARE HOME SPONSORING ORGANIZATIONS.—
‘‘(A) REIMBURSEMENT FACTOR.—
‘‘(i) IN
GENERAL.—An institution
that participates in the program under this
section as a family or group day care home
sponsoring organization shall be provided,
for payment to a home sponsored by the
organization, reimbursement factors in ac-
cordance with this subparagraph for the
cost of obtaining and preparing food and
prescribed labor costs involved in providing
meals under this section.
‘‘(ii) TIER I FAMILY OR GROUP DAY
CARE HOMES.—
‘‘(I) DEFINITION.—In this para-
graph, the term ‘tier I family or group
day care home’ means—
‘‘(aa) a family or group day
care home that is located in a ge-
ographic area, as defined by the
Secretary based on census data,
in which at least 50 percent of
175
the children residing in the area
are members of households whose
incomes meet the income eligi-
bility guidelines for free or re-
duced price meals under section
9;
‘‘(bb) a family or group day
care home that is located in an
area served by a school enrolling
elementary students in which at
least 50 percent of the total num-
ber of children enrolled are cer-
tified eligible to receive free or
reduced price school meals under
this Act or the Child Nutrition
Act of 1966 (42 U.S.C. 1771 et
seq.); or
‘‘(cc) a family or group day
care home that is operated by a
provider whose household meets
the income eligibility guidelines
for free or reduced price meals
under section 9 and whose in-
come is verified by the sponsor-
ing organization of the home
176
under regulations established by
the Secretary.
‘‘(II) REIMBURSEMENT.—Except
as provided in subclause (III), a tier
I family or group day care home shall
be provided reimbursement factors
under this clause without a require-
ment for documentation of the costs
described in clause (i), except that re-
imbursement shall not be provided
under this subclause for meals or sup-
plements served to the children of a
person acting as a family or group
day care home provider unless the
children meet the income eligibility
guidelines for free or reduced price
meals under section 9.
‘‘(III) FACTORS.—Except as pro-
vided in subclause (IV), the reim-
bursement factors applied to a home
referred to in subclause (II) shall be
the factors in effect on July 1, 1996.
‘‘(IV) ADJUSTMENTS.—The re-
imbursement factors under this sub-
paragraph shall be adjusted on July
177
1, 1997, and each July 1 thereafter,
to reflect changes in the Consumer
Price Index for food at home for the
most recent 12-month period for
which the data are available. The re-
imbursement factors under this sub-
paragraph shall be rounded to the
nearest lower cent increment and
based on the unrounded adjustment in
effect on June 30 of the preceding
school year.
‘‘(iii) TIER II FAMILY OR GROUP DAY
CARE HOMES.—
‘‘(I) IN GENERAL.—
‘‘(aa) FACTORS.—Except as
provided in subclause (II), with
respect to meals or supplements
served under this clause by a
family or group day care home
that does not meet the criteria
set forth in clause (ii)(I), the re-
imbursement factors shall be 90
cents for lunches and suppers, 25
cents for breakfasts, and 10
cents for supplements.
178
‘‘(bb) ADJUSTMENTS.—The
factors shall be adjusted on July
1, 1997, and each July 1 there-
after, to reflect changes in the
Consumer Price Index for food at
home for the most recent 12-
month period for which the data
are available. The reimbursement
factors under this item shall be
rounded down to the nearest
lower cent increment and based
on the unrounded adjustment for
the preceding 12-month period.
‘‘(cc) REIMBURSEMENT.—A
family or group day care home
shall be provided reimbursement
factors under this subclause with-
out a requirement for docu-
mentation of the costs described
in clause (i), except that reim-
bursement shall not be provided
under this subclause for meals or
supplements served to the chil-
dren of a person acting as a fam-
ily or group day care home pro-
179
vider unless the children meet the
income eligibility guidelines for
free or reduced price meals under
section 9.
‘‘(II) OTHER FACTORS.—A fam-
ily or group day care home that does
not meet the criteria set forth in
clause (ii)(I) may elect to be provided
reimbursement factors determined in
accordance with the following require-
ments:
‘‘(aa) CHILDREN
ELIGIBLE
FOR
FREE
OR
REDUCED
PRICE
MEALS.—In the case of meals or
supplements served under this
subsection to children who are
members of households whose in-
comes meet the income eligibility
guidelines for free or reduced
price meals under section 9, the
family or group day care home
shall be provided reimbursement
factors set by the Secretary in
accordance with clause (ii)(III).
180
‘‘(bb) 
INELIGIBLE
CHIL-
DREN.—In the case of meals or
supplements served under this
subsection to children who are
members of households whose in-
comes do not meet the income
eligibility guidelines, the family
or group day care home shall be
provided reimbursement factors
in accordance with subclause (I).
‘‘(III) INFORMATION
AND
DE-
TERMINATIONS.—
‘‘(aa) IN
GENERAL.—If a
family or group day care home
elects to claim the factors de-
scribed in subclause (II), the
family or group day care home
sponsoring organization serving
the home shall collect the nec-
essary income information, as de-
termined by the Secretary, from
any parent or other caretaker to
make the determinations speci-
fied in subclause (II) and shall
make the determinations in ac-
181
cordance with rules prescribed by
the Secretary.
‘‘(bb) CATEGORICAL
ELIGI-
BILITY.—In making a determina-
tion under item (aa), a family or
group day care home sponsoring
organization may consider a child
participating in or subsidized
under, or a child with a parent
participating in or subsidized
under, a federally or State sup-
ported child care or other benefit
program with an income eligi-
bility limit that does not exceed
the eligibility standard for free or
reduced price meals under section
9 to be a child who is a member
of a household whose income
meets 
the 
income 
eligibility
guidelines under section 9.
‘‘(cc) FACTORS
FOR
CHIL-
DREN ONLY.—A family or group
day care home may elect to re-
ceive the reimbursement factors
prescribed under clause (ii)(III)
182
solely for the children participat-
ing in a program referred to in
item (bb) if the home elects not
to have income statements col-
lected from parents or other care-
takers.
‘‘(IV) SIMPLIFIED MEAL COUNT-
ING AND REPORTING PROCEDURES.—
The Secretary shall prescribe sim-
plified meal counting and reporting
procedures for use by a family or
group day care home that elects to
claim the factors under subclause (II)
and by a family or group day care
home sponsoring organization that
sponsors the home. The procedures
the Secretary prescribes may include
1 or more of the following:
‘‘(aa) Setting an annual per-
centage for each home of the
number of meals served that are
to be reimbursed in accordance
with the reimbursement factors
prescribed under clause (ii)(III)
and an annual percentage of the
183
number of meals served that are
to be reimbursed in accordance
with the reimbursement factors
prescribed under subclause (I),
based on the family income of
children enrolled in the home in a
specified month or other period.
‘‘(bb) Placing a home into 1
of 2 or more reimbursement cat-
egories annually based on the
percentage of children in the
home whose households have in-
comes that meet the income eligi-
bility guidelines under section 9,
with each such reimbursement
category carrying a set of reim-
bursement factors such as the
factors prescribed under clause
(ii)(III) or subclause (I) or fac-
tors established within the range
of factors prescribed under clause
(ii)(III) and subclause (I).
‘‘(cc) Such other simplified
procedures as the Secretary may
prescribe.
184
‘‘(V) 
MINIMUM
VERIFICATION
REQUIREMENTS.—The Secretary may
establish any necessary minimum ver-
ification requirements.’’.
(2) GRANTS TO STATES TO PROVIDE ASSIST-
ANCE TO FAMILY OR GROUP DAY CARE HOMES.—
Section 17(f)(3) of the Act is amended by adding at
the end the following:
‘‘(D) GRANTS TO STATES TO PROVIDE AS-
SISTANCE
TO
FAMILY
OR
GROUP
DAY
CARE
HOMES.—
‘‘(i) IN GENERAL.—
‘‘(I) 
RESERVATION.—From
amounts made available to carry out
this section, the Secretary shall re-
serve $5,000,000 of the amount made
available for fiscal year 1997.
‘‘(II) PURPOSE.—The Secretary
shall use the funds made available
under subclause (I) to provide grants
to States for the purpose of provid-
ing—
‘‘(aa) assistance, including
grants, to family and day care
home sponsoring organizations
185
and other appropriate organiza-
tions, in securing and providing
training, materials, automated
data processing assistance, and
other assistance for the staff of
the sponsoring organizations; and
‘‘(bb) training and other as-
sistance to family and group day
care homes in the implementation
of the amendment to subpara-
graph 
(A) 
made 
by 
section
3208(e)(1) of the Personal Re-
sponsibility and Work Oppor-
tunity Act of 1996.
‘‘(ii) 
ALLOCATION.—The 
Secretary
shall allocate from the funds reserved
under clause (i)(I)—
‘‘(I) $30,000 in base funding to
each State; and
‘‘(II) 
any 
remaining 
amount
among the States, based on the num-
ber of family day care homes partici-
pating in the program in a State dur-
ing fiscal year 1995 as a percentage
of the number of all family day care
186
homes participating in the program
during fiscal year 1995.
‘‘(iii) RETENTION OF FUNDS.—Of the
amount of funds made available to a State
for fiscal year 1997 under clause (i), the
State may retain not to exceed 30 percent
of the amount to carry out this subpara-
graph.
‘‘(iv) ADDITIONAL
PAYMENTS.—Any
payments received under this subpara-
graph shall be in addition to payments
that a State receives under subparagraph
(A).’’.
(3) PROVISION OF DATA.—Section 17(f)(3) of
the Act, as amended by paragraph (2), is further
amended by adding at the end the following:
‘‘(E) PROVISION OF DATA TO FAMILY OR
GROUP DAY CARE HOME SPONSORING ORGANI-
ZATIONS.—
‘‘(i) CENSUS
DATA.—The Secretary
shall provide to each State agency admin-
istering a child care food program under
this section data from the most recent de-
cennial census survey or other appropriate
census survey for which the data are avail-
187
able showing which areas in the State meet
the 
requirements 
of 
subparagraph
(A)(ii)(I)(aa). The State agency shall pro-
vide the data to family or group day care
home sponsoring organizations located in
the State.
‘‘(ii) SCHOOL DATA.—
‘‘(I) 
IN
GENERAL.—A 
State
agency administering the school lunch
program under this Act or the school
breakfast program under the Child
Nutrition Act of 1966 (42 U.S.C.
1771 et seq.) shall provide to ap-
proved family or group day care home
sponsoring organizations a list of
schools serving elementary school chil-
dren in the State in which not less
than 1⁄2 of the children enrolled are
certified to receive free or reduced
price meals. The State agency shall
collect the data necessary to create
the list annually and provide the list
on a timely basis to any approved
family or group day care home spon-
188
soring organization that requests the
list.
‘‘(II) USE OF DATA FROM PRE-
CEDING SCHOOL YEAR.—In determin-
ing for a fiscal year or other annual
period whether a home qualifies as a
tier I family or group day care home
under subparagraph (A)(ii)(I), the
State agency administering the pro-
gram under this section, and a family
or group day care home sponsoring
organization, shall use the most cur-
rent available data at the time of the
determination.
‘‘(iii) 
DURATION
OF
DETERMINA-
TION.—For purposes of this section, a de-
termination that a family or group day
care home is located in an area that quali-
fies the home as a tier I family or group
day care home (as the term is defined in
subparagraph (A)(ii)(I)), shall be in effect
for 3 years (unless the determination is
made on the basis of census data, in which
case the determination shall remain in ef-
fect until more recent census data are