H. R. 2559—55
20 local agencies in one State under which costs of nutrition
services and administration (as defined in subsection (b)(4))
shall include the costs of identification of children eligible for
benefits under, and the provision of enrollment assistance for
children in—
‘‘(A) the State medicaid program under title XIX of
the Social Security Act (42 U.S.C. 1396 et seq.); and
‘‘(B) the State children’s health insurance program
under title XXI of that Act (42 U.S.C. 1397aa et seq.).
‘‘(2) STATE-RELATED REQUIREMENTS.—The State in which
a demonstration project is established under paragraph (1)—
‘‘(A) shall operate not fewer than 20 pilot site locations;
‘‘(B) as of the date of establishment of the demonstra-
tion project—
‘‘(i) with respect to the programs referred to in
subparagraphs (A) and (B) of paragraph (1)—
‘‘(I) shall have in use a simplified application
form with a length of not more than two pages;
‘‘(II) shall accept mail-in applications; and
‘‘(III) shall permit enrollment in the program
in a variety of locations; and
‘‘(ii) shall have served as an original pilot site
for the program under this section; and
‘‘(C) as of December 31, 1998, shall have had—
‘‘(i) an infant mortality rate that is above the
national average; and
‘‘(ii) an overall rate of age-appropriate immuniza-
tions against vaccine-preventable diseases that is below
80 percent.
‘‘(3) TERMINATION OF AUTHORITY.—The authority provided
by this subsection terminates September 30, 2003.’’.
(2) TECHNICAL
AMENDMENTS.—Section 17 of the Child
Nutrition Act of 1966 (42 U.S.C. 1786) is amended—
(A) in subsection (b)(4), by striking ‘‘(4)’’ and all that
follows through ‘‘means’’ and inserting ‘‘(4) ‘Costs of nutri-
tion services and administration’ or ‘nutrition services and
administration’ means’’; and
(B) in subsection (h)(1)(A), by striking ‘‘costs incurred
by State and local agencies for nutrition services and
administration’’ and inserting ‘‘costs of nutrition services
and administration incurred by State and local agencies’’.
(3) GRANT FOR DEMONSTRATION PROJECT.—Section 12 of
the Richard B. Russell National School Lunch Act (42 U.S.C.
1760) is amended by adding at the end the following:
‘‘(p) GRANT FOR DEMONSTRATION PROJECT.—
‘‘(1) USE OF FUNDS FOR WIC DEMONSTRATION PROJECT.—
‘‘(A) IN GENERAL.—The Secretary shall make grants
of funds under this subsection to a State—
‘‘(i) for purposes that include carrying out the dem-
onstration project under section 17(r) of the Child
Nutrition Act of 1966 (42 U.S.C. 1786(r)); and
‘‘(ii) for the purpose described in clause (i), in
amounts not to exceed $10,000 for each fiscal year
for each site in the State.
‘‘(B) APPORTIONMENT.—A State that receives a grant
under subparagraph (A) shall apportion the funds received
H. R. 2559—56
to ensure that each site in the State receives not more
than $10,000 for any fiscal year.
‘‘(2) EVALUATIONS OF DEMONSTRATION PROJECT.—The Sec-
retary shall conduct an evaluation of the demonstration project
and grant program for identification and enrollment efforts
funded under this subsection that include a determination of—
‘‘(A) the number of children enrolled as a result of
the enactment of this subsection;
‘‘(B) the income levels of the families of enrolled chil-
dren;
‘‘(C) the cost of identification and enrollment assistance
services provided under the project or grant program;
‘‘(D) the effect on the caseloads of local agencies that
carry out the special supplemental nutrition program for
woman, infants, and children established under section
17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786);
and
‘‘(E) such other factors as the Secretary determines
to be appropriate.
‘‘(3) FUNDING.—
‘‘(A) IN GENERAL.—Out of any moneys in the Treasury
not otherwise appropriated, the Secretary of the Treasury
shall provide to the Secretary to carry out this subsection
$1,000,000 for the period of fiscal years 2001 through 2004,
to remain available until expended but not later than Sep-
tember 30, 2004.
‘‘(B) RECEIPT AND ACCEPTANCE.—The Secretary shall
be entitled to receive the funds and shall accept the funds
provided under subparagraph (A), without further appro-
priation.’’.
(c) EFFECTIVE DATE.—The amendments made by this section
take effect on October 1, 2000.
SEC. 243. CHILD AND ADULT CARE FOOD PROGRAM INTEGRITY.
(a) DEFINITION OF INSTITUTION; EXCLUSION OF SERIOUSLY DEFI-
CIENT INSTITUTIONS.—Section 17(a) of the Richard B. Russell
National School Lunch Act (42 U.S.C. 1766(a)) is amended—
(1) by striking ‘‘(a) The Secretary’’ and inserting the
following:
‘‘(a) GRANT AUTHORITY AND INSTITUTION ELIGIBILITY.—
‘‘(1) GRANT AUTHORITY.—The Secretary’’;
(2) by striking the second and third sentences and inserting
the following:
‘‘(2) DEFINITION OF INSTITUTION.—In this section, the term
‘institution’ means—
‘‘(A) any public or private nonprofit organization pro-
viding nonresidential child care or day care outside school
hours for school children, including any child care center,
settlement house, recreational center, Head Start center,
and institution providing child care facilities for children
with disabilities;
‘‘(B) any other private organization providing nonresi-
dential child care or day care outside school hours for
school children for which the organization receives com-
pensation from amounts granted to the States under title
XX of the Social Security Act (42 U.S.C. 1397 et seq.)
(but only if the organization receives compensation under
H. R. 2559—57
that title for at least 25 percent of its enrolled children
or 25 percent of its licensed capacity, whichever is less);
‘‘(C) any public or private nonprofit organization acting
as a sponsoring organization for one or more of the
organizations described in subparagraph (A) or (B) or for
an adult day care center (as defined in subsection (o)(2));
‘‘(D) any other private organization acting as a spon-
soring organization for, and that is part of the same legal
entity as, one or more organizations that are—
‘‘(i) described in subparagraph (B); or
‘‘(ii) proprietary title XIX or title XX centers (as
defined in subsection (o)(2));
‘‘(E) any public or private nonprofit organization acting
as a sponsoring organization for one or more family or
group day care homes; and
‘‘(F) any emergency shelter (as defined in subsection
(t)).’’;
(3) by striking ‘‘Except as provided in subsection (r),’’ and
inserting the following:
‘‘(3) AGE
LIMIT.—Except as provided in subsection (r),’’;
(4) by striking ‘‘The Secretary may establish separate
guidelines’’ and inserting the following:
‘‘(4) ADDITIONAL GUIDELINES.—The Secretary may establish
separate guidelines’’;
(5) by striking ‘‘For purposes of determining’’ and all that
follows through ‘‘an institution’’ and inserting the following:
‘‘(5) LICENSING.—In order to be eligible, an institution’’;
and
(6) by striking ‘‘standards; and’’ and inserting ‘‘standards.’’;
(7) by striking ‘‘(2) no institution’’ and inserting the fol-
lowing:
‘‘(6) ELIGIBILITY CRITERIA.—No institution’’; and
(8) in paragraph (6) (as so designated)—
(A) in subparagraph (B), by inserting ‘‘, or has not
been determined to be ineligible to participate in any other
publicly funded program by reason of violation of the
requirements of the program’’ before ‘‘, for a period’’;
(B) in subparagraph (C)—
(i) by inserting ‘‘(i)’’ after ‘‘(C)’’; and
(ii) by adding at the end the following:
‘‘(ii) in the case of a sponsoring organization, the
organization shall employ an appropriate number of moni-
toring personnel based on the number and characteristics
of child care centers and family or group day care homes
sponsored by the organization, as approved by the State
(in accordance with regulations promulgated by the Sec-
retary), to ensure effective oversight of the operations of
the child care centers and family or group day care homes;
and’’;
(C) in subparagraph (D), by striking the period and
inserting a semicolon; and
(D) by adding at the end the following:
‘‘(E) in the case of a sponsoring organization, the
organization has in effect a policy that restricts other
employment by employees that interferes with the respon-
sibilities and duties of the employees of the organization
with respect to the program; and
H. R. 2559—58
‘‘(F) in the case of a sponsoring organization that
applies for initial participation in the program on or after
the date of the enactment of this subparagraph and that
operates in a State that requires such institutions to be
bonded under State law, regulation, or policy, the institu-
tion is bonded in accordance with such law, regulation,
or policy.’’.
(b) INSTITUTION APPROVAL AND APPLICATIONS.—
(1) IN GENERAL.—Section 17(d) of the Richard B. Russell
National School Lunch Act (42 U.S.C. 1766(d)) is amended
by striking the subsection designation and all that follows
through the end of paragraph (1) and inserting the following:
‘‘(d) INSTITUTION APPROVAL AND APPLICATIONS.—
‘‘(1) INSTITUTION APPROVAL.—
‘‘(A) ADMINISTRATIVE CAPABILITY.—Subject to subpara-
graph (B) and except as provided in subparagraph (C),
the State agency shall approve an institution that meets
the requirements of this section for participation in the
child and adult care food program if the State agency
determines that the institution—
‘‘(i) is financially viable;
‘‘(ii) is administratively capable of operating the
program (including whether the sponsoring organiza-
tion has business experience and management plans
appropriate to operate the program) described in the
application of the institution; and
‘‘(iii) has internal controls in effect to ensure pro-
gram accountability.
‘‘(B) APPROVAL OF PRIVATE INSTITUTIONS.—
‘‘(i) IN GENERAL.—In addition to the requirements
established by subparagraph (A) and subject to clause
(ii), the State agency shall approve a private institution
that meets the requirements of this section for partici-
pation in the child and adult care food program only
if—
‘‘(I) the State agency conducts a satisfactory
visit to the institution before approving the partici-
pation of the institution in the program; and
‘‘(II) the institution—
‘‘(aa) has tax exempt status under the
Internal Revenue Code of 1986;
‘‘(bb) is operating a Federal program
requiring nonprofit status to participate in the
program; or
‘‘(cc) is described in subsection (a)(2)(B).
‘‘(ii) EXCEPTION FOR FAMILY OR GROUP DAY CARE
HOMES.—Clause (i) shall not apply to a family or group
day care home.
‘‘(C) EXCEPTION FOR CERTAIN SPONSORING ORGANIZA-
TIONS.—
‘‘(i) IN GENERAL.—The State agency may approve
an eligible institution acting as a sponsoring organiza-
tion for one or more family or group day care homes
or centers that, at the time of application, is not partici-
pating in the child and adult care food program only
if the State agency determines that—
H. R. 2559—59
‘‘(I) the institution meets the requirements
established by subparagraphs (A) and (B); and
‘‘(II) the participation of the institution will
help to ensure the delivery of benefits to otherwise
unserved family or group day care homes or cen-
ters or to unserved children in an area.
‘‘(ii) CRITERIA FOR SELECTION.—The State agency
shall establish criteria for approving an eligible institu-
tion acting as a sponsoring organization for one or
more family or group day care homes or centers that,
at the time of application, is not participating in the
child and adult care food program for the purpose
of determining if the participation of the institution
will help ensure the delivery of benefits to otherwise
unserved family or group day care homes or centers
or to unserved children in an area.
‘‘(D) NOTIFICATION TO APPLICANTS.—Not later than 30
days after the date on which an applicant institution files
a completed application with the State agency, the State
agency shall notify the applicant institution whether the
institution has been approved or disapproved to participate
in the child and adult care food program.’’.
(2) SITE
VISITS.—Section 17(d)(2)(A) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1766(d)(2)(A))
is amended—
(A) in clause (i), by striking ‘‘; and’’ and inserting
a semicolon;
(B) by redesignating clause (ii) as clause (iii); and
(C) by inserting after clause (i) the following:
‘‘(ii)(I) requires periodic unannounced site visits at not less
than 3-year intervals to sponsored child care centers and family
or group day care homes to identify and prevent management
deficiencies and fraud and abuse under the program;
‘‘(II) requires at least one scheduled site visit each year
to sponsored child care centers and family or group day care
homes to identify and prevent management deficiencies and
fraud and abuse under the program and to improve program
operations; and
‘‘(III) requires at least one scheduled site visit at not less
than 3-year intervals to sponsoring organizations and nonspon-
sored child care centers to identify and prevent management
deficiencies and fraud and abuse under the program and to
improve program operations; and’’.
(3) CONFORMING AMENDMENT.—Section 17(d)(2)(B) of the
Richard B. Russell National School Lunch Act (42 U.S.C.
1766(d)(2)(B)) is amended by striking ‘‘subsection (a)(1)’’ and
inserting ‘‘subsection (a)(5)’’.
(4) PROGRAM INFORMATION.—
(A) IN
GENERAL.—Section 17(d) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1766(d))
is amended by adding at the end the following:
‘‘(3) PROGRAM INFORMATION.—
‘‘(A) IN GENERAL.—On enrollment of a child in a spon-
sored child care center or family or group day care home
participating in the program, the center or home (or its
sponsoring organization) shall provide to the child’s parents
or guardians—
H. R. 2559—60
‘‘(i) information that describes the program and
its benefits; and
‘‘(ii) the name and telephone number of the spon-
soring organization of the center or home and the
State agency involved in the operation of the program.
‘‘(B) FORM.—The information described in subpara-
graph (A) shall be in a form and, to the maximum extent
practicable, language easily understandable by the child’s
parents or guardians.’’.
(B) EFFECTIVE DATE.—In the case of a child that is
enrolled in a sponsored child care center or family or group
day care home participating in the child and adult care
food program under section 17 of the Richard B. Russell
National School Lunch Act (42 U.S.C. 1766) before the
date of the enactment of this Act, the center or home
shall provide information to the child’s parents or guard-
ians pursuant to section 17(d)(3) of that Act, as added
by subparagraph (A), not later than 90 days after the
date of the enactment of this Act.
(5) ALLOWABLE ADMINISTRATIVE EXPENSES FOR SPONSORING
ORGANIZATIONS.—Section 17(d) of the Richard B. Russell
National School Lunch Act (42 U.S.C. 1766(d)), as amended
by paragraph (4)(A), is amended by adding at the end the
following:
‘‘(4) ALLOWABLE ADMINISTRATIVE EXPENSES FOR SPONSORING
ORGANIZATIONS.—In consultation with State agencies and spon-
soring organizations, the Secretary shall develop, and provide
for the dissemination to State agencies and sponsoring
organizations of, a list of allowable reimbursable administrative
expenses for sponsoring organizations under the program.’’.
(c) TERMINATION OR SUSPENSION OF PARTICIPATING ORGANIZA-
TIONS.—Section 17(d) of the Richard B. Russell National School
Lunch Act (42 U.S.C. 1766(d)), as amended by subsection (b)(5),
is amended by adding at the end the following:
‘‘(5) TERMINATION
OR
SUSPENSION
OF
PARTICIPATING
ORGANIZATIONS.—
‘‘(A) IN GENERAL.—The Secretary shall establish proce-
dures for the termination of participation by institutions
and family or group day care homes under the program.
‘‘(B) STANDARDS.—Procedures established pursuant to
subparagraph (A) shall include standards for terminating
the participation of an institution or family or group day
care home that—
‘‘(i) engages in unlawful practices, falsifies informa-
tion provided to the State agency, or conceals a
criminal background; or
‘‘(ii) substantially fails to fulfill the terms of its
agreement with the State agency.
‘‘(C) 
CORRECTIVE
ACTION.—Procedures 
established
pursuant to subparagraph (A)—
‘‘(i) shall require an entity described in subpara-
graph (B) to undertake corrective action; and
‘‘(ii) may require the immediate suspension of oper-
ation of the program by an entity described in subpara-
graph (B), without the opportunity for corrective action,
if the State agency determines that there is imminent
threat to the health or safety of a participant at the
H. R. 2559—61
entity or the entity engages in any activity that poses
a threat to public health or safety.
‘‘(D) HEARING.—An institution or family or group day
care home shall be provided a fair hearing in accordance
with subsection (e)(1) prior to any determination to termi-
nate participation by the institution or family or group
day care home under the program.
‘‘(E) LIST OF DISQUALIFIED INSTITUTIONS AND INDIVID-
UALS.—
‘‘(i) IN
GENERAL.—The Secretary shall maintain
a list of institutions, sponsored family or group day
care homes, and individuals that have been terminated
or otherwise disqualified from participation in the pro-
gram.
‘‘(ii) AVAILABILITY.—The Secretary shall make the
list available to State agencies for use in approving
or renewing applications by institutions, sponsored
family or group day care homes, and individuals for
participation in the program.’’.
(d) RECOVERY
OF
AMOUNTS
FROM
INSTITUTIONS.—Section
17(f )(1) of the Richard B. Russell National School Lunch Act (42
U.S.C. 1766(f )(1)) is amended—
(1) by striking ‘‘(f )(1) Funds paid’’ and inserting the fol-
lowing:
‘‘(f ) STATE DISBURSEMENTS TO INSTITUTIONS.—
‘‘(1) IN GENERAL.—
‘‘(A) REQUIREMENT.—Funds paid’’; and
(2) by adding at the end the following:
‘‘(B) FRAUD OR ABUSE.—
‘‘(i) IN
GENERAL.—The State may recover funds
disbursed under subparagraph (A) to an institution
if the State determines that the institution has engaged
in fraud or abuse with respect to the program or has
submitted an invalid claim for reimbursement.
‘‘(ii) PAYMENT.—Amounts recovered under clause
(i)—
‘‘(I) may be paid by the institution to the State
over a period of one or more years; and
‘‘(II) shall not be paid from funds used to pro-
vide meals and supplements.
‘‘(iii) HEARING.—An institution shall be provided
a fair hearing in accordance with subsection (e)(1) prior
to any determination to recover funds under this
subparagraph.’’.
(e) LIMITATION
ON ADMINISTRATIVE EXPENSES
FOR CERTAIN
SPONSORING ORGANIZATIONS.—Section 17(f )(2) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1766(f )(2)) is amended
by adding at the end the following:
‘‘(C) LIMITATION
ON
ADMINISTRATIVE
EXPENSES
FOR
CERTAIN SPONSORING ORGANIZATIONS.—
‘‘(i) IN
GENERAL.—Except as provided in clause
(ii), a sponsoring organization of a day care center
may reserve not more than 15 percent of the funds
provided under paragraph (1) for the administrative
expenses of the organization.
‘‘(ii) WAIVER.—A State may waive the requirement
in clause (i) with respect to a sponsoring organization
H. R. 2559—62
if the organization provides justification to the State
that the organization requires funds in excess of 15
percent of the funds provided under paragraph (1)
to pay the administrative expenses of the organiza-
tion.’’.
(f ) LIMITATIONS ON ABILITY OF FAMILY OR GROUP DAY CARE
HOMES TO TRANSFER SPONSORING ORGANIZATIONS.—Section 17(f )(3)
of the Richard B. Russell National School Lunch Act (42 U.S.C.
1766(f )(3)) is amended by striking subparagraph (D) and inserting
the following:
‘‘(D) LIMITATIONS ON ABILITY OF FAMILY OR GROUP DAY
CARE HOMES TO TRANSFER SPONSORING ORGANIZATIONS.—
‘‘(i) IN GENERAL.—Subject to clause (ii), a State
agency shall limit the ability of a family or group
day care home to transfer from a sponsoring organiza-
tion to another sponsoring organization more fre-
quently than once a year.
‘‘(ii) GOOD CAUSE.—The State agency may permit
or require a family or group day care home to transfer
from a sponsoring organization to another sponsoring
organization more frequently than once a year for good
cause (as determined by the State agency), including
circumstances in which the sponsoring organization
of the family or group day care home ceases to partici-
pate in the child and adult care food program.’’.
(g) STATE-WIDE DEMONSTRATION PROJECTS INVOLVING PRIVATE
FOR-PROFIT ORGANIZATIONS THAT PROVIDE NONRESIDENTIAL DAY
CARE SERVICES.—
(1) IN GENERAL.—Section 17(p) of the Richard B. Russell
National School Lunch Act (42 U.S.C. 1766(p)) is amended—
(A) in the first sentence of paragraph (1), by striking
‘‘2 statewide demonstration projects’’ and inserting ‘‘State-
wide demonstration projects in three States’’; and
(B) in paragraph (3)—
(i) by inserting ‘‘in’’ after ‘‘subsection’’;
(ii) in subparagraph (A), by striking ‘‘and’’ at the
end;
(iii) in subparagraph (B), by striking the period
at the end and inserting ‘‘; and’’; and
(iv) by adding at the end the following:
‘‘(C) one other State—
‘‘(i) with fewer than 60,000 children below 5 years
of age;
‘‘(ii) that serves more than the national average propor-
tion of children potentially eligible for assistance provided
under the Child Care and Development Fund (as indicated
in data published by the Department of Health and Human
Services in October 1999);
‘‘(iii) that exempts all families from cost sharing
requirements under programs funded by the Child Care
and Development Fund; and
‘‘(iv) in which State spending represents more than
50 percent of total expenditures made under the Child
Care and Development Fund.’’.
(2) EFFECTIVE DATE.—The Secretary may carry out dem-
onstration projects in the State described in section 17(p)(3)(C)
of the Richard B. Russell National School Lunch Act, as added
H. R. 2559—63
by paragraph (1)(B)(iv), beginning not earlier than October
1, 2001.
(h) TECHNICAL AND TRAINING ASSISTANCE FOR IDENTIFICATION
AND PREVENTION
OF FRAUD
AND ABUSE.—Section 17(q) of the
Richard B. Russell National School Lunch Act (42 U.S.C. 1766(q))
is amended—
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:
‘‘(2) TECHNICAL AND TRAINING ASSISTANCE FOR IDENTIFICA-
TION
AND
PREVENTION
OF
FRAUD
AND
ABUSE.—As part of
training and technical assistance provided under paragraph
(1), the Secretary shall provide training on a continuous basis
to State agencies, and shall ensure that such training is pro-
vided to sponsoring organizations, for the identification and
prevention of fraud and abuse under the program and to
improve management of the program.’’.
(i) PROGRAM FOR AT-RISK SCHOOL CHILDREN.—Section 17(r)
of the Richard B. Russell National School Lunch Act (42 U.S.C.
1766(r)) is amended—
(1) in paragraph (2), by inserting ‘‘meals or’’ before ‘‘supple-
ments’’;
(2) in paragraph (4)—
(A) in the heading, by striking ‘‘SUPPLEMENT’’ and
inserting ‘‘MEAL AND SUPPLEMENT’’;
(B) in subparagraph (A)—
(i) by striking ‘‘only for’’ and all that follows
through ‘‘(i) a supplement’’ and inserting ‘‘only for one
meal per child per day and one supplement per child
per day’’;
(ii) by striking ‘‘; and’’ and inserting a period;
and
(iii) by striking clause (ii);
(C) in subparagraph (B), by striking ‘‘RATE.—A supple-
ment’’ and inserting the following: ‘‘RATES.—
‘‘(i) MEALS.—A meal shall be reimbursed under
this subsection at the rate established for free meals
under subsection (c).
‘‘(ii) SUPPLEMENTS.—A supplement’’; and
(D) in subparagraph (C), by inserting ‘‘meal or’’ before
‘‘supplement’’; and
(3) by adding at the end the following:
‘‘(5) LIMITATION.—The Secretary shall limit reimbursement
under this subsection for meals served under a program to
institutions located in six States, of which four States shall
be Pennsylvania, Missouri, Delaware, and Michigan and two
States shall be approved by the Secretary through a competitive
application process.’’.
( j) WITHHOLDING OF FUNDS FOR FAILURE TO PROVIDE SUFFI-
CIENT TRAINING, TECHNICAL ASSISTANCE, AND MONITORING.—Sec-
tion 7(a)(9)(A) of the Child Nutrition Act of 1966 (42 U.S.C.
1776(a)(9)(A)) is amended by inserting after ‘‘the Richard B. Russell
National School Lunch Act (42 U.S.C. 1751 et seq.)’’ the following:
‘‘(including any requirement to provide sufficient training, technical
assistance, and monitoring of the child and adult care food program
under section 17 of that Act (42 U.S.C. 1766))’’.