trition services and administration during the subse-
quent 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 administration,
an amount equal to not more than one-half of 1 per-
cent of the total amount of funds allocated to the
agency under this section for a fiscal year for the de-
velopment of a management information system, in-
cluding 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 services
and administration funds’’ the following: ‘‘and
food benefit funds’’; and
(B) in subsection (i)(3)—
(i) by striking subparagraphs (C)
through (G); and
(ii) by redesignating subparagraph
(H) as subparagraph (C).
(n) 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.—Sec-
tion 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 insert-
ing ‘‘1999 through 2003’’.
(o) 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 fol-
lowing:
‘‘(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 ac-
cess 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 notification of
the disqualification and shall make such disqualifica-
tion effective on the date of receipt of the notice of dis-
qualification.
‘‘(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.—
‘‘(A) IN GENERAL.— A State agency may
permit a vendor that would otherwise be dis-
qualified under paragraph (1) to continue to re-
deem food instruments or otherwise provide sup-
plemental foods to participants if the State agen-
cy determines, in its sole discretion according to
criteria established by the Secretary, disquali-
fication of the vendor would cause hardship to
participants in the program authorized under
this section.
‘‘(B) CIVIL MONEY PENALTY.—Whenever a
State agency authorizes a vendor that would oth-
erwise be disqualified to redeem food instruments
or provide supplemental foods in accordance
with subparagraph (A), the State agency shall
assess the vendor a civil money penalty in lieu
of a disqualification.
‘‘(C) AMOUNT.—The State agency shall de-
termine the amount of the civil penalty accord-
ing to criteria established by the Secretary.’’.
(2) REGULATIONS.—
(A) IN GENERAL.—Not later than March 1,
1999, the Secretary of Agriculture shall promul-
gate final regulations to carry out section 17(o)
of such Act (42 U.S.C. 1786(o)), as added by
paragraph (1).
(B) ADDITIONAL REQUIREMENT.—The final
regulations described in subparagraph (A) shall
include criteria for determining the amount of
civil money penalties in lieu of disqualification
and for making hardship determinations under
such section.
(p) STUDY AND REPORT BY ECONOMIC RESEARCH
SERVICE.—Section 17 of such Act (42 U.S.C. 1786), as
amended by this Act, is further amended by adding at the
end the following:
‘‘(p) STUDY AND REPORT BY ECONOMIC RESEARCH
SERVICE.—
‘‘(1) STUDY.—The Secretary, acting through the
Administrator of the Economic Research Service,
shall conduct a study on the effect of cost containment
practices established by States under the program for
the selection of vendors and approved food items
(other than infant formula) on the following:
‘‘(A) Program participation.
‘‘(B) Access and availability of prescribed
foods.
‘‘(C) Voucher redemption rates and actual
food selections by participants.
‘‘(D) Participants on special diets or with
specific food allergies.
‘‘(E) Participant use and satisfaction of
prescribed foods.
‘‘(F) Achievement of positive health out-
comes.
‘‘(G) Program costs.
‘‘(2) REPORT.—Not later than 3 years after the
date of the enactment of the Child Nutrition and WIC
Reauthorization Amendments of 1998, the Adminis-
trator shall submit to the Secretary of Agriculture, the
Committee on Education and the Workforce of the
House of Representatives, and the Committee on Agri-
culture, Nutrition, and Forestry of the Senate a re-
port containing the results of the study conducted
under paragraph (1).’’.
(q) COLLECTION AND USE OF PENALTIES FROM VEN-
DOR AND RECIPIENT FRAUD AND ABUSE.—Section 17 of
such Act (42 U.S.C. 1786), as amended by this Act, is fur-
ther amended by adding at the end the following:
‘‘(q) USE OF PENALTIES FROM VENDOR AND RECIPI-
ENT FRAUD AND ABUSE.—Amounts collected from penalties
from vendors and recipients relating to violations of any
provision of this section (including any regulation estab-
lished to carry out this section) for fraud and abuse under
the program may be used for nutrition services and admin-
istration and food benefits only for the 1-year period begin-
ning on the date on which amounts under the penalty are
received.’’.
(r) MAXIMUM AMOUNT OF FINE FOR CERTAIN VIOLA-
TIONS UNDER THE PROGRAM.—Section 17 of such Act (42
U.S.C. 1786), as amended by this Act, is further amended
by adding at the end the following:
‘‘(r) MAXIMUM AMOUNT OF FINE FOR CERTAIN VIOLA-
TIONS UNDER THE PROGRAM.—The maximum amount of
a 
fine 
with 
respect 
to 
the 
embezzlement, 
willful
misapplication, stealing, obtaining by fraud, or trafficking
in food instruments of funds, assets, or property that are
of a value of $100 or more under the program shall be
$25,000.’’.
(s) CRIMINAL FORFEITURE.—Section 17 of such Act
(42 U.S.C. 1786), as amended by this Act, is further amend-
ed by adding at the end the following:
‘‘(s) CRIMINAL FORFEITURE.—
‘‘(1) IN GENERAL.—In imposing a sentence on a
person convicted of an offense in violation of any pro-
vision of this section (or any regulation promulgated
under this section), a court shall order, in addition
to any other sentence imposed under this section, that
the person forfeit to the United States all property de-
scribed in paragraph (2).
‘‘(2) PROPERTY SUBJECT TO FORFEITURE.—All
property, real and personal, used in a transaction or
attempted transaction, to commit, or to facilitate the
commission of, a violation (other than a mis-
demeanor) of any provision of this section (or any
regulation promulgated under this section), or pro-
ceeds traceable to a violation of any provision of this
section (or any regulation promulgated under this
section), shall be subject to forfeiture to the United
States under paragraph (1).
‘‘(3) INTEREST OF OWNER.—No interest in prop-
erty shall be forfeited under this subsection as the re-
sult of any act or omission established by the owner
of the interest to have been committed or omitted
without the knowledge or consent of the owner.
‘‘(4) PROCEEDS.—The proceeds from any sale of
forfeited property and any monies forfeited under this
subsection shall be used—
‘‘(A) first, to reimburse the Department of
Justice for the costs incurred by the Department
to initiate and complete the forfeiture proceed-
ing;
‘‘(B) second, to reimburse the Department of
Agriculture Office of Inspector General for any
costs the Office incurred in the law enforcement
effort resulting in the forfeiture;
‘‘(C) third, to reimburse any Federal or
State law enforcement agency for any costs in-
curred in the law enforcement effort resulting in
the forfeiture; and
‘‘(D) fourth, by the State agency to carry
out the approval, reauthorization, and compli-
ance investigations of vendors.’’.
SEC. 203. NUTRITION EDUCATION AND TRAINING PRO-
GRAM.
Section 19(i) of the Child Nutrition Act of 1966 (42
U.S.C. 1788(i)) is amended—
(1) by striking paragraphs (1) and (2);
(2) by redesignating paragraphs (3), (4), and (5)
as paragraphs (1), (2), and (3), respectively; and
(3) in paragraph (1) (as redesignated)—
(A) in the paragraph heading, by striking
‘‘1997
THROUGH
2002
’’ and inserting ‘‘1999
THROUGH 2003’’; and
(B) by amending subparagraph (A) to read
as follows:
‘‘(A) IN GENERAL.—There are authorized to
be appropriated to carry out this section such
sums as are necessary for fiscal years 1999
through 2003.’’.
Amend the title so as to read: ‘‘A bill to amend the
National School Lunch Act and the Child Nutrition Act
of 1966 to provide children with increased access to food
and nutrition assistance, to simplify program operations
and improve program management, to extend certain au-
thorities contained in those Acts through fiscal year
2003, and for other purposes.’’.