105TH CONGRESS
2D SESSION
H. R. 3874
AN ACT
To amend the National School Lunch Act and the
Child Nutrition Act of 1966 to provide children
with increased access to food and nutrition as-
sistance, to simplify program operations and im-
prove program management, to extend certain
authorities contained in those Acts through fiscal
year 2003, and for other purposes.
105TH CONGRESS
2D SESSION
H. R. 3874
AN ACT
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 pro-
gram operations and improve program management, to
extend certain authorities contained in those Acts
through fiscal year 2003, and for other purposes.
sure that meals provided under such programs are pre-
pared and served in a healthful and safe environment.’’.
(b) SINGLE PERMANENT AGREEMENTS BETWEEN
STATE AGENCIES
AND SCHOOL FOOD AUTHORITIES;
COMMON CLAIMING PROCEDURES.—Section 9 of such Act
(42 U.S.C. 1758), as amended by this Act, is further
amended by adding at the end the following:
‘‘(i)(1) If a single State agency administers the school
lunch program under this Act, the school breakfast pro-
gram under section 4 of the Child Nutrition Act of 1966
(42 U.S.C. 1773), the summer food service program for
children under section 13 of this Act, or the child and
adult care food program under section 17 of this Act, then
such agency—
‘‘(A) shall require each school food authority to
submit a single agreement with respect to the oper-
ation of such programs by such authority; and
‘‘(B) shall require a common claiming proce-
dure with respect to meals and supplements served
under such programs.
‘‘(2) The agreement described in paragraph (1)(A)
shall be a permanent agreement that may be amended as
necessary.’’.
SEC. 103. SPECIAL ASSISTANCE.
(a) SCHOOL ELIGIBILITY REQUIREMENTS FOR PAY-
MENTS.—Section 11(a)(1) of the National School Lunch
Act (42 U.S.C. 1759a(a)(1)) is amended—
(1) in subparagraph (C)—
(A) in clause (i)(I), by striking ‘‘3 succes-
sive school years’’ each place it appears and in-
serting ‘‘4 successive school years’’; and
(B) in clauses (ii) and (iii), by striking ‘‘3-
school-year period’’ each place it appears and
inserting ‘‘4-school-year period’’; and
(2) in subparagraph (D)—
(A) in clause (i)—
(i) by striking ‘‘3-school-year period’’
each place it appears and inserting ‘‘4-
school-year period’’; and
(ii) by striking ‘‘2 school years’’ and
inserting ‘‘4 school years’’;
(B) in clause (ii)—
(i) by striking the first sentence; and
(ii) by striking ‘‘5-school-year period’’
each place it appears and inserting ‘‘4-
school-year period’’; and
(C) in clause (iii), by striking ‘‘5-school-
year period’’ and inserting ‘‘4-school-year pe-
riod’’.
(b) ADJUSTMENTS TO PAYMENT RATES.—
(1) IN GENERAL.—Section 11(a)(3)(B) of such
Act (42 U.S.C. 1759a(a)(3)(B)) is amended—
(A) in the first sentence, by striking ‘‘The
annual’’ and inserting ‘‘(i) The annual’’; and
(B) in the third sentence—
(i) by striking ‘‘The adjustments’’ and
inserting the following:
‘‘(ii) The adjustments’’; and
(ii) by inserting ‘‘through April 30,
1999,’’ after ‘‘under this paragraph’’; and
(iii) by adding at the end the follow-
ing:
‘‘(iii) For the period beginning on May 1, 1999, and
ending on June 30, 1999, the national average payment
rates for meals and supplements shall be adjusted to the
nearest lower cent increment and shall be based on the
unrounded amounts used to calculate the rates in effect
on July 1, 1998.
‘‘(iv) For July 1, 1999, and each subsequent July 1,
the national average payment rates for meals and supple-
ments shall be adjusted to the nearest lower cent incre-
ment and shall be based on the unrounded amount for
the preceding 12-month period.’’.
(2) CONFORMING AMENDMENTS.—Section 4(b)
of the Child Nutrition Act of 1966 (42 U.S.C.
1773(b)) is amended—
(1) in the second sentence of paragraph (1)(B),
by striking ‘‘adjusted to the nearest one-fourth
cent,’’; and
(2) in paragraph (2)(B)(ii), by striking ‘‘to the
nearest one-fourth cent’’.
SEC. 104. MISCELLANEOUS PROVISIONS AND DEFINITIONS.
(a) ADJUSTMENTS TO REIMBURSEMENT RATES FOR
CERTAIN STATES AND TERRITORIES.—Section 12(f) of
the National School Lunch Act (42 U.S.C. 1760(f)) is
amended—
(1) by striking ‘‘school breakfasts and lunches’’
and inserting ‘‘breakfasts, lunches, suppers, and
supplements’’;
(2) by striking ‘‘sections 4 and 11’’ and insert-
ing ‘‘sections 4, 11, 13, and 17’’; and
(3) by striking ‘‘lunches and breakfasts’’ each
place it appears and inserting ‘‘meals’’.
(b) BUY AMERICAN REQUIREMENT.—Section 12 of
the National School Lunch Act (42 U.S.C. 1760) is
amended by adding at the end the following:
‘‘(n) BUY AMERICAN REQUIREMENT.—
‘‘(1) IN GENERAL.—For purposes of providing
meals under the school lunch program under this
Act or the school breakfast program under section 4
of the Child Nutrition Act of 1966 (42 U.S.C.
1773), the Secretary shall require schools located in
the contiguous United States to purchase, to the ex-
tent practicable, only food products that are pro-
duced in the United States.
‘‘(2) ADDITIONAL
REQUIREMENT.—The re-
quirement of paragraph (1) shall also apply to recip-
ient agencies in Hawaii only with respect to food
products that are grown in Hawaii in sufficient
quantities to meet the needs of meals provided under
the school lunch program under this Act or the
school breakfast program under section 4 of the
Child Nutrition Act of 1966 (42 U.S.C. 1773).
‘‘(3) DEFINITION.—As used in this subsection,
the term ‘food products that are produced in the
United States’ means—
‘‘(A) unmanufactured food products that
are grown or produced in the United States;
and
‘‘(B) manufactured food products that are
manufactured in the United States substantially
from agricultural products grown or produced
in the United States.’’.
SEC. 105. SUMMER FOOD SERVICE PROGRAM FOR CHIL-
DREN.
(a) DEFINITION OF PRIVATE NONPROFIT ORGANIZA-
TIONS.—Section 13(a)(7)(B) of the National School
Lunch Act (42 U.S.C. 1761(a)(7)(B)) is amended—
(1) in clause (i), to read as follows:
‘‘(i) operate not more than 25 sites, with not
more than 300 children being served at any one site
(or, with a waiver granted by the State agency under
standards developed by the Secretary, not more than
500 children being served at any one site);’’;
(2) by striking clauses (ii) and (iii); and
(3) by redesignating clauses (iv), (v), (vi), and
(vii) as clauses (ii), (iii), (iv), and (v), respectively.
(b) OFFER VERSUS SERVE.—Section 13(f)(7) of such
Act (42 U.S.C. 1761(f)(7)) is amended in the first sen-
tence by striking ‘‘attending a site on school premises op-
erated directly by the authority’’.
(c) FOOD SERVICE MANAGEMENT COMPANIES.—
(1) CONTRACTING FOR PROVISION OF MEALS
OR MANAGEMENT OF PROGRAM.—Section 13(l)(1) of
such Act (42 U.S.C. 1761(l)(1)) is amended—
(A) in the first sentence—
(i) by striking ‘‘(other than private
nonprofit organizations eligible under sub-
section (a)(7))’’; and
(ii) by striking ‘‘only with food service
management companies registered with the
State in which they operate’’ and inserting
‘‘with food service management compa-
nies’’; and
(B) by striking the last sentence.
(2) REGISTRATION.—Section 13(l)(2) of such
Act (42 U.S.C. 1761(l)(2)) is amended—
(A) in the first sentence of the matter pre-
ceding subparagraph (A), by striking ‘‘shall’’
and inserting ‘‘may’’; and
(B) by striking all after the first sentence.
(3) OTHER PROVISIONS.—Section 13(l) of such
Act (42 U.S.C. 1761(l)) is amended—
(A) by striking paragraph (3); and
(B) by redesignating paragraphs (4) and
(5) as paragraphs (3) and (4), respectively.
(d) REAUTHORIZATION OF PROGRAM.—Section 13(q)
of such Act (42 U.S.C. 1761(q)) is amended by striking
‘‘1998’’ and inserting ‘‘2003’’.
SEC. 106. COMMODITY DISTRIBUTION PROGRAM.
Section 14(a) of the National School Lunch Act (42
U.S.C. 1762a(a)) is amended in the matter preceding
paragraph (1) by striking ‘‘1998’’ and inserting ‘‘2003’’.
SEC. 107. CHILD AND ADULT CARE FOOD PROGRAM.
(a) 
ELIGIBILITY
OF
INSTITUTIONS.—Section
17(a)(1) of the National School Lunch Act (42 U.S.C.
1766(a)(1)) is amended to read as follows:
‘‘(1) an institution (except a school or family or
group day care home sponsoring organization) or
family or group day care home—
‘‘(A)(i) shall be licensed, or otherwise have
approval, by the appropriate Federal, State, or
local licensing authority; or
‘‘(ii) shall be in compliance with appro-
priate procedures for renewing participation in
the program, as prescribed by the Secretary,
unless the State has information indicating that
the institution or family or group day care
home’s license will not be renewed;
‘‘(B) if Federal, State, or local licensing or
approval is not available—
‘‘(i) shall meet any alternate approval
standards established by the appropriate
State or local governmental agency; or
‘‘(ii) shall meet any alternate approval
standards established by the Secretary
after consultation with the Secretary of
Health and Human Services; or
‘‘(C) if the institution provides care to
school children outside of school hours and Fed-
eral, State, or local licensing or approval is not
required for such institution, shall meet State
or local health and safety standards; and’’.
(b) CATEGORICAL ELIGIBILITY
FOR EVEN START
PROGRAM PARTICIPANTS.—Section 17(c)(6)(B) of such
Act (42 U.S.C. 1766(c)(6)(B)) is amended by striking
‘‘1997’’ and inserting ‘‘2003’’.
(c) TAX EXEMPT STATUS OF ELIGIBLE INSTITU-
TIONS; REMOVAL OF NOTIFICATION REQUIREMENT FOR
INCOMPLETE APPLICATIONS.—Section 17(d)(1) of such
Act (42 U.S.C. 1766(d)(1)) is amended—
(1) by inserting after the third sentence the fol-
lowing: ‘‘An institution moving toward compliance
with the requirement for tax exempt status shall be
allowed to participate in the program for a period of
not more than 6 months unless it can demonstrate
to the satisfaction of the State agency that its in-
ability to obtain tax exempt status within the 6-
month period is beyond the control of the institution
in which case the State agency may grant a single
extension not to exceed 90 days.’’; and
(2) by striking the last sentence.
(d) USE OF FUNDS FOR AUDITS OF PARTICIPATING
INSTITUTIONS.—Section 17(i) of such Act (42 U.S.C.
1766(i)) is amended by striking ‘‘2 percent’’ and inserting
‘‘1 percent’’.
(e) PERMANENT AUTHORIZATION OF DEMONSTRA-
TION PROJECT.—Section 17(p) of such Act (42 U.S.C.
1766(p)) is amended by striking paragraphs (4) and (5).
(f) TRANSFER OF HOMELESS PROGRAMS.—
(1) IN GENERAL.—Section 17 of such Act (42
U.S.C. 1766) is amended by adding at the end the
following:
‘‘(q) PARTICIPATION BY EMERGENCY SHELTERS.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, an emergency shelter shall
be eligible to participate in the program authorized
under this section in accordance with the terms and
conditions applicable to eligible institutions described
in subsection (a).
‘‘(2) LICENSING REQUIREMENTS.—The licens-
ing requirements contained in subsection (a)(1) shall
not apply to emergency shelters or sites operated by
such shelters under the program.
‘‘(3) ADDITIONAL REQUIREMENTS.—
‘‘(A) HEALTH AND SAFETY STANDARDS.—
An emergency shelter and each site operated by
such shelter shall comply with State or local
health and safety standards.
‘‘(B) MEAL REIMBURSEMENT.—
‘‘(i) 
LIMITATION.—An 
emergency
shelter may claim reimbursement—
‘‘(I) only for meals and supple-
ments served to children who have not
attained the age of 13 and who are
residing at an emergency shelter; and
‘‘(II) for not more than 3 meals,
or 2 meals and a supplement, per
child per day.
‘‘(ii) RATE.—A meal or supplement
eligible for reimbursement shall be reim-
bursed at the rate at which free meals and
supplements are reimbursed under sub-
section (c).
‘‘(iii) NO CHARGE.—A meal or supple-
ment claimed for reimbursement shall be
served without charge.
‘‘(4) DEFINITION OF EMERGENCY SHELTER.—
As used in this subsection, the term ‘emergency
shelter’ has the meaning given such term in section
321(2) of the Stewart B. McKinney Homeless As-
sistance Act (42 U.S.C. 11351(2)).’’.
(2) CONFORMING AMENDMENTS.—(A) Section
13(a)(3)(C) of such Act (42 U.S.C. 1761(a)(3)(C))
is amended—
(i) in clause (i), by adding ‘‘or’’ at the end;
(ii) by striking clause (ii); and
(iii) by redesignating clause (iii) as clause
(ii).
(B) Section 17B of such Act (42 U.S.C. 1766b)
is hereby repealed.
(g) PARTICIPATION BY ‘‘AT RISK’’ CHILD CARE PRO-
GRAMS.—Section 17 of such Act (42 U.S.C. 1766), as
amended by this Act, is further amended by adding at the
end the following:
‘‘(r) ‘AT RISK’ CHILD CARE.—
‘‘(1) IN GENERAL.—Subject to the conditions in
this subsection, institutions that provide care to at
risk school children during after-school hours, week-
ends, or holidays during the regular school year may
participate in the program authorized under this
section. Unless otherwise specified in this subsection,
all other provisions of this section shall apply to
these institutions.
‘‘(2) AT
RISK
SCHOOL
CHILDREN.—Children
ages 12 through 18 who live in a geographical area
served by a school enrolling elementary students in
which at least 50 percent of the total number of
children enrolled are certified eligible to receive free
or reduced price school meals under this Act or the
Child Nutrition Act of 1966 shall be considered at
risk.
‘‘(3) SUPPLEMENT REIMBURSEMENT.—
‘‘(A) 
LIMITATION.—Only 
supplements
served to at risk school children during after-
school hours, weekends, or holidays during the
regular school year may be claimed for reim-
bursement. Institutions may claim reimburse-
ment for only one supplement per child per day.
‘‘(B) RATE.—Eligible supplements shall be
reimbursed at the rate for free supplements
under subsection (c)(3).
‘‘(C) 
NO
CHARGE.—All 
supplements
claimed for reimbursement shall be served with-
out charge.’’.
SEC. 108. MEAL SUPPLEMENTS FOR CHILDREN IN AFTER-
SCHOOL CARE.
Section 17A of the National School Lunch Act (42
U.S.C. 1766a) is amended—
(1) in subsection (a)(2)(C) to read as follows:
‘‘(C) operate afterschool programs with an
educational or enrichment purpose.’’; and
(2) in subsection (b), by striking ‘‘served to
children’’ and all that follows and inserting ‘‘served
to children who are not more than 18 years of age.’’.
SEC. 109. UNIVERSAL FREE BREAKFAST PILOT PROJECTS.
Section 18(i) of the National School Lunch Act (42
U.S.C. 1769(i)) is amended to read as follows:
‘‘(i) 
UNIVERSAL
FREE
BREAKFAST
PILOT
PROJECTS.—
‘‘(1) IN GENERAL.—
‘‘(A) GRANTS TO STATES.—(i) Subject to
the availability of advance appropriations under
paragraph (8), the Secretary shall make grants
to not more than 5 States to conduct pilot
projects in elementary schools under school food
authorities located in each such State—
‘‘(I) to reduce paperwork;
‘‘(II) to simplify meal counting re-
quirements; and
‘‘(III) to make changes that will in-
crease participation in the school breakfast
program.
‘‘(ii) The Secretary shall select States to
receive grants under clause (i), and make
grants to such States, in the first fiscal year for
which appropriations are made to carry out this
subsection.
‘‘(B) GRANTS TO SCHOOL FOOD AUTHORI-
TIES; DURATION OF PILOT PROJECTS.—(i)(I) A
State receiving a grant under subparagraph (A)
shall make grants to school food authorities to
carry out the pilot projects described in such
subparagraph.
‘‘(II) The State shall select school food au-
thorities to receive grants under clause (i), and
make grants to such authorities, in the first fis-
cal year for which the State receives amounts
under a grant.
‘‘(ii) A school food authority receiving
amounts under a grant to conduct a pilot
project described in subparagraph (A) shall
conduct such project for the 3-year period be-
ginning in the first fiscal year in which the au-
thority receives amounts under a grant from
the State.
‘‘(C) 
PARTICIPATION
LIMITATION.—A
school food authority conducting a pilot project
under this paragraph shall ensure that some el-
ementary schools under such authority do not
participate in the pilot project.
‘‘(2) WAIVER AUTHORITY.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the Secretary may waive the
requirements of this Act and the Child Nutri-
tion Act of 1966 (42 U.S.C. 1771 et seq.) relat-
ing to counting of meals, applications for eligi-
bility, and related requirements that would pre-
clude the Secretary from making a grant to
conduct a pilot project under paragraph (1).
‘‘(B) NON-WAIVABLE
REQUIREMENTS.—
The Secretary may not waive a requirement
under subparagraph (A) if the waiver would
prevent a program participant, a potential re-
cipient, or a school from receiving all of the
benefits and protections of this Act, the Child
Nutrition Act of 1966, or a Federal statute or
regulation that protects an individual constitu-
tional right or a statutory civil right.
‘‘(3) REQUIREMENTS
FOR
PARTICIPATION
IN
PILOT.—To be eligible to participate in a pilot
project under this subsection—
‘‘(A) a State—
‘‘(i) shall submit an application to the
Secretary at such time and in such manner
as the Secretary shall establish; and
‘‘(ii) shall provide such information
relative to the operation and results of the
pilot as the Secretary may reasonably re-
quire; and
‘‘(B) a school food authority—
‘‘(i) shall agree to serve all breakfasts
at no charge to all children in participating
elementary schools;
‘‘(ii) shall not have a history of viola-
tions of this Act or the Child Nutrition Act
of 1966 (42 U.S.C. 1771 et seq.); and
‘‘(iii) shall meet any other require-
ment that the Secretary may reasonably
require.
‘‘(4) 
SELECTION
OF
PILOT
ELEMENTARY
SCHOOLS.—To the extent practicable, a State shall
select school food authorities to participate in the
pilot program under this subsection in a manner
that will provide for an equitable distribution among
the following types of elementary schools:
‘‘(A) Urban and rural elementary schools.
‘‘(B) Elementary schools of varying family
income levels.
‘‘(5) REIMBURSEMENT RATES.—A school food
authority conducting a pilot project under this sub-
section shall receive reimbursement for each break-
fast served under the pilot in an amount equal to
the rate for free breakfasts established under section
4(b)(1)(B) of the Child Nutrition Act of 1966 (42
U.S.C. 1773(b)(1)(B)).
‘‘(6) COMMODITY
ENTITLEMENT.—A school
food authority conducting a pilot project under this
subsection shall receive commodities in the amount
of at least 5 cents per breakfast served under the
pilot. The value of such commodities shall be de-
ducted from the amount of cash reimbursement de-
scribed in paragraph (5).
‘‘(7) EVALUATION OF PILOT PROJECT.—
‘‘(A) IN GENERAL.—The Secretary, acting
through the Administrator of the Food and Nu-
trition Service, shall conduct an evaluation of
the pilot projects in each of the school food au-
thorities selected for participation. Such evalua-
tion shall include—
‘‘(i) a determination of the effect of
participation in the pilot project on the
academic achievement, tardiness and at-
tendance, and dietary intake of participat-
ing children that is not attributable to
changes in educational policies and prac-
tices; and
‘‘(ii) a determination of the effect that
participation by elementary schools in the
pilot projects has on the proportion of stu-
dents who eat breakfast.
‘‘(B) REPORT.—Upon completion of the
pilot projects and the evaluation, the Secretary
shall submit to the Committee on Education
and the Workforce of the House of Representa-
tives and the Committee on Agriculture, Nutri-
tion, and Forestry of the Senate a report con-
taining the evaluation of the pilot required
under subparagraph (A).
‘‘(8) REIMBURSEMENT
REQUIREMENT
UNDER
BREAKFAST PROGRAM.—(A) Except as provided in
subparagraph (B), a school participating in a pilot
project under this subsection shall receive a total
Federal reimbursement under the school breakfast
program in an amount equal to the total Federal re-
imbursement for the school in the prior year under
such program (adjusted for inflation and fluctua-
tions in enrollment).
‘‘(B) Funds required for the pilot project in ex-
cess of the level of reimbursement received by the
school in the prior year (adjusted for inflation and
fluctuations in enrollment) may be taken from any
non-Federal source or from amounts appropriated to
carry out this subsection. If no appropriations are
made for the pilot projects, schools may not conduct
the pilot projects.
‘‘(9) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(A) IN GENERAL.—There are authorized
to be appropriated such sums as may be nec-
essary to carry out this subsection.
‘‘(B) REQUIREMENT.—No amounts may
be provided under this subsection unless specifi-
cally provided in appropriations Acts.’’.
SEC. 110. TRAINING AND TECHNICAL ASSISTANCE.
Section 21(e)(1) of the National School Lunch Act
(42 U.S.C. 1769b–1(e)(1)) is amended by striking ‘‘1998’’
and inserting ‘‘2003’’.
SEC. 111. COMPLIANCE AND ACCOUNTABILITY.
Section 22(d) of the National School Lunch Act (42
U.S.C. 1769c(d)) is amended by striking ‘‘1996’’ and in-
serting ‘‘2003’’.
SEC. 112. INFORMATION CLEARINGHOUSE.
(a) AUTHORITY
TO
ESTABLISH
AND
MAINTAIN
CLEARINGHOUSE.—Section 26(a) of the National School
Lunch Act (42 U.S.C. 1769g(a)) is amended by striking
‘‘shall’’ and inserting ‘‘may’’.
(b) NONGOVERNMENTAL
ORGANIZATION.—Section
26(b) of such Act (42 U.S.C. 1769g(b)) is amended in
the matter preceding paragraph (1) by inserting after
‘‘shall be selected on a competitive basis’’ the following:
‘‘, except that, notwithstanding any other provision of law,
the Secretary may enter into a contract for the services
of any organization with which the Secretary has pre-
viously entered into a contract under this section without
such organization competing for such new contract, if such
organization has performed satisfactorily under such prior
contract and otherwise meets the criteria established in
this subsection,’’.
(c) LIMITATION ON AMOUNT PROVIDED UNDER THE
CONTRACT.—Section 26 of such Act (42 U.S.C. 1769g)
is amended—
(1) by redesignating subsections (c) and (d) as
subsections (d) and (e), respectively; and
(2) by inserting after subsection (b) the follow-
ing:
‘‘(c) LIMITATION
ON AMOUNT PROVIDED UNDER
THE CONTRACT.—The Secretary may provide to the orga-
nization described in subsection (b) an amount not to ex-
ceed $150,000 in each of fiscal years 1999 through
2003.’’.
(d) FUNDING.—Section 26(e) of such Act (42 U.S.C.
1769g(e)) (as so redesignated) is amended to read as fol-
lows:
‘‘(e) FUNDING.—
‘‘(1) IN GENERAL.—There are authorized to be
appropriated $150,000 for each of the fiscal years
1999 through 2003 to carry out this section.
‘‘(2) REQUIREMENT.—No amounts may be pro-
vided for the clearinghouse under this section unless
specifically provided in appropriations Acts.’’.
SEC. 113. ACCOMMODATION OF THE SPECIAL DIETARY
NEEDS OF INDIVIDUALS WITH DISABILITIES.
Section 27 of the National School Lunch Act (42
U.S.C. 1769h) is amended to read as follows:
‘‘SEC. 27. ACCOMMODATION OF THE SPECIAL DIETARY
NEEDS OF INDIVIDUALS WITH DISABILITIES.
‘‘(a) IN GENERAL.—The Secretary may carry out ac-
tivities to help accommodate the special dietary needs of
individuals with disabilities who are participating in a cov-
ered program. Such activities may include—
‘‘(1) developing and disseminating to State
agencies guidance and technical assistance materials;
‘‘(2) conducting training of State agencies and
eligible entities; and
‘‘(3) providing grants to State agencies and eli-
gible entities.
‘‘(b) DEFINITIONS.—As used in this section:
‘‘(1) INDIVIDUALS
WITH
DISABILITIES.—The
term ‘individuals with disabilities’ has the meaning
given the term ‘individual with a disability’ as de-
fined in section 7(8) of the Rehabilitation Act of
1973 (29 U.S.C. 706(8)).
‘‘(2) COVERED PROGRAM.—The term ‘covered
program’ means—
‘‘(A) the school lunch program authorized
under this Act;
‘‘(B) the school breakfast program author-
ized under section 4 of the Child Nutrition Act
of 1966 (42 U.S.C. 1773); and
‘‘(C) any other program authorized under
this Act or the Child Nutrition Act of 1966 (ex-
cept for section 17) that the Secretary deter-
mines is appropriate.
‘‘(3) ELIGIBLE ENTITY.—The term ‘eligible en-
tity’ means a school food authority, institution, or
service institution that participates in a covered pro-
gram.
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated such sums as may be
necessary for each of the fiscal years 1999 through 2003
to carry out this section.’’.
TITLE II—AMENDMENTS TO THE
CHILD NUTRITION ACT OF 1966
SEC. 201. STATE ADMINISTRATIVE EXPENSES.
(a) 
REALLOCATION
OF
AMOUNTS.—Section
7(a)(5)(B) of the Child Nutrition Act of 1966 (42 U.S.C.
1776(a)(5)(B)) is amended—
(1) by striking ‘‘(i)’’;
(2) by striking the second sentence and all that
follows; and
(3) by adding at the end the following: ‘‘The
Secretary shall then allocate, for purposes of admin-
istration costs, any remaining amounts among
States that demonstrate a need for such amounts.’’.
(b) ELIMINATION OF 10 PERCENT TRANSFER LIMI-
TATION.—Section 7(a)(6) of such Act (42 U.S.C.
1776(a)(6)) is amended to read as follows:
‘‘(6) Funds available to States under this subsection
and under section 13(k)(1) of the National School Lunch
Act may be used by State agencies for the costs of admin-
istration of the programs authorized under this Act (ex-
cept for the programs authorized under sections 17 and
21) and the National School Lunch Act without regard
to the basis on which such funds were earned and allo-
cated.’’.
(c) REAUTHORIZATION OF PROGRAM.—Section 7(g)
of such Act (42 U.S.C. 1776(g)) is amended by striking
‘‘1998’’ and inserting ‘‘2003’’.
SEC. 202. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM
FOR WOMEN, INFANTS, AND CHILDREN.
(a) 
ADDITIONAL
REQUIREMENTS
FOR
APPLI-
CANTS.—
(1) PHYSICAL PRESENCE REQUIREMENT.—Sec-
tion 17(d)(3) of the Child Nutrition Act of 1966 (42
U.S.C. 1786(d)(3)) is amended by adding at the end
the following:
‘‘(C)(i) Except as provided in clause (ii), each appli-
cant to the program shall be physically present at each
certification determination in order to determine eligibility
under the program.
‘‘(ii) A local agency may waive the requirement of
clause (i)—
‘‘(I) if required to do so by requirements under
the Americans with Disabilities Act;
‘‘(II) with respect to a child who was present at
the initial certification visit and who is receiving on-
going health care from a provider other than such
local agency, if the agency determines that the re-
quirement of clause (i) would present a barrier to
participation; or
‘‘(III) with respect to a child (aa) who was
present at the initial certification visit, (bb) who was
present at a certification determination within the 1-
year period ending on the date of the certification
determination described in clause (i), and (cc) who
has one or more parents who work, if the agency de-
termines that the requirement of clause (i) would
cause a barrier to participation.’’.
(2) INCOME DOCUMENTATION REQUIREMENT.—
Section 17(d)(3) of the Child Nutrition Act of 1966
(42 U.S.C. 1786(d)(3)), as amended by paragraph
(1), is further amended by adding at the end the fol-
lowing:
‘‘(D)(i) Except as provided in clause (ii), in order to
be eligible for the program, each applicant to the program
shall provide—
‘‘(I) documentation of household income; or
‘‘(II) documentation of participation in a pro-
gram described in clauses (ii) and (iii) of paragraph
(2)(A).
‘‘(ii)(I) A State agency may waive the requirement
of clause (i)—
‘‘(aa) with respect to an applicant for whom the
necessary documentation is not available; or
‘‘(bb) with respect to an applicant, such as
homeless women or children, for whom the agency
determines the requirement of clause (i) would
present a barrier to participation.
‘‘(II) The Secretary shall prescribe regulations to
carry out division (aa).’’.
(b) EDUCATION AND EDUCATIONAL MATERIALS RE-
LATING TO EFFECTS OF DRUG AND ALCOHOL USE.—Sec-
tion 17(e)(1) of such Act (42 U.S.C. 1786(e)(1)) is
amended by adding at the end the following: ‘‘A local
agency participating in the program shall provide edu-
cation or educational materials relating to the effects of
drug and alcohol use by a pregnant, postpartum, or
breastfeeding woman on the developing child of the
woman.’’.
(c) DISTRIBUTION OF NUTRITION EDUCATION MA-
TERIALS TO STATE AGENCIES ADMINISTERING THE COM-
MODITY SUPPLEMENTAL FOOD PROGRAM.—Section 17(e)
of such Act (42 U.S.C. 1786(e)) is amended—
(1) by redesignating paragraphs (4) and (5) as
paragraphs (5) and (6), respectively; and
(2) by inserting after paragraph (3) the follow-
ing:
‘‘(4) The Secretary may provide nutrition education
materials, including breastfeeding promotion materials,
developed with funds appropriated to carry out the pro-
gram under this section in bulk quantity to State agencies
administering the commodity supplemental food program
authorized under sections 4(a) and 5 of the Agriculture
and Consumer Protection Act of 1973 at no cost to that
program.’’.
(d) IDENTIFICATION OF RECIPIENTS PARTICIPATING
AT MORE THAN One SITE.—Section 17(f) of such Act (42
U.S.C. 1786(f)) is amended by adding at the end the fol-
lowing:
‘‘(23) Each State agency shall implement a system
designed to identify recipients who are participating at
more than one site under the program.’’.
(e) IDENTIFICATION OF HIGH RISK VENDORS; COM-
PLIANCE INVESTIGATIONS.—
(1) IN GENERAL.—Section 17(f) of such Act
(42 U.S.C. 1786(f)), as amended by this Act, is fur-
ther amended by adding at the end the following:
‘‘(24) Each State agency—
‘‘(A) shall identify vendors that have a high
probability of program abuse; and
‘‘(B) shall conduct compliance investigations of
such vendors.’’.
(2) REGULATIONS.—Not later than March 1,
1999, the Secretary of Agriculture shall promulgate
final regulations to carry out section 17(f)(24) of
such Act (42 U.S.C. 1786(f)(24)), as added by para-
graph (1).
(f) 
REAUTHORIZATION
OF
PROGRAM.—Section
17(g)(1) of such Act (42 U.S.C. 1786(g)(1)) is amended
in the first sentence by striking ‘‘1995 through 1998’’ and
inserting ‘‘1999 through 2003’’.
(g) 
PURCHASE
OF
BREAST
PUMPS.—Section
17(h)(1)(C) of such Act (42 U.S.C. 1786(h)(1)(C)) is
amended—
(1) by striking ‘‘(C)’’ and inserting ‘‘(C)(i)’’;
and
(2) by adding at the end the following:
‘‘(ii)(I) Notwithstanding any other provision of this
section, with respect to fiscal year 2000 and subsequent
fiscal years, a State agency may use amounts made avail-
able under clause (i) for the purchase of breast pumps.
‘‘(II) A State agency that exercises the authority of
subclause (I) shall expend from amounts allocated for nu-
trition services and administration an amount for the pur-
chase of breast pumps that is not less than the amount
expended for the purchase of breast pumps from amounts
available for nutrition services and administration for the
prior fiscal year.’’.
(h) NUTRITION SERVICES AND ADMINISTRATION.—
(1) 
ALLOCATION
OF
AMOUNTS.—Section
17(h)(2)(A) of such Act (42 U.S.C. 1786(h)(2)(A))
is amended in the first sentence by striking ‘‘1995
through 1998’’ and inserting ‘‘1999 through 2003’’.
(2) LEVEL
OF
PER
PARTICIPANT
EXPENDI-
TURE.—Section 17(h)(2)(B)(ii) of such Act (42
U.S.C. 1786(h)(2)(B)(ii)) is amended by striking
‘‘15 percent’’ and inserting ‘‘10 percent (except that
the Secretary may establish a higher percentage for
small State agencies)’’.
(i) CONVERSION OF AMOUNTS FOR FOOD BENEFITS
TO AMOUNTS FOR NUTRITION SERVICES AND ADMINIS-
TRATION.—Section 17(h)(5)(A) of such Act (42 U.S.C.
1786(h)(5)(A)) is amended in the matter preceding clause
(i) by striking ‘‘achieves’’ and all that follows through
‘‘such State agency may’’ and inserting ‘‘submits a plan
to reduce average food costs per participant and to in-
crease participation above the level estimated for such
State agency, such State agency may, with the approval
of the Secretary,’’.
(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
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
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
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
(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:
‘‘(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.—
‘‘(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
supplemental foods to participants if the State
agency determines, in its sole discretion accord-
ing to criteria established by the Secretary, dis-
qualification of the vendor would cause hard-
ship to participants in the program authorized
under this section.
‘‘(B) CIVIL MONEY PENALTY.—Whenever a
State agency authorizes a vendor that would
otherwise be disqualified to redeem food instru-
ments or provide supplemental foods in accord-
ance 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
determine the amount of the civil penalty ac-
cording to criteria established by the Sec-
retary.’’.
(2) REGULATIONS.—
(A) IN GENERAL.—Not later than March
1, 1999, the Secretary of Agriculture shall pro-
mulgate 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 dis-
qualification and for making hardship deter-
minations under such section.
(q) 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 contain-
ment practices established by States under the pro-
gram 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 Ad-
ministrator shall submit to the Secretary of Agri-
culture, the Committee on Education and the Work-
force of the House of Representatives, and the Com-
mittee on Agriculture, Nutrition, and Forestry of
the Senate a report containing the results of the
study conducted under paragraph (1).’’.
(r) COLLECTION
AND USE
OF PENALTIES FROM
VENDOR AND RECIPIENT FRAUD AND ABUSE.—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:
‘‘(q) USE OF PENALTIES FROM VENDOR AND RECIP-
IENT FRAUD AND ABUSE.—Amounts collected from pen-
alties from vendors and recipients relating to violations of
any provision of this section (including any regulation es-
tablished to carry out this section) for fraud and abuse
under the program may be used for nutrition services and
administration and food benefits only for the 1-year period
beginning on the date on which amounts under the penalty
are received.’’.
(s) MAXIMUM AMOUNT OF FINE FOR CERTAIN VIO-
LATIONS 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 VIO-
LATIONS 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.’’.
(t) CRIMINAL FORFEITURE.—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:
‘‘(s) CRIMINAL FORFEITURE.—
‘‘(1) IN GENERAL.—In imposing a sentence on
a person convicted of an offense in violation of any
provision of this section (or any regulation promul-
gated under this section), a court shall order, in ad-
dition to any other sentence imposed under this sec-
‘‘(B) second, to reimburse the Department
of Agriculture Office of Inspector General for
any costs the Office incurred in the law enforce-
ment 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.’’.
Passed the House of Representatives July 20, 1998.
Attest:
Clerk.