II 114th CONGRESS 1st Session S. 540 IN THE SENATE OF THE UNITED STATES February 24, 2015 Ms. Collins (for herself and Ms. Heitkamp ) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry A BILL To amend the Richard B. Russell National School Lunch Act to require the Secretary of Agriculture to make loan guarantees and grants to finance certain improvements to school lunch facilities, to train school food service personnel, and for other purposes.

1. Short title This Act may be cited as the School Food Modernization Act . 2. Loan guarantees and grants to finance certain improvements to school lunch facilities The Richard B. Russell National School Lunch Act is amended by inserting after section 26 ( 42 U.S.C. 1769g ) the following: 27. Loan guarantees and grants to finance certain improvements to school lunch facilities (a) Definitions In this section: (1) Durable equipment The term durable equipment means durable food preparation, handling, cooking, serving, and storage equipment greater than $500 in value. (2) Eligible entity The term eligible entity means— (A) a local educational agency or a school food authority administering or operating a school lunch program; (B) a tribal organization; or (C) a consortium that includes a local educational agency or school food authority described in subparagraph (A), a tribal organization, or both. (3) Infrastructure The term infrastructure means a food storage facility, kitchen, food service facility, cafeteria, dining room, or food preparation facility. (4) Local educational agency The term local educational agency has the meaning given the term in section 9101 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7801 ). (5) School food authority The term school food authority has the meaning given the term in section 210.2 of title 7, Code of Federal Regulations (or a successor regulation). (6) Tribal organization The term tribal organization has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act ( 25 U.S.C. 450b ). (b) Loan guarantees for assistance to schools for infrastructure improvements and durable equipment necessary To provide healthy meals through school lunch programs (1) Authority to guarantee loans The Secretary shall issue a loan guarantee to an eligible entity for purposes of financing the construction, remodeling, or expansion of infrastructure or the purchase of durable equipment that the Secretary determines will assist the eligible entity in providing healthy meals through a school lunch program. (2) Competitive basis Subject to paragraph (3), the Secretary shall select eligible entities to receive a loan guarantee under this subsection on a competitive basis. (3) Preferences In issuing a loan guarantee under this subsection, the Secretary shall give a preference to an eligible entity that, as compared with other eligible entities seeking a loan guarantee under this subsection, the Secretary determines demonstrates substantial or disproportionate— (A) need for infrastructure improvement; or (B) durable equipment need or impairment. (4) Oversight The Secretary shall establish procedures to enable the Secretary to oversee the construction, remodeling, or expansion of infrastructure or the purchase of durable equipment for which a loan guarantee is issued under this subsection. (5) Guarantee amount A loan guarantee issued under this subsection may not guarantee more than 80 percent of the principal amount of the loan. (6) Fees The Secretary shall establish fees with respect to loan guarantees under this subsection that, as determined by the Secretary— (A) are sufficient to cover all the administrative costs to the Federal Government for the operation of the program; (B) may be in the form of an application or transaction fee, or interest rate adjustment; and (C) may be based on the risk premium associated with the loan or loan guarantee, taking into consideration— (i) the price of Treasury obligations of a similar maturity; (ii) prevailing market conditions; (iii) the ability of the eligible infrastructure project to support the loan guarantee; and (iv) the total amount of the loan guarantee. (7) Funding (A) In general To provide loan guarantees under this subsection, the Secretary shall reserve $300,000,000 of the loan guarantee authority remaining and unobligated as of the date of enactment of the School Food Modernization Act under the program of community facility guaranteed loans under section 306(a) of the Consolidated Farm and Rural Development Act ( 7 U.S.C. 1926(a) ). (B) Technical assistance The Secretary may use not more than 5 percent of the amount made available to carry out this subsection for each fiscal year to provide technical assistance to applicants and prospective applicants in preparing applications and creating financing packages that leverage a mix of public and private funding sources. (c) Equipment grants (1) Authority to make grants Beginning in fiscal year 2016 and subject to the availability of appropriations, the Secretary shall make grants, on a competitive basis, to eligible entities to assist the eligible entities in purchasing the durable equipment and infrastructure needed to serve healthier meals and improve food safety. (2) Priority In awarding grants under this subsection, the Secretary shall give priority to— (A) eligible entities in States that have enacted comparable statutory grant funding mechanisms or that have otherwise appropriated funds to assist eligible entities in purchasing the durable equipment and infrastructure needed to serve healthier meals and improve food safety, as determined by the Secretary; and (B) eligible entities that have identified and are reasonably expected to meet an unmet local or community need, including through— (i) a public-private partnership or partnership with a food pantry or other low-income assistance agency; or (ii) the provision for or allowance of kitchen or cafeteria usage by related or outside community organizations. (3) Federal share (A) In general The Federal share of costs for assistance funded through a grant awarded under this subsection shall not exceed 80 percent of the total cost of the durable equipment or infrastructure. (B) Matching As a condition on receiving a grant under this subsection, an eligible entity shall provide matching support in the form of cash or in-kind contributions. (C) Waiver The Secretary may waive or vary the requirements of subparagraphs (A) and (B) if the Secretary determines that undue hardship or effective exclusion from participation in the grant program under this subsection would otherwise result. (4) Authorization of appropriations (A) In general There are authorized to be appropriated such sums as may be necessary to carry out this subsection for fiscal year 2016 and each subsequent fiscal year. (B) Technical assistance The Secretary may use not more than 5 percent of the amount made available to carry out this subsection for each fiscal year to provide technical assistance to applicants and prospective applicants in preparing applications and creating financing packages that leverage a mix of public and private funding sources. . 3. Training and technical assistance for school food service personnel The Richard B. Russell National School Lunch Act is amended by inserting after section 21 ( 42 U.S.C. 1769b–1 ) the following: 21A. Training and technical assistance for school food service personnel (a) In general The Secretary shall carry out a grant program under which the Secretary shall award grants, on a competitive basis, to provide support to eligible third-party training institutions described in subsection (b) to develop and administer training and technical assistance for school food service personnel to meet nutrition standards under section 4(b)(3) and improve efficacy and efficiency of the school lunch program under this Act and the school breakfast program established by section 4 of the Child Nutrition Act of 1966 ( 42 U.S.C. 1773 ). (b) Criteria for eligible third-Party institutions The Secretary shall establish specific criteria that eligible third-party training institutions shall meet to qualify to receive grants under this section, which shall include— (1) a demonstrated capacity to administer effective training and technical assistance programming to school food service personnel; (2) prior, successful experience in providing or engaging in training and technical assistance programming or applied research activities involving eligible entities, school food service administrators, or directors; (3) prior, successful experience in developing relevant educational training tools or course materials or curricula on topics addressing child and school nutrition or the updated nutrition standards under section 4(b)(3); and (4) the ability to deliver effective and cost-efficient training and technical assistance programming to school food service personnel— (A) at training sites that are located within a proximate geographic distance to schools, central kitchens, or other worksites; or (B) through an online training and assistance program on topics that do not require in-person attendance. (c) Program assistance The Secretary shall assist the institutions receiving grants under this section in publicizing and disseminating training and other project materials and online tools to the maximum extent practicable. (d) Federal share (1) In general The Federal share of costs for training and technical assistance funded through a grant awarded under this section shall not exceed 80 percent of the total cost of the training and technical assistance. (2) Matching As a condition of receiving a grant under this section, the eligible third-party training institution shall provide matching support in the form of cash or in-kind contributions. (e) Oversight The Secretary shall establish procedures to enable the Secretary— (1) to oversee the administration and operation of training and technical assistance funded through grants awarded under this section; and (2) to ensure that the training and assistance is operated consistent with the goals and requirements of this Act. (f) Authorization of appropriations (1) In general There are authorized to be appropriated such sums as may be necessary to carry out this section for fiscal year 2016 and each subsequent fiscal year. (2) Technical assistance The Secretary may use not more than 5 percent of the amount made available to carry out this section for each fiscal year to provide technical assistance to applicants and prospective applicants in preparing applications and creating financing packages that leverage a mix of public and private funding sources. . 4. Report to Congress Not later than 1 year after funds are made available to carry out the amendments made by this Act, and annually thereafter, the Secretary of Agriculture shall submit to Congress a report on the progress of the Secretary in implementing the amendments made by this Act.