S 1958 IS

To amend the Child Nutrition Act of 1966 to authorize the Secretary of Agriculture to make grants for startup costs of school breakfast programs.

To amend the Child Nutrition Act of 1966 to authorize the Secretary of Agriculture to make grants for startup costs of school breakfast programs.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. FINANCIAL INCENTIVE GRANTS FOR SCHOOL BREAKFAST PROGRAMS.

Section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) is amended by adding at the end the following:

`(f) STARTUP GRANTS FOR SCHOOL BREAKFAST PROGRAMS-

`(1) DEFINITION OF ELIGIBLE SCHOOL- In this subsection, the term `eligible school' means a school that agrees to operate the school breakfast program established with the assistance provided under this subsection for a period of not less than 3 years.

`(2) GRANTS- The Secretary may make grants to State educational agencies, from funds made available to the Secretary, for a fiscal year, to assist eligible schools in initiating school breakfast programs.

`(3) PAYMENT RATES- A State educational agency shall use grants made available under this subsection during the first fiscal year an eligible school initiates a school breakfast program--

`(A) to increase by not more than 5 cents the annually adjusted payment for each breakfast served by the eligible school; or

`(B) to assist eligible schools with non-recurring expenses incurred in initiating school breakfast programs.

`(4) FUNDS SUPPLEMENTARY- A grant under this subsection shall supplement any payment to which a State educational agency is entitled under subsection (b).

`(5) PLAN- To be eligible to receive a grant under this subsection, a State educational agency shall submit to the Secretary a plan to initiate school breakfast programs conducted in the State, including a description of the manner in which the State educational agency shall provide technical assistance and funding to eligible schools in the State to initiate the programs.

`(6) STATE EDUCATIONAL AGENCY PREFERENCES- In making a grant under this subsection for a fiscal year to initiate school breakfast programs, the Secretary shall provide a preference to a State educational agency that--

`(A) has in effect a State law that promotes the expansion of State participation in the school breakfast program during the year;

`(B) has significant public or private resources that will be used to carry out the expansion of the school breakfast program during the year;

`(C)(i) has not more than 55 percent of schools in the State that are participating in the school lunch program also participating in the school breakfast program; or

`(ii) has not more than 30 percent of the students in the State receiving free or reduced price lunch also receiving free or reduced price breakfasts; and

`(D) serves an unmet need among low-income children, as determined by the Secretary.

`(7) REALLOCATION- The Secretary shall act in a timely manner to recover and reallocate to other State educational agencies or States any amount made available to a State educational agency or State under this subsection that is not used by the agency or State within a reasonable period (as determined by the Secretary).

`(8) APPLICATION- The Secretary shall allow application by State educational agencies on an annual basis for grants under this subsection.

`(9) PREFERENCES BY STATE EDUCATIONAL AGENCIES AND STATES- In allocating funds within the State, each State educational agency shall give preference for assistance under this subsection to an eligible school that demonstrates the greatest need for assistance for a school breakfast program, based on the percentage of children not participating in the school breakfast program, as determined by the State educational agency.

`(10) MAINTENANCE OF EFFORT- The expenditure of funds from State and local sources for the maintenance of the school breakfast program shall not be diminished as a result of grants made available under this subsection.'.