[H.R. 6209, 87th Cong., 1st sess.] A BILL To provide additional funds for carrying out the National School Lunch Act in the fiscal year 1961 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of Agriculture is authorized to utilize from funds of the Commodity Credit Corporation an amount not to exceed $10,000,000 for the purpose of carrying out the provisions of the National School Lunch Act (42 U.S.C. 1751-1760) during the remainder of the fiscal year 1961. Such sums shall be in addition to any funds heretofore appropriated for carrying out such Act in the fiscal year 1961. SEC. 2. There is hereby authorized to be appropriated to the Commodity Credit Corporation an amount equal to the amount utilized by the Secretary of Agriculture pursuant to the provisions of the first section of this Act. [H.R. 8962, 87th Cong., 1st sess.] A BILL To revise the formula for apportioning cash assistance funds among the States under the National School Lunch Act, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the National School Lunch Act of 1946, as amended, is amended by revising section 3 to read as follows: "(a) For each fiscal year there is hereby authorized to be appropriated, out of money in the Treasury not otherwise appropriated, such sums as may be necessary to enable the Secretary of Agriculture (hereinafter referred to as 'the Secretary') to carry out the provisions of this Act other than section 11. "(b) For each fiscal year there is hereby authorized to be appropriated in addition to the sums authorized in subsection (a) above, out of money in the Treasury not otherwise appropriated, such sums as may be necessary to enable the Secretary to carry out the provisions of section 11 of this Act." SEC. 2. Section 4 of the Act is revised to read as follows: "The sums appropriated for any fiscal year pursuant to the authorization contained in section 3(a) of this Act, excluding the sum specified in section 5, shall be available to the Secretary for supplying agricultural commodities and other foods for the program in accordance with the provisions of this Act. The Secretary shall apportion among the States during each fiscal year not less than 75 per centum of the funds made available for such year for supplying agricultural commodities and other foods under the provisions of section 3(a) of this Act. Apportionment among the States shall be made on the basis of two factors: (1) the participation rate for the State, and (2) the assistance need rate for the State. The amount of apportionment to any State shall be determined by the following method: First, determine an index for the State by multiplying factors (1) and (2); second, divide this index by the sum of the indices for all the States; and third, apply the figure thus obtained to the total funds to be apportioned. If any State cannot utilize all funds so apportioned to it, or if additional funds are made available under section 3(a) for apportionment among the States, the Secretary shall make further apportionments to the remaining States in the same manner. Notwithstanding the foregoing provisions of this section, for the fiscal year ending June 30, 1962, one-half of the funds available for apportionment among the States shall be apportioned on the basis of the factors used prior to such fiscal year, and one-half of such funds, and any funds available for further apportionments, shall be apportioned in accordance with the foregoing provisions.' SEC. 3. Section 5 of the Act is amended by striking out the last sentence thereof. SEC. 4. Section 10 of the Act is amended by striking out "number of children between the ages of five and seventeen, inclusive, attending nonprofit private schools within the State is of the total number of persons of those ages within the State attending school" and inserting in lieu thereof the following: "participation rate for all nonprofit private schools within the State is of the participation rate for the State". SEC. 5. Section 11 of the Act is redesignated as section 12 and subsection (d) thereof is amended to read as follows: "For the purposes of this Act "(1) 'State' means any of the fifty States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, and Guam. "(2) 'State educational agency' means, as the State legislature may determine, (a) the chief State school officer (such as the State superintendent of public instruction, commissioner of education, or similar officer), or (b) a board of education controlling the State department of education. "(3) 'Nonprofit private school' means any private school exempt from income tax under section 101(6) of the Internal Revenue Code, as amended. "(4) 'Nonfood assistance' means equipment used by schools in storing, preparing, or serving food for school children. "(5) 'Participation rate' means the number of lunches, meeting the minimum requirements of the type of lunch for which the maximum rate of reimbursement is authorized by the Secretary, served by participating schools in each State in the preceding fiscal year, as determined by the Secretary. "(6) 'Assistance need rate' means that rate determined by assigning a value of five for each State having an annual per capita income less than the average annual per capita income of all the States by the ratio that the average annual per capita income of all the States bears to the per capita income of said State, up to a maximum value of nine. The per capita income figures shall be the average of those certified by the Department of Commerce for the latest three years for which such figures are available. "(7) 'School' means any public or nonprofit private school of high school grade or under and, with respect to Puerto Rico, shall also include nonprofit child-care centers certified as such by the Governor of Puerto Rico." SEC. 6. The following language is inserted after section 10 of the Act: "SPECIAL ASSISTANCE "SEC. 11. The sums appropriated pursuant to section 3(b) of this Act shall be used by the Secretary, under such terms and conditions as he deems to be in the public interest, to provide special assistance to needy schools for the purpose of helping them to meet the requirements established in this Act concerning the service of lunches to children unable to pay the full cost of the lunch." SEC. 7. These amendments shall become effective July 1, 1961. Mr. BAILEY. The general chairman having called a caucus in this room at 11 o'clock, we shall be hard put for time to conclude the hearing, so I trust all witnesses will understand that there is a time limit. Without any further delay we shall hear from the first witness, Mr. Howard P. Davis, Deputy Director, Food Distribution Division, Agricultural Marketing Service, Department of Agriculture. Mr. Davis. Mr. McCORD. Before Mr. Davis takes the stand, Mr. Chairman, might we have the permission of the committee to submit for the record, preceding Mr. Davis' testimony, a letter from Secretary of Agriculture Orville L. Freeman, addressed to you, transmitting a draft copy of the bill which Mr. O'Hara has introduced, together with the Department's section-by-section explanation of the bill. Mr. BAILEY. If there is no objection, it will be accepted for inclusion in the record. (The documents referred to follow:) Hon. CLEVELAND M. BAILEY, DEPARTMENT OF AGRICULTURE, Chairman, General Subcommittee on Education, Committee on Education and Labor, House of Representatives. DEAR CONGRESSMAN BAILEY: The attached bill incorporates the principles outlined in the school lunch recommendations which were included in the President's farm message to the Congress (H. Doc. No. 109). We believe it will also meet the objectives outlined in your letter of February 17, 1961. The bill incorporates the factor of participation into the formula for apportioning cash assistance funds among the States and provides for a transition period of 1 year before the new formula would become fully effective. A new section would be added to the National School Lunch Act which would provide for an additional appropriation of funds to provide special help to especially needy 75213-61 schools. Also, the bill provides that, where it is necessary to initially divide a State's share of the total apportionment between public and private schools, the division should be based upon a participation factor. This was the method authorized in H.R. 13016, 86th Congress. The bill provides that funds shall be apportioned among the States on the basis of the number of lunches served in each State in the preceding year, with the lower income States receiving relatively more per meal than average or aboveaverage-income States. This is accomplished by applying a value of 5 to each lunch served in average or above-average-income States and a higher value (up to 9) in below-average-income States. At any appropriation level, therefore, the minimum rate assigned to any State would be the rate assigned to the averageincome State. The minimum rate in any year would depend upon the amount made available for apportionment to the States in that year. The bill provides for considerable administrative flexibility in developing the new program for especially needy schools. However, the percentage of free meals served to needy children would be one of the principal criteria for selecting the schools to receive such assistance. The Bureau of the Budget advises that the enactment of this proposed legislation would be in accord with the President's program. Sincerely yours, ORVILLE L. FREEMAN, Secretary. EXPLANATION OF THE BILL This bill amends the National School Lunch Act in two principal respects: (1) It revises the method by which cash assistance funds are apportioned among the States and (2) it provides for a new appropriation authority in order to give additional assistance to especially needy schools. Most of these schools are located in economically depressed urban and rural areas. The following is an explanation of each section of the bill: Section 1: This section amends the appropriation authority in section 3 of the act. It adds a new authority to provide an additional annual appropriation to be used to help especially needy schools. Section 2: This section revises the formula prescribed in section 4 of the act for the apportionment of cash assistance funds among the States. The act now provides that the apportionment shall be based upon the number of school-age children in each State and the State's need for assistance as measured by its per capita income. This bill recognizes that the percentage of schoolchildren actually participating in the programs varies considerably from State to State. Rela The bill provides that the number of lunches meeting the minimum requirements of what is now referred to as the "type A" lunch, served in each State during the preceding year, shall be a basis for the apportionment of funds, rather than the number of school-age children residing in each State. The milk-only or "type C" lunch is excluded in counting the number of lunches served. tive need is taken into account by applying a value of 5 to each lunch served in those States with average or above-average per capita incomes and by increasing that value (up to a maximum of 9) for States with a per capita income below the national average. For the fiscal year 1962, a transition period is provided. In that year, one-half of the funds made available for apportionment would be apportioned on the basis of the method now in effect and one-half of the amount would be apportioned under the new method proposed in this bill. Section 3: This section amends section 5 of the act to provide for the same method of apportioning funds made available for nonfood (equipment) assistance as is provided in this bill for cash food assistance. (Congress has not appropriated funds for nonfood assistance since 1946-47). Section 4: This section revises the method outlined in section 10 of the act for dividing the State's share of the cash assistance funds between public and private schools, when such a division is necessary because State statutes prevent the State agency from disbursing funds to private schools. The bill provides that the division shall be made on the basis of the number of type A lunches served in each type of school in the preceding year, resulting in the same average per meal rate in both public and private schools. Section 5: This section amends section 11 of the act which is concerned with miscellaneous requirements and definitions. Section 11 is redesignated as section 12 and the definitions are revised and enlarged to add to the clarity of the act. Section 6: This section adds a new provision to the act. It authorizes the Secretary of Agriculture to establish the terms and conditions under which additional assistance is to be provided to needy schools. Although the language provides considerable latitude to the Secretary in determining the schools eligible for such assistance, it is intended that the percentage of lunches served free to needy children should be one of the principal criteria. STATEMENT OF HOWARD P. DAVIS, DEPUTY DIRECTOR, FOOD DISTRIBUTION DIVISION, AGRICULTURAL MARKETING SERVICE, DEPARTMENT OF AGRICULTURE Mr. DAVIS. I am Howard P. Davis, Deputy Director of the Food Distribution Division, Agricultural Marketing Service, U.S. Department of Agriculture. Our Division has the responsibility for administering the school lunch program among some other food distribution programs. Mr. Chairman, I have a statement which I would like to make to the committee. I could read it or submit it in the interests of time, whichever you would prefer. Mr. BAILEY. I would suggest that it be offered now for inclusion in the record in its entirety, and you take whatever time you need to touch the high points of your proposal. (Mr. Davis' statement follows:) STATEMENT OF HOWARD P. DAVIS, DEPUTY DIRECTOR, FOOD DISTRIBUTION DIVISION, AGRICULTURAL MARKETING SERVICE We are pleased to appear again before this subcommittee to discuss changes in the National School Lunch Act. The changes proposed in the bill now under consideration meet with the approval of the Department. At a hearing in August of last year before this subcommittee, we presented a detailed description of the origin and progress of the national school lunch program, together with a review of the principal feature of the enabling legislation. With that background, we feel we can begin today with a brief review of the current status of the program. (Also, in table I, selected program statistics are shown for 1946-47-the first year of operations under the act and for 1960-61.) Last year, 13.5 million children were participating in the program. This represents about 32 percent of the children enrolled in elementary and secondary schools. Almost 2.3 billion lunches were served to these children and 1 out of 10 of these lunches were served free or at reduced prices to children who could not afford to pay the full price of the lunch. The total cost of the program last year was in excess of $1 billion. The Federal contribution-in cash and commodity food assistance-totaled $225 million. The remainder of the cost was financed by State and local sources, including the payments children made for their lunches. The amount of Federal cash and commodity food assistance will be larger this year than in 1960-61. I should like to outline for you the amounts and sources of this assistance: Appropriation: Cash food assistance.. Sec. 6 commodities. Fiscal year $98.6 14. 4 With respect to the additional $10 million made available for section 6 commodity purchases, the Congress authorized that up to $21⁄2 million can be used to inaugurate a program of special assistance to "needy schools which because of poor local economic conditions (1) have not been operating a school lunch program or (2) have been serving free or at substantially reduced prices at least 20 percent of the lunches to children." The bill before this subcommittee is primarily concerned with a new formula for apportioning cash food assistance funds among the States and territories and with the addition of a new section to the National School Lunch Act which would authorize a program of special assistance for especially needy schools. Also involved is a new method of dividing a State's share of the total cash assistance funds between public and private schools in any State where State law is such as to make it necessary for the U.S. Department of Agriculture to administer the lunch program in private schools. Federal cash assistance funds are used to help participating schools make local purchase of food for the lunch program, Basically, the bill before this subcommittee is a modification of the two billssponsored by Chairman Bailey and Congressman Brademas-on which hearings were held last August. Following those hearings, Chairman Bailey requested the technical assistance of the Department in drafting a bill for the subcommittee which would accomplish the following: 1. Base the allocation formula on the rate of participation; 2. Provide for a minimum reimbursement rate for all States; 3. Set up a "need formula"; 4. Revise the method of dividing funds between public and private schools; and 5. Add a new section or title providing for an additional authorization to assist those districts where, because of depressed economic conditions, it was necessary to serve an unusually large number of free lunches or where the price of the lunch is greatly reduced. We felt the bill, as drafted for the subcommittee, was in line with the President's school lunch recommendations contained in his farm message to the Congress. It was subsequently submitted to the subcommittee with the approval of the Department and with advice from the Bureau of the Budget that the proposed legislation was in accord with the President's program. The Department did, however, recommend that a 1-year transition period be provided in order to assist in an orderly change between the old and new method of apportioning cash assistance funds. This provision is included in the bill now being considered. The National School Lunch Act now prescribes the formula under which these cash assistance funds shall be apportioned among the States and territories. The formula involves two factors: (1) The school-age population in each State (a measure of the maximum potential size of the program) and (2) the relationship of each State's per capita income to national per capita income (a measure of the relative need of the various States for Federal assistance). The act provides that States shall use these funds to reimburse participating schools on the basis of the number of lunches served. The maximum allowable payment of 9 cents for a type A lunch has been established by Department regulation. In 1961-62, it is estimated that the national average Federal cash assistance rate will be 4.2 cents. Because the program has grown faster in some States than in others, in actual practice the average per-meal rates of cash assistance any State is able to provide to its participating schools tends to be related more to the rate of program growth than to need, as measured by the per capita income of a State. Thus, a higher income State with below average participation may be able to provide its schools with a higher average per-meal payment than can a lower income State with above average participation. The first column of table II illustrates the effect of the current formula. States are ranked by income, from the highest to the lowest, together with the probable average per-meal rates of assistance that can be provided to schools by the various States this school year. Likewise, the act now provides that when a State's share of the cash assistance funds must be divided between the public and private schools, such a division be based upon the relative number of children attending school in each type of school within the State. Here, too, variations in the rate of school lunch growth can result in differences within a State in the average rate of payment than can be provided to public schools by the State and to private schools by the Department. (This is a problem, of course, only in those States where it is necessary for the Department to administer the program in private schools.) |