TABLE II.-Average per meal rate of assistance under present formula for apportionment and under proposed formula

1 States ranked in order from highest to lowest per capita income average for latest 3 years: 1958, 1959, 1960. 2 Based on estimated meals in fiscal year 1962.

TABLE III.—Payments to States under present formula for apportionment and under proposed formula

1 States ranked in order from highest to lowest per capita income average for latest 3 years: 1958, 1959, 1960.

TABLE IV.—Payments to States under present formula for apportionment and under proposed formula during transition period 1

1 Represents an apportionment of funds, 1⁄2 under the present formula and 1⁄2 under the proposed formula. 2 States ranked in order from highest to lowest per capita income average for latest 3 years: 1958, 1959, 1960.

75213-61--3

Mr. DAVIS. Essentially, this bill is of course designed to provide a more equitable apportionment of the school lunch funds among the States. To do that, we feel we have outgrown the previous legislation which provided for that apportionment on the basis of child population plus relative per capita income of the States. At this point it would be much more equitable to apportion the money among the States, as provided in the bill, on the basis of actual participation in the program plus the relative need of the State.

By apportioning it on the basis of the actual participation in the program, we feel that we are giving recognition to those areas that have made greater progress in extending the school lunch to more children rather than, under the old formula, penalizing them by forcing them to divide their money among more children.

The new bill would provide the money on the basis of the number of children among whom the money would be divided in reimbursement payments for lunches.

Essentially, that is what this bill does.

In order to minimize the impact of certain changes this bill will bring about in the amount of money the several States will get the first year, we would like to provide an interim arrangement whereby the new formula would be applied toward half the total available funds, and the old formula to the other half.

The other basic feature of the bill would make provision for use of part of the appropriation for special assistance to especially needy schools throughout the country. In working with the formula, trying to develop the new formula, we found that, regardless of the method we used for apportioning the money, there still remained the problem of some very needy school that would not receive enough to provide free meals or reduced-cost meals to all the children who needed it. The bill provides for some special assistance funds out of the annual apropriations.

The formula is so designed that for those States at or above the average per capita income for the Nation, there will be a certain minimum amount of money based on participation, and those States which are under the national average will get varying amounts based on the need of the State.

I believe that is about all I would need to say at this point, Mr. Chairman. I would be glad to answer any questions the committee might have.

Mr. BAILEY. I would suggest that the witness review briefly the status of the School Lunch Act at the present time. I notice you deal with it on the first page of your formal presentation. Give us a little résumé of that.

Mr. DAVIS. Our estimates for the current fiscal year are that the average payment per meal will probably run about 4.2 cents. This is based upon an increased appropriation this year which will provide cash assistance, to be apportioned among the States, of $98.6 million. In addition to that, the current appropriation will provide for $14.4 million for special purchases as provided in the act. In addition, the Congress added to the original appropriation $10 million additional for food purchases under section 6 of the act. Further, they provided for $45 million to be transferred from section 32, also for direct purchases of food to be distributed to the States.

This, of course, is all in addition to the commodities which will be made available to the schools as a result of surplus removal purchases and our price-support program. Our present estimate is that this quantity will represent a cost of about $100 million, or in total the Federal assistance will run to $268 million. We estimate approximately 131⁄2 million children will participate this year, and this represents, I believe, somewhat more than 31 percent of the school enrollment.

Mr. BAILEY. I note the comments on page 2 of your presentation with respect to the additional $10 million made available for section 6 commodity purposes. Is the $2 million in addition to the $14.4 million, or is that included in the $14.4 million in your breakdown?

Mr. DAVIS. No, sir; that is included in the $10 million additional which I mentioned, which was made available for direct purchases this year. There was quite a bit of legislative history to that $10 million. As I recall, in the House appropriations bill, I believe they added $10 million in cash to be used for special assistance. When the Senate reported the bill out, they deleted the $10 million. In conference they put the $10 million back in, but made the $10 million available not as cash but for the purpose of purchasing food nationally and shipping it out to the schools, with the further provision that up to $21⁄2 million of that $10 million could be used to make purchases to be used for special assistance for especially needy schools.

Mr. BAILEY. Will you go into that somewhat in detail, stating the purpose of that program.

Mr. DAVIS. We have not yet worked out all of the program details, just how the $21⁄2 million will be expended. However, we had a group of representative State directors, both our direct distribution program and our school lunch program, in Washington last week to give us their best suggestions on how we might go about using this $21⁄2 million worth of commodities to aid these particularly needy schools. As a result of that, they recommended that perhaps our first priority or our first aim should be in the nature of special purchases which would enable schools which do not now have a school lunch program to initiate one.

Mr. BAILEY. May I interrupt to inquire how many of the States do not have a program?

Mr. DAVIS. All of the States have the school lunch program. Actually, the school lunch program is available in schools which represent about two-thirds of the Nation's enrollment. About half of those two-thirds actually participate in the program, on the average. Of course, many of those children participate part of the time during the year. All of the States have the national school lunch program, including Puerto Rico, the Virgin Islands, and Guam. They all have tried to provide, to the extent they were able, for free lunches for those children who could not afford them. However, as you well know, in certain sections of certain States there are areas which are in extremely difficult economic condition, and their requirement for free meals is so great that some schools just cannot afford a program at all. Mr. BAILEY. I think that is the situation in my State particularly. Mr. DAVIS. In many areas; yes, sir.

Mr. BAILEY. There are too many free meals involved.

Mr. DAVIS. We requested cash to attempt to meet this problem over and above the regular school lunch program. With the com