((a)) ** Administrative expenses; nutritional education; pilot projects; cash-in-lieu of commodities study; refusal of commodities and receipt of other commodities available to the State in lieu of the refused commodities** The funds provided by appropriation or transfer from other accounts for any fiscal year for carrying out the provisions of this chapter, and for carrying out the provisions of the Child Nutrition Act of 1966 [ et seq.], other than section 3 thereof [] less

((1)) not to exceed 3½ per centum thereof which per centum is hereby made available to the Secretary for the Secretary’s administrative expenses under this chapter and under the Child Nutrition Act of 1966 [ et seq.];

((2)) the amount apportioned by the Secretary pursuant to and the amount appropriated pursuant to sections 1759a and 1761 of this title and sections 4 and 7 of the Child Nutrition Act of 1966 [ and 1776]; and

((3)) not to exceed 1 per centum of the funds provided for carrying out the programs under this chapter and the programs under the Child Nutrition Act of 1966 [ et seq.], other than section 3 [], which per centum is hereby made available to the Secretary to supplement the nutritional benefits of these programs through grants to States and other means for nutritional training and education for workers, cooperators, and participants in these programs, for pilot projects and the cash-in-lieu of commodities study required to be carried out under , and for necessary surveys and studies of requirements for food service programs in furtherance of the purposes expressed in , and section 2 of the Child Nutrition Act of 1966 [],

((b)) ** Delivery of commodities** The Secretary shall deliver, to each State participating in the school lunch program under this chapter, commodities valued at the total level of assistance authorized under subsection (c)  for each school year for the school lunch program in the State, not later than September 30 of the following school year.1

((c)) ** Level of commodity assistance; computation of index; calculation of total assistance to each State; emphasis on high protein foods; per meal value of donated foods**

((1))

((A)) The national average value of donated foods, or cash payments in lieu thereof, shall be 11 cents, adjusted on , and each July 1 thereafter to reflect changes in the Price Index for Food Used in Schools and Institutions. The Index shall be computed using 5 major food components in the Bureau of Labor Statistics’ Producer Price Index (cereal and bakery products, meats, poultry and fish, dairy products, processed fruits and vegetables, and fats and oils). Each component shall be weighed using the same relative weight as determined by the Bureau of Labor Statistics.

((B)) The value of food assistance for each meal shall be adjusted each July 1 by the annual percentage change in a 3-month average value of the Price Index for Foods Used in Schools and Institutions for March, April, and May each year. Such adjustment shall be computed to the nearest ¼ cent.

((C)) For each school year, the total commodity assistance or cash in lieu thereof available to a State for the school lunch program shall be calculated by multiplying the number of lunches served in the preceding school year by the rate established by subparagraph (B). After the end of each school year, the Secretary shall reconcile the number of lunches served by schools in each State with the number of lunches served by schools in each State during the preceding school year and increase or reduce subsequent commodity assistance or cash in lieu thereof provided to each State based on such reconciliation.

((D)) Among those commodities delivered under this section, the Secretary shall give special emphasis to high protein foods, meat, and meat alternates (which may include domestic seafood commodities and their products).

((E)) Notwithstanding any other provision of this section, not less than 75 percent of the assistance provided under this subsection shall be in the form of donated foods for the school lunch program.

((2)) To the maximum extent feasible, each State agency shall offer to each school food authority under its jurisdiction that participates in the school lunch program and receives commodities, agricultural commodities and their products, the per meal value of which is not less than the national average value of donated foods established under paragraph (1). Each such offer shall include the full range of such commodities and products that are available from the Secretary to the extent that quantities requested are sufficient to allow efficient delivery to and within the State.

((d)) ** Termination of commodity assistance based upon school breakfast program** Beginning with the school year ending , the Secretary shall not offer commodity assistance based upon the number of breakfasts served to children under section 4 of the Child Nutrition Act of 1966 [].42 U.S.C. 1773June 30, 19811981-06-30

((e)) ** Minimum percentage of commodity assistance**

((1)) Subject to paragraph (2), in each school year the Secretary shall ensure that not less than 12 percent of the assistance provided under , this section, and shall be in the form of—

((A)) commodity assistance provided under this section, including cash in lieu of commodities and administrative costs for procurement of commodities under this section; or

((B)) during the period beginning , and ending , commodities provided by the Secretary under any provision of law.

((2)) If amounts available to carry out the requirements of the sections described in paragraph (1) are insufficient to meet the requirement contained in paragraph (1) for a school year, the Secretary shall, to the extent necessary, use the authority provided under to meet the requirement for the school year.

((f)) ** Pilot project for procurement of unprocessed fruits and vegetables**

((1)) ** In general** The Secretary shall conduct a pilot project under which the Secretary shall facilitate the procurement of unprocessed fruits and vegetables in not more than 8 States receiving funds under this chapter.

((2)) ** Purpose** The purpose of the pilot project required by this subsection is to provide selected States flexibility for the procurement of unprocessed fruits and vegetables by permitting each State—

((A)) to utilize multiple suppliers and products established and qualified by the Secretary; and

((B)) to allow geographic preference, if desired, in the procurement of the products under the pilot project.

((3)) ** Selection and participation**

((A)) ** In general** The Secretary shall select States for participation in the pilot project in accordance with criteria established by the Secretary and terms and conditions established for participation.

((B)) ** Requirement** The Secretary shall ensure that at least 1 project is located in a State in each of—

((i)) the Pacific Northwest Region;

((ii)) the Northeast Region;

((iii)) the Western Region;

((iv)) the Midwest Region; and

((v)) the Southern Region.

((4)) ** Priority** In selecting States for participation in the pilot project, the Secretary shall prioritize applications based on—

((A)) the quantity and variety of growers of local fruits and vegetables in the States on a per capita basis;

((B)) the demonstrated commitment of the States to farm-to-school efforts, as evidenced by prior efforts to increase and promote farm-to-school programs in the States; and

((C)) whether the States contain a sufficient quantity of local educational agencies, various population sizes, and geographical locations.

((5)) ** Recordkeeping and reporting requirements**

((A)) ** Recordkeeping requirement** States selected to participate in the pilot project, and participating school food authorities within those States, shall keep records of the fruits and vegetables received under the pilot project in such manner and form as requested by the Secretary.

((B)) ** Reporting requirement** Each participating State shall submit to the Secretary a report on the success of the pilot project in the State, including information on—

((i)) the quantity and cost of each type of fruit and vegetable received by the State under the pilot project; and

((ii)) the benefit provided by those procurements in conducting school food service in the State, including meeting school meal requirements.