text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Child Nutrition Protection Act of 
  1994''.
  
  SEC. 2. FINDINGS.
  
      The Congress finds the following:
              (1) In recent years, there has been a substantial number of 
          instances of price-fixing, bid-rigging, and other fraudulent 
          activity regarding foods purchased for--
                      (A) the school lunch program established under the 
                  National School Lunch Act (42 U.S.C. 1751 et seq.); and
                      (B) the school breakfast program established under 
                  section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 
                  1773).
              (2) In 1986, President Reagan issued Executive Order 12549 
          which was intended to curb fraud, waste, and abuse in Federal 
          programs, increase accountability, and ensure consistency among 
          agency regulations concerning debarment and suspension of 
          participants in Federal programs.
              (3) During the past several years, the Antitrust Division 
          of the Department of Justice has filed over 95 criminal cases 
          against companies and individuals accused of bid-rigging 
          conspiracies, false statements, mail fraud, price-fixing, and 
          similar activities involving dairy products sold to schools or 
          to the Department of Defense.
              (4) Over 30 grand juries in several States are 
          investigating similar activities.
              (5) 45 corporations and 48 individuals have been convicted 
          by Federal courts of similar activities, and total fines and 
          civil damages of approximately $100,000,000 have been assessed 
          in Federal and State court actions for similar activities.
              (6) Although several companies have violated the 
          regulations of food and nutrition programs of the Department of 
          Agriculture, such companies continue to participate in such 
          programs and monetarily benefit from such programs.
              (7) A report of the Comptroller General of the United 
          States noted that, as of March 1992, the Secretary of 
          Agriculture had neither suspended nor debarred any of the 13 
          dairy companies or 28 individuals convicted of milk contract 
          bid-rigging from participating in the school lunch and school 
          breakfast programs.
              (8) Effective educational and monitoring programs can 
          greatly reduce the incidence of fraud, price-fixing, and bid-
          rigging by companies that sell food products to schools.
              (9) Reducing the incidence of fraud, price-fixing, and bid-
          rigging in connection with the school lunch and school 
          breakfast programs could save school districts, parents, and 
          taxpayers millions of dollars per year.
              (10) The Comptroller General of the United States has noted 
          that bid-rigging awareness training is an effective means of 
          deterring improper collusion and bid-rigging.
              (11) The Comptroller General of the United States in a 
          General Accounting Office report addressed many of the concerns 
          described in this section with respect to bid-rigging in the 
          school lunch program.
  
  SEC. 3. DUTIES OF THE SECRETARY OF AGRICULTURE RELATING TO 
                NONPROCUREMENT DEBARMENT UNDER CERTAIN CHILD NUTRITION 
                PROGRAMS.
  
      (a) In General.--The National School Lunch Act (42 U.S.C. 1751 et 
  seq.) is amended by adding at the end the following new section:
  
  ``SEC. 25. DUTIES OF THE SECRETARY RELATING TO NONPROCUREMENT 
                DEBARMENT.
  
      ``(a) Definitions.--For purposes of this section, the following 
  definitions apply:
              ``(1) Appropriate congressional committees.--The term 
          `appropriate congressional committees' means the Committee on 
          Education and Labor of the House of Representatives and the 
          Committee on Agriculture, Nutrition, and Forestry of the 
          Senate.
              ``(2) Child nutrition program.--The term `child nutrition 
          program' means--
                      ``(A) the school lunch program established under 
                  this Act;
                      ``(B) the school breakfast program established 
                  under section 4 of the Child Nutrition Act of 1966 (42 
                  U.S.C. 1773);
                      ``(C) the special milk program established under 
                  section 3 of such Act (42 U.S.C. 1772);
                      ``(D) the special nutrition program for women, 
                  infants, and children authorized under section 17 of 
                  such Act (42 U.S.C. 1786);
                      ``(E) the summer food service program for children 
                  established under section 13 of this Act; and
                      ``(F) the child and adult care food program 
                  established under section 17 of this Act.
              ``(3) Contractor.--The term `contractor' means a person 
          that contracts with a State, an agency of a State, or a local 
          agency to provide goods or services in conjunction with the 
          participation of a local agency in a child nutrition program.
              ``(4) Local agency.--The term `local agency' means a 
          school, school food authority, child care center, sponsoring 
          organization, or other entity authorized to operate a child 
          nutrition program at the local level.
              ``(5) Nonprocurement debarment.--The term `nonprocurement 
          debarment' means an action to bar a person from programs and 
          activities involving Federal financial and nonfinancial 
          assistance, but not including Federal procurement programs and 
          activities.
              ``(6) Person.--The term `person' means any individual, 
          corporation, partnership, association, or other legal entity, 
          however organized.
      ``(b) Assistance to Identify and Prevent Fraud and Anticompetitive 
  Activities.--The Secretary shall--
              ``(1) through the food service management institute 
          authorized under section 21, provide advice, training, 
          technical assistance, and guidance (which may include awareness 
          training, training films, and troubleshooting advice) to 
          representatives of States and local agencies regarding means of 
          identifying and preventing fraud and anticompetitive activities 
          relating to the provision of goods or services in conjunction 
          with the participation of a local agency in a child nutrition 
          program; and
              ``(2) provide information to, and fully cooperate with, the 
          Attorney General and State attorneys general regarding 
          investigations of fraud and anticompetitive activities relating 
          to the provision of goods or services in conjunction with the 
          participation of a local agency in a child nutrition program.
      ``(c) Nonprocurement Debarment.--
              ``(1) In general.--Except as provided in paragraph (3), not 
          later than 180 days after notification of the occurrence of a 
          cause for debarment described in paragraph (2), the Secretary 
          shall initiate nonprocurement debarment proceedings against the 
          contractor who has committed the cause for debarment.
              ``(2) Causes for debarment.--Actions requiring initiation 
          of nonprocurement debarment pursuant to paragraph (1) shall 
          include the following:
                      ``(A) A contractor commits an action or series of 
                  actions which constitute a substantial and material 
                  violation of a regulation of a child nutrition program 
                  of the Department of Agriculture, as determined by the 
                  Secretary.
                      ``(B) A contractor is found guilty in any criminal, 
                  civil, or administrative proceeding, or found liable in 
                  any civil or administrative proceeding, in connection 
                  with the supplying, providing, or selling of a product 
                  or commodity to any local agency or to any Federal 
                  agency in connection with the child nutrition programs, 
                  of--
                              ``(i) an anticompetitive activity, 
                          including bid-rigging, price-fixing, the 
                          allocation of customers between competitors, or 
                          other violation of Federal or State antitrust 
                          laws;
                              ``(ii) fraud, bribery, theft, forgery or 
                          embezzlement;
                              ``(iii) breach of contract;
                              ``(iv) making a false claim or statement; 
                          or
                              ``(v) other obstruction of justice.
              ``(3) Exception.--If the Secretary determines that a 
          decision on initiating nonprocurement debarment proceedings 
          cannot be made within 180 days after notification of the 
          occurrence of a cause for debarment described in paragraph (2) 
          because of the need to further investigate matters relating to 
          the possible debarment, the Secretary may have such additional 
          time as the Secretary considers necessary to make a decision, 
          but not to exceed an additional 180 days.
              ``(4) Mandatory child nutrition program debarment 
          periods.--
                      ``(A) In general.--Subject to the other provisions 
                  of this paragraph and notwithstanding any other 
                  provision of law except subsection (d), if, after 
                  deciding to initiate nonprocurement debarment 
                  proceedings pursuant to paragraph (1), the Secretary 
                  decides to debar a contractor, the debarment shall be 
                  for a period of not less than 3 years.
                      ``(B) Previous debarment.--If the contractor has 
                  been previously debarred pursuant to nonprocurement 
                  debarment proceedings initiated pursuant to paragraph 
                  (1), and the cause for debarment is described in 
                  paragraph (2) based on activities that occurred 
                  subsequent to the initial debarment, the debarment 
                  shall be for a period of not less than 5 years.
                      ``(C) Scope.--At a minimum, a debarment under this 
                  subsection shall serve to bar the contractor for the 
                  specified period from contracting to provide goods or 
                  services in conjunction with the participation of a 
                  local agency in a child nutrition program.
                      ``(D) Reversal, reduction, or exception.--Nothing 
                  in this paragraph shall restrict the ability of the 
                  Secretary to reverse a debarment decision, to reduce 
                  the period or scope of a debarment, nor to grant an 
                  exception permitting a debarred contractor to 
                  participate in a particular contract to provide goods 
                  or services in conjunction with the participation of a 
                  local agency in a child nutrition program, if the 
                  Secretary determines there is good cause for the 
                  action.
              ``(5) Information.--On request, the Secretary shall present 
          to the appropriate congressional committees information 
          regarding the decisions required by this subsection.
              ``(6) Relationship to other authorities.--A debarment 
          imposed under this section shall not reduce or diminish the 
          authority of a Federal, State, or local government agency or 
          court to penalize, imprison, fine, suspend, debar, or take 
          other adverse action against a person in a civil, criminal, or 
          administrative proceeding.
              ``(7) Regulations.--The Secretary shall issue such 
          regulations as are necessary to carry out this subsection.
      ``(d) Mandatory Debarment.--Notwithstanding any other provision of 
  this section, the Secretary shall initiate nonprocurement debarment 
  proceedings against the contractor (including any cooperative) who has 
  committed the cause for debarment (as determined under section (c)(2)), 
  unless the action--
              ``(1) is likely to have a significant adverse effect on 
          competition or prices in the relevant market or nationally;
              ``(2) will interfere with the ability of a local agency to 
          procure a needed product for a child nutrition program;
              ``(3) is unfair to a person, subsidiary corporation, 
          affiliate, parent company, or local division of a corporation 
          that is not involved in the improper activity that would 
          otherwise result in the debarment; or
              ``(4) is not in the public interest, as determined by the 
          Secretary.
      ``(e) Exhaustion of Administrative Remedies.--Prior to seeking 
  judicial review in a court of competent jurisdiction, a contractor 
  against whom a nonprocurement debarment proceeding has been initiated 
  shall--
              ``(1) exhaust all administrative procedures prescribed by 
          the Secretary; and
              ``(2) receive notice of the final determination of the 
          Secretary.
      ``(f) Information Relating to Prevention and Control of 
  Anticompetitive Activities.--On request, the Secretary shall present to 
  the appropriate congressional committees information regarding the 
  activities of the Secretary relating to anticompetitive activities, 
  fraud, nonprocurement debarment, and any waiver granted by the 
  Secretary under this section.''.
      (b) Applicability.--Section 25(c) of the National School Lunch Act 
  (as added by subsection (a)) shall not apply to a cause for debarment 
  as described in section 25(c)(2) of such Act that is based on an 
  activity that took place prior to the date of enactment of this Act.
  
  SEC. 4. REPORT ON CONSISTENT DEBARMENT POLICY.
  
      Not later than 120 days after the date of enactment of this Act, 
  the Secretary of Agriculture, in consultation with the Director of the 
  Office of Management and Budget, the Secretary of Defense, and such 
  other officials as the Secretary of Agriculture determines are 
  appropriate, shall advise the appropriate committees of the Congress 
  and the Comptroller General of the United States as to the 
  appropriateness and usefulness of a consistent debarment policy under--
              (1) the Federal acquisition regulations issued under title 
          48, Code of Federal Regulations; and
              (2) Federal nonprocurement regulations.
  
  SEC. 5. NO REDUCTION IN AUTHORITY TO DEBAR OR SUSPEND A PERSON FROM 
                FEDERAL FINANCIAL AND NONFINANCIAL ASSISTANCE AND 
                BENEFITS.
  
      (a) In General.--The authority of the Secretary of Agriculture that 
  exists on the date of enactment of this Act to debar or suspend a 
  person from Federal financial and nonfinancial assistance and benefits 
  under Federal programs and activities, on a government-wide basis, 
  shall not be diminished or reduced by this Act or the amendment made by 
  section 3 of this Act.
      (b) Debarment or Suspension.--The Secretary may continue, after the 
  date of enactment of this Act, to debar or suspend a person on a 
  government-wide basis, from Federal financial and nonfinancial 
  assistance and benefits for any cause for debarment or suspension that 
  is specified in part 3017 of chapter XXX of subtitle B of title 7, Code 
  of Federal Regulations, or as otherwise permitted by law, including 
  regulations.
target: Child Nutrition Protection Act of 1994 - Amends the National School Lunch Act to direct the Secretary of Agriculture (Secretary) to provide State and local agencies with training and other assistance to prevent fraud and anticompetitive activities in the school lunch, school breakfast, special milk, summer food service, WIC, and child and adult care food programs. 
  Directs the Secretary to bar a company for at least three years (five years for a repeat conviction) from program participation upon conviction for anticompetitive or specified related activities.
feat_title: Child Nutrition Protection Act of 1994