Apportionment to States

Section 4(b) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1753(b)) is amended— (1) by striking paragraph (2) and inserting the following: (2) Payment amounts (A) In general The national average payment for each free lunch shall be $5.42, adjusted annually for inflation in accordance with subparagraph (C) and rounded in accordance with subparagraph (D). (B) Additional payment for local food (i) Definition of locally-sourced farm product In this subparagraph, the term locally-sourced farm product means a farm product that— (I) is marketed to consumers— (aa) directly; or (bb) through intermediated channels (such as food hubs and cooperatives); and (II) with respect to the school food authority purchasing the farm product, is produced and distributed— (aa) in the State in which the school food authority is located; or (bb) not more than 250 miles from the location of the school food authority. (ii) Additional payment eligibility During a school year, a school food authority shall receive an additional payment described in clause (iii) if the State certifies that the school food authority served meals (including breakfasts, lunches, suppers, and supplements) during the last school year of which not less than 25 percent were made with locally sourced farm products. (iii) Payment amount (I) In general The additional payment amount under this subparagraph shall be— (aa) $0.30 for each free lunch and supper; (bb) $0.21 for each free breakfast; and (cc) $0.08 for each free supplement. (II) Adjustments Each additional payment amount under subclause (I) shall be adjusted annually in accordance with subparagraph (C) and rounded in accordance with subparagraph (D). (iv) Disbursement The State agency shall disburse funds made available under this clause to school food authorities eligible to receive additional reimbursement. (C) Inflation adjustment (i) In general The annual inflation adjustment under subparagraphs (A) and (B)(iii) shall reflect changes in the cost of operating the free lunch program under this Act, as indicated by the change in the Consumer Price Index for food away from home for all urban consumers. (ii) Basis Each annual inflation adjustment under subparagraphs (A) and (B)(iii) shall reflect the changes in the Consumer Price Index for food away from home for the most recent 12-month period for which that data is available. (D) Rounding On July 1, 2026, and annually thereafter, the national average payment rate for free lunch and the additional payment amount for free breakfast, lunch, supper, and supplement under subparagraph (B) shall be— (i) adjusted to the nearest lower-cent increment; and (ii) based on the unrounded amounts for the preceding 12-month period.; and (2) by striking paragraph (3).