RENEWAL OF APPLICATION MATERIALS AND PERMANENT OPERATING AGREEMENTS.

SEC. 331. RENEWAL OF APPLICATION MATERIALS AND PERMANENT OPERATING AGREEMENTS.(a) Permanent Operating Agreements.—Section 17(d)(1) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1766(d)(1)) is amended by adding at the end the following:“(E) Permanent operating agreements.—“(i) In general.—Subject to clauses (ii) and (iii), to participate in the child and adult care food program, an institution that meets the conditions of eligibility described in this subsection shall be required to enter into a permanent agreement with the applicable State agency.“(ii) Amendments.—A permanent agreement described in clause (i) may be amended as necessary to ensure that the institution is in compliance with all requirements established in this section or by the Secretary.“(iii) Termination.—A permanent agreement described in clause (i)—“(I) may be terminated for convenience by the institution or State agency that is a party to the permanent agreement; and“(II) shall be terminated—“(aa) for cause by the applicable State agency in accordance with paragraph (5); or“(bb) on termination of participation of the institution in the child and adult care food program.”.(b) Applications and Reviews.—Section 17(d) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1766(d)) is amended by striking paragraph (2) and inserting the following:124 STAT. 3249 “(2) Program applications.—“(A) In general.—The Secretary shall develop a policy under which each institution providing child care that participates in the program under this section shall—“(i) submit to the State agency an initial application to participate in the program that meets all requirements established by the Secretary by regulation;“(ii) annually confirm to the State agency that the institution, and any facilities of the institution in which the program is operated by a sponsoring organization, is in compliance with subsection (a)(5); and“(iii) annually submit to the State agency any additional information necessary to confirm that the institution is in compliance with all other requirements to participate in the program, as established in this Act and by the Secretary by regulation.“(B) Required reviews of sponsored facilities.—“(i) In general.—The Secretary shall develop a policy under which each sponsoring organization participating in the program under this section shall conduct—“(I) periodic unannounced site visits at not less than 3-year intervals to sponsored child and adult care centers and family or group day care homes to identify and prevent management deficiencies and fraud and abuse under the program; and“(II) at least 1 scheduled site visit each year to sponsored child and adult care centers and family or group day care homes to identify and prevent management deficiencies and fraud and abuse under the program and to improve program operations.“(ii) Varied timing.—Sponsoring organizations shall vary the timing of unannounced reviews under clause (i)(I) in a manner that makes the reviews unpredictable to sponsored facilities.“(C) Required reviews of institutions.—The Secretary shall develop a policy under which each State agency shall conduct—“(i) at least 1 scheduled site visit at not less than 3-year intervals to each institution under the State agency participating in the program under this section—“(I) to identify and prevent management deficiencies and fraud and abuse under the program; and“(II) to improve program operations; and“(ii) more frequent reviews of any institution that—“(I) sponsors a significant share of the facilities participating in the program;“(II) conducts activities other than the program authorized under this section;124 STAT. 3250“(III) has serious management problems, as identified in a prior review, or is at risk of having serious management problems; or“(IV) meets such other criteria as are defined by the Secretary.“(D) Detection and deterrence of erroneous payments and false claims.—“(i) In general.—The Secretary may develop a policy to detect and deter, and recover erroneous payments to, and false claims submitted by, institutions, sponsored child and adult care centers, and family or group day care homes participating in the program under this section.“(ii) Block claims.—“(I) Definition of block claim.—In this clause, the term ‘block claim’ has the meaning given the term in section 226.2 of title 7, Code of Federal Regulations (or successor regulations).“(II) Program edit checks.—The Secretary may not require any State agency, sponsoring organization, or other institution to perform edit checks or on-site reviews relating to the detection of block claims by any child care facility.“(III) Allowance.—Notwithstanding subclause (II), the Secretary may require any State agency, sponsoring organization, or other institution to collect, store, and transmit to the appropriate entity information necessary to develop any other policy developed under clause (i).”.(c) Agreements.—Section 17(j)(1) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1766(j)(1)) is amended—(1) by striking “may” and inserting “shall”;(2) by striking “family or group day care” the first place it appears; and(3) by inserting “or sponsored day care centers” before “participating”.