(1) From the state school aid fund money appropriated in section 11, there is allocated an amount not to exceed $11,900,000.00 for 2022-2023, and there is allocated an amount not to exceed $16,900,000.00 for 2023-2024 for the purpose of making payments to districts to reimburse for the cost of providing breakfast.

    (2) The funds allocated under this section for school breakfast programs are made available to all eligible applicant districts that meet all of the following criteria:

    (a) The district participates in the federal school breakfast program and meets all standards as prescribed by 7 C.F.R. § part parts 210, 220, 225, 226, and 245.

    (b) Each breakfast eligible for payment meets the federal standards described in subdivision (a).

    (3) The payment for a district under this section is at a per meal rate equal to the lesser of the district’s actual cost or 100% of the statewide average cost of a meal served, as determined and approved by the department, less federal reimbursement, participant payments, and state breakfast reimbursements received under section 30d. The department shall determine the statewide average cost using costs as reported in a manner approved by the department for the preceding school year.

    (4) Notwithstanding section 17b, the department may make payments under this section pursuant to an agreement with the department.

    (5) In purchasing food for a school breakfast program funded under this section, a district shall give preference to food that is grown or produced by Michigan businesses if it is competitively priced and of comparable quality.