Scalloped Potatoes

3 tablespoons butter, divided
1 tablespoon all-purpose flour
1 teaspoon salt
1/4 teaspoon pepper
1-1/2 cups milk
4 cups thinly sliced peeled potatoes (about 2 pounds)
1 medium onion, finely chopped
1 small green pepper, finely chopped
1/2 cup dry bread crumbs
3/4 cup shredded cheddar cheese

In a small saucepan, melt 2 tablespoons butter; stir in flour, salt and pepper. Gradually stir in milk. Bring to a boil over medium heat; cook and stir for 2 minutes or until thickened.

In a greased 1-1/2-qt. baking dish, arrange half the potatoes, onion and green pepper in layers; cover with half of the sauce. Repeat layers.

Cover and bake at 350° for 35 minutes. Melt remaining butter; combine with bread crumbs and sprinkle over potatoes. Bake, uncovered, about 40 minutes longer or until potatoes are tender. Sprinkle with cheddar cheese. Let stand for 5 minutes before serving. Makes 4 servings.