What This Bill Does
This bill directs the Secretary of Agriculture to create a grant program that gives money to states. States then use this money to set up revolving funds (money accounts that get refilled as loans are repaid) to help establish and operate grocery stores in underserved communities (areas without enough access to fresh food).
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Who It Affects
- States that apply for and receive grants
- Grocery store owners and operators in underserved communities
- Communities without adequate grocery store access
- The Secretary of Agriculture
- Nonprofit organizations and municipally owned stores (government-owned stores)
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Key Provisions
- The Secretary of Agriculture must establish a program to provide capitalization grants (startup funding) to states for revolving funds that support grocery stores in underserved communities (Sec. 2(a))
- Money from revolving funds can be loaned to open new grocery stores (except through new construction), support existing stores, provide access to healthy food, or help keep a store operating in a community that would otherwise be underserved (Sec. 2(c))
- Eligible grocery stores must emphasize unprocessed, healthful foods and provide a variety of raw fruits, vegetables and staple foods, and must charge affordable prices at or below market value (Sec. 2(d)(1))
- Loans must be made at or below market interest rates and can be interest-free for up to 30 years or the projected useful life of the project, whichever is less (Sec. 2(f)(2))
- States must match no less than 20 percent of each loan with non-federal funds (Sec. 2(d)(1)(H))
- A state can provide no more than 10 percent of its annual available fund balance to any single borrower in one fiscal year (Sec. 2(f)(4))
- The Secretary must provide technical assistance to program participants on food sourcing, storage and operational requirements (Sec. 2(h))
- Capitalization grants must be distributed to states based on the ratio of their underserved population to the total underserved population across all eligible states (Sec. 3(c))
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What Changes
If this becomes law, states can apply for federal grants to create revolving loan funds specifically designed to help establish and operate grocery stores in areas that lack adequate food access. Grocery store operators in these communities would gain access to loans with affordable rates (potentially interest-free) to open or improve stores. Communities without adequate grocery stores would have a new pathway to develop local grocery access.
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Important Definitions
- **Capitalization grant**: Money given to a state to fund the revolving loan program
- **Healthful food**: Food that follows the most recent Dietary Guidelines for Americans
- **Grocery store**: A retail store that makes most of its money from selling food for people to prepare and eat at home
- **Program**: The grocery store grant program described in the bill
- **Program participant**: Any organization that receives a loan under this program
- **Revolving fund**: A money account set up by a state to hold grants and loan repayments
- **Secretary**: The Secretary of Agriculture
- **Staple food**: Not specified in bill text (defined elsewhere in existing federal law)
- **State**: States of the Union, District of Columbia, Puerto Rico, Virgin Islands, Guam, American Samoa and Northern Mariana Islands
- **Underserved community**: Not specified in bill text (defined elsewhere in existing federal law)
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Effective Date
Not specified in bill text
I
118TH CONGRESS
1ST SESSION H. R. 1230
To direct the Secretary of Agriculture to make grants to States to support
the establishment and operation of grocery stores in underserved commu-
nities, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 28, 2023
Mr. CARSON (for himself, Mr. KHANNA, Ms. KAPTUR, Mr. THOMPSON of Mis-
sissippi, Mr. TAKANO, Mr. GREEN of Texas, Ms. NORTON, Mr. DOGGETT,
Mr. PAYNE, Ms. BLUNT ROCHESTER, Ms. TITUS, Mr. JOHNSON of Geor-
gia, Mrs. WATSON COLEMAN, Mrs. BEATTY, Mrs. CHERFILUS-MCCOR-
MICK, Ms. STANSBURY, Mr. CUELLAR, Mr. DESAULNIER, Ms. LEE of
California, Ms. SCHAKOWSKY, Mr. GARAMENDI, Mr. MOULTON, Ms.
SCHOLTEN, Mr. DAVIS of Illinois, Mr. LARSON of Connecticut, Ms.
CLARKE of New York, Mr. VARGAS, Ms. ROSS, Mr. TONKO, Mr.
GALLEGO, Mr. SOTO, Ms. BARRAGA´N, Mr. CLEAVER, Ms. TOKUDA, and
Mr. CARTER of Louisiana) introduced the following bill; which was re-
ferred to the Committee on Agriculture
A BILL
To direct the Secretary of Agriculture to make grants to
States to support the establishment and operation of
grocery stores in underserved communities, and for other
purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Food Deserts Act’’.
4
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•HR 1230 IH
SEC. 2. GRANT PROGRAM TO ESTABLISH GROCERY STORES
1
IN UNDERSERVED COMMUNITIES.
2
(a) ESTABLISHMENT
OF GRANT PROGRAM.—The
3
Secretary shall establish a program to provide capitaliza-
4
tion grants to States for the purpose of establishing re-
5
volving funds to support the establishment and operation
6
of grocery stores in underserved communities.
7
(b) ADMINISTRATION.—A State receiving funds
8
under this Act shall administer the revolving fund of the
9
State through an instrumentality of the State with such
10
powers and limitations as may be required to operate such
11
fund in accordance with the requirements of this Act.
12
(c) PROJECTS AND ACTIVITIES ELIGIBLE FOR AS-
13
SISTANCE.—Amounts in a revolving fund shall be used for
14
the purpose of making loans—
15
(1) to open a grocery store in an underserved
16
community, except that such loan may not be used
17
for the purpose of new construction;
18
(2) to support the operations of an existing gro-
19
cery store in an underserved community;
20
(3) to provide access to healthy food; or
21
(4) to support the operations of a program par-
22
ticipant that is located in a community that would
23
be an underserved community if the program partici-
24
pant was not located in such community.
25
(d) GROCERY STORES ELIGIBLE FOR ASSISTANCE.—
26
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•HR 1230 IH
(1) REQUIRED CRITERIA.—A State receiving a
1
capitalization grant under this Act may only make
2
a loan from the revolving fund of the State to an en-
3
tity that the State determines—
4
(A) is a grocery store or will be a grocery
5
store after opening;
6
(B) emphasizes or will emphasize unproc-
7
essed, healthful foods;
8
(C) provides or will provide a variety of
9
raw fruits and vegetables;
10
(D) provides or will provide staple foods;
11
(E) has a plan to keep such foods in stock
12
to the extent possible;
13
(F) charge affordable at or below market
14
values;
15
(G) either—
16
(i) is demonstrably qualified to oper-
17
ate a grocery store; or
18
(ii) at the time of such application,
19
has existing partnerships with organiza-
20
tions that provide technical assistance on
21
business operations of food services; and
22
(H) will match no less than 20 percent,
23
from non-Federal funds, of the amount of such
24
loan.
25
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•HR 1230 IH
(2)
PRIORITY
CRITERIA.—A
State
shall
1
prioritize an application for a loan from the revolv-
2
ing fund of the State from an entity that the State
3
determines—
4
(A) hires or plans to hire workers who re-
5
side within the underserved community that
6
would be served by the entity;
7
(B) provides or plans to provide classes or
8
other educational information about a healthful
9
diet;
10
(C) sources or plans to source food from
11
local urban farms and gardens; and
12
(D) demonstrates existing supply chain re-
13
lationships in the grocery industry.
14
(e) APPLICATION.—An entity that desires a loan
15
from a revolving fund of a State shall submit an applica-
16
tion to the State at such time, in such manner, and con-
17
taining such information as the State may require.
18
(f) LOAN CONDITIONS.—
19
(1) IN GENERAL.—A loan distributed from a
20
revolving fund by a State may be used by a program
21
participant only for the purposes specified in sub-
22
section (c).
23
(2) INTEREST RATES.—A loan distributed by a
24
State from a revolving fund—
25
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•HR 1230 IH
(A) shall be made at or below market in-
1
terest rates; and
2
(B) may be an interest free loan, at terms
3
not to exceed the lesser of 30 years or the pro-
4
jected useful life (as determined by the State)
5
of the project to be financed with the proceeds
6
of the loan.
7
(3) STRUCTURE OF LOAN.—A loan may be dis-
8
tributed from a revolving fund by a State to a pro-
9
gram participant in—
10
(A) a lump sum; or
11
(B) in multiple distributions over a period
12
of years, if the State determines multiple dis-
13
tributions are necessary to carry out the
14
project.
15
(4) LOAN AMOUNT.—A State may not provide
16
a loan to a program participant from the revolving
17
fund of the State in a fiscal year that exceeds 10
18
percent of the amount available from the fund for
19
making distributions in that fiscal year.
20
(5) PAYMENTS.—Annual principal and interest
21
payments on a loan received from a revolving fund
22
of a State shall commence not later than 1 year
23
after the loan is disbursed to the program partici-
24
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•HR 1230 IH
pant and all loans will be fully amortized upon the
1
expiration of the term of the loan.
2
(6) REVENUE
FOR
REPAYMENT.—A program
3
participant shall establish a dedicated source of rev-
4
enue for repayment of a loan received from a revolv-
5
ing fund of a State.
6
(7) CREDITING REVOLVING FUND.—A revolving
7
fund of a State shall be credited with all payments
8
of principal and interest on all loans made from the
9
revolving fund.
10
(g) ADMINISTRATION COSTS.—A State shall charge
11
a program participant an administrative fee of not more
12
than 4 percent of the loan amount. The State shall use
13
the fees to administer the revolving fund and conduct ad-
14
ministration activities under this Act.
15
(h) TECHNICAL ASSISTANCE.—The Secretary shall
16
provide technical assistance to program participants to as-
17
sist with sourcing of food, food storage, and other oper-
18
ational requirements.
19
(i) BANKRUPTCY.—In the case of the bankruptcy of
20
a program participant, amounts owed on a loan from a
21
revolving fund shall be afforded precedence over other
22
debt.
23
(j) CHANGE IN UNDERSERVED STATUS.—In the case
24
of a community that qualified as underserved during a pe-
25
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•HR 1230 IH
riod in which loans were made by a State pursuant to this
1
section and no longer qualifies as underserved, recipients
2
of loans under this section in such community—
3
(1) shall not be eligible for further loans under
4
this section; and
5
(2) may not have their loan agreements altered.
6
(k) GROCERY STORE EARNINGS.—Earnings of a non-
7
profit organization or municipally owned program partici-
8
pant that are attributable to a loan received from a revolv-
9
ing fund of a State shall be used for reinvestment into
10
the program participant or to support the continuity of
11
operations of the program participant.
12
SEC. 3. CAPITALIZATION GRANTS TO FUND STATE REVOLV-
13
ING FUNDS.
14
(a) ELIGIBILITY
OF STATE
FOR CAPITALIZATION
15
GRANT.—To be eligible for a capitalization grant, a State
16
shall—
17
(1) establish a revolving fund that complies
18
with the requirements of this Act; and
19
(2) establish a process for applications and cri-
20
teria for making loans from the revolving fund, sub-
21
ject to the requirements in section 2(d).
22
(b) UPON RECEIPT OF CAPITALIZATION GRANT.—
23
Upon the receipt of a capitalization grant, a State shall
24
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•HR 1230 IH
deposit such capitalization grant into the revolving fund
1
of the State.
2
(c) DISTRIBUTION.—For a fiscal year, the Secretary
3
shall apportion amounts made available for capitalization
4
grants under this section among the States eligible under
5
subsection (a) in the ratio that—
6
(1) the population of underserved communities
7
in each State eligible under subsection (a), bears to
8
(2) the population of underserved communities
9
in all States eligible under subsection (a).
10
SEC. 4. AUTHORIZATION OF APPROPRIATIONS.
11
There is authorized to be appropriated to carry out
12
this Act $150,000,000 for fiscal year 2022.
13
SEC. 5. DEFINITIONS.
14
In this Act:
15
(1) CAPITALIZATION GRANT.—The term ‘‘cap-
16
italization grant’’ means a grant made to a State
17
under the program.
18
(2) HEALTHFUL FOOD.—The term ‘‘healthful
19
food’’ means food that reflects the most recent Die-
20
tary Guidelines for Americans.
21
(3) GROCERY
STORE.—The term ‘‘grocery
22
store’’ means a retail store that derives income pri-
23
marily from the sale of food for home preparation
24
and consumption.
25
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•HR 1230 IH
(4) PROGRAM.—The term ‘‘program’’ means
1
the program described in section 2(a).
2
(5) PROGRAM PARTICIPANT.—The term ‘‘pro-
3
gram participant’’ means an entity that has received
4
a loan under the program.
5
(6) REVOLVING
FUND.—The term ‘‘revolving
6
fund’’ means a fund established by a State for use
7
as a depository for a capitalization grant.
8
(7) SECRETARY.—The term ‘‘Secretary’’ means
9
the Secretary of Agriculture.
10
(8) STAPLE
FOOD.—The term ‘‘staple food’’
11
has the meaning given the term in section 243(b) of
12
the of the Department of Agriculture Reorganization
13
Act of 1994 (7 U.S.C. 6953(b)).
14
(9) STATE.—The term ‘‘State’’ means States of
15
the Union, the District of Columbia, Puerto Rico,
16
the Virgin Islands, Guam, American Samoa, and the
17
Northern Mariana Islands.
18
(10) UNDERSERVED
COMMUNITY.—The term
19
‘‘underserved community’’ has the meaning given
20
the term in section 310B(g)(9)(A) of the Consoli-
21
dated Farm and Rural Development Act (7 U.S.C.
22
1932(g)(9)(A)).
23
Æ
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