Food Deserts Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 8531 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 OCTOBER 6, 2020 Mr. CARSON of Indiana introduced the following bill; which was referred 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 of 4 2020’’. 5 VerDate Sep 11 2014 06:26 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8531.IH H8531 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8531 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 facilitate the fair market value purchase 21 of an existing grocery store in an underserved com- 22 munity; or 23 (4) to support the operations of a program par- 24 ticipant that is located in a community that would 25 VerDate Sep 11 2014 06:26 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8531.IH H8531 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 8531 IH be an underserved community if the program partici- 1 pant was not located in such community. 2 (d) GROCERY STORES ELIGIBLE FOR ASSISTANCE.— 3 (1) REQUIRED CRITERIA.—A State receiving a 4 capitalization grant under this Act may only make 5 a loan from the revolving fund of the State to an en- 6 tity that the State determines— 7 (A) is a grocery store or will be a grocery 8 store after opening; 9 (B) emphasizes or will emphasize unproc- 10 essed, healthful foods; 11 (C) provides or will provide a variety of 12 raw fruits and vegetables; 13 (D) provides or will provide staple foods; 14 (E) has a plan to keep such foods in stock 15 to the extent possible; 16 (F) charges or will charge prices at or 17 below market averages; 18 (G) either— 19 (i) is demonstrably qualified to oper- 20 ate a grocery store; or 21 (ii) at the time of such application, 22 has existing partnerships with organiza- 23 tions that provide technical assistance on 24 business operations of food services; and 25 VerDate Sep 11 2014 06:26 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8531.IH H8531 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 8531 IH (H) will match no less than 20 percent, 1 from non-Federal funds, of the amount of such 2 loan. 3 (2) PRIORITY CRITERIA.—A State shall 4 prioritize an application for a loan from the revolv- 5 ing fund of the State from an entity that the State 6 determines— 7 (A) hires or plans to hire workers who re- 8 side within the underserved community that 9 would be served by the entity; 10 (B) provides or plans to provide classes or 11 other educational information about a healthful 12 diet; 13 (C) sources or plans to source food from 14 local urban farms and gardens; 15 (D) does not or will not sell alcohol or to- 16 bacco products; or 17 (E) demonstrates existing supply chain re- 18 lationships in the grocery industry. 19 (e) APPLICATION.—An entity that desires a loan 20 from a revolving fund of a State shall submit an applica- 21 tion to the State at such time, in such manner, and con- 22 taining such information as the State may require. 23 (f) LOAN CONDITIONS.— 24 VerDate Sep 11 2014 06:26 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8531.IH H8531 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 8531 IH (1) IN GENERAL.—A loan distributed from a 1 revolving fund by a State may be used by a program 2 participant only for the purposes specified in sub- 3 section (c). 4 (2) INTEREST RATES.—A loan distributed by a 5 State from a revolving fund— 6 (A) shall be made at or below market in- 7 terest rates; and 8 (B) may be an interest free loan, at terms 9 not to exceed the lesser of 30 years or the pro- 10 jected useful life (as determined by the State) 11 of the project to be financed with the proceeds 12 of the loan. 13 (3) STRUCTURE OF LOAN.—A loan may be dis- 14 tributed from a revolving fund by a State to a pro- 15 gram participant in— 16 (A) a lump sum; or 17 (B) in multiple distributions over a period 18 of years, if the State determines multiple dis- 19 tributions are necessary to carry out the 20 project. 21 (4) LOAN AMOUNT.—A State may not provide 22 a loan to a program participant from the revolving 23 fund of the State in a fiscal year that exceeds 10 24 VerDate Sep 11 2014 06:26 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8531.IH H8531 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 8531 IH percent of the amount available from the fund for 1 making distributions in that fiscal year. 2 (5) PAYMENTS.—Annual principal and interest 3 payments on a loan received from a revolving fund 4 of a State shall commence not later than 1 year 5 after the loan is disbursed to the program partici- 6 pant and all loans will be fully amortized upon the 7 expiration of the term of the loan. 8 (6) REVENUE FOR REPAYMENT.—A program 9 participant shall establish a dedicated source of rev- 10 enue for repayment of a loan received from a revolv- 11 ing fund of a State. 12 (7) CREDITING REVOLVING FUND.—A revolving 13 fund of a State shall be credited with all payments 14 of principal and interest on all loans made from the 15 revolving fund. 16 (g) ADMINISTRATION COSTS.—A State shall charge 17 a program participant an administrative fee of not more 18 than 4 percent of the loan amount. The State shall use 19 the fees to administer the revolving fund and conduct ad- 20 ministration activities under this Act. 21 (h) TECHNICAL ASSISTANCE.—The Secretary shall 22 provide technical assistance to program participants to as- 23 sist with sourcing of food, food storage, and other oper- 24 ational requirements. 25 VerDate Sep 11 2014 06:26 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8531.IH H8531 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 8531 IH (i) BANKRUPTCY.—In the case of the bankruptcy of 1 a program participant, amounts owed on a loan from a 2 revolving fund shall be afforded precedence over other 3 debt. 4 (j) CHANGE IN UNDERSERVED STATUS.—In the case 5 of a community that qualified as underserved during a pe- 6 riod in which loans were made by a State pursuant to this 7 section and no longer qualifies as underserved, recipients 8 of loans under this section in such community— 9 (1) shall not be eligible for further loans under 10 this section; and 11 (2) may not have their loan agreements altered. 12 (k) GROCERY STORE EARNINGS.—Earnings of a non- 13 profit organization or municipally owned program partici- 14 pant that are attributable to a loan received from a revolv- 15 ing fund of a State shall be used for reinvestment into 16 the program participant or to support the continuity of 17 operations of the program participant. 18 SEC. 3. CAPITALIZATION GRANTS TO FUND STATE REVOLV- 19 ING FUNDS. 20 (a) ELIGIBILITY OF STATE FOR CAPITALIZATION 21 GRANT.—To be eligible for a capitalization grant, a State 22 shall— 23 (1) establish a revolving fund that complies 24 with the requirements of this Act; and 25 VerDate Sep 11 2014 06:26 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8531.IH H8531 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 8531 IH (2) establish a process for applications and cri- 1 teria for making loans from the revolving fund, sub- 2 ject to the requirements in section 2(d). 3 (b) UPON RECEIPT OF CAPITALIZATION GRANT.— 4 Upon the receipt of a capitalization grant, a State shall 5 deposit such capitalization grant into the revolving fund 6 of the State. 7 (c) DISTRIBUTION.—For a fiscal year, the Secretary 8 shall apportion amounts made available for capitalization 9 grants under this section among the States eligible under 10 subsection (a) in the ratio that— 11 (1) the population of underserved communities 12 in each State eligible under subsection (a), bears to 13 (2) the population of underserved communities 14 in all States eligible under subsection (a). 15 SEC. 4. AUTHORIZATION OF APPROPRIATIONS. 16 There is authorized to be appropriated to carry out 17 this Act $150,000,000 for fiscal year 2020. 18 SEC. 5. DEFINITIONS. 19 In this Act: 20 (1) CAPITALIZATION GRANT.—The term ‘‘cap- 21 italization grant’’ means a grant made to a State 22 under the program. 23 VerDate Sep 11 2014 06:26 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8531.IH H8531 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 8531 IH (2) HEALTHFUL FOOD.—The term ‘‘healthful 1 food’’ means food that reflects the most recent Die- 2 tary Guidelines for Americans. 3 (3) GROCERY STORE.—The term ‘‘grocery 4 store’’ means a retail store that derives income pri- 5 marily from the sale of food for home preparation 6 and consumption. 7 (4) PROGRAM.—The term ‘‘program’’ means 8 the program described in section 2(a). 9 (5) PROGRAM PARTICIPANT.—The term ‘‘pro- 10 gram participant’’ means an entity that has received 11 a loan under the program. 12 (6) REVOLVING FUND.—The term ‘‘revolving 13 fund’’ means a fund established by a State for use 14 as a depository for a capitalization grant. 15 (7) SECRETARY.—The term ‘‘Secretary’’ means 16 the Secretary of Agriculture. 17 (8) STAPLE FOOD.—The term ‘‘staple food’’ 18 has the meaning given the term in section 243(b) of 19 the of the Department of Agriculture Reorganization 20 Act of 1994 (7 U.S.C. 6953(b)). 21 (9) STATE.—The term ‘‘State’’ means States of 22 the Union, the District of Columbia, Puerto Rico, 23 the Virgin Islands, Guam, American Samoa, and the 24 Northern Mariana Islands. 25 VerDate Sep 11 2014 06:26 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8531.IH H8531 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 8531 IH (10) UNDERSERVED COMMUNITY.—The term 1 ‘‘underserved community’’ has the meaning given 2 the term in section 310B(g)(9)(A) of the Consoli- 3 dated Farm and Rural Development Act (7 U.S.C. 4 1932(g)(9)(A)). 5 Æ VerDate Sep 11 2014 06:26 Oct 29, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H8531.IH H8531 pbinns on DSKJLVW7X2PROD with BILLS