Summary
# BUTCHER BLOCK ACT (H.R. 559)
## WHAT THIS BILL DOES
This bill allows the Secretary of Agriculture to make or guarantee loans to help livestock and poultry processing businesses grow, build new facilities, or expand. The bill also authorizes the Secretary to give grants to support new and expanding meat processing operations and to help remove barriers that prevent new processors from entering the business.
## WHO IT AFFECTS
- The Secretary of Agriculture
- Livestock and poultry producers
- Meat and poultry processing businesses
- Individual farmers and ranchers
- Farmer and rancher cooperatives
- Indian tribes and tribal groups
- Government agencies
- Rural and non-rural communities where processing facilities operate
## KEY PROVISIONS
- The Secretary of Agriculture can make or guarantee loans up to $50,000,000 to help increase livestock and poultry processing capacity, create more sales opportunities for producers, and improve processing facilities (Sec. 2(a) and 2(b)(3)(A))
- Loans can go to public or nonprofit organizations, cooperatives, Indian tribes, and individuals, but cannot go to entities owned by foreign companies or companies that process over 5 percent of the daily harvest of any animal species (Sec. 2(b)(1) and 2(b)(3)(B))
- Cooperative organizations can receive loans up to $100,000,000 instead of the normal $50,000,000 limit if the loan significantly increases processing in regions that lack sufficient capacity (Sec. 2(c)(1))
- The Secretary can make grants to government agencies, public or nonprofit organizations, cooperatives, and Indian tribes to expand processing capacity, improve compliance with federal meat inspection rules, remove barriers for new processors, and establish training centers (Sec. 3(a) and 3(b))
- Borrowers can use up to 25 percent of their loan to refinance previous processing loans if they are current on payments and have not defaulted (Sec. 2(d))
## WHAT CHANGES
If this becomes law, the federal government will begin offering new loans and loan guarantees to help build and expand livestock and poultry processing facilities. The government will also award grants to support processing businesses, provide training to workers, and help new processors meet federal and state regulations. This gives farmers, ranchers, and processing businesses access to federal money they did not have before.
## IMPORTANT DEFINITIONS
- **Rural area**: Defined by section 343(a)(13) of the Consolidated Farm and Rural Development Act (a specific reference to another federal law)
- **Accounts receivable**: Money owed to a business by its customers that can be used as security for a loan
## EFFECTIVE DATE
Not specified in bill text
I
118TH CONGRESS
1ST SESSION
H. R. 559
To make improvements with respect to the pricing of cattle in the United
States, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 26, 2023
Mr. JOHNSON of South Dakota (for himself, Ms. SPANBERGER, Mr. BAIRD,
Mr. GOTTHEIMER, Mr. FEENSTRA, Ms. WEXTON, and Mr. CUELLAR) in-
troduced the following bill; which was referred to the Committee on Agri-
culture
A BILL
To make improvements with respect to the pricing of cattle
in the United States, 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 ‘‘Butcher Block Act’’.
4
SEC. 2. ASSISTANCE FOR NEW AND EXPANDED LIVESTOCK
5
OR MEAT PROCESSORS.
6
(a) IN GENERAL.—The Secretary of Agriculture (in
7
this section referred to as the ‘‘Secretary’’) may make or
8
guarantee a loan for the purpose of—
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•HR 559 IH
(1) increasing capacity of livestock and poultry
1
processing, facilitating economic opportunity for live-
2
stock and poultry producers through processing ac-
3
tivities, and diversifying processing ownership;
4
(2) increasing the customer base or revenue re-
5
turns of livestock and poultry producers through in-
6
vestment in processing capacity;
7
(3) improving, developing, or financing livestock
8
and poultry processing capacity or employment in-
9
cluding through the financing of working capital; or
10
(4) promoting the interstate trade and local
11
sales of processed livestock and poultry by financing
12
improvements to meet relevant Federal, State, and
13
local regulatory standards.
14
(b) ELIGIBILITY; GENERAL LIMITATIONS.—
15
(1) ELIGIBLE RECIPIENT.—An entity shall be
16
eligible for a loan or guarantee under this section if
17
the entity is—
18
(A) a public, private, or cooperative organi-
19
zation organized on a for-profit or nonprofit
20
basis;
21
(B) an Indian tribe on a Federal or State
22
reservation, or any other federally recognized
23
Indian tribal group; or
24
(C) an individual.
25
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(2) FACILITY LOCATION.—
1
(A) IN GENERAL.—Except as provided in
2
subparagraph (B), a facility constructed, ex-
3
panded, modified, refurbished, or re-equipped
4
with proceeds from a loan made or guaranteed
5
under this section shall be in a rural area.
6
(B) EXCEPTION.—A facility constructed,
7
expanded, modified, refurbished, or re-equipped
8
with proceeds from a loan made or guaranteed
9
under this section may be in a non-rural area
10
if—
11
(i) the primary use of the loan in-
12
volved is for the facility, and the facility
13
will increase the customer base or revenue
14
returns of livestock and poultry producers
15
that are located within 300 miles of the fa-
16
cility;
17
(ii) the loan involved will be used to
18
increase the capacity in livestock and poul-
19
try processing in a region; and
20
(iii) the principal amount of the loan
21
involved does not exceed $50,000,000.
22
(C) RURAL AREA DEFINED.—In this para-
23
graph, the term ‘‘rural area’’ has the meaning
24
given the term in section 343(a)(13) of the
25
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•HR 559 IH
Consolidated Farm and Rural Development Act
1
(7 U.S.C. 1991(a)(13)).
2
(3) LIMITATIONS.—
3
(A) LIMITATION ON AMOUNT OF LOAN IN-
4
VOLVED.—A loan of more than $50,000,000
5
may not be made or guaranteed under this sec-
6
tion.
7
(B) LIMITATION ON ELIGIBILITY.—A loan
8
may not be made or guaranteed under this sec-
9
tion to an entity that is owned in partnership
10
or in whole by—
11
(i) a foreign entity; or
12
(ii) an entity that currently processes
13
over 5 percent of the daily harvest of any
14
species.
15
(c) SPECIAL RULES APPLICABLE WITH RESPECT TO
16
COOPERATIVES.—
17
(1) LIMITATION
ON
AMOUNT
OF
LOAN
IN-
18
VOLVED.—
19
(A) IN
GENERAL.—Notwithstanding sub-
20
section (b)(3), a loan of not more than
21
$100,000,000 may be made or guaranteed for
22
a cooperative organization under this section.
23
(B) CONDITIONS APPLICABLE IF LOAN IN-
24
VOLVED
IS
FOR
MORE
THAN
$50,000,000.—A
25
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•HR 559 IH
loan of more than $50,000,000 may not be
1
made or guaranteed for a cooperative organiza-
2
tion under this section unless the loan is used
3
to carry out a project that significantly in-
4
creases the livestock and poultry processing in
5
a region, where insufficient processing capacity
6
exists, as determined by the Secretary.
7
(2) INTANGIBLE ASSETS.—
8
(A) IN GENERAL.—In determining whether
9
a cooperative organization is eligible for a loan
10
or guarantee under this section, the Secretary
11
may consider the market value of a properly ap-
12
praised brand name, patent, or trademark of
13
the cooperative.
14
(B) ACCOUNTS RECEIVABLE.—In the sole
15
discretion of the Secretary, if the Secretary de-
16
termines that the action would not create or
17
otherwise contribute to an unreasonable risk of
18
default or loss to the Federal Government, the
19
Secretary may take accounts receivable as secu-
20
rity for the obligations entered into in connec-
21
tion with a loan made or guaranteed under this
22
section, and a borrower may use accounts re-
23
ceivable as collateral to secure such a loan.
24
(3) PURCHASE OF COOPERATIVE STOCK.—
25
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•HR 559 IH
(A) IN
GENERAL.—The Secretary may
1
make or guarantee a loan in accordance with
2
this section to an individual farmer or rancher
3
for the purpose of purchasing capital stock of
4
a farmer or rancher cooperative undertaking an
5
eligible project under this section.
6
(B) PROCESSING CONTRACTS DURING INI-
7
TIAL PERIOD.—A cooperative described in sub-
8
paragraph (A) with respect to which a farmer
9
or rancher receives a guarantee to purchase
10
stock under subparagraph (A) may contract for
11
services to fulfill any eligible purpose under this
12
section, during the 5-year period beginning on
13
the date the cooperative commences operations,
14
in order to provide adequate time for the plan-
15
ning and construction of the processing facility
16
of the cooperative.
17
(C) FINANCIAL INFORMATION.—A farmer
18
or rancher from whom the Secretary requires fi-
19
nancial information as a condition of making or
20
guaranteeing a loan under subparagraph (A)
21
shall provide the information in the manner
22
generally required by commercial agricultural
23
lenders in the geographical area in which the
24
farmer or rancher is located.
25
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•HR 559 IH
(d) CONDITIONS APPLICABLE WITH RESPECT
TO
1
USING LOAN INVOLVED FOR REFINANCING.—A borrower
2
may use 25 percent of a loan made or guaranteed under
3
this section to refinance a loan made for a purpose de-
4
scribed in subsection (a) if—
5
(1) the borrower is current and performing with
6
respect to the loan to be refinanced;
7
(2) the borrower has not defaulted on any pay-
8
ment required to be made with respect to the loan
9
to be refinanced;
10
(3) none of the collateral for the loan to be refi-
11
nanced has been converted; and
12
(4) there is adequate security or full collateral
13
for the loan to be refinanced.
14
(e) LOAN APPRAISAL.—The Secretary may require
15
that any appraisal made in connection with a loan made
16
or guaranteed under this section be conducted by a spe-
17
cialized appraiser that uses standards that are similar to
18
standards used for similar purposes in the private sector,
19
as determined by the Secretary.
20
(f) PREFERENCE.—In making or guaranteeing a loan
21
under this section, the Secretary shall give a preference
22
to applicants that have experience in livestock and poultry
23
processing and can quickly scale-up to increase overall
24
processing capacity in the region involved.
25
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•HR 559 IH
(g) LIMITATIONS
ON AUTHORIZATION
OF APPRO-
1
PRIATIONS.—There is authorized to be appropriated to
2
carry out this section $100,000,000 for each of fiscal
3
years 2024 through 2026.
4
SEC. 3. NEW AND EXPANDING LIVESTOCK OR MEAT PROC-
5
ESSING GRANTS.
6
(a) IN GENERAL.—The Secretary of Agriculture may
7
make grants to—
8
(1) expand, diversify, and increase capacity in
9
livestock or poultry processing activities;
10
(2) improve compliance with livestock and poul-
11
try processing statutes (including the regulations
12
issued thereunder), such as the Federal Meat In-
13
spection Act (21 U.S.C. 601 et seq.) and the Poultry
14
Products Inspection Act (21 U.S.C. 451 et seq.);
15
(3) identify and reduce barriers to entry for
16
new livestock and poultry processers; or
17
(4) update, expand, or otherwise improve exist-
18
ing facilities.
19
(b) ELIGIBLE GRANTEES.—An entity shall be eligible
20
for a grant under this section if the entity is—
21
(1) a governmental entity;
22
(2) a public, private, or cooperative organiza-
23
tion organized on a for-profit or nonprofit basis; or
24
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•HR 559 IH
(3) an Indian tribe on a Federal or State res-
1
ervation or any other federally recognized Indian
2
tribal group.
3
(c) USE OF FUNDS.—An entity to which a grant is
4
made under this section may use the grant funds to estab-
5
lish or support new or expanded livestock or poultry proc-
6
essing activity, or other activity which will increase the
7
customer base or revenue returns of livestock and poultry
8
producers, by undertaking a project that—
9
(1) identifies and analyzes business opportuni-
10
ties, including feasibility studies as required for
11
creditworthiness;
12
(2) identifies, trains, and provides technical as-
13
sistance to existing or prospective rural entre-
14
preneurs and managers or processing facilities;
15
(3) provides technical assistance to gain compli-
16
ance with Federal, State, or local regulations;
17
(4) conducts regional, community, and local
18
economic development planning and coordination,
19
and leadership development; or
20
(5) establishes a center for training, technology,
21
and trade that will provide training to livestock or
22
poultry processing employees.
23
(d) PREFERENCE.—In awarding grants under this
24
section, the Secretary shall give a preference to applicants
25
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•HR 559 IH
that have experience in livestock and poultry processing
1
and can quickly scale-up to increase overall processing ca-
2
pacity in the region involved.
3
(e) LIMITATIONS
ON AUTHORIZATION
OF APPRO-
4
PRIATIONS.—There is authorized to be appropriated to
5
carry out this section $20,000,000 for each of fiscal years
6
2024 through 2026.
7
Æ
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