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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 678 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                 S. 678

To amend the Food, Conservation, and Energy Act of 2008 to establish a 
 program to provide loans for local farms, ranches, and market gardens 
to improve public health and nutrition, reduce energy consumption, and 
                          for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             April 9, 2013

 Mr. Casey (for himself and Mr. Harkin) introduced the following bill; 
  which was read twice and referred to the Committee on Agriculture, 
                        Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL

 
To amend the Food, Conservation, and Energy Act of 2008 to establish a 
 program to provide loans for local farms, ranches, and market gardens 
to improve public health and nutrition, reduce energy consumption, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Growing Opportunities for 
Agriculture and Responding to Markets Act of 2013''.

SEC. 2. LOCAL FARM BUSINESS AND MARKET GARDEN COMPETITIVE LOAN PROGRAM.

    Subtitle D of title X of the Food, Conservation, and Energy Act of 
2008 is amended by adding after section 10404 (Public Law 110-246; 122 
Stat. 2111) the following:

``SEC. 10405. LOCAL FARM BUSINESS AND MARKET GARDEN COMPETITIVE LOAN 
              PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Agricultural commodity.--The term `agricultural 
        commodity' has the meaning given the term in section 102 of the 
        Agricultural Trade Act of 1978 (7 U.S.C. 5602).
            ``(2) Eligible lending entity.--The term `eligible lending 
        entity' means a government agency, nonprofit organization, or 
        any other entity that the Secretary designates to finance and 
        facilitate the development of a local farm business project or 
        market garden project.
            ``(3) Eligible producer.--The term `eligible producer' 
        means an individual or group of individuals who carry out a 
        local farm business project or market garden project.
            ``(4) Food desert.--The term `food desert' has the meaning 
        given the term in section 7527(a).
            ``(5) Local farm business project.--The term `local farm 
        business project' means a project on a farm or ranch that--
                    ``(A) is for the production of an agricultural 
                commodity for local markets in the local service area; 
                and
                    ``(B) is located on 1 or more property lots, the 
                cumulative acreage of which shall be more than 1 acre.
            ``(6) Local service area.--The term `local service area' 
        means an area consisting of a certain mile radius (as 
        determined by the Secretary) from the physical location of 
        production by an eligible local farm business or market garden 
        project.
            ``(7) Market garden project.--The term `market garden 
        project' means a project that--
                    ``(A) is for the production of an agricultural 
                commodity for local markets in the local service area; 
                and
                    ``(B) is located on 1 or more property lots 
                (regardless of the population density of the area in 
                which the property lots are located), the cumulative 
                acreage of which shall be more than \1/4\ acre.
            ``(8) Revolving loan fund.--The term `revolving loan fund' 
        means a revolving loan fund established by an eligible lending 
        entity as described in subsection (c).
            ``(9) Socially disadvantaged farmer or rancher.--The term 
        `socially disadvantaged farmer or rancher' has the meaning 
        given the term in section 355(e) of the Consolidated Farm and 
        Rural Development Act (7 U.S.C. 2003(e)).
            ``(10) Specialty crop.--The term `specialty crop' has the 
        meaning given the term in section 3 of the Specialty Crops 
        Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public Law 
        108-465).
            ``(11) Sustainable agriculture.--The term `sustainable 
        agriculture' has the meaning given the term in section 1404 of 
        the National Agricultural Research, Extension, and Teaching 
        Policy Act of 1977 (7 U.S.C. 3103).
    ``(b) Competitive Loan Program for Eligible Lending Entities.--
            ``(1) In general.--To support new entrepreneurship and job 
        creation, the Secretary shall establish a local farm business 
        and market garden competitive loan program under which the 
        Secretary shall make available to eligible lending entities 
        loans to develop revolving loan funds to assist--
                    ``(A) eligible producers in establishing local farm 
                business projects or market garden projects that will 
                locally produce fresh foods; and
                    ``(B) local farm business projects and market 
                garden projects to create local employment 
                opportunities by--
                            ``(i) increasing farm and garden income by 
                        connecting producers and consumers;
                            ``(ii) creating more reliable local food 
                        systems;
                            ``(iii) diversifying food production;
                            ``(iv) increasing consumer access to fresh, 
                        local healthful foods produced by local farms, 
                        ranches, and market gardens in urban, suburban, 
                        or rural areas;
                            ``(v) supporting nutrition education that 
                        incorporates participation of school children 
                        in farm- and garden-based agricultural 
                        education activities; and
                            ``(vi) preserving farmland.
            ``(2) Eligibility.--To be eligible to receive a loan under 
        the program established under paragraph (1), an eligible 
        lending entity shall submit to the Secretary an application at 
        such time, in such form, and containing such information as the 
        Secretary may require.
            ``(3) Selection criteria.--
                    ``(A) Approval.--Not later than 1 year after the 
                date of enactment of this section and in accordance 
                with this paragraph, the Secretary shall, on a 
                competitive basis, begin assessing and approving such 
                applications received under paragraph (2) as the 
                Secretary considers appropriate.
                    ``(B) Criteria.--In considering a loan application 
                received under paragraph (2), the Secretary shall--
                            ``(i) evaluate the extent to which the 
                        application demonstrates the ability of the 
                        eligible lending entity--
                                    ``(I) to manage, market, and 
                                administer a revolving loan fund;
                                    ``(II) to assist local eligible 
                                producers to successfully meet local 
                                service area opportunities;
                                    ``(III) to work with partners to 
                                provide technical support to eligible 
                                local farm business projects and market 
                                garden projects;
                                    ``(IV) to recruit, educate, and 
                                assist local producers to advance local 
                                farming and ranching opportunities that 
                                meet local service area needs; and
                                    ``(V) subject to paragraph (5), to 
                                provide matching funds in the form of 
                                cash or in-kind services to properly 
                                implement and manage the revolving loan 
                                fund;
                            ``(ii) assess--
                                    ``(I) the number and type of local 
                                farm business projects and market 
                                garden projects to be affected by local 
                                farm business project loan funding;
                                    ``(II) the number of new jobs and 
                                eligible local farm business projects 
                                and market garden projects to be 
                                created by the revolving loan fund;
                                    ``(III) the ability of an eligible 
                                local farm business project or market 
                                garden project--
                                            ``(aa) to preserve farmland 
                                        through economically and 
                                        environmentally sustainable 
                                        agriculture practices (as 
                                        determined by the Secretary); 
                                        and
                                            ``(bb) to serve schools and 
                                        institutions with a high 
                                        proportion of students who are 
                                        eligible for free or reduced 
                                        price lunches under the Richard 
                                        B. Russell National School 
                                        Lunch Act (42 U.S.C. 1751 et 
                                        seq.);
                                    ``(IV) the degree to which an 
                                eligible local farm business project or 
                                market garden project--
                                            ``(aa) incorporates 
                                        experiential nutrition 
                                        education;
                                            ``(bb) demonstrates the 
                                        potential positive economic 
                                        impact for the local economy;
                                            ``(cc) demonstrates 
                                        environmentally sustainable 
                                        agriculture practices; and
                                            ``(dd) demonstrates a 
                                        collaboration between schools 
                                        or educational institutions, 
                                        nongovernmental organizations, 
                                        producer groups, and other 
                                        community and business 
                                        partners; and
                                    ``(V) the market opportunity for 
                                eligible local farm business projects 
                                or market garden projects to sell 
                                products in the local community; and
                            ``(iii) consider any other factors that the 
                        Secretary determines to be appropriate.
                    ``(C) Regional balance.--To the maximum extent 
                practicable, in awarding loans under this section, the 
                Secretary shall ensure that loan recipients--
                            ``(i) are geographically diverse;
                            ``(ii) serve clients targeted by the loan 
                        program, including socially disadvantaged 
                        farmers or ranchers;
                            ``(iii) serve clients located in areas with 
                        a variety of population densities, including 
                        rural, suburban, urban, and tribal areas; and
                            ``(iv) identify and serve food deserts 
                        within the local service area.
                    ``(D) Priority.--
                            ``(i) In general.--In considering loan 
                        applications received under paragraph (2), the 
                        Secretary shall give priority to applications 
                        that demonstrate the ability and willingness of 
                        the eligible lending entity--
                                    ``(I) to serve clients targeted by 
                                the program, including, as appropriate, 
                                socially disadvantaged farmers or 
                                ranchers;
                                    ``(II) to assist with the financial 
                                management aspects of specialty crop 
                                farming and other types of local 
                                agricultural projects; and
                                    ``(III) to address the nutritional 
                                needs of an underserved area, as 
                                determined in accordance with clause 
                                (ii).
                            ``(ii) Underserved areas.--In determining 
                        whether an area is an underserved area, the 
                        Secretary shall consider--
                                    ``(I) population density;
                                    ``(II) below-average supermarket 
                                density or sales;
                                    ``(III) the rate of ownership of 
                                motor vehicles; and
                                    ``(IV) geographical or physical 
                                barriers, such as highways, mountains, 
                                major parks, or bodies of water.
            ``(4) Loan terms for eligible lending entities.--
                    ``(A) In general.--For each fiscal year for which 
                the Secretary makes a loan to an eligible lending 
                entity under this subsection, the loan shall--
                            ``(i) be in an amount that is not less than 
                        $200,000 and not more than $1,000,000; and
                            ``(ii) be used by the eligible lending 
                        entity to establish a revolving loan fund to 
                        provide loans for local farm business projects 
                        or market garden projects.
                    ``(B) Term.--The term of a loan under this 
                subsection shall not exceed 20 years from the date on 
                which the loan is finalized.
                    ``(C) Loan financing terms.--In making loans to 
                eligible lending entities under this subsection, the 
                Secretary shall--
                            ``(i) set the rate of interest at not more 
                        than 2 percent per year; and
                            ``(ii) ensure that no payments are due on 
                        the loan during the first 2 years of the loan.
            ``(5) Matching funds.--The Secretary may not require an 
        eligible lending entity that receives a loan under this 
        subsection to provide, from non-Federal sources, in cash or in-
        kind, the cost of carrying out activities under the loan.
            ``(6) Administrative expenses.--
                    ``(A) In general.--Each eligible lending entity 
                that receives a loan under this subsection shall be 
                eligible additionally to receive a 1-time grant for 
                purposes described in subparagraph (B) in an amount 
                that is not more than the lesser of--
                            ``(i) 10 percent of the total amount of the 
                        loan received by the eligible lending entity; 
                        or
                            ``(ii) $50,000.
                    ``(B) Use of grant funds.--Grant funds received 
                under subparagraph (A) may be used by the eligible 
                lending entity only to pay management and technical 
                support costs associated with the loan.
                    ``(C) Interest rate.--If an eligible lending entity 
                receives a grant under subparagraph (A), the eligible 
                lending entity may not set the interest rate of loans 
                made by the eligible lending entity to local farm 
                business projects or market garden projects at more 
                than 3 percent per year.
            ``(7) Progress reports.--
                    ``(A) In general.--Not later than 90 days after the 
                last day of each fiscal year, each eligible lending 
                entity that has a loan under this subsection shall 
                submit to the Secretary a report that includes--
                            ``(i) an evaluation of the progress of the 
                        revolving loan fund carried out by the eligible 
                        lending entity;
                            ``(ii) a description of the revolving loan 
                        fund, including information on all loans made 
                        to local farm business projects or market 
                        garden projects;
                            ``(iii) a status update for the local farm 
                        business projects and market garden projects 
                        funded by the revolving loan fund that 
                        describes--
                                    ``(I) the amount of food produced;
                                    ``(II) the amount of revenue 
                                generated; and
                                    ``(III) the number of new and 
                                retained jobs; and
                            ``(iv) such other information as the 
                        Secretary may require.
                    ``(B) Reports by the secretary.--Not later than 3 
                years after the date of enactment of this section, the 
                Secretary shall submit to the Committee on Agriculture 
                of the House of Representatives and the Committee on 
                Agriculture, Nutrition, and Forestry of the Senate a 
                report that describes the results and findings of the 
                loan program carried out under this subsection.
            ``(8) Annual review.--The Secretary shall conduct an annual 
        review of the financial records of each eligible lending entity 
        that receives funding under this subsection--
                    ``(A) to assess the financial soundness of the 
                eligible lending entity; and
                    ``(B) to determine the effective use of loan and 
                grant funds made available to the eligible lending 
                entity under this subsection.
    ``(c) Revolving Loan Fund.--
            ``(1) Establishment and purpose.--Each eligible lending 
        entity that receives a loan under subsection (b) shall use the 
        funds to establish a revolving loan fund to provide loans to 
        eligible producers in the local service area.
            ``(2) Eligible activities.--Loans made by an eligible 
        lending entity under this subsection shall be used by the 
        eligible producer to carry out eligible activities in the local 
        service area, including--
                    ``(A) to carry out production projects for value-
                added food products;
                    ``(B) to provide working capital for general 
                operational costs of the local farm business project or 
                market garden project;
                    ``(C) to purchase project-related equipment;
                    ``(D) to purchase seeds, plants, and fruit or nut 
                trees;
                    ``(E) to purchase livestock, poultry, and breeding 
                stock;
                    ``(F) to construct and maintain irrigation systems;
                    ``(G) to construct buildings (including barns, 
                sheds, greenhouses, and dry and cold storage sheds) 
                necessary to support production;
                    ``(H) to lease, lease to purchase, or directly 
                purchase farmland or make a down payment on an accepted 
                purchase offer for farmland; or
                    ``(I) to carry out any other activity that the 
                Secretary determines to be in accordance with this 
                section.
            ``(3) Loan conditions.--
                    ``(A) In general.--To be eligible to receive a loan 
                under this section from an eligible lending entity, an 
                eligible producer shall--
                            ``(i) supply a minimum level of support of 
                        the cost of the local farm business project, 
                        market garden project, or institution costs, as 
                        determined by the Secretary; and
                            ``(ii) submit to the eligible lending 
                        entity--
                                    ``(I) documentation of, as 
                                appropriate--
                                            ``(aa) a long-term land 
                                        lease contract granting the 
                                        right to perform local 
                                        production agriculture;
                                            ``(bb) a building lease; or
                                            ``(cc) a deed of property 
                                        ownership; and
                                    ``(II) a conservation plan and a 
                                sound business plan that is likely to 
                                result in a profitable business with 
                                sustainable employment for the eligible 
                                producer and any employees.
                    ``(B) Secretarial approval; guarantee.--
                            ``(i) Approval.--Before an eligible lending 
                        entity may make a loan or package of loans to 
                        an eligible producer under this section, the 
                        Secretary shall approve the loan or package of 
                        loans in accordance with the requirements of 
                        this section.
                            ``(ii) Loan guarantee.--The Secretary shall 
                        guarantee not more than 85 percent of the 
                        principal and interest on each loan approved 
                        under clause (i).
            ``(4) Priority.--In making loans under this subsection, the 
        eligible lending entity shall give priority to eligible 
        producers that are operated by, or that support--
                    ``(A) qualified beginning farmers or ranchers (as 
                defined in section 343(a) of the Consolidated Farm and 
                Rural Development Act (7 U.S.C. 1991(a))) and socially 
                disadvantaged farmers or ranchers;
                    ``(B) existing eligible producers, whether owners 
                or tenants, who use loan funds to convert to 
                agricultural production systems approved by the 
                Secretary;
                    ``(C) eligible producers who use loan funds to 
                build conservation structures or carry out conservation 
                practices;
                    ``(D) eligible producers who will supply fresh and 
                locally produced food to underserved communities; and
                    ``(E) existing eligible producers of agriculture 
                commodities who want to diversify farm, ranch, or 
                market garden production and income.
            ``(5) Loan terms for eligible producers.--
                    ``(A) In general.--A loan made by an eligible 
                lending entity to an eligible producer under this 
                subsection shall be in an amount that is--
                            ``(i) in the case of a local farm business 
                        project, not less than $5,000 and not more than 
                        $100,000; and
                            ``(ii) in the case of a market garden 
                        project, not less than $3,000 and not more than 
                        $50,000.
                    ``(B) Term.--The term of a loan under this 
                subsection shall not exceed--
                            ``(i) in the case of a loan in an amount 
                        that is not more than $35,000, 12 years from 
                        the date on which the loan is finalized; and
                            ``(ii) in the case of all other loans, 20 
                        years from the date on which the loan is 
                        finalized.
                    ``(C) Loan financing terms.--In making loans under 
                this subsection, an eligible lending entity shall--
                            ``(i) set the rate of interest at not more 
                        than 3 percent per year;
                            ``(ii) ensure that no payments are due on 
                        the loan during the first 9 months of the loan; 
                        and
                            ``(iii) ensure that only interest is due on 
                        the loan during the period beginning on the 
                        last day of the period described in clause (ii) 
                        and ending 24 months after the issuance of the 
                        loan.
                    ``(D) Loan forgiveness.--If an eligible producer 
                has received a loan under this section to carry out a 
                local farm business project or market garden project, 
                and after 3 years the Secretary determines that the 
                project is successful, the Secretary may offer to 
                forgive--
                            ``(i) up to 10 percent of the outstanding 
                        amount of the loan; and
                            ``(ii) in the case of an eligible producer 
                        supporting sustainable agriculture practices, 
                        up to 20 percent of the outstanding amount of 
                        the loan.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for each of fiscal years 2014 through 
2024--
            ``(1) $20,000,000 to provide loans and grants under 
        subsection (b); and
            ``(2) $1,000,000 for the administrative costs of carrying 
        out this section.''.
                                 <all>
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