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 communities, 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Food Deserts Act of 

5 2020’’. 


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1 SEC. 2. GRANT PROGRAM TO ESTABLISH GROCERY STORES 

2 IN UNDERSERVED COMMUNITIES. 

3 (a) ESTABLISHMENT OF GRANT PROGRAM.—The 

4 Secretary shall establish a program to provide capitaliza5 tion grants to States for the purpose of establishing re6 volving funds to support the establishment and operation 

7 of grocery stores in underserved communities. 

8 (b) ADMINISTRATION.—A State receiving funds 

9 under this Act shall administer the revolving fund of the 

10 State through an instrumentality of the State with such 

11 powers and limitations as may be required to operate such 

12 fund in accordance with the requirements of this Act. 

13 (c) PROJECTS AND ACTIVITIES ELIGIBLE FOR AS14 SISTANCE.—Amounts in a revolving fund shall be used for 

15 the purpose of making loans— 

16 (1) to open a grocery store in an underserved 

17 community, except that such loan may not be used 

18 for the purpose of new construction; 

19 (2) to support the operations of an existing gro20 cery store in an underserved community; 

21 (3) to facilitate the fair market value purchase 

22 of an existing grocery store in an underserved com23 munity; or 

24 (4) to support the operations of a program par25 ticipant that is located in a community that would 


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1 be an underserved community if the program partici2 pant was not located in such community. 

3 (d) GROCERY STORES ELIGIBLE FOR ASSISTANCE.— 

4 (1) REQUIRED CRITERIA.—A State receiving a 

5 capitalization grant under this Act may only make 

6 a loan from the revolving fund of the State to an en7 tity that the State determines— 

8 (A) is a grocery store or will be a grocery 

9 store after opening; 

10 (B) emphasizes or will emphasize unproc11 essed, healthful foods; 

12 (C) provides or will provide a variety of 

13 raw fruits and vegetables; 

14 (D) provides or will provide staple foods; 

15 (E) has a plan to keep such foods in stock 

16 to the extent possible; 

17 (F) charges or will charge prices at or 

18 below market averages; 

19 (G) either— 

20 (i) is demonstrably qualified to oper21 ate a grocery store; or 

22 (ii) at the time of such application, 

23 has existing partnerships with organiza24 tions that provide technical assistance on 

25 business operations of food services; and 


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1 (H) will match no less than 20 percent, 

2 from non-Federal funds, of the amount of such 

3 loan. 

4 (2) PRIORITY CRITERIA.—A State shall 

5 prioritize an application for a loan from the revolv6 ing fund of the State from an entity that the State 

7 determines— 

8 (A) hires or plans to hire workers who re9 side within the underserved community that 

10 would be served by the entity; 

11 (B) provides or plans to provide classes or 

12 other educational information about a healthful 

13 diet; 

14 (C) sources or plans to source food from 

15 local urban farms and gardens; 

16 (D) does not or will not sell alcohol or to17 bacco products; or 

18 (E) demonstrates existing supply chain re19 lationships in the grocery industry. 

20 (e) APPLICATION.—An entity that desires a loan 

21 from a revolving fund of a State shall submit an applica22 tion to the State at such time, in such manner, and con23 taining such information as the State may require. 

24 (f) LOAN CONDITIONS.— 


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1 (1) IN GENERAL.—A loan distributed from a 

2 revolving fund by a State may be used by a program 

3 participant only for the purposes specified in sub4 section (c). 

5 (2) INTEREST RATES.—A loan distributed by a 

6 State from a revolving fund— 

7 (A) shall be made at or below market in8 terest rates; and 

9 (B) may be an interest free loan, at terms 

10 not to exceed the lesser of 30 years or the pro11 jected useful life (as determined by the State) 

12 of the project to be financed with the proceeds 

13 of the loan. 

14 (3) STRUCTURE OF LOAN.—A loan may be dis15 tributed from a revolving fund by a State to a pro16 gram participant in— 

17 (A) a lump sum; or 

18 (B) in multiple distributions over a period 

19 of years, if the State determines multiple dis20 tributions are necessary to carry out the 

21 project. 

22 (4) LOAN AMOUNT.—A State may not provide 

23 a loan to a program participant from the revolving 

24 fund of the State in a fiscal year that exceeds 10 


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1 percent of the amount available from the fund for 

2 making distributions in that fiscal year. 

3 (5) PAYMENTS.—Annual principal and interest 

4 payments on a loan received from a revolving fund 

5 of a State shall commence not later than 1 year 

6 after the loan is disbursed to the program partici7 pant and all loans will be fully amortized upon the 

8 expiration of the term of the loan. 

9 (6) REVENUE FOR REPAYMENT.—A program 

10 participant shall establish a dedicated source of rev11 enue for repayment of a loan received from a revolv12 ing fund of a State. 

13 (7) CREDITING REVOLVING FUND.—A revolving 

14 fund of a State shall be credited with all payments 

15 of principal and interest on all loans made from the 

16 revolving fund. 

17 (g) ADMINISTRATION COSTS.—A State shall charge 

18 a program participant an administrative fee of not more 

19 than 4 percent of the loan amount. The State shall use 

20 the fees to administer the revolving fund and conduct ad21 ministration activities under this Act. 

22 (h) TECHNICAL ASSISTANCE.—The Secretary shall 

23 provide technical assistance to program participants to as24 sist with sourcing of food, food storage, and other oper25 ational requirements. 


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1 (i) BANKRUPTCY.—In the case of the bankruptcy of 

2 a program participant, amounts owed on a loan from a 

3 revolving fund shall be afforded precedence over other 

4 debt. 

5 (j) CHANGE IN UNDERSERVED STATUS.—In the case 

6 of a community that qualified as underserved during a pe7 riod in which loans were made by a State pursuant to this 

8 section and no longer qualifies as underserved, recipients 

9 of loans under this section in such community— 

10 (1) shall not be eligible for further loans under 

11 this section; and 

12 (2) may not have their loan agreements altered. 

13 (k) GROCERY STORE EARNINGS.—Earnings of a non14 profit organization or municipally owned program partici15 pant that are attributable to a loan received from a revolv16 ing fund of a State shall be used for reinvestment into 

17 the program participant or to support the continuity of 

18 operations of the program participant. 

19 SEC. 3. CAPITALIZATION GRANTS TO FUND STATE REVOLV20 ING FUNDS. 

21 (a) ELIGIBILITY OF STATE FOR CAPITALIZATION

22 GRANT.—To be eligible for a capitalization grant, a State 

23 shall— 

24 (1) establish a revolving fund that complies 

25 with the requirements of this Act; and 


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1 (2) establish a process for applications and cri2 teria for making loans from the revolving fund, sub3 ject to the requirements in section 2(d). 

4 (b) UPON RECEIPT OF CAPITALIZATION GRANT.— 

5 Upon the receipt of a capitalization grant, a State shall 

6 deposit such capitalization grant into the revolving fund 

7 of the State. 

8 (c) DISTRIBUTION.—For a fiscal year, the Secretary 

9 shall apportion amounts made available for capitalization 

10 grants under this section among the States eligible under 

11 subsection (a) in the ratio that— 

12 (1) the population of underserved communities 

13 in each State eligible under subsection (a), bears to 

14 (2) the population of underserved communities 

15 in all States eligible under subsection (a). 

16 SEC. 4. AUTHORIZATION OF APPROPRIATIONS. 

17 There is authorized to be appropriated to carry out 

18 this Act $150,000,000 for fiscal year 2020. 

19 SEC. 5. DEFINITIONS. 

20 In this Act: 

21 (1) CAPITALIZATION GRANT.—The term ‘‘cap22 italization grant’’ means a grant made to a State 

23 under the program. 


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1 (2) HEALTHFUL FOOD.—The term ‘‘healthful 

2 food’’ means food that reflects the most recent Die3 tary Guidelines for Americans. 

4 (3) GROCERY STORE.—The term ‘‘grocery 

5 store’’ means a retail store that derives income pri6 marily from the sale of food for home preparation 

7 and consumption. 

8 (4) PROGRAM.—The term ‘‘program’’ means 

9 the program described in section 2(a). 

10 (5) PROGRAM PARTICIPANT.—The term ‘‘pro11 gram participant’’ means an entity that has received 

12 a loan under the program. 

13 (6) REVOLVING FUND.—The term ‘‘revolving 

14 fund’’ means a fund established by a State for use 

15 as a depository for a capitalization grant. 

16 (7) SECRETARY.—The term ‘‘Secretary’’ means 

17 the Secretary of Agriculture. 

18 (8) STAPLE FOOD.—The term ‘‘staple food’’ 

19 has the meaning given the term in section 243(b) of 

20 the of the Department of Agriculture Reorganization 

21 Act of 1994 (7 U.S.C. 6953(b)). 

22 (9) STATE.—The term ‘‘State’’ means States of 

23 the Union, the District of Columbia, Puerto Rico, 

24 the Virgin Islands, Guam, American Samoa, and the 

25 Northern Mariana Islands. 


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1 (10) UNDERSERVED COMMUNITY.—The term 

2 ‘‘underserved community’’ has the meaning given 

3 the term in section 310B(g)(9)(A) of the Consoli4 dated Farm and Rural Development Act (7 U.S.C. 

5 1932(g)(9)(A)). 

Æ 


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