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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1432 Introduced in Senate (IS)]

110th CONGRESS
  1st Session
                                S. 1432

To amend the Food Stamp Act of 1977 and the Richard B. Russell National 
  School Lunch Act to improve access to healthy foods, and for other 
                               purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 17, 2007

 Mr. Brown (for himself, Mrs. Clinton, Mr. Kerry, Mr. Sanders, and Mr. 
Reed) introduced the following bill; which was read twice and referred 
        to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL

 
To amend the Food Stamp Act of 1977 and the Richard B. Russell National 
  School Lunch Act to improve access to healthy foods, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Food Outreach and 
Opportunity Development for a Healthy America Act of 2007''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
                      TITLE I--FOOD STAMP PROGRAM

Sec. 101. Assistance for community food projects.
Sec. 102. Food Stamp nutrition education.
                TITLE II--NATIONAL SCHOOL LUNCH PROGRAM

Sec. 201. Fresh fruit and vegetable program.
Sec. 202. Farm-to-cafeteria program.
Sec. 203. Purchases of locally produced foods.
                 TITLE III--FARMLAND PROTECTION PROGRAM

Sec. 301. Farmland protection program.
                        TITLE IV--MISCELLANEOUS

Sec. 401. Farmers' Market Promotion Program Plus.
Sec. 402. Seniors farmers' market nutrition program.
Sec. 403. Healthy food enterprise development program.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) diabetes, heart disease, and other diet-related 
        diseases can be reduced in part by improved access to 
        affordable healthy foods, including fresh fruit and vegetables;
            (2) increasing the availability of healthy and fresh food 
        in schools, hospitals, and underserved communities is an 
        important aspect of improving overall health and food security 
        in the United States;
            (3) strengthening local and regional food systems--
                    (A) is necessary for the long-term provision of 
                fresh and healthy food to underserved communities; and
                    (B) helps support family farmers and the 
                communities of the farmers by providing alternative 
                marketing channels for the agricultural products of the 
                farmers;
            (4) local and regional food systems that supply underserved 
        communities should be provided Federal financial and technical 
        support, with a focus on--
                    (A) locally-led food access initiatives;
                    (B) infrastructure needs, such as food processing, 
                transportation, and marketing;
                    (C) direct farmer-to-consumer marketing activities, 
                such as farmers' markets;
                    (D) the protection of productive farmland in close 
                proximity to urban areas, which is necessary to grow 
                food; and
                    (E) access to fresh fruit and vegetables for school 
                children.

                      TITLE I--FOOD STAMP PROGRAM

SEC. 101. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

    Section 25 of the Food Stamp Act of 1977 (7 U.S.C. 2034) is 
amended--
            (1) in subsection (b)(2)(B)--
                    (A) by striking ``$5,000,000'' and inserting 
                ``$30,000,000''; and
                    (B) by striking ``2007'' and inserting ``2013''; 
                and
            (2) in subsection (h)(4)--
                    (A) by striking ``$200,000'' and inserting 
                ``$500,000''; and
                    (B) by striking ``2007'' and inserting ``2013''.

SEC. 102. FOOD STAMP NUTRITION EDUCATION.

    (a) Definition of Food Stamp Nutrition Education.--Section 3 of the 
Food Stamp Act of 1977 (7 U.S.C. 2012) is amended by adding at the end 
the following:
    ``(v) Food Stamp Nutrition Education.--The term `food stamp 
nutrition education' means direct education, group activities, 
community health promotion, and comprehensive public health approaches 
(including marketing, mass media, public-private partnerships, policy, 
systems and environmental changes, and evaluation) that--
            ``(1) promote healthy eating;
            ``(2) make healthy food and physical activity choices more 
        desired, affordable, and accessible;
            ``(3) are designed to reach large numbers of low-income 
        households; and
            ``(4) support behavior change consistent with the most 
        recent Dietary Guidelines for Americans published under section 
        301 of the National Nutrition Monitoring and Related Research 
        Act of 1990 (7 U.S.C. 5341), including promotion of a diet rich 
        in fruits and vegetables, whole grains, and low-fat milk 
        products.''.
    (b) Administration.--Section 11(e)(1)(A) of the Food Stamp Act of 
1977 (7 U.S.C. 2020(e)(1)(A)) is amended by inserting ``, and provide 
food stamp nutrition education'' after ``program''.
    (c) Funding.--Section 18(a) of the Food Stamp Act of 1977 (7 U.S.C. 
2027(a)) is amended by adding at the end the following:
            ``(4) Nutrition education.--Of the amounts made available 
        to carry out this Act under paragraph (1), the Secretary shall 
        use not less than $100,000,000 for each of fiscal years 2008 
        through 2013 to provide food stamp nutrition education in 
        accordance with section 11(e)(1)(A).''.

                TITLE II--NATIONAL SCHOOL LUNCH PROGRAM

SEC. 201. FRESH FRUIT AND VEGETABLE PROGRAM.

    Section 18(g) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1769(g)) is amended--
            (1) in paragraph (1)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``July 2004'' and inserting ``July 2007''; and
                    (B) by striking subparagraphs (A) and (B) and 
                inserting the following:
                    ``(A) 100 elementary schools or secondary schools 
                in each State;
                    ``(B) additional elementary schools or secondary 
                schools in each State, in accordance with the 
                proportion that--
                            ``(i) the student population of the State; 
                        bears to
                            ``(ii) the total student population of all 
                        States; and'';
            (2) in paragraph (3)(A), by striking ``paragraph (1)(B)'' 
        and inserting ``paragraph (1)'';
            (3) in subparagraphs (A) and (B) of paragraph (5) by 
        striking ``2008'' each place it appears and inserting ``2011''; 
        and
            (4) in paragraph (6)(B)--
                    (A) in clause (i)--
                            (i) by striking ``October 1, 2004'' and 
                        inserting ``October 1, 2007''; and
                            (ii) by striking ``$9,000,000'' and 
                        inserting ``$300,000,000''; and
                    (B) by adding at the end the following:
                            ``(iii) Administrative expenses.--For 
                        fiscal year 2008 and each fiscal year 
                        thereafter, of amounts made available to carry 
                        out this subsection, the Secretary may use not 
                        more than 1 percent for administrative expenses 
                        of carrying out this subsection.
                            ``(iv) State administrative costs.--
                                    ``(I) In general.--Subject to 
                                subclause (II), for fiscal year 2008 
                                and each fiscal year thereafter, of 
                                amounts made available to a State to 
                                carry out this subsection, the State 
                                may use not more than 5 percent for 
                                administrative expenses of carrying out 
                                this subsection.
                                    ``(II) Requirement.--To be eligible 
                                to use funds under subclause (I), a 
                                State shall submit to the Secretary a 
                                plan indicating the manner in which the 
                                State intends to use the funds.
                            ``(v) Federal requirements.--Not later than 
                        1 year after the date of enactment of this 
                        clause, and periodically thereafter as the 
                        Secretary determines to be appropriate, the 
                        Secretary shall establish requirements for 
                        States in administering this subsection.''.

SEC. 202. FARM-TO-CAFETERIA PROGRAM.

    Section 18(i)(2) of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1769(i)(2)) is amended by striking ``such sums as are 
necessary'' and all that follows through the period at the end and 
inserting ``to carry out this subsection $20,000,000 for each of fiscal 
years 2008 through 2013.''.

SEC. 203. PURCHASES OF LOCALLY PRODUCED FOODS.

    Section 9(j) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1758(j)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``In general'' and inserting 
                ``Purchases''; and
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) allow institutions described in paragraph 
                (3)(A) to use geographical preferences in bidding and 
                procurement programs to purchase, in addition to other 
                food purchases, locally produced foods for meal 
                programs;'';
                    (C) in subparagraph (B), by striking ``and'' at the 
                end;
                    (D) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (E) by inserting after subparagraph (C) the 
                following:
                    ``(D) submit to Congress an annual report on the 
                implementation of this subsection.'';
            (2) by redesignating paragraph (2) as paragraph (6); and
            (3) by inserting after paragraph (1) the following:
            ``(2) Department of defense.--Notwithstanding any other 
        provision of law, the Secretary of Defense may elect to use a 
        geographic preference to purchase locally produced agricultural 
        products for--
                    ``(A) the Defense Supply Center Philadelphia;
                    ``(B) the Department of Defense Farm to School 
                Program;
                    ``(C) the Department of Defense Fresh Fruit and 
                Vegetable Program;
                    ``(D) the service academies of the Department of 
                Defense;
                    ``(E) Department of Defense domestic dependent 
                schools;
                    ``(F) other Department of Defense schools under 
                chapter 108 of title 10, United States Code;
                    ``(G) commissary and exchange stores of the 
                Department of Defense; and
                    ``(H) morale, welfare, and recreation facilities 
                operated by the Department of Defense.
            ``(3) Department of agriculture and related entities.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, the Secretary or the head of any 
                school, local educational agency, or other entity, as 
                applicable, may elect to use a geographic preference to 
                purchase locally produced agricultural products for--
                            ``(i) the school breakfast program 
                        established by section 4 of the Child Nutrition 
                        Act of 1966 (42 U.S.C. 1773);
                            ``(ii) the school lunch program established 
                        under this Act;
                            ``(iii) the summer food service program for 
                        children established under section 13; and
                            ``(iv) the child and adult care food 
                        program established under section 17.
                    ``(B) Report.--The head of any school, local 
                educational agency, or other entity participating in a 
                program described in subparagraph (A) that makes an 
                election under that subparagraph shall submit to the 
                Secretary a report describing any case in which the 
                school, local educational agency, or other entity pays 
                an amount in excess of an amount equal to 10 percent 
                more than the lowest applicable bid to purchase locally 
                produced agricultural products.
            ``(4) Treatment of certain bids.--On making an election 
        under paragraph (2) or (3), the Secretary, the Secretary of 
        Defense, or the head of any school, local educational agency, 
        or other entity participating in a program described in 
        paragraph (3)(A) may--
                    ``(A) include in the text of any bid a description 
                of the election; and
                    ``(B) select any bid involving a locally produced 
                agricultural product, regardless of whether the bid is 
                the lowest bid relating to the agricultural product.
            ``(5) Review.--The Secretary and the Secretary of Defense 
        shall periodically review each election to use a geographic 
        preference under this subsection to prevent fraud or abuse.''.

                 TITLE III--FARMLAND PROTECTION PROGRAM

SEC. 301. FARMLAND PROTECTION PROGRAM.

    (a) Definitions.--Section 1238H of the Food Security Act of 1985 
(16 U.S.C. 3838h) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Eligible land.--
                    ``(A) In general.--The term `eligible land' means 
                land on a farm or ranch that is--
                            ``(i) cropland;
                            ``(ii) rangeland;
                            ``(iii) grassland;
                            ``(iv) pasture land; or
                            ``(v) forest land that is an incidental 
                        part of an agricultural operation, as 
                        determined by the Secretary.'';
            (2) by redesignating paragraph (4) as paragraph (5);
            (3) by inserting after paragraph (3) the following:
            ``(4) Permanent conservation easement.--The term `permanent 
        conservation easement' means a conservation easement or other 
        interest in eligible land that--
                    ``(A) is for the primary purpose of protecting the 
                agricultural production capacity of the eligible land; 
                and
                    ``(B) is permanent or for the maximum duration 
                allowed under State law.''; and
            (4) by adding at the end the following:
            ``(6) Qualified state or local entity.--The term `qualified 
        State or local entity' means a public or private entity that--
                    ``(A) operates a farm and ranch land protection 
                program that--
                            ``(i) has for at least 3 calendar or fiscal 
                        years used or provided public or private funds 
                        to purchase permanent conservation easements on 
                        not less than 10 farms or ranches;
                            ``(ii) has the necessary authority under 
                        State law, as well as the technical and 
                        financial capacity--
                                    ``(I) to monitor and enforce the 
                                terms of the permanent conservation 
                                easements so that the purpose of the 
                                permanent conservation easements is 
                                carried out for the maximum allowable 
                                duration; or
                                    ``(II) in the case of a 
                                governmental entity, to require other 
                                public or private holders of the 
                                permanent conservation easements 
                                acquired with public funding to hold, 
                                monitor, and enforce the permanent 
                                conservation easements for the purpose 
                                described in subclause (I); and
                            ``(iii) has financial control policies to 
                        ensure that, on average, the purchase price of 
                        the permanent conservation easements does not 
                        exceed the appraised fair market value of the 
                        permanent conservation easements; and
                    ``(B) is an eligible entity.''.
    (b) Farmland Protection.--Section 1238I of the Food Security Act of 
1985 (16 U.S.C. 3838i) is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (e) and (f), respectively;
            (2) by striking subsection (a) and inserting the following:
    ``(a) Program.--
            ``(1) In general.--The Secretary, acting through the 
        Natural Resources Conservation Service, shall carry out a farm 
        and ranch land protection program under which the Secretary 
        shall facilitate and provide funding for the purchase of 
        conservation easements or other interests in eligible land for 
        the purpose of protecting the agricultural production capacity 
        of the land and related conservation values by limiting 
        incompatible nonagricultural uses of the land.
            ``(2) Priority.--In carrying out the program, the Secretary 
        shall give the highest priority to protecting farm and ranch 
        land with prime, unique, or other productive soils that are at 
        risk of nonagricultural development.
    ``(b) Grants.--
            ``(1) In general.--The Secretary, acting through the 
        Natural Resources Conservation Service, shall use funds made 
        available to carry out this subchapter to award grants to 
        qualified State or local entities for the purchase of 
        conservation easements and other interests in land.
            ``(2) Distribution.--The Secretary shall distribute grants 
        described in paragraph (1) among States based on--
                    ``(A) the demonstrated need for farm and ranch land 
                protection; and
                    ``(B) the relative contribution of funds provided 
                by State or local entities for the protection of farm 
                and ranch land.
            ``(3) Use of grants.--A qualified State or local entity 
        that receives a grant under this subsection--
                    ``(A) may use the grant funds to purchase 1 or more 
                conservation easements, regardless of whether the 
                qualified State or local entity has a pending purchase 
                offer for any of the conversation easements at the time 
                of receiving the grant;
                    ``(B) shall use the grant funds only for the 
                purchase of conservation easements and other interests 
                in land; and
                    ``(C) may use an amount equal to not more than 10 
                percent of the amount of the grant for reasonable costs 
                of purchasing and enforcing conservation easements and 
                other interests in land.
            ``(4) Remaining funds.--Any funds remaining after grants 
        are distributed to qualified State or local entities shall be 
        available to other eligible entities as matching funds for 
        individual purchases of conservation easements and other 
        interests in land.
    ``(c) Grant Agreements.--
            ``(1) In general.--The Secretary, acting through the 
        Natural Resources Conservation Service, may enter into 
        agreements with qualified State or local entities, under which 
        a State or local entity may purchase conservation easements 
        using a combination of the funds of the entity and grant funds 
        made available by the Secretary under subsection (b).
            ``(2) Terms and conditions.--
                    ``(A) In general.--Subject to subparagraph (B), an 
                agreement described in paragraph (1) shall stipulate 
                the terms and conditions under which qualified State or 
                local entities shall use grant funds distributed by the 
                Secretary under subsection (b).
                    ``(B) Requirements.--Each agreement shall--
                            ``(i) authorize the State or local entity 
                        to determine the criteria and priorities of the 
                        entity for purchasing conservation easements 
                        and other interests in land;
                            ``(ii) authorize the State or local entity 
                        to establish terms and conditions for 
                        conservation easements and other interests in 
                        land, if--
                                    ``(I) the terms and conditions are 
                                adequate under State law to achieve and 
                                permit effective enforcement of the 
                                conservation purposes of the 
                                conservation easements or other 
                                interests; and
                                    ``(II) the State or local entity 
                                includes in the terms and conditions a 
                                requirement consistent with the 
                                purposes of the program regarding the 
                                impervious surfaces to be permitted for 
                                any conservation easement or other 
                                interest in land purchased using a 
                                grant provided under this section;
                            ``(iii) not require a Federal contingent 
                        right of enforcement or reversionary interest 
                        in the conservation easement or other interest 
                        in land; and
                            ``(iv) permit qualified entities to use an 
                        amount equal to not more than 10 percent of the 
                        amount of the grant for reasonable costs of 
                        purchasing and enforcing conservation easements 
                        and other interests in land..
    ``(d) Individual Purchases.--
            ``(1) In general.--The Secretary may enter into agreements 
        with eligible entities under which the Secretary shall provide 
        matching funds to the eligible entities for the purpose of 
        purchasing conservation easements or other interests in land on 
        individual farm and ranch properties.
            ``(2) Requirements.--An agreement described in paragraph 
        (1) shall--
                    ``(A) include such terms and conditions as the 
                Secretary considers appropriate to ensure that the 
                purposes of the farmland protection program are carried 
                out;
                    ``(B) not require a Federal continent right of 
                enforcement or reversionary interest in the 
                conservation easement or other interest in land, if--
                            ``(i) the conservation easement or other 
                        interest in land is held by a State or local 
                        agency; or
                            ``(ii) a qualified State or local entity 
                        will hold a contingent right of enforcement in 
                        the conservation easement or other interest.''.
            (3) in subsection (e) (as redesignated by paragraph (1))--
                    (A) by striking ``Any highly'' and inserting the 
                following:
            ``(1) In general.--Notwithstanding subsection 
        (c)(2)(B)(ii), subject to paragraph (2), any highly''; and
                    (B) by adding at the end the following:
            ``(2) Permanent conservation easements.--In the case of a 
        permanent conservation easement, the Secretary may not require 
        the conversion of cropland to less intensive uses if, under the 
        conservation plan, soil erosion can be reduced to `T' or 
        below.''; and
            (4) in paragraph (1)(A) of subsection (f) (as redesignated 
        by paragraph (1))--
                    (A) by striking ``section 1241(d)'' and inserting 
                ``1241(a)(4)'';
                    (B) by striking ``shall not exceed 50 percent'' and 
                inserting the following: ``shall not exceed--
                            ``(i) 50 percent'';
                    (C) by striking the period at the end and inserting 
                ``; or''; and
                    (D) by adding at the end the following:
                            ``(ii) if a qualified conservation 
                        contribution, as defined by section 170(h) of 
                        the Internal Revenue Code of 1986, of at least 
                        25 percent of the market value is made by the 
                        landowner in connection with the purchase of a 
                        conservation easement or other interest in 
                        land, \2/3\ of the actual cost of purchasing 
                        the conservation easement or other interest in 
                        land.''.

                        TITLE IV--MISCELLANEOUS

SEC. 401. FARMERS' MARKET PROMOTION PROGRAM PLUS.

    (a) Findings.--Congress finds that--
            (1) agricultural direct farmer-to-consumer marketing 
        activities, including farmers' markets, roadside stands, on-
        farm markets, community-supported agriculture, Internet, mail 
        order, and other similar direct order marketing activities, 
        significantly enhance the ability of agricultural producers to 
        retain a greater share of the retail value of the products of 
        the producers;
            (2) direct farmer-to-consumer marketing activities are a 
        crucial component of the current and future viability of small- 
        and mid-sized family farms and ranches, including those owned 
        by beginning and socially disadvantaged farmers and ranchers; 
        and
            (3) agricultural direct marketing activities contribute to 
        the health and well-being of consumers in rural, urban, and 
        Indian tribal communities by providing access to healthy, 
        fresh, and affordable food.
    (b) Program.--The Farmer-to-Consumer Direct Marketing Act of 1976 
(7 U.S.C. 3001 et seq.) is amended by inserting after section 6 the 
following:

``SEC. 6A. FARMERS' MARKET PROMOTION PROGRAM PLUS.

    ``(a) Establishment.--The Secretary shall carry out a program, to 
be known as the `Farmers' Market Promotion Program Plus' (referred to 
in this section as the `Program'), to make grants to eligible entities 
for projects to establish, expand, and promote the full spectrum of 
direct farmer-to-consumer marketing opportunities.
    ``(b) Program Purposes.--
            ``(1) In general.--The purposes of the Program are--
                    ``(A) to increase domestic consumption of 
                agricultural commodities by improving and expanding, or 
                assisting in the improvement and expansion of, direct 
                farmer-to-consumer marketing opportunities;
                    ``(B) to develop, or aid in the development of, new 
                direct farmer-to-consumer marketing opportunities; and
                    ``(C) to increase direct farmer-to-consumer direct 
                marketing opportunities in underserved areas by 
                providing, to the maximum extent practicable, not less 
                than 25 percent of grants to projects in underserved 
                areas, as determined by the Secretary.
            ``(2) Limitations.--An eligible entity shall not use a 
        grant or other assistance provided under the Program for the 
        purchase, construction, or rehabilitation of a building or 
        structure.
    ``(c) Eligible Entities.--An entity shall be eligible to receive a 
grant under the Program if the entity is--
            ``(1) composed of 2 or more agricultural producers that 
        produce and sell products through a common distribution 
        channel;
            ``(2) an agricultural cooperative or producer association 
        or network;
            ``(3) a local government;
            ``(4) a nonprofit corporation;
            ``(5) a public benefit corporation;
            ``(6) an economic development corporation;
            ``(7) a regional farmers' market authority; or
            ``(8) such other entity as the Secretary may designate.
    ``(d) Eligible Activities.--An eligible entity may use a grant 
provided under this section to carry out activities relating to--
            ``(1) farmers' markets;
            ``(2) roadside stands;
            ``(3) community-supported agriculture;
            ``(4) supporting the use of electronic benefits transfer 
        systems at farmers' markets and, where feasible, other direct 
        market enterprises;
            ``(5) pick-your-own operations;
            ``(6) direct Internet and mail order sales;
            ``(7) producer-owned agritourism activities facilitating 
        the direct sale of agricultural products; and
            ``(8) other similar ventures, as determined by the 
        Secretary.
    ``(e) Criteria and Guidelines.--The Secretary shall establish 
criteria and guidelines for the submission, evaluation, and funding of 
proposed projects under the Program.
    ``(f) Funding.--Of the funds of the Commodity Credit Corporation, 
the Secretary shall use to carry out this section $25,000,000 for each 
of fiscal years 2008 through 2013.''.

SEC. 402. SENIORS FARMERS' MARKET NUTRITION PROGRAM.

    Section 4402 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 3007) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Establishment.--Of funds available to the Commodity Credit 
Corporation, the Secretary of Agriculture (referred to in this section 
as the `Secretary') shall use to carry out and expand a seniors 
farmers' market nutrition program--
            ``(1) $20,000,000 for fiscal year 2008;
            ``(2) $30,000,000 for fiscal year 2009;
            ``(3) $45,000,000 for fiscal year 2010;
            ``(4) $60,000,000 for fiscal year 2011; and
            ``(5) not less than $75,000,000 for fiscal year 2012 and 
        each fiscal year thereafter.'';
            (2) by redesignating subsection (c) as subsection (d); and
            (3) by inserting after subsection (b) the following:
    ``(c) Eligible Participants; Benefits Levels.--Regulations issued 
pursuant to subsection (d)--
            ``(1) shall allow for participation by participants in 
        farmers' markets, roadside stands, and community supported 
        agriculture programs; and
            ``(2) shall not limit the ability of any State or regional 
        program to set benefit levels for individual seniors.''.

SEC. 403. HEALTHY FOOD ENTERPRISE DEVELOPMENT PROGRAM.

    Title II of the Specialty Crops Competitiveness Act of 2004 (Public 
Law 108-465) is amended by adding at the end the following:

``SEC. 204. HEALTHY FOOD ENTERPRISE DEVELOPMENT PROGRAM.

    ``(a) Purpose.--The purpose of this section is to promote the 
health and well-being of all people in the United States, particularly 
school-aged children, low-income populations, and individuals residing 
in underserved communities, by increasing the availability and 
affordability of healthy foods, such as fresh fruit and vegetables, 
which, when produced, processed, and packaged locally or regionally, 
can significantly enhance the income of agricultural producers by 
increasing the share of the producers of the final retail price of the 
foods.
    ``(b) Definitions.--In this section:
            ``(1) Beginning farmer or rancher.--The term `beginning 
        farmer or rancher' has the meaning given the term `qualified 
        beginning farmer or rancher' in section 343(a) of the 
        Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)).
            ``(2) Eligible entity.--The term `eligible entity' 
        includes--
                    ``(A) a small or midsized processor, distributor, 
                wholesaler, or retail food outlet;
                    ``(B) a group of producers operating as a legally 
                recognized marketing alliance;
                    ``(C) a producer-owned cooperative;
                    ``(D) a nonprofit organization;
                    ``(E) an economic development or community 
                development corporation;
                    ``(F) a unit of State or local government; and
                    ``(G) an academic institution.
            ``(3) Indian tribe.--The term `Indian tribe' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            ``(4) Locally or regionally produced food.--The term 
        `locally or regionally produced food' means any agricultural 
        product distributed within the locality or region in which the 
        agricultural product is produced in a manner that ensures 
        that--
                    ``(A) information is typically conveyed to the end-
                use consumer regarding the product origin, production 
                practices, or other valuable information;
                    ``(B) the income of the producer is increased 
                through maximization of the share of the retail food 
                price retained by the producer;
                    ``(C) consumers are provided with affordable 
                agricultural products produced, processed, and 
                distributed in the locality or region of the consumers;
                    ``(D) the produce has been shipped not greater than 
                \1/2\ of the current average distance of all food 
                produced and consumed in the United States, as 
                determined by the Secretary; and
                    ``(E) environmental integrity and social welfare 
                are maintained and enhanced, respectively, throughout 
                the supply chain with respect to the product.
            ``(5) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture.
            ``(6) 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)).
            ``(7) Underserved community.--The term `underserved 
        community' includes any community that may have, as determined 
        by the Secretary--
                    ``(A) limited access to affordable, healthy foods, 
                including fresh fruits and vegetables, in grocery 
                retail stores or farmer-to-consumer direct markets;
                    ``(B) high incidences of diet-related diseases, 
                including obesity;
                    ``(C) high rates of hunger or food insecurity; or
                    ``(D) severe or persistent poverty in urban or 
                rural communities, including Indian tribal communities.
    ``(c) Grant Program.--
            ``(1) Establishment.--The Secretary, acting through the 
        head of the market services branch of the Agricultural 
        Marketing Service, shall establish a program under which the 
        Secretary shall provide grants, on a competitive basis, to 
        eligible entities to conduct enterprise feasibility studies 
        (including studies of consumer preference), in accordance with 
        the purpose of this section.
            ``(2) Application.--To be eligible to receive a grant under 
        this subsection, an eligible entity shall submit to the 
        Secretary an application at such time, in such manner, and 
        containing such information as the Secretary may require.
            ``(3) Coordination with other agencies.--In carrying out 
        the program under this subsection, the Secretary shall 
        coordinate, with respect to the development of the program and 
        reviews of grant applications, with--
                    ``(A) the Cooperative State Research, Education, 
                and Extension Service; and
                    ``(B) the Rural Business Cooperative Service.
            ``(4) Priority.--In providing grants under this subsection, 
        the Secretary shall give priority to applications with proposed 
        projects that--
                    ``(A) convey locally or regionally produced food 
                products that are processed and distributed near the 
                point of final retail purchase;
                    ``(B) are from partnerships of 2 or more eligible 
                entities;
                    ``(C) include features effectively targeting 
                participation by socially disadvantaged farmers or 
                ranchers or beginning farmers or ranchers;
                    ``(D) increase employment opportunities in 
                underserved communities; or
                    ``(E) establish and maintain satisfactory 
                environmental and labor standards, including worker 
                protection.
            ``(5) Maximum amount.--The amount of a grant provided under 
        this subsection shall not exceed $250,000.
            ``(6) Term.--A grant provided under this subsection shall 
        have a term of not more than 3 years.
            ``(7) Reports.--
                    ``(A) In general.--Each eligible entity that 
                receives a grant under this subsection shall submit to 
                the Secretary an annual report describing the results 
                and progress of each feasibility study to ensure 
                sufficient progress is achieved with respect to the 
                goals of the projects carried out by the eligible 
                entity.
                    ``(B) Public availability.--The Secretary shall 
                ensure that any information contained in a report under 
                subparagraph (A) relating to consumer preference or 
                producer availability is made available to the public.
            ``(8) Funding.--On October 1, 2008, and on each October 1 
        thereafter through October 1, 2013, out of any funds in the 
        Treasury not otherwise appropriated, the Secretary of the 
        Treasury shall transfer to the Secretary to carry out this 
        subsection $5,000,000, to remain available until expended.
    ``(d) Enterprise Development Loan Program.--
            ``(1) Establishment.--The Secretary, acting through the 
        Agricultural Marketing Service, shall establish a program under 
        which the Secretary shall provide loans and loan guarantees to 
        eligible entities and individual producers for use in 
        accordance with paragraph (6).
            ``(2) Coordination with other agencies.--In carrying out 
        the program under this subsection, the Secretary shall 
        coordinate, with respect to the development of the program, 
        reviews of applications, and implementation, with the Rural 
        Business Cooperative Service.
            ``(3) Application.--To be eligible to receive a loan or 
        loan guarantee under this subsection, an eligible entity or 
        individual producer shall submit to the Secretary an 
        application at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(4) Requirements.--
                    ``(A) Priority.--In providing loans and loan 
                guarantees under this subsection, the Secretary shall 
                give priority to applications that represent--
                            ``(i) projects that convey locally or 
                        regionally produced food products that are 
                        processed and distributed near the point of 
                        final retail purchase;
                            ``(ii) partnerships of 2 or more eligible 
                        entities;
                            ``(iii) socially disadvantaged farmers or 
                        ranchers or beginning farmers or ranchers;
                            ``(iv) projects that increase employment 
                        opportunities in underserved communities; or
                            ``(v) projects that establish and maintain 
                        clear environmental and labor standards, 
                        including worker protection.
                    ``(B) Limitation.--The Secretary shall ensure that 
                no recipient of a loan or loan guarantee under this 
                subsection holds, or significantly benefits from, more 
                than 1 loan or guarantee for the term of the loan or 
                guarantee.
            ``(5) Direct loans.--
                    ``(A) In general.--The Secretary shall provide 
                loans under this subsection--
                            ``(i) on an annual and competitive basis;
                            ``(ii) after conducting a review of 
                        applicable applications in accordance with 
                        subsection (c)(3);
                            ``(iii) in a manner that is economically 
                        sound, as determined by the Secretary;
                            ``(iv) that may be subordinated to loans 
                        made by local private lenders; and
                            ``(v) in an amount equal to not more than 
                        $1,500,000, as adjusted to reflect changes for 
                        the 12-month period ending the preceding 
                        November 30 in the Consumer Price Index for All 
                        Urban Consumers published by the Bureau of 
                        Labor Statistics of the Department of Labor.
                    ``(B) Interest rate.--The interest rate of a loan 
                provided under this subsection--
                            ``(i) shall be equivalent to the interest 
                        rate of securities of the United States 
                        Treasury of comparable maturity as of the date 
                        on which the loan is provided;
                            ``(ii) may be offered as a variable rate to 
                        allow lower-interest payments until an eligible 
                        entity is able to pay higher-interest payments, 
                        subject to the condition that the total 
                        interest rate does not exceed the standard 
                        interest rate of the Department of the 
                        Treasury, as in existence on the date on which 
                        the loan is approved; and
                            ``(iii) shall not change, in the aggregate, 
                        during the term of the loan.
                    ``(C) Repayment.--An eligible entity or individual 
                producer shall repay the Secretary an amount equal to 
                the amount of the loan received by the eligible entity 
                or individual producer (including interest) by not 
                later than 15 years after the date on which the loan is 
                provided.
                    ``(D) Underserved communities.--The Secretary shall 
                defer repayment of a loan (including interest) provided 
                to an eligible entity located in an underserved 
                community for the 3-year period beginning on the date 
                on which the loan is provided.
            ``(6) Loan guarantees.--
                    ``(A) Rates.--
                            ``(i) In general.--Except as provided in 
                        clauses (ii) and (iii), the rate of a loan 
                        guarantee provided under this subsection shall 
                        be not less than 80 percent and not more than 
                        90 percent.
                            ``(ii) Certain recipients.--The rate of a 
                        loan guarantee provided under this subsection 
                        to an eligible entity that serves primarily a 
                        majority of socially disadvantaged farmers or 
                        ranchers or beginning farmers or ranchers, as 
                        determined by the Secretary, shall be not less 
                        than 95 percent.
                            ``(iii) Certain projects.--The rate of a 
                        loan guarantee provided under this subsection 
                        for a project that, as determined by the 
                        Secretary, will result in increased employment 
                        in a low-income community, an economic 
                        empowerment zone, or such other similar area as 
                        the Secretary may designate, shall be not less 
                        than 95 percent.
                    ``(B) Eligible lenders.--For purposes of loan 
                guarantees under this paragraph, eligible lender 
                institutions include--
                            ``(i) community development financial 
                        institutions;
                            ``(ii) community development banks;
                            ``(iii) credit unions;
                            ``(iv) banks owned by Indian tribes; and
                            ``(v) such other institutions as the 
                        Secretary may designate to ensure equitable 
                        access to loan guarantees--
                                    ``(I) in each State; and
                                    ``(II) to Indian tribal 
                                organizations.
                    ``(C) Maximum amount.--The amount of a loan 
                guaranteed under this subsection shall not exceed 
                $1,500,000, as adjusted to reflect changes for the 12-
                month period ending the preceding November 30 in the 
                Consumer Price Index for All Urban Consumers published 
                by the Bureau of Labor Statistics of the Department of 
                Labor.
            ``(7) Use of funds.--An eligible entity or individual 
        producer shall use funds provided pursuant to a loan or loan 
        guarantee under this subsection to develop processing, 
        distribution, and information infrastructure for locally or 
        regionally produced food, in accordance with the purpose of 
        this section, including through--
                    ``(A) construction of new infrastructure;
                    ``(B) rehabilitation of existing infrastructure;
                    ``(C) activities to support the development of 
                marketing networks and alliances;
                    ``(D) development of information infrastructure, 
                including websites;
                    ``(E) purchases of equipment for processing, 
                distribution, transportation, storage, and other 
                related purposes; and
                    ``(F) other activities, as the Secretary determines 
                to be appropriate.
            ``(8) Funding.--On October 1, 2008, and on each October 1 
        thereafter through October 1, 2013, out of any funds in the 
        Treasury not otherwise appropriated, the Secretary of the 
        Treasury shall transfer to the Secretary to carry out this 
        subsection $35,000,000, to remain available until expended, of 
        which--
                    ``(A) not less than $15,000,000 shall be used for 
                each fiscal year to provide loans under paragraph (4); 
                and
                    ``(B) not less than $10,000,000 shall be used for 
                each fiscal year to provide loan guarantees under 
                paragraph (5).
    ``(e) Grant and Loan Program Requirements.--
            ``(1) Technical assistance and outreach.--
                    ``(A) In general.--The Secretary shall--
                            ``(i) provide to the public information 
                        relating to the grant and loan programs under 
                        this section; and
                            ``(ii) provide technical assistance to--
                                    ``(I) socially disadvantaged 
                                farmers or ranchers;
                                    ``(II) Indian tribal organizations;
                                    ``(III) low-income populations; and
                                    ``(IV) other underserved 
                                communities and producers.
                    ``(B) Service providers.--In carrying out 
                subparagraph (A), the Secretary may enter into 
                contracts, on a competitive basis, with entities that, 
                as determined by the Secretary--
                            ``(i) demonstrate experience in serving 
                        socially disadvantaged farmers or ranchers and 
                        other underserved communities and producers;
                            ``(ii) include, in the governance structure 
                        of the entity, 2 or more members representing 
                        the targeted communities served by the entity; 
                        and
                            ``(iii) will share information developed or 
                        used by the entity with--
                                    ``(I) researchers;
                                    ``(II) practitioners; and
                                    ``(III) other interested parties.
                    ``(C) Funding.--On October 1, 2008, and on each 
                October 1 thereafter through October 1, 2013, out of 
                any funds in the Treasury not otherwise appropriated, 
                the Secretary of the Treasury shall transfer to the 
                Secretary to carry out this paragraph not less than 
                $200,000 and not more than an amount equal to 5 percent 
                of the funds required to carry out this program, to 
                remain available until expended.
            ``(2) Limitations.--For purposes of the programs under this 
        section, the Secretary--
                    ``(A) shall not give preference to any entity based 
                on an agricultural commodity produced or supported by 
                the entity; and
                    ``(B) shall encourage, to the maximum extent 
                practicable, projects that use infrastructure 
                efficiently for more than 1 agricultural product.
            ``(3) Report.--Not less frequently than once each year, the 
        Secretary shall submit to Congress a report that describes the 
        programs (including the level of participation in each program) 
        under this section, including information relating to--
                    ``(A) projects carried out under this section;
                    ``(B) characteristics of the agricultural producers 
                and communities served by the projects;
                    ``(C) the benefits of the projects;
                    ``(D) data necessary to comply with--
                            ``(i) section 2501A of the Food, 
                        Agriculture, Conservation, and Trade Act of 
                        1990 (7 U.S.C. 2279-1); or
                            ``(ii) section 8(b)(5)(B) of the Soil 
                        Conservation and Domestic Allotment Act (16 
                        U.S.C. 590h(b)(5)); and
                    ``(E) outreach and technical assistance activities 
                carried out by the Secretary under paragraph (1).''.
                                 <all>
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