I 
117TH CONGRESS 
1ST SESSION H. R. 5176 
To amend the Internal Revenue Code of 1986 to adjust the applicable percent-
age of the new markets tax credit, the application of such credit to 
certain agricultural trades or businesses, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 3, 2021 
Mr. THOMPSON of California introduced the following bill; which was referred 
to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to adjust 
the applicable percentage of the new markets tax credit, 
the application of such credit to certain agricultural 
trades or businesses, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Local Food Production 
Enhancement Act of 2021’’. 
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SEC. 2. INCREASE IN CREDIT PERCENTAGE OF NEW MAR-
KETS TAX CREDIT. 
(a) IN GENERAL.—Section 45D(a)(2) of the Internal 
Revenue Code of 1986 is amended to read as follows: 
‘‘(2) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1)— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified equity investment made after the date 
of the enactment of Local Food Production En-
hancement Act of 2021, the applicable percent-
age is— 
‘‘(i) 6 percent with respect to the first 
4 credit allowance dates, and 
‘‘(ii) 7 percent with respect to the re-
mainder of the credit allowance dates. 
‘‘(B) CERTAIN OLDER INVESTMENTS.—In 
the case of any qualified equity investment 
made on or before the date of the enactment of 
the Local Food Production Enhancement Act of 
2021, the applicable percentage is— 
‘‘(i) 5 percent with respect to the first 
3 credit allowance dates, and 
‘‘(ii) 6 percent with respect to the re-
mainder of the credit allowance dates.’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to investments made after the date 
of the enactment of this Act. 
SEC. 3. CERTAIN FARMING OPERATIONS MADE ELIGIBLE 
FOR INVESTMENT UNDER THE NEW MAR-
KETS TAX CREDIT. 
(a) IN GENERAL.—Section 45D(d)(3) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘and’’ at 
the end of subparagraph (A), by striking the period at 
the end of subparagraph (B) and inserting ‘‘, and’’, and 
by adding at the end the following new subparagraph: 
‘‘(C) a qualified farming business shall not 
fail to be treated as a qualified business by rea-
son of paragraph (5)(B) thereof.’’. 
(b) 
QUALIFIED
FARMING
BUSINESS.—Section 
45D(d) of such Code is amended by adding at the end 
the following new paragraph: 
‘‘(4) QUALIFIED FARMING BUSINESS.—For pur-
poses of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
farming business’ means any trade or business 
of farming if— 
‘‘(i) all of such farming is conducted 
in a qualified area or an area adjacent to 
a qualified area, and 
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‘‘(ii) such trade or business has in ef-
fect a local distribution plan, a surplus 
stock distribution plan, and a local work-
force plan, each of which is certified by the 
Secretary. 
‘‘(B) QUALIFIED AREA.— 
‘‘(i) IN GENERAL.—The term ‘quali-
fied area’ means— 
‘‘(I) any low-income community 
if at least 500 individuals (or at least 
33 percent) of the population of such 
community lives more than 0.5 miles 
(10 miles if such community is in a 
rural area) from a large grocery store, 
and 
‘‘(II) any population census tract 
adjacent to a low-income community 
described in subclause (I). 
‘‘(ii) LARGE
GROCERY
STORE.—For 
purposes of this subparagraph, the term 
‘large grocery store’ means any means any 
single retail grocery store location which 
includes all of the major food departments 
and 
has 
annual 
sales 
of 
at 
least 
$2,000,000. 
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‘‘(C) LOCAL
DISTRIBUTION
PLAN.—The 
term ‘local distribution plan’ means, with re-
spect any trade or business, having the fol-
lowing in effect with respect to such trade or 
business: 
‘‘(i) A list of grocery retailers within 
5 miles of the principal location of such 
trade or business (20 miles if such prin-
cipal location is in a rural area). 
‘‘(ii) A documented offer to distribute 
agricultural or horticultural products to at 
least 80 percent of such grocery retailers. 
‘‘(iii) A documented agreement to pro-
vide fresh produce year-round to grocery 
retailers who agree to such offer. 
‘‘(D) LOCAL
WORKFORCE
PLAN.—The 
term ‘local workforce plan’ means, with respect 
to any trade or business, having the following 
in effect with respect to such trade or busi-
ness— 
‘‘(i) a documented commitment to hir-
ing locally including— 
‘‘(I) a list of local media such 
trade or business will use to publicize 
job openings, 
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‘‘(G) RURAL AREA.—The term ‘rural area’ 
has the meaning given such term by section 
1393(a)(2).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
Æ 
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