Butcher Block Act
Bill: H.R.4140 | Sponsor: Rep. Johnson, Dusty (R-SD)
Policy area: Agriculture and Food

Summary:
Butcher Block Act
This bill authorizes the Department of Agriculture (USDA) to make (or guarantee) loans and award grants for establishing, expanding, and otherwise supporting livestock and poultry processing and related activities.
In awarding grants and making or guaranteeing loans, USDA shall prioritize applicants that have experience in livestock and poultry processing and can quickly scale-up to increase overall processing capacity in the region involved.

To make improvements with respect to the pricing of cattle in the 
                 United States, and for other purposes.


 


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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Butcher Block Act''.

SEC. 2. ASSISTANCE FOR NEW AND EXPANDED LIVESTOCK OR MEAT PROCESSORS.

    (a) In General.--The Secretary of Agriculture (in this section 
referred to as the ``Secretary'') may make or guarantee a loan for the 
purpose of--
            (1) increasing capacity of livestock and poultry 
        processing, facilitating economic opportunity for livestock and 
        poultry producers through processing activities, and 
        diversifying processing ownership;
            (2) increasing the customer base or revenue returns of 
        livestock and poultry producers through investment in 
        processing capacity;
            (3) improving, developing, or financing livestock and 
        poultry processing capacity or employment including through the 
        financing of working capital; or
            (4) promoting the interstate trade and local sales of 
        processed livestock and poultry by financing improvements to 
        meet relevant Federal, State, and local regulatory standards.
    (b) Eligibility; General Limitations.--
            (1) Eligible recipient.--An entity shall be eligible for a 
        loan or guarantee under this section if the entity is--
                    (A) a public, private, or cooperative organization 
                organized on a for-profit or nonprofit basis;
                    (B) an Indian tribe on a Federal or State 
                reservation, or any other federally recognized Indian 
                tribal group; or
                    (C) an individual.
            (2) Facility location.--
                    (A) In general.--Except as provided in subparagraph 
                (B), a facility constructed, expanded, modified, 
                refurbished, or re-equipped with proceeds from a loan 
                made or guaranteed under this section shall be in a 
                rural area.
                    (B) Exception.--A facility constructed, expanded, 
                modified, refurbished, or re-equipped with proceeds 
                from a loan made or guaranteed under this section may 
                be in a non-rural area if--
                            (i) the primary use of the loan involved is 
                        for the facility, and the facility will 
                        increase the customer base or revenue returns 
                        of livestock and poultry producers that are 
                        located within 300 miles of the facility;
                            (ii) the loan involved will be used to 
                        increase the capacity in livestock and poultry 
                        processing in a region; and
                            (iii) the principal amount of the loan 
                        involved does not exceed $50,000,000.
                    (C) Rural area defined.--In this paragraph, the 
                term ``rural area'' has the meaning given the term in 
                section 343(a)(13) of the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 1991(a)(13)).
            (3) Limitations.--
                    (A) Limitation on amount of loan involved.--A loan 
                of more than $50,000,000 may not be made or guaranteed 
                under this section.
                    (B) Limitation on eligibility.--A loan may not be 
                made or guaranteed under this section to an entity that 
                is owned in partnership or in whole by--
                            (i) a foreign entity; or
                            (ii) an entity that currently processes 
                        over 5 percent of the daily harvest of any 
                        species.
    (c) Special Rules Applicable With Respect to Cooperatives.--
            (1) Limitation on amount of loan involved.--
                    (A) In general.--Notwithstanding subsection (b)(3), 
                a loan of not more than $100,000,000 may be made or 
                guaranteed for a cooperative organization under this 
                section.
                    (B) Conditions applicable if loan involved is for 
                more than $50,000,000.--A loan of more than $50,000,000 
                may not be made or guaranteed for a cooperative 
                organization under this section unless the loan is used 
                to carry out a project that significantly increases the 
                livestock and poultry processing in a region, where 
                insufficient processing capacity exists, as determined 
                by the Secretary.
            (2) Intangible assets.--
                    (A) In general.--In determining whether a 
                cooperative organization is eligible for a loan or 
                guarantee under this section, the Secretary may 
                consider the market value of a properly appraised brand 
                name, patent, or trademark of the cooperative.
                    (B) Accounts receivable.--In the sole discretion of 
                the Secretary, if the Secretary determines that the 
                action would not create or otherwise contribute to an 
                unreasonable risk of default or loss to the Federal 
                Government, the Secretary may take accounts receivable 
                as security for the obligations entered into in 
                connection with a loan made or guaranteed under this 
                section, and a borrower may use accounts receivable as 
                collateral to secure such a loan.
            (3) Purchase of cooperative stock.--
                    (A) In general.--The Secretary may make or 
                guarantee a loan in accordance with this section to an 
                individual farmer or rancher for the purpose of 
                purchasing capital stock of a farmer or rancher 
                cooperative undertaking an eligible project under this 
                section.
                    (B) Processing contracts during initial period.--A 
                cooperative described in subparagraph (A) with respect 
                to which a farmer or rancher receives a guarantee to 
                purchase stock under subparagraph (A) may contract for 
                services to fulfill any eligible purpose under this 
                section, during the 5-year period beginning on the date 
                the cooperative commences operations, in order to 
                provide adequate time for the planning and construction 
                of the processing facility of the cooperative.
                    (C) Financial information.--A farmer or rancher 
                from whom the Secretary requires financial information 
                as a condition of making or guaranteeing a loan under 
                subparagraph (A) shall provide the information in the 
                manner generally required by commercial agricultural 
                lenders in the geographical area in which the farmer or 
                rancher is located.
    (d) Conditions Applicable With Respect to Using Loan Involved for 
Refinancing.--A borrower may use 25 percent of a loan made or 
guaranteed under this section to refinance a loan made for a purpose 
described in subsection (a) if--
            (1) the borrower is current and performing with respect to 
        the loan to be refinanced;
            (2) the borrower has not defaulted on any payment required 
        to be made with respect to the loan to be refinanced;
            (3) none of the collateral for the loan to be refinanced 
        has been converted; and
            (4) there is adequate security or full collateral for the 
        loan to be refinanced.
    (e) Loan Appraisal.--The Secretary may require that any appraisal 
made in connection with a loan made or guaranteed under this section be 
conducted by a specialized appraiser that uses standards that are 
similar to standards used for similar purposes in the private sector, 
as determined by the Secretary.
    (f) Preference.--In making or guaranteeing a loan under this 
section, the Secretary shall give a preference to applicants that have 
experience in livestock and poultry processing and can quickly scale-up 
to increase overall processing capacity in the region involved.
    (g) Limitations on Authorization of Appropriations.--There is 
authorized to be appropriated to carry out this section $100,000,000 
for each of fiscal years 2023 through 2025.

SEC. 3. NEW AND EXPANDING LIVESTOCK OR MEAT PROCESSING GRANTS.

    (a) In General.--The Secretary of Agriculture may make grants to--
            (1) expand, diversify, and increase capacity in livestock 
        or poultry processing activities;
            (2) improve compliance with livestock and poultry 
        processing statutes (including the regulations issued 
        thereunder), such as the Federal Meat Inspection Act (21 U.S.C. 
        661) and the Poultry Products Inspection Act (21 U.S.C. 454);
            (3) identify and reduce barriers to entry for new for new 
        livestock and poultry processers; or
            (4) update, expand, or otherwise improve existing 
        facilities.
    (b) Eligible Grantees.--An entity shall be eligible for a grant 
under this section if the entity is--
            (1) a governmental entity;
            (2) a public, private, or cooperative organization 
        organized on a for-profit or nonprofit basis; or
            (3) an Indian tribe on a Federal or State reservation or 
        any other federally recognized Indian tribal group.
    (c) Use of Funds.--An entity to which a grant is made under this 
section may use the grant funds to establish or support new or expanded 
livestock or poultry processing activity, or other activity which will 
increase the customer base or revenue returns of livestock and poultry 
producers, by undertaking project, that--
            (1) identifies and analyzes business opportunities, 
        including feasibility studies as required for creditworthiness;
            (2) identifies, trains, and provides technical assistance 
        to existing or prospective rural entrepreneurs and managers or 
        processing facilities;
            (3) provides technical assistance to gain compliance with 
        Federal, State, or local regulations;
            (4) conducts regional, community, and local economic 
        development planning and coordination, and leadership 
        development; or
            (5) establishes a center for training, technology, and 
        trade that will provide training to livestock or poultry 
        processing employees.
    (d) Preference.--In awarding grants under this section, the 
Secretary shall give a preference to applicants that have experience in 
livestock and poultry processing and can quickly scale-up to increase 
overall processing capacity in the region involved.
    (e) Limitations on Authorization of Appropriations.--There is 
authorized to be appropriated to carry out this section $20,000,000 for 
each of fiscal years 2023 through 2025.
                                                 Union Calendar No. 279

117th CONGRESS

  2d Session

                               H. R. 4140

                          [Report No. 117-368]

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