Local Food Production Enhancement Act of 2021
Bill: H.R.5176 | Sponsor: Rep. Thompson, Mike (D-CA)
Policy area: Taxation

Summary:
Local Food Production Enhancement Act of 2021
This bill increases the credit percentage of the new markets tax credit and allows such credit for farming businesses conducted in certain low-income or rural areas that are a certain distance from a large grocery store.

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 Representatives 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''.

SEC. 2. INCREASE IN CREDIT PERCENTAGE OF NEW MARKETS 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 Enhancement Act of 2021, the 
                applicable percentage is--
                            ``(i) 6 percent with respect to the first 4 
                        credit allowance dates, and
                            ``(ii) 7 percent with respect to the 
                        remainder 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 
                        remainder of the credit allowance dates.''.
    (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 MARKETS 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 reason 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 purposes 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
                            ``(ii) such trade or business has in effect 
                        a local distribution plan, a surplus stock 
                        distribution plan, and a local workforce plan, 
                        each of which is certified by the Secretary.
                    ``(B) Qualified area.--
                            ``(i) In general.--The term `qualified 
                        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.
                    ``(C) Local distribution plan.--The term `local 
                distribution plan' means, with respect any trade or 
                business, having the following 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 principal 
                        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 provide 
                        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 business--
                            ``(i) a documented commitment to hiring 
                        locally including--
                                    ``(I) a list of local media such 
                                trade or business will use to publicize 
                                job openings,
                                    ``(II) a list of local job centers, 
                                trade schools, and other workforce 
                                development organizations, and
                                    ``(III) a written plan to carry out 
                                agreements with entities listed under 
                                subclause (II) to hire locally when 
                                feasible, and
                            ``(ii) a list of local youth science, 
                        technology, engineering, and math programs 
                        supported or operated by the trade or business.
                    ``(E) Surplus stock distribution plan.--The term 
                `surplus stock distribution plan' means, with respect 
                to any trade or business, having in effect a plan for 
                distributing surplus agricultural or horticultural 
                products to food banks and other nonprofit food 
                providers located in qualified areas.
                    ``(F) Farming.--The term `farming' means raising or 
                harvesting any agricultural or horticultural commodity, 
                not including the raising, shearing, feeding, caring 
                for, or management of animals.
                    ``(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.
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