I 115th CONGRESS 2d Session H. R. 5017 IN THE HOUSE OF REPRESENTATIVES February 14, 2018 Ms. Fudge (for herself, Mr. Evans , and Ms. Lee ) introduced the following bill; which was referred to the Committee on Agriculture A BILL To amend the Department of Agriculture Reorganization Act of 1994 to reauthorize the Healthy Food Financing Initiative, and for other purposes.

1. Short title This Act may be cited as the Healthy Food Financing Initiative Reauthorization Act of 2018 . 2. Reauthorization of Healthy Food Financing Initiative Section 243 of the Department of Agriculture Reorganization Act of 1994 ( 7 U.S.C. 6953 ) is amended to read as follows: 243. Healthy Food Financing Initiative (a) Purpose The purpose of this section is to establish an initiative to provide financial and technical assistance to healthy food producers and retailers, food hubs, and mid-tier value chains that serve healthy food retailers and other healthy food business enterprises— (1) to improve access to, and expand the supply of, healthy food in low-income, underserved communities; (2) to create and preserve quality jobs and businesses; (3) to revitalize distressed rural, urban, and small town economies; (4) to support the development of local and regional food systems; (5) to increase the distribution of locally produced agricultural products; and (6) to strengthen farm-to-consumer relationships. (b) Definitions In this section: (1) Community development financial institution The term community development financial institution has the meaning given the term in section 103 of the Community Development Banking and Financial Institutions Act of 1994 ( 12 U.S.C. 4702 ). (2) Disadvantaged business enterprise The term disadvantaged business enterprise has the meaning given the term in section 26.5 of title 49, Code of Federal Regulations (as in effect on the date of enactment of the Healthy Food Financing Initiative Reauthorization Act of 2018 ). (3) Farmers market The term farmers market means a common facility or area where several agricultural producers gather on a regular, recurring basis to sell a variety of fresh fruits and vegetables and other locally grown farm products directly to consumers. (4) Food access organization The term food access organization means a nonprofit organization with expertise in improving access to healthy food in underserved communities. (5) Food hub The term food hub means a commercial, cooperatively owned, or nonprofit enterprise that actively manages the aggregation, distribution, and marketing of source-identified food products primarily from local and regional producers to strengthen the ability of the producers to satisfy wholesale, retail, and institutional demand. (6) Healthy food The term healthy food means a food or beverage that improves and maintains overall human health and reduces the risk of chronic disease, as described in the 2015–2020 Dietary Guidelines for Americans of the Secretary of Health and Human Services and the Secretary. (7) Healthy food business enterprise The term healthy food business enterprise means an entrepreneurial activity that improves access to healthy food in low-income and underserved communities, such as a commercial kitchen or food business incubator. (8) Healthy food producer The term healthy food producer means a commercial, cooperatively owned, or nonprofit enterprise that produces agricultural commodities or adds value to agricultural commodity products to create healthy food products. (9) Healthy food retailer (A) In general The term healthy food retailer means a commercial, cooperatively owned, or nonprofit seller of a healthy food, including— (i) a grocery store; (ii) a mobile food retailer; (iii) a farmers market; (iv) a cooperative; (v) a corner store; (vi) a bodega; and (vii) any other store that sells a full range of fresh and healthy foods, including any such store that sells nonhealthy foods. (B) Inclusion The term healthy food retailer includes a retail store in existence on the date of enactment of the Healthy Food Financing Initiative Reauthorization Act of 2018 that upgrades to sell a full range of healthy foods after that date of enactment. (10) Historically underserved producer The term historically underserved producer means a beginning, limited resource, urban, or socially disadvantaged farmer or rancher, as determined by the Secretary. (11) Incubator The term incubator means a commercial, cooperatively owned, or nonprofit enterprise that assists start-up businesses by providing support, resources, and business services and advice, normally in 1 physical location. (12) Initiative The term Initiative means the Healthy Food Financing Initiative established under subsection (c). (13) Initiative funds The term Initiative funds means— (A) any Federal amounts that are made available to carry out this section; and (B) any other forms of financial assistance (including grants, loans, and equity investments) that are raised by the National Fund Manager under this section. (14) Low-income The term low-income has the meaning given the term in section 103 of the Community Development Banking and Financial Institutions Act of 1994 ( 12 U.S.C. 4702 ). (15) Mid-tier value chain (A) In general The term mid-tier value chain has the meaning given the term in section 231(a) of the Agricultural Risk Protection Act of 2000 ( 7 U.S.C. 1632a(a) ). (B) Inclusions The term mid-tier value chain includes strategic business relationships with respect to production, aggregation, processing, storage, distribution, or marketing. (16) Moderate-income The term moderate-income has the meaning given the term by the Bureau of the Census. (17) National Fund Manager The term National Fund Manager means a community development financial institution that is— (A) in existence on the date of enactment of the Healthy Food Financing Initiative Reauthorization Act of 2018 ; (B) certified by the Community Development Financial Institutions Fund of the Department of the Treasury to manage the Initiative; and (C) designated by the Secretary under subsection (d)(1) to manage the Initiative. (18) Partnership The term partnership means a regional, State, or local collaborative entity that is organized to improve access to healthy foods by providing financial and technical assistance to projects. (19) Project The term project means a healthy food retailer, a food hub, a healthy food producer, or a healthy food business enterprise under a commercial, cooperatively owned, or nonprofit enterprise that satisfies eligibility criteria for assistance under the Initiative established by the National Fund Manager in accordance with subsection (g)(1). (20) Quality job The term quality job means a job that includes three or more of the following characteristics: (A) A living wage that— (i) is sufficient to support a decent standard of living; or (ii) exceeds the median wage offered within the applicable industry. (B) Basic benefits that increase economic security, improve health, and promote work-life balance for employees, including— (i) paid leave; (ii) health insurance; and (iii) a retirement savings plan, including the use of an employee stock ownership plan. (C) Career-building opportunities that help employees develop the skills, networks, and experiences necessary to launch a career or advance along a career path, including— (i) formal and informal training and mentorship; and (ii) avenues for advancement within the company. (D) Wealth-building opportunities that enable and provide incentives for an employee to build the assets that the employee needs to manage financial emergencies and achieve long-term financial security for the employee and the family of the employee, including through employee ownership, such as an employee stock ownership plan or a cooperative. (E) A fair and engaging workplace that balances the priorities and well-being of employees with the needs of the business, including— (i) flexible and predictable schedules; (ii) treating employees with respect and dignity; (iii) actively soliciting ideas from employees to improve the business; and (iv) helping employees understand how their work contributes to the success of the business. (21) Rural; rural area The terms rural and rural area have the meanings given those terms in section 343(a) of the Consolidated Farm and Rural Development Act ( 7 U.S.C. 1991(a) ). (22) Staple Food (A) In general The term staple food means food that is a basic dietary item. (B) Inclusions The term staple food includes— (i) bread; (ii) cereal; (iii) flour; (iv) fruit; (v) vegetables; (vi) meat; and (vii) dairy products. (23) Underserved community (A) In general The term underserved community means a food desert, as defined by the Community Development Financial Institutions Fund of the Department of the Treasury, including a distressed geographical area described in subparagraph (B), that is— (i) within a census tract that is described as a food desert on the food access research atlas of the Secretary; (ii) within a census tract that— (I) is adjacent to a census tract described in clause (i); and (II) has a median family income that is less than or equal to 120 percent of the applicable area median family income; or (iii) a geographic unit (as described in section 1805.201(b)(3)(ii)(B) of title 12, Code of Federal Regulations (as in effect on the date of enactment of the Healthy Food Financing Initiative Reauthorization Act of 2018 )) that— (I) individually meets at least one of the criteria described in section 1805.201(b)(3)(ii)(D) of title 12, Code of Federal Regulations (as in effect on the date of enactment of the Healthy Food Financing Initiative Reauthorization Act of 2018 ); and (II) meets the criteria for having low access to a supermarket or grocery store through a methodology that has been adopted for use by a State or unit of local government or philanthropic healthy food initiative. (B) Distressed geographical area described A distressed geographical area referred to in subparagraph (A) is a geographical area where a substantial number or share of residents has low access to a supermarket or large grocery store. (c) Establishment The Secretary shall establish within the Department an initiative, to be known as the Healthy Food Financing Initiative , to achieve the purpose described in subsection (a) in accordance with this section. (d) Duties of the Secretary The Secretary shall— (1) once every 5 years, designate a National Fund Manager through a competitive process from among community development financial institutions that have qualifications and a demonstrated record of success and effectiveness in— (A) raising significant amounts of private funds and managing healthy food financing programs that provide grants, loans, and tax credits to improve access to, and the supply of, healthy foods in low-income, underserved communities; (B) developing and managing programs that provide financial and technical assistance to healthy food retailers, healthy food producers, food hubs, farmers markets, and other healthy food business enterprises that serve low-income, underserved communities; (C) partnering with food access organizations or other nonprofit organizations with expertise in improving food access in low-income, underserved communities in the implementation of healthy food financing programs; (D) investing in rural communities directly or in partnership with other rural economic development organizations; (E) building the capacities of other community development financial institutions and building a network of collaboration across food access programs and food systems programs; (F) engaging— (i) rural, Tribal, and disadvantaged business enterprises; and (ii) businesses that serve low-income populations and support local or regional food systems and supply chains; (G) developing performance goals and metrics to track and report the impact of healthy food financing programs; (H) making and servicing grants, loans, loan loss reserves, tax credits, and other financing tools that are needed to effectively implement the Initiative; (I) financing and investing public and private funds in projects to improve access in low-income urban and rural communities; (J) administering multiple contracts and subcontractors; (K) providing or contracting for the provision of technical assistance; and (L) managing large capital pools; (2) determine whether to approve— (A) the eligibility criteria developed by the National Fund Manager under subsection (e)(2)(A); (B) the program strategy and budget for the Initiative submitted by the National Fund Manager under subsection (e)(1)(E); and (C) the outcome metrics developed by the National Fund Manager under subsection (e)(3)(A); (3) develop and make publically available annual progress reports and financial audits of the Initiative to determine the effectiveness and impact of the Initiative; and (4) ensure that Initiative funds are used appropriately and efficiently. (e) Duties of the National Fund Manager The National Fund Manager shall carry out the following duties under the Initiative: (1) Assistance The National Fund Manager shall— (A) raise private funds to be used under the Initiative; (B) leverage and encourage the use of other Federal funds from the Department and other Federal agencies; (C) provide loan and grant awards to partnerships and projects in accordance with paragraph (2); (D) consider providing to partnerships and projects financial assistance other than awards described in subparagraph (C), subject to the conditions that the financial assistance shall— (i) conform to all applicable laws (including regulations) and best industry practices; and (ii) be approved by the Secretary before the financial assistance is provided; (E) submit to the Secretary a program strategy and budget for the Initiative for approval under subsection (d)(2)(B); and (F) provide appropriate technical assistance to partnerships and projects that are seeking or have received funding under the Initiative, such as— (i) business planning; (ii) project feasibility analysis; (iii) market studies; (iv) pipeline development; (v) community engagement; and (vi) local hiring practices. (2) Awards process The National Fund Manager shall— (A) with respect to partnerships— (i) establish eligibility criteria for assistance under the Initiative; (ii) review each partnership application to ensure that the application is complete and the partnership is eligible to be considered for an award; (iii) establish a competitive award process that considers— (I) the lack of access to healthy food items in the community of a partnership; (II) the amount of local funds and other resources pledged by a partnership to match or leverage Initiative funds; (III) the degree of State, local, or Tribal government support of the partnership; (IV) the capacity of the partnership to successfully develop and manage loan and grant programs; (V) the capacity of the partnership to successfully develop, provide, or contract for technical assistance and business development services for healthy food retailers, healthy food producers, food hubs, or other healthy food business enterprises; (VI) the capacity of the partnership— (aa) to market and promote the Initiative; and (bb) to support disadvantaged business enterprises or historically underserved producers; (VII) the capacity of the partnership to collect data and monitor and track program outcomes; (VIII) the degree of community engagement and participation in, or benefits from, projects to be financed by the partnership; and (IX) the contribution of the partnership to the overall geographical diversity of the Initiative; (iv) provide awards to each of— (I) a State, Tribal, or unit of local government or a quasi-public State or local government agency; (II) a food access organization or an organization similarly committed to improving access to healthy foods; and (III) a community development financial institution or other organization that can administer a loan and grant program in accordance with this section; and (v) enter into a loan or grant agreement, as applicable, with each partnership to which the National Fund Manager provides an award; and (B) with respect to projects— (i) establish eligibility criteria for assistance under the Initiative in accordance with subsection (g)(1); (ii) review each application to ensure that the application is complete and the project is eligible to be considered for an award; (iii) evaluate each application and provide awards to projects in accordance with the priorities described in subsection (g)(2), on a rolling basis, that— (I) are consistent with this section; and (II) demonstrate the need for assistance under the Initiative; and (iv) based on a review of the use of Initiative funds described in paragraph (3)(C)(v)(II), ensure that a reasonable amount of Initiative funds are used to support nonretail projects. (3) Post-award activities The National Fund Manager shall— (A) recommend to the Secretary for approval under subsection (d)(2)(C) outcome metrics for evaluating the effectiveness and impact of the Initiative, including— (i) the location, type, and number of— (I) businesses assisted by the Initiative; (II) businesses created or expanded by the Initiative; (III) rural businesses assisted by the Initiative; and (IV) disadvantaged businesses assisted by the Initiative; (ii) demographic characteristics of the populations and communities served by the Initiative, such as income, race, and ethnicity; (iii) jobs created and retained by very low- and low-income persons as a result of the Initiative; (iv) the job quality of jobs created by the Initiative; (v) funds leveraged by the Initiative; (vi) project participation in— (I) the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 ( 7 U.S.C. 2011 et seq.); (II) the special supplemental nutrition program for women, infants, and children established by section 17 of the Child Nutrition Act of 1966 ( 42 U.S.C. 1786 ); and (III) other nutrition benefit programs; (vii) project participation in, and offering of, job training programs targeting low-income populations; (viii) project participation in programs to promote healthy food choices and increase the affordability of healthy food by low-income populations, such as— (I) nutrition education under the Food and Nutrition Act of 2008 ( 7 U.S.C. 2011 et seq.); and (II) the food insecurity nutrition incentive program under section 4405 of the Food, Conservation, and Energy Act of 2008 ( 7 U.S.C. 7517 ); and (ix) the degree of collaboration among local partners; (B) (i) collect data from partnerships and projects awarded funding under the Initiative; and (ii) compile the data for the approved outcome metrics described in subparagraph (A); and (C) submit to the Secretary— (i) with respect to partnerships and projects awarded funding under the Initiative, periodic reports on approved outcome metrics described in subparagraph (A) using data collected and compiled under subparagraph (B); (ii) the percentage of the number of partnerships and projects funded for each fiscal year that are located in a rural area; (iii) the percentage of the number of partnerships and projects funded for each fiscal year that are located in— (I) low-income communities; and (II) moderate-income communities; (iv) a copy of— (I) the Community Development Financial Institutions Fund annual certification for the National Fund Manager; and (II) the data collection report form submitted to the Department of the Treasury by the National Fund Manager; and (v) an annual report that includes— (I) a synopsis of each partnership and project receiving funding under the Initiative; and (II) a description of the use of Initiative funds for the applicable year. (4) Outreach The National Fund Manager shall contract with a national food access organization (and may contract with regional or local food access organizations)— (A) to publicize the Initiative to target communities and priority populations; and (B) to organize and build the capacities of partnerships, potential applicants for funding under the Initiative, and peer organizations to ensure that resources are directed to communities most in need of funding under the Initiative. (5) Alignment To maximize the impact of the Initiative, the National Fund Manager shall seek to align the Initiative with— (A) other programs of the Department, such as— (i) the food insecurity nutrition incentive program under section 4405 of the Food, Conservation, and Energy Act of 2008 ( 7 U.S.C. 7517 ); and (ii) the Farmers' Market and Local Food Promotion Program under section 6 of the Farmer-to-Consumer Direct Marketing Act of 1976 ( 7 U.S.C. 3005 ); and (B) other Federal nutrition programs. (f) Duties of partnerships A partnership that receives an award from the National Fund Manager shall carry out financing and other activities to implement and maximize the effectiveness of the Initiative, as described in the grant or loan agreement, as applicable, with the National Fund Manager under subsection (e)(2)(A)(v), including— (1) conducting marketing and outreach to communities, the grocery industry, and others— (A) to solicit applications from projects in underserved communities; (B) to build an understanding of the economics of the local food retail market; and (C) to identify opportunities in the target area; (2) reviewing applications from projects for funding under the Initiative; (3) underwriting and disbursing Initiative funds to projects; (4) providing technical assistance and business development services to projects; (5) submitting an annual financial and program report to the National Fund Manager that describes— (A) the activities of the partnership; (B) the expenditure of Initiative funds; and (C) any success in meeting approved outcome metrics described in subsection (e)(3)(A) and satisfying such other terms and conditions as are specified in the grant or loan agreement; and (6) expending reasonable administrative costs, which shall not exceed 10 percent of the amounts provided to the partnership under the Initiative. (g) Projects (1) Eligibility To be eligible to receive an award under the Initiative, a project shall— (A) be located in a low-income area or a moderate-income area; (B) be located in or serve an underserved community; (C) expand or preserve the availability of staple food; (D) demonstrate the need for funding under the Initiative; (E) in the case of a healthy food retailer— (i) accept benefits under the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 ( 7 U.S.C. 2011 et seq.); or (ii) develop mid-tier value chains that expand the availability of healthy food in underserved communities; (F) in the case of a food hub or healthy food producer— (i) (I) sell healthy food items to food retailers that serve an underserved area; and (II) accept benefits under the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 ( 7 U.S.C. 2011 et seq.); or (ii) sell or donate healthy food items to an institution, such as a hospital, school, food bank or pantry, social service agency, community center, or religious organization, that serves low-income, underserved communities; and (G) in the case of a healthy food business enterprise, train or employ individuals from low-income, underserved communities. (2) Priorities In making awards to projects under the Initiative, priority shall be given to a project that— (A) is located in an area that meets at least one of the criteria described in section 1805.201(b)(3)(ii)(D) of title 12, Code of Federal Regulations (as in effect on the date of enactment of the Healthy Food Financing Initiative Reauthorization Act of 2018 ); and (B) (i) is located in or serves a rural area; (ii) supports rural economic development; (iii) includes mid-tier value chains that use agricultural producer business and cooperative ownership models; (iv) involves a disadvantaged business enterprise or historically underserved producer; (v) participates in a job training or workforce development program that targets low-income individuals and underserved communities; (vi) commits to hiring low-income residents from the community that the project serves; (vii) will create or retain quality jobs in the community that the project serves; (viii) is supported by the community served by the project, based on the factors of store quality, affordability, site location, and coordination with local community plans or other programs promoting community and economic development; (ix) supports regional food systems and locally grown foods; (x) is associated with a transit-oriented development project; (xi) is accessible by public transit, if public transit is available in the area; (xii) receives funding from other Federal agencies or is part of another Federal program or initiative; (xiii) involves veteran-owned businesses or veteran farmers and ranchers (as defined in section 2501(e) of the Food, Agriculture, Conservation and Trade Act of 1990 ( 7 U.S.C. 2279(e) )); or (xiv) participates in other food assistance and nutrition education programs of the Department. (h) Funding (1) Authorization of appropriations There is authorized to be appropriated to the Secretary to carry out this section $125,000,000, to remain available until expended. (2) Allocation Of amounts appropriated under paragraph (1)— (A) not less than 75 percent shall be used to fund projects of healthy food retailers; and (B) not more than 25 percent shall be used to fund projects of food hubs, healthy food producers, and healthy food business enterprises. (3) Administrative costs Not more than 10 percent of amounts appropriated under paragraph (1) shall be used for administrative costs. .