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Title II — Creation of the Healthy Food Financing Initiative

H.R. 1933 · 113th Congress · May 9, 2013 · Lineage

II Creation of the Healthy Food Financing Initiative

Sec. 201 Purpose and definitions

(a)
Purpose— The purpose of the Healthy Food Financing Initiative is to improve access to healthy foods in underserved areas, to create and preserve quality jobs, and to revitalize low-income communities by providing loans and grants to retailers of fresh and healthy food to overcome the higher costs and initial barriers to entry in underserved urban, suburban, and rural areas.
(b)
Definitions— In this title:
(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)
Expand or preserve the availability of fresh fruits and vegetables in underserved areas— The term “expand or preserve the availability of fresh fruits and vegetables in underserved areas” means—
(A)
in the case of a project not involving a regional food hub, a project that—
(i)
carries a variety of fresh produce, as defined by the national fund manager to reflect differences in project size and type;
(ii)
sells food for home preparation and consumption; and
(iii)
at a minimum—
(I)
offers for sale at least 3 different varieties of food in each of the 4 staple food groups (bread and grains, dairy, fruits and vegetables, and meat, poultry, and fish), with perishable food in at least 2 categories, on a daily basis; or
(II)
has at least 50 percent of the total sales of the store (including food and nonfood items or services) from the sale of eligible staple food; and
(B)
in the case of a regional food hub, a project that—
(i)
supplies a variety of fresh produce to a healthy food retailer located in an underserved, low- and moderate-income area; and
(ii)
participates in the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).
(3)
Farmers’ market— The term “farmers’ market” means a common facility or area in which several agricultural producers gather on a regular and recurring basis to sell a variety of fresh fruits and vegetables and other locally grown agricultural 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)
Healthy food retailer— The term “healthy food retailer” means a commercial, cooperative, and nonprofit seller of fresh or healthy food, including a grocery store, mobile healthy food retailer, farmers’ market, cooperative, corner store, bodega, or other store that sells other food and non-food options along with a full range of fresh or healthy foods.
(6)
Initiative— The term Initiative means the Healthy Food Financing Initiative.
(7)
Local funds— The term local funds means the allocation of national funds and any other forms of financial assistance (including grants, loans, and equity investments) that are raised by partnerships to carry out the purposes of the Initiative.
(8)
National funds— The term national funds means amounts appropriated to carry out the Initiative and any other forms of financial assistance (including grants, loans, and equity investments) that are raised by the national fund manager to carry out the Initiative.
(9)
National fund manager— The term national fund manager means a community development financial institution in existence as of the date of enactment of this Act and certified by the Community Development Financial Institutions Fund of the Department of the Treasury that is designated by the Secretary to manage the Initiative for purposes of—
(A)
raising private capital;
(B)
providing financial and technical assistance to partnerships; and
(C)
funding eligible projects directly at the request of partnerships to attract retailers of healthy food to underserved urban, suburban, and rural areas in accordance with this title.
(10)
Partnership—
(A)
In general— The term partnership means a regional, State, or local public and private partnership that is organized to improve access to healthy foods by providing financial and technical assistance to eligible projects.
(B)
Inclusions— The term includes—
(i)
an unit of State, local, or tribal government or a quasi-public State or local government agency;
(ii)
a food access or community health organization committed to improving access to healthy foods;
(iii)
a community development financial institution or other organization that is capable of administering a loan and grant program in accordance with this title; and
(iv)
other organizations interested in improving access to healthy foods in underserved areas.
(11)
Perishable food—
(A)
In general— The term perishable food means food that is fresh, refrigerated, or frozen.
(B)
Exclusion— The term perishable food does not include packaged or canned goods.
(12)
Regional food hub— The term “regional food hub” means a business or organization 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.
(13)
Secretary— The term “Secretary” means the Secretary of Agriculture.
(14)
Serve— The term “serve” means, with respect to a regional food hub, that the regional food hub, in connection with an eligible project, supplies fresh produce or other healthy foods—
(A)
to a healthy food retailer that participates in the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.);
(B)
to a healthy food retailer located in a low- or moderate-income area; and
(C)
to institutions such as hospitals, schools, or food banks that largely serve a low- and moderate-income area.
(15)
Staple food—
(A)
In general— The term staple food means food that is a basic dietary item, including bread, flour, fruits, vegetables, and meat.
(B)
Exclusions— The term staple food does not include snack or accessory food (such as chips, soda, coffee, condiments, and spices) or ready-to-eat, prepared food.
(16)
Variety— The term variety means an assortment of different types of food items.

Sec. 202 Establishment of Healthy Food Financing Initiative and eligible projects

(a)
Establishment— There is established in the Department of Agriculture a Healthy Food Financing Initiative.
(b)
Management— Not later than 1 year after the date of enactment of this Act, the Secretary shall select and enter into a grant agreement with a national fund manager that will be responsible for the management of the Initiative.
(c)
Eligible projects—
(1)
Eligibility criteria— Subject to the requirements of this section, the national fund manager shall establish the eligibility criteria for projects to be assisted by the Initiative.
(2)
Required project elements— To be eligible to receive assistance through the Initiative, a project shall—
(A)
include a supermarket, grocery store, regional food hub, farmers’ market, or other healthy food retailer;
(B)
consist of a for-profit business enterprise, a member- or worker-owned cooperative, or a nonprofit organization;
(C)
meet the eligibility criteria established under this section;
(D)
continue to be a viable business enterprise with a financial viability plan;
(E)
require an investment of public funding to move forward and be competitive;
(F)
operate on a self-service basis;
(G)
expand or preserve the availability of fresh fruits and vegetables in underserved areas and other healthy, fresh, high quality unprepared and unprocessed foods in such areas; and
(H)
(i)
in the case of a regional food hub, serve retailers that 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)
in the case of a retailer that is not a regional food hub, agree to accept such benefits.
(d)
Income criteria— Each eligible project shall be located in or, in the case of a project involving a regional food hub, shall serve—
(1)
a low- or moderate-income census tract, as determined by the Bureau of the Census of the Department of Commerce;
(2)
a population census tract that is treated as a low-income community under section 45D(e) of the Internal Revenue Code of 1986; or
(3)
an area that significantly serves an adjacent area that meets the criteria described in paragraph (1) or (2), as approved by the national fund manager.
(e)
Underserved criteria—
(1)
In general— Each eligible project shall be located in, or in the case of a project involving a regional food hub, shall serve, an underserved area, as determined by the partnerships according to criteria established by the national fund manager.
(2)
Factors— In determining whether an area is an underserved area, the following factors shall be taken into consideration:
(A)
Population density.
(B)
Below average supermarket density or sales.
(C)
Car ownership.
(D)
Geographical or physical barriers, such as highways, mountains, major parks, bodies of water, or areas with large amounts of vacant lots or foreclosed properties.
(3)
Locations— On an annual basis, the national fund manager shall collect data and publish maps that show the location of underserved areas.
(f)
Priority projects—
(1)
In general— Priority shall be given to projects that—
(A)
are located in severely distressed low-income communities, as defined by the Community Development Financial Institutions Fund of the Department of the Treasury; and
(B)
include 1 or more of the following characteristics:
(i)
The project will create or retain quality jobs in the community, as determined in accordance with paragraph (2).
(ii)
The project has community support in terms of store quality, affordability, site location, and coordination with local community plans or other programs promoting community and economic development.
(iii)
The project supports regional food systems and locally grown foods, to the extent available.
(iv)
In major metropolitan areas, the project is associated with a transit-oriented development project.
(v)
In areas with public transit, the project is accessible by public transit.
(vi)
The project involves the reuse of a building that is listed in or eligible for the National Register of Historic Places.
(vii)
The project involves a brownfield or grayfield (as those terms are used in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.)).
(viii)
The estimated energy consumption of the project, calculated using building energy software approved by the Department of Energy, will qualify the project for designation under the Energy Star program established by section 324A of the Energy Policy and Conservation Act (42 U.S.C. 6294a).
(ix)
The project involves women- and minority-owned businesses.
(2)
Quality jobs— For purposes of paragraph (1)(B)(i), a quality job is a job that—
(A)
provides wages that are comparable to or better than similar positions in existing businesses of similar size in similar local economies;
(B)
offers benefits that are comparable to or better than what is offered for similar positions in existing local businesses of similar size in similar local economies; and
(C)
is targeted for residents of neighborhoods with a high proportion of persons of low income (as that term is defined in section 102(a) of the Housing and Community Development Act of 1974 (42 U.S.C. 5302(a))) through local targeted hiring programs.

Sec. 203 Duties of Secretary

(a)
In general— The Secretary shall—
(1)
designate a national fund manager to manage national funds;
(2)
oversee the Initiative nationally;
(3)
work closely with the national fund manager—
(A)
to ensure that funds are used appropriately and in the most effective manner practicable; and
(B)
to develop the program strategy into a detailed work plan, program, and operating budget;
(4)
review and approve the operating budget for the national fund manager to ensure that the administrative costs are—
(A)
reasonable (not more than 5 percent of the total budget);
(B)
connected to the costs of operations; and
(C)
reflect efficient operations by the national fund manager; and
(5)
make available to the public an annual report, using data obtained from the Department of Agriculture, the Department of Health and Human Services, and the community development financial institutions, that describes the impacts of the Initiative, including tracking health and economic development indicators at the local, State, and national levels to determine the impacts of individual projects and the collective impact in local areas and statewide of funded projects and the Initiative overall.
(b)
Performance targets—
(1)
In general— The Secretary shall conduct financial audits of, and establish performance targets for, the national fund manager, which shall include, at a minimum, the requirements described in this subsection.
(2)
Geographic spread— Partnerships funded by the Initiative shall be geographically diverse and representative of the underserved areas across the United States.
(3)
Focus on low-income communities— A substantial portion of the projects funded by partnerships shall serve very low- and low-income communities, as defined by the Bureau of the Census of the Department of Commerce.
(4)
Financial effectiveness of the national fund manager— The national fund manager and any local financial institution involved in a partnership shall demonstrate on-going capacity and timeliness in raising private capital and disbursing funds as required under the Initiative.
(5)
Technical assistance effectiveness of the national fund manager— The provision of technical assistance by the national fund manager shall be evaluated based on—
(A)
the responsiveness of the national fund manager to requests for assistance; and
(B)
the ability of the national fund manager to craft programs that develop needed new capacities in partnerships.
(6)
Impact— Performance targets shall address the allocation of funds by the national fund manager to partnerships and the tracking and reporting of the impacts of the funds in improving access to fresh, healthy foods and in achieving other related impacts.
(c)
Disbursement of funds— The Secretary shall assist in the administration of the Initiative by approving the disbursement of funds to the national fund manager in a manner that facilitates the implementation of the overall Initiative.

Sec. 204 National fund manager

(a)
Selection of National fund manager— The Secretary shall select the national fund manager through a competitive process from among community development financial institutions that have a proven and recent track record of success and effectiveness in—
(1)
attracting private capital;
(2)
developing and managing programs that provide grants and loans to support supermarkets and other healthy food retailers in low- and moderate-income areas, including the development of grocery stores, farmers markets, and other healthy food retailer models;
(3)
making and servicing loans that are similar to loans proposed in the Initiative or having a record of otherwise successfully investing in the development of healthy food retailers;
(4)
effectively managing multiple contracts and subcontractors;
(5)
effectively managing large capital pools, of at least $100,000,000; and
(6)
providing or contracting for the provision of technical assistance.
(b)
Responsibilities of the national fund manager— The designated national fund manager shall—
(1)
raise other forms of financial assistance to match or leverage the national funds;
(2)
use administrative funds to develop appropriate training programs and offer technical assistance services to—
(A)
partnerships;
(B)
State, local, and tribal governments;
(C)
the food retail industry; and
(D)
food access and health advocacy organizations to augment local capacities;
(3)
develop financial products such as loans, grants, and credit enhancement tools that can be used by partnerships to incentivize and support the development and retention of supermarkets and other healthy food retailers in underserved areas;
(4)
award Initiative funds to eligible partnerships through an annual competitive process in accordance with section 205(d);
(5)
contract with a national food access organization to assist in the review of applications from partnerships and to provide technical assistance to local food access organizations in the proposed partnerships;
(6)
award and disburse funds to partnerships or eligible local projects in a timely manner;
(7)
create and meet performance benchmarks and reporting guidelines, as approved by the Secretary, including for—
(A)
the amount of capital raised and leveraged from financial institutions, partnerships, and other resources;
(B)
the geographic diversity of partnerships; and
(C)
the proportion of projects funded by the partnership that are in severely distressed low-income communities;
(8)
develop program guidelines and operating procedures for the Initiative, including—
(A)
maximum grant and loan amounts for projects;
(B)
eligible uses of funds;
(C)
prudent underwriting criteria;
(D)
performance targets;
(E)
reporting guidelines;
(F)
limits on administrative costs; and
(G)
implementation milestones;
(9)
monitor the performance of partnerships; and
(10)
collect data, compile information, and conduct such research studies as the national fund manager determines to be relevant to the successful implementation of the Initiative, including—
(A)
to assess national and local market conditions;
(B)
to determine barriers to market entry; and
(C)
to identify opportunities for the development or retention of supermarkets and other healthy food retailers in underserved communities.
(c)
Work plan—
(1)
In general— Not later than 45 days after the date of receipt of an award, the national fund manager shall develop, with guidance from and in consultation with the Secretary, and submit to the Secretary, a detailed work plan.
(2)
Approval required— The Secretary shall review and approve the work plan, program budget, and administrative costs under subsection (e)(4)(C) prior to entering into an agreement with the national fund manager to administer the Initiative.

Sec. 205 Allocation and use of funds

(a)
Allocation— The national fund manager shall—
(1)
allocate at least 70 percent of all funds appropriated for the Initiative for a fiscal year to partnerships that are selected based on the criteria described in subsection (d);
(2)
use not more than 25 percent of all funds appropriated for the Initiative for a fiscal year to establish regional food hubs; and
(3)
retain the remainder of the funds appropriated for the Initiative for a fiscal year to undertake financing activities described in subsection (c), including a reasonable amount for administrative costs (not to exceed 5 percent) approved by the Secretary.
(b)
Use of the national funds by partnership programs—
(1)
In general— As a condition on the receipt of funds, each partnership shall use—
(A)
the national funds received from the national fund manager under subsection (a)(1) to create 1 or more revolving loan programs or other revolving pools of capital or other products to facilitate financing of local projects as determined by the agreement between the partnership and the national fund manager; and
(B)
any remaining funds for grants, or, as approved, for innovative financing mechanisms.
(2)
Limitations—
(A)
In general— Use of funds for administrative costs and other purposes shall be—
(i)
limited in accordance with the terms of the agreement negotiated between the national fund manager and partnerships;
(ii)
based on whether administrative costs are reasonable, connected to the costs of operation, and reflect efficient operations by the partnership; and
(iii)
determined using criteria including geographic coverage, program duration, and total funding amount.
(B)
Goal— The goal of this paragraph is to limit administrative costs to the maximum extent practicable, but in no case may the amount used for administrative costs exceed 10 percent of the Federal funds allocated.
(c)
Use of the national funds by the national fund manager— The national fund manager shall use national funds described in subsection (a)(2) to undertake financing and other activities to enhance and maximize the effectiveness of the Initiative, as determined by the agreement with the Secretary, including—
(1)
attracting other forms of financial assistance to match or leverage the national funds;
(2)
awarding national funds to partnerships in accordance with subsection (d);
(3)
creating and managing pools of grant or loan capital that blend or leverage national funds with other forms of financial assistance, including capital in the form of tax credits under section 45D of the Internal Revenue Code of 1986, for the benefit of partnerships;
(4)
creating and managing pools of grant or loan capital that blend or leverage the national funds with other forms of financial assistance, including capital in the form of tax credits under section 45D of the Internal Revenue Code of 1986, to finance eligible local projects identified by partnerships or the national fund manager that have special or unique characteristics;
(5)
providing loans or grants directly to eligible local projects as matching funds if requested by a partnership;
(6)
providing credit enhancement or other financial products and instruments for the benefit of partnerships or eligible local projects;
(7)
providing technical assistance; and
(8)
funding reasonable administrative costs approved by the Secretary.
(d)
Criteria for awarding national funds to partnerships—
(1)
In general— The national fund manager shall award national funds to partnerships through a competitive process on an annual basis.
(2)
First round priority— In the first round of funding, the national fund manager shall give priority to existing partnerships that have demonstrable capacity to implement fresh food financing programs in underserved areas quickly.
(3)
Additional rounds— Additional rounds shall be designed to promote geographic diversity.
(4)
Criteria— In awarding national funds to partnerships, the national fund manager shall consider—
(A)
the amount of funds and other resources pledged by a partnership to match or leverage national funds;
(B)
the degree of State, local, or tribal government support of the partnership as evidenced by matching grant and loan funds or other types of support, such as allocation of tax-exempt bonds, loan guarantees, and coordination of resources from other State or local economic development programs;
(C)
the capacity of the partnership to successfully develop and manage loan and grant programs;
(D)
the lack of supermarkets and other healthy food retailers in low- and moderate-income areas that would be served by the partnership;
(E)
the experience of the food access or community health organization of the partnership in outreach about access to healthy foods and local healthy food access issues;
(F)
the degree of community engagement and support in the development and retention of supermarkets and other healthy food retailers; and
(G)
the contribution of the program of the partnership to the overall geographic diversity of the Initiative.
(e)
Administrative costs—
(1)
In general— Not later than 45 days after the date of receipt of an award, the national fund manager shall submit to the Secretary for approval a 3-year program and operating budget and detailed work plan that shall include—
(A)
costs for research and evaluation, technical assistance, and training; and
(B)
program and operating costs.
(2)
Earned revenues— Earned revenues from loan fees and interest may be expended on program and operating costs in accordance with the budget approved by the Secretary.
(3)
Basis of review— The Secretary shall base the review under subparagraph (A) on—
(A)
the likelihood of the plan and expenditures to further the purposes of this section; and
(B)
whether the administrative costs are reasonable, connected to the costs of operation, and reflect efficient operations by the national fund manager.

Sec. 206 Partnerships

(a)
In general— Each partnership that receives assistance through the Initiative shall provide financial and technical assistance to eligible healthy food retailer projects in underserved areas within the defined communities of the partnership.
(b)
Administration— Each partnership shall designate a community development financial institution or other organization that is capable of administering a loan and grant program—
(1)
to execute grant agreements with the national fund manager; and
(2)
to serve as the manager of local funds.
(c)
Responsibilities of partnerships— A partnership shall—
(1)
raise other forms of financial assistance to match the national funds received by the partnership;
(2)
provide marketing and outreach to communities, the supermarket industry, other healthy food retailers, State and local government officials, and civic and public interest organizations—
(A)
to solicit applications from underserved areas from across the State or locality to be served by the partnership; and
(B)
to inform the communities and other persons about the availability of grants, loans, training, and technical assistance;
(3)
review and underwrite projects to determine whether—
(A)
a proposed project meets the criteria for eligible projects under section __02; and
(B)
a proposed project meets the criteria for priority projects under subsection (g) of such section;
(4)
provide technical assistance services to operators and developers of healthy food retailers;
(5)
track and report outcomes, including—
(A)
the number of jobs created or retained;
(B)
the quantity of healthy food retailer space created or retained and the quantity of regional food hub capacity developed; and
(C)
such other health and economic indicators as are required by the national fund manager;
(6)
monitor and audit funded projects to ensure compliance with the Initiative, the national fund manager, and partnership program requirements for a period of at least 3 years;
(7)
submit an annual report to the national fund manager that describes—
(A)
the activities of the partnership;
(B)
the expenditure of local funds; and
(C)
success in meeting performance targets and satisfying such other terms and conditions as are specified in the agreement between the partnership and the national fund manager; and
(8)
coordinate with the national fund manager for the smooth operation of the Initiative.
(d)
Administrative costs—
(1)
In general— As a condition on the receipt of assistance under this section, each partnership shall submit to the national fund manager for approval a 3-year budget and plan for all program and operating costs, including—
(A)
costs for research and evaluation, technical assistance, and training; and
(B)
administrative and operating costs.
(2)
Earned revenues— Earned revenues from loan fees and interest may be expended on program and operating costs in accordance with the budget approved by the national fund manager.
(3)
Basis of review— The national fund manager shall base the review of the budget and plan under paragraph (1) on the likelihood of the budget and plan to further the purposes of the Initiative.

Sec. 207 Evaluation and monitoring

(a)
In general— Program evaluation and financial audits shall occur at all levels of the Initiative to ensure that—
(1)
national and local funds are used properly; and
(2)
the objectives of the Initiative are met.
(b)
Program evaluation and financial audits—
(1)
In general— The Secretary shall—
(A)
conduct periodic program evaluations and financial audits of the national fund manager, partnerships, and projects funded by the Initiative; and
(B)
share with the national fund manager the results of the evaluations and audits.
(2)
Funded projects— The Secretary or the national fund manager shall evaluate partnerships to assess the health and economic impacts of projects funded by the Initiative.
(3)
Other impacts—
(A)
Secretary of Health and Human Services— The Secretary of Health and Human Services shall conduct research studies and evaluate the health impacts of the Initiative.
(B)
Community Development Financial Institutions— Representatives of the community development financial institutions shall conduct research studies and evaluate the economic impacts of the Initiative.
(4)
Partnerships—
(A)
In general— Each partnership shall—
(i)
conduct periodic administrative and financial audits of projects funded by the Initiative; and
(ii)
share with the national fund manager the results of the audits.
(B)
Failure of partnership— In a case in which a partnership fails, the national fund manager shall take over the portfolio of the failed partnership.

Sec. 208 Administrative provisions

Not later than 180 days after the date of enactment of this Act, the Secretary shall promulgate such regulations as may be necessary to carry out the Initiative, including regulations—
(1)
for the conduct of a performance evaluation at the end of the initial 5-year period;
(2)
to terminate the contract for cause; and
(3)
to extend the contract for an additional 5-year period.

Sec. 209 Authorization of appropriations

There is authorized to be appropriated to the Secretary to carry out the Initiative $500,000,000. Amounts appropriated pursuant to this authorization of appropriation shall remain available until expended.