Summary#
This bill creates a new federal tax credit and a grant program to encourage grocery stores, food banks, mobile markets, and farmers markets to open, renovate, or operate in defined “food deserts” (areas with poor physical or economic access to grocery stores). The main change is adding a new tax code section that gives credits to qualified grocery projects and grants to food banks and temporary vendors. The bill also requires annual updates to the USDA’s Food Access Research Atlas so locations of new retailers are tracked.
- Creates a Special Access Food Provider program that certifies eligible grocery stores, food banks, mobile markets, and farmers markets.
- Offers a tax credit equal to up to 15% of the basis (purchase or construction cost used for tax depreciation) for a new grocery store or permanent food bank, and 10% for qualified renovation areas.
- Provides grants to permanent food banks (up to 15% of qualified construction costs) and annual grants to temporary access merchants (10% of annual operational costs), for up to 10 years.
- Requires certification and reporting by the IRS (Secretary of the Treasury) in coordination with USDA and regional community development entities.
- Includes a 5-year recapture rule (repayment or added tax) if the project fails to meet certification rules, and reduces the tax basis of property by the credit or grant amount.
- Authorizes whatever sums are necessary to run the program (no dollar amount in the bill) and updates the USDA Food Access Research Atlas at least once a year.
What it means for you#
- Grocery store developers and owners: Could get a federal tax credit worth 15% of the eligible cost for building a new grocery in a qualifying food desert, or 10% for renovating the grocery-sales area. Must be certified and meet the sale-of-groceries threshold (groceries must forecast at least 35% of total sales).
- Nonprofit food banks: Permanent food banks built in food deserts could get grants equal to up to 15% of qualified construction costs. Grants are not taxable income under the bill.
- Mobile markets, farmers markets, temporary/mobile food banks (temporary access merchants): May be eligible for annual grants equal to 10% of operational costs if they meet minimum weeks/hours of operation rules and certification requirements. Grants can be renewed annually for up to 10 years.
- Local low-income communities and residents: Could see more grocery stores, renovated stores, food banks, or regular farmers/mobile markets near them, which may increase access to fresh foods.
- Regional community development entities / local governments: Will play a role in certification and must meet the bill’s accountability criteria; local governments can act as the regional entity if none exists within 50 miles.
- Taxpayers / federal budget: The program reduces federal tax revenue through credits and requires appropriations for grants and administration. Exact budget impact is not provided in the bill text.
- Farmers markets already receiving most USDA grants: Are not eligible for certification while they receive other USDA program funding, except for a specific nutrition incentive program; this could limit which markets benefit.
Expenses#
No clear dollar estimate is given in the bill text or the supplied material.
- No publicly available information on total expected cost or revenue loss is included in the bill text.
- The bill authorizes “such sums as may be necessary” for implementation, which means Congress would need to appropriate money for the grant side and administrative work.
- The tax credit would reduce federal tax revenue to the extent businesses claim it; the bill does not set a dollar cap or annual allocation limit in the text provided.
- The program will likely create administrative costs for the IRS and USDA to certify applicants, allocate credits/grants, monitor compliance, and run recapture procedures.
- Businesses and nonprofit applicants will face compliance and reporting costs to apply and maintain certification.
Proponents' View#
The bill appears intended to address limited access to healthy food in low-income areas. Possible supporting points based on the bill text:
- The bill appears intended to encourage private investment in grocery stores where they are scarce by making projects cheaper through tax credits.
- It could strengthen food assistance by funding construction of permanent food banks and supporting mobile/temporary distribution options.
- Annual updates to the Food Access Research Atlas may improve targeting by keeping map data current about where food retailers exist.
- The certification and coordination with regional community entities aim to focus benefits on low-income communities and prevent misuse.
- Grants being non-taxable may make nonprofit participation easier.
Opponents' View#
Possible concerns or trade-offs based on the bill’s design and missing details:
- One concern is that the bill does not include a clear annual or total cap on credits or grants in the text provided, so the fiscal cost and revenue loss are unknown.
- The bill does not provide a fiscal estimate or budget numbers, making it hard to judge affordability or budget priorities.
- Certification, reporting, and recapture rules will require administrative work; the bill gives no estimate of those costs or staffing needs.
- The 5-year recapture window may or may not be long enough to ensure long-term grocery service in a community; failure to meet requirements could force repayment and create financial risk for projects.
- Some farmers markets that already receive USDA grants are excluded from certification while funded, which could prevent certain existing markets from accessing these new funds.
- The basis reduction rule (reducing tax basis by the credit/grant amount) affects future depreciation and could complicate accounting and tax planning for businesses.