Introduced in Senate — S. 1237

119th CONGRESS

1st Session

S. 1237

IN THE SENATE OF THE UNITED STATES

April 1 (legislative day, March 31), 2025

Ms. Smith introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry

A BILL

To establish the New Producer Economic Security Program within the Farm Service Agency Office of Outreach and Education.

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 New Producer Economic Security Act.

Sec. 2. New Producer Economic Security Program

(a) Definitions

In this section:

(1) Authorized legal entity

The term authorized legal entity means any corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, cooperative, pension or investment fund, or any other legal or commercial entity organized or created under the laws of any State that meets each of the following requirements:

(A)

The entity is not a subsidiary of, or owned in any part by, a multilayered subsidiary entity.

(B)

The shareholders, partners, members, or beneficial owners of the entity do not exceed 25 individuals.

(C)

The shareholders, partners, members, or beneficial owners of the entity are all natural persons who—

(i)

regularly and frequently make, or take an important part in making, management decisions substantially contributing to or affecting the operation of a farm or forest; or

(ii)

perform physical work that significantly contributes to cultivation, stewardship, crop or livestock production, or food production.

(2) Covered project

The term covered project means a project described in subsection (e).

(3) Eligible entity

(A) In general

The term eligible entity means an entity that—

(i)

has demonstrated experience in serving qualified beneficiaries; and

(ii)

is—

(I)

a State, local, or territorial government;

(II)

an Indian Tribe or Tribal organization (as those terms are defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304));

(III)

a Native community development financial institution certified by the Secretary of the Treasury;

(IV)

a community development financial institution (as defined in section 103 of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702)) certified by the Secretary of the Treasury, acting through the Director of the Community Development Financial Institutions Fund established under section 104(a) of that Act (12 U.S.C. 4703(a));

(V)

an organization described in paragraph (2) or (3) of section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code;

(VI)

a foundation;

(VII)

a cooperative entity;

(VIII)

an institution of higher education (as defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001));

(IX)

a financial institution described in section 1.7(b)(1)(B) of the Farm Credit Act of 1971 (12 U.S.C. 2015(b)(1)(B)); and

(X)

any other appropriate partner, as determined by the Secretary.

(B) Exclusion

The term eligible entity does not include a corporation that is foreign-based or foreign-owned.

(4) Eligible land

(A) In general

The term eligible land means—

(i)

agricultural land;

(ii)

private land;

(iii)

urban land;

(iv)

public land, including Federal, State, and municipally owned or managed land;

(v)

lands held in common that are controlled and managed by groups of individuals;

(vi)

lands held in trust;

(vii)

multiple parcels of land described in any of clauses (i) through (vi) that are noncontiguous; and

(viii)

public or private shoreline or intertidal zone areas, which may be wholly or partially underwater.

(B) Exclusion

The term eligible land does not include a natural area (as defined in section 650.23(a) of title 7, Code of Federal Regulations (or successor regulations)).

(5) Program

The term program means the New Producer Economic Security Program established under subsection (b).

(6) Qualified beneficiary

(A) In general

The term qualified beneficiary means a farmer, a rancher, or a forest owner who—

(i)

is a natural person;

(ii)

is—

(I)

a shareholder in an authorized legal entity;

(II)

an officer, director, or employee of an authorized legal entity;

(III)

a member or manager of an authorized legal entity;

(IV)

a partner in an authorized legal entity;

(V)

a beneficiary or trustee of an authorized legal entity; or

(VI)

any other individual who—

(aa)

regularly and frequently makes, or takes an important part in making, management decisions substantially contributing to or affecting the operation of a farm or forest; or

(bb)

performs physical work that significantly contributes to cultivation, stewardship, crop or livestock production, or food production; and

(iii)

(I)

has never operated, or has not operated for more than 10 consecutive years, a farm or a ranch;

(II)

operates only on rented or leased land;

(III)

has an income that is at or below 200 percent of the national poverty level or half of the median household income of the county in which the natural person is located; or

(IV)

is economically disadvantaged, as determined by the Secretary.

(B) Exclusion

The term qualified beneficiary does not include a natural person who solely provides capital to an authorized legal entity that is not a qualified beneficiary described in subparagraph (A).

(7) Secretary

The term Secretary means the Secretary of Agriculture.

(b) Establishment

The Secretary shall establish within the Farm Service Agency a competitive program, to be known as the New Producer Economic Security Program, to make grants to, enter into cooperative agreements with, or provide other capital support to eligible entities to carry out covered projects in accordance with subsection (e).

(c) Purpose

The purposes of the program are—

(1)

to strengthen the food systems security of the United States by efficiently investing in community-led solutions to increasing access to land, capital, and markets for qualified beneficiaries; and

(2)

to support projects that—

(A)

support farm establishment and long-term farm business viability;

(B)

support the financial viability of qualified beneficiaries;

(C)

support the physical and mental health of qualified beneficiaries;

(D)

increase land access;

(E)

prevent land loss;

(F)

establish innovative ways to make land accessible to qualified beneficiaries;

(G)

transition farmland from existing landowners to qualified beneficiaries; and

(H)

provide appropriate technical assistance related to permissible activities described in subsection (e)(2).

(d) Selection

(1) Application requirements

To be eligible to receive assistance under the program, an eligible entity shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including—

(A)

information demonstrating that the covered project the eligible entity seeks to carry out is designed—

(i)

to serve qualified beneficiaries; and

(ii)

to meet the purposes of the program described in subsection (c);

(B)

a description of how project activities will support the long-term financial viability of qualified beneficiaries;

(C)

a plan for notification and consultation with local Tribal governments for the future sale of land, if applicable;

(D)

an analysis of anticipated benefits to the community and the agricultural economy within the project area; and

(E)

a plan for evaluation, data management, communication, and reporting of project findings and results.

(2) Evaluation and selection of applications

(A) Evaluation process

The Secretary shall develop a process for evaluating and selecting applications submitted under paragraph (1) in collaboration with the stakeholder committee established under subparagraph (B).

(B) Stakeholder committee

(i) In general

Not later than 180 days after the date of enactment of this Act, the Secretary shall establish and convene a stakeholder committee to provide input on the distribution of funds and the evaluation and selection of applications submitted under paragraph (1).

(ii) Consideration

The Secretary shall ensure that the stakeholder committee established under clause (i) includes perspectives reflecting—

(I)

the complexity of the rural and urban agricultural landscapes of the United States; and

(II)

the wide variety of agricultural production models employed by qualified beneficiaries.

(C) Priority

In selecting applications submitted under paragraph (1), the Secretary shall give priority to applications for covered projects that—

(i)

provide direct financial assistance to qualified beneficiaries;

(ii)

involve a substantial and effective collaborative network or partnership of public or private entities;

(iii)

include a right of first refusal for Tribal citizens or governments when land becomes available on or near Tribal communities;

(iv)

involve mechanisms, such as a deed restriction or conservation easement, that restrict the resale value of eligible land to protect the land for agricultural use;

(v)

support the voluntary transition of agricultural land from existing producers to qualified beneficiaries;

(vi)

provide technical assistance, including translation and interpretation services;

(vii)

include activities under subsection (e) designed to support farmworkers; or

(viii)

support long-term adoption of conservation practices that are consistent with conservation practice standards of the Natural Resources Conservation Service and designed to achieve conservation outcomes.

(e) Covered projects

(1) Required use of funds

An eligible entity that receives assistance under the program shall provide direct assistance to qualified beneficiaries in order to facilitate access to land, capital, and markets, which may include payments—

(A)

to acquire real property (including air rights, water rights, and other interests therein), including closing costs;

(B)

to subsidize interest rates and mortgage principal amounts for qualified beneficiaries;

(C)

to provide down payment assistance to decrease farm mortgages;

(D)

to secure clear title on heirs’ property;

(E)

to conduct surveys and assessments of eligible land;

(F)

to improve or remediate land, water, and soil;

(G)

to construct or repair infrastructure;

(H)

to support land use planning;

(I)

to acquire succession planning assistance;

(J)

to carry out Tribal consultation;

(K)

to support acquisition of a Department of Agriculture farm number; and

(L)

for any other activities, as determined by the Secretary.

(2) Permissible activities

An eligible entity that receives assistance under the program may use the funds—

(A)

for activities associated with strengthening the economic security of qualified beneficiaries by increasing access to markets and capital;

(B)

to provide direct assistance to qualified beneficiaries in assessing, purchasing, acquiring, or retaining eligible land;

(C)

for activities designed to support farm establishment and long-term viability;

(D)

to establish a revolving loan fund or other innovative financial mechanism designed for the purpose of investing in covered projects beyond the initial project timeline; and

(E)

to provide technical assistance that meets the specific needs of, and is accessible to qualified beneficiaries, including—

(i)

providing translation and interpretation services;

(ii)

developing and carrying out strategies to identify unique needs and gaps in access, knowledge, and services; and

(iii)

specialized consultation, training, coaching, capacity building, and mentoring focused on—

(I)

accessing, purchasing, acquiring, or retaining eligible land;

(II)

comprehension of, preparation to apply for, and complying with Department of Agriculture programs;

(III)

succession planning;

(IV)

market planning and risk analysis;

(V)

cooperative development;

(VI)

legal and tax issues;

(VII)

developing business plans and feasibility studies;

(VIII)

financial planning and recordkeeping;

(IX)

enterprise, business, and labor management; and

(X)

any other activities as determined by the Secretary.

(3) Subcontract

An eligible entity may subcontract with an organization to carry out a use or activity under paragraph (1) or (2) if the services of the subcontractor are necessary.

(4) Funding mechanism

(A) Eligible entities

The Secretary shall make funding available under the program to eligible entities in the form of—

(i)

grants;

(ii)

cooperative agreements;

(iii)

capitalization loans, in the case of an activity described in paragraph (2)(D); or

(iv)

other means, as determined by the Secretary.

(B) Qualified beneficiaries

In carrying out covered projects under the program, an eligible entity shall provide direct assistance to qualified beneficiaries in the form of—

(i)

grants;

(ii)

loans (both long-term and interim); or

(iii)

other direct payments or assistance, as determined by the Secretary.

(5) Repayment of funds in case of noncompliance

An eligible entity that violates the terms or conditions of assistance provided under the program shall reimburse the Secretary for that assistance.

(f) Funding

(1) Authorization of appropriations

There are authorized to be appropriated to the Secretary such sums as are necessary to carry out this section.

(2) Agency contribution account

In addition to amounts otherwise made available under paragraph (1), the Secretary may use funds available through 1 or more contribution accounts established under section 1241(f)(1) of the Food Security Act of 1985 (16 U.S.C. 3841(f)(1)).

(3) Administration

Of the amounts made available to carry out the program, the Secretary may use an appropriate amount for the costs of implementing and administering the program.

(4) Distribution of funds

(A) Limitation

An eligible entity that receives assistance under the program shall obligate the amounts for a covered project by not later than 5 years after the date on which the funds are made available to the eligible entity, unless the Secretary determines otherwise.

(B) Exclusion

In the case of a covered project to support qualified beneficiaries in assessing, purchasing, acquiring, or retaining eligible land for a period longer than the 5-year period described in subparagraph (A), section 200.311 of title 2, Code of Federal Regulations (or a successor regulation) shall not apply.