Sec. 5. Food supply chain grants and loans
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In this section: The term custom establishment means a very small or custom establishment that is exempt from inspection requirements under the Federal Meat Inspection Act ( 21 U.S.C. 601 et seq.) pursuant to section 23 of that Act ( 21 U.S.C. 623 ). The term eligible entity means— a small or midsized food processor or distributor (including a manufacturer, food hub, custom establishment, business cooperative, and food service provider) with fewer than 1,500 employees; a sole proprietor food business; a producer, an agricultural producer group, a producer cooperative, or a majority-controlled producer-based business venture (as defined in section 210A(a) of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1627c(a) )); a farmers market; a farm labor contractor or farm worker organization; and such other similar entities, as determined by the Secretary.
The Secretary shall establish a program to provide temporary assistance to eligible entities to address and respond to the COVID–19 emergency within the food supply chain through the provision of grants under subsection (d), direct loans under subsection (e), and guaranteed loans in accordance with subsection
(f)to eligible entities in accordance with this section. An eligible entity may receive not more than 1 grant, 1 direct loan, and 1 guaranteed loan under this section. An eligible entity that receives a grant, direct loan, or guaranteed loan under this section shall use the amounts received under the grant, direct loan, or guaranteed loan for the purpose of responding to the COVID–19 emergency by building flexibility into the food supply chain and incentivizing creative economic solutions to strengthen the farm economy and agricultural communities, protect workers, and minimize food waste through any of the following uses: Retooling processing lines. Purchasing packaging materials and food labels. Developing new food products to meet a change in demand. Converting industrial-sized products to consumer-sized products. Upgrading technology, software, and computers. Purchasing temporary space or holding pens, dry or cold storage, equipment, or transportation services or equipment. Developing and disseminating educational materials relating to COVID–19 protective measures. Purchasing test kits or equipment to screen the body temperature of employees for the presence of COVID–19, disinfectant, sanitation systems, or hand washing stations. Purchasing and decontaminating personal protective equipment. Providing other measures to protect workers against, or aid in preventing the spread of, COVID–19. In the case of a grant under subsection (d), repaying— a direct loan made under subsection (e); or a loan guaranteed in accordance with subsection (f). An eligible entity desiring to receive a grant under this subsection shall submit to the Secretary an application in accordance with an application process established by the Secretary. In establishing the application process under subparagraph (A), the Secretary shall establish a simplified, separate application process for eligible entities requesting less than $100,000 in grants. Subject to paragraphs
(3)and (4), the Secretary shall provide grants under this subsection in the order in which the Secretary receives applications submitted in accordance with paragraph (1). The Secretary shall give priority to applications submitted under paragraph
(1)that include, at least in part, the use of the grant amount for purchases described in paragraphs
(8)and
(9)of subsection (c). Of the amount made available for grants under this section, 10 percent shall be reserved for grants provided to beginning, veteran, or socially disadvantaged farmers, ranchers, or businesses. The amount of a grant under this subsection shall be not more than $1,000,000. An eligible entity desiring to receive a direct loan under this subsection shall submit to the Secretary an application in accordance with an application process established by the Secretary in accordance with this subsection. Subject to paragraph (3), not later than 3 business days after the date on which the Secretary receives an application in accordance with paragraph (1), the Secretary shall provide the amount under the applicable direct loan to the applicable eligible entity. Before providing amounts under paragraph (2), the Secretary shall verify that the applicant is an eligible entity by accepting a self-certification from the applicant under penalty of perjury pursuant to section 1746 of title 28, United States Code. The Secretary may approve an applicant for a direct loan under this subsection based solely on— the credit score of the applicant; or the verification under subparagraph (A). The Secretary shall not require an applicant for a direct loan under this subsection— to submit a tax return or a tax return transcript for approval; or to provide collateral or a personal guarantee. The interest rate for a direct loan under this subsection shall be 2.375 percent. Any otherwise applicable fees shall not be required for a direct loan under this subsection. To the extent practicable, notwithstanding paragraph (3)(B)(i), the Secretary shall accept applicants with lower credit scores, as necessary to ensure that eligible entities that are socially disadvantaged, small businesses, or located in underserved communities that have a high poverty rate have an opportunity to receive a direct loan under this subsection. The amount of a direct loan under this subsection shall be not more than $50,000. The Secretary may guarantee a loan under subsections (a)(2)(A) and
(g)of section 310B of the Consolidated Farm and Rural Development Act ( 7 U.S.C. 1932 ) to an eligible entity that verifies that the amounts under the loan will be used for— the purpose described in subsection (c); and any of the uses described in paragraphs
(1)through
(10)of that subsection. Notwithstanding any otherwise applicable requirements under subsections (a)(2)(A) and
(g)of section 310B of the Consolidated Farm and Rural Development Act ( 7 U.S.C. 1932 ), the following provisions shall apply to guaranteed loans under this subsection: The Secretary shall guarantee loans under this subsection without regard to any requirement under any other provision of law that an eligible entity be located in, or serve, a rural area. Notwithstanding section 310B(g)(5) of the Consolidated Farm and Rural Development Act ( 7 U.S.C. 1932(g)(5) ), the Secretary may assess a 1-time fee for a guaranteed loan under this subsection in an amount that does not exceed 1 percent of the guaranteed principal portion of the loan. The amount of a loan guarantee under this subsection shall be not more than— 100 percent of the amount of a loan that is not more than $5,000,000; and 90 percent of the amount of a loan that is more than $5,000,000 and not more than $25,000,000. The Secretary shall not guarantee a loan under this subsection that is more than $25,000,000. The interest rate for a loan guaranteed under this subsection shall be not more than 4 percent. Except as provided in subparagraph (B), the Secretary shall waive any otherwise applicable fees for a loan guaranteed under this subsection, including— an initial guarantee fee (other than the fee described in subparagraph (B)) that is paid at the time the loan note guarantee is issued; an annual renewal fee on the outstanding balance of a loan guarantee; and any customary borrower or lender fees. In the case of a guaranteed loan under this subsection for the financing of working capital— the Secretary shall waive any otherwise applicable collateral requirements; and the maximum term of the loan shall be 10 years. The Secretary shall waive the following underwriting requirements for loans guaranteed under this subsection: Any required feasibility studies by independent consultants. Any requirements for applicants to provide a tangible balance sheet equity position of 10 percent or more for existing businesses at loan closing or project completion. The Secretary shall award competitive grants to land-grant colleges and universities, local offices of the Cooperative Extension System, State departments of agriculture, and other technical service providers to provide to eligible entities technical assistance, rapid training, and outreach to develop new food products or adjust business models to respond to the COVID–19 emergency. The authority of the Secretary to provide a grant, direct loan, or guaranteed loan under this section shall remain available until the date on which the COVID–19 emergency is lifted. Of the funds of the Commodity Credit Corporation, the Secretary shall use $5,500,000,000 to carry out this section. Of the amount made available under paragraph (1), the Secretary shall use $2,000,000,000 to provide grants under subsection (d). Of the amount made available under paragraph (1), the Secretary shall use $1,000,000,000 to provide direct loans under subsection (e). Of the amount made available under paragraph (1), the Secretary shall use $2,500,000,000 to guarantee loans under subsection (f). Of the amount made available under paragraph (2), the Secretary shall use 5 percent to carry out subsection (g).
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