Federal tax credits and grants to expand grocery stores in low-income food deserts

What it does

This bill creates a new federal tax credit and grant program to encourage investment in grocery stores, food banks, and mobile markets in food deserts—low-income areas with limited access to fresh food. Grocery stores and food bank operators can claim a 15% tax credit on construction costs; renovations get 10%. Food banks and mobile markets receive direct grants covering 15% of construction or 10% of annual operating costs. Participants must be certified as serving food deserts and meet eligibility criteria tied to the existing Healthy Food Financing Initiative.

Why we flagged it

The bill's operative mechanism is a direct subsidy—tax credits and grants—to incentivize private and nonprofit investment in food retail infrastructure in underserved areas. It is not a regulatory reform or a mandate; it is a spending program using tax expenditures and appropriated grants.

What the text implies

• The 5-year recapture provision (subsection e) creates a clawback mechanism: if a certified grocery store or food bank fails to meet requirements after receiving the credit/grant, the tax liability increases. This could deter marginal operators and creates ongoing compliance burden.
• Farmers markets are explicitly barred from receiving this program's grants if they receive any other USDA grant (except the Food Insecurity Nutrition Incentive), potentially fragmenting funding sources and limiting participation.
• The bill requires non-metropolitan areas to receive a 'proportional amount' of allocations but does not define 'proportional'—this leaves discretion to the Secretary and may create disputes over rural vs. urban funding splits.
• Basis reduction (subsection f) means recipients must reduce the depreciable basis of their property by the credit/grant amount, reducing future depreciation deductions and creating a hidden tax cost in later years.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill directly funds expansion of food retail and distribution in low-income areas where access is currently limited, addressing a documented public health problem. While the tax credits and grants flow to private operators and nonprofits, the mechanism is designed to produce a public good—increased availability of fresh produce, meat, and dairy in food deserts—that benefits residents of those areas.

Who stands to gain

• grocery store operators and chains opening or renovating locations in food deserts
• nonprofit food banks and food distribution organizations
• mobile market and farmers market operators serving low-income areas

Named in the bill

Internal Revenue Service, Department of Agriculture, Regional community development entities, Healthy Food Financing Initiative, Food Access Research Atlas, Food Insecurity Nutrition Incentive (FINI)

Where it stands

3 cosponsors: 3 Democrats.

• Mar 27, 2025 — Introduced · Congress.gov: “Introduced in House”
• Mar 27, 2025 — Referred to House Committee on Agriculture and House Committee on Ways and Means · Congress.gov: “Referred to the Committee on Ways and Means, and in addition to the Committee on Agriculture, for a period to…”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.