FARMERS’ MARKET COUPONS DEMONSTRATION PROJECT.

SEC. 501. FARMERS’ MARKET COUPONS DEMONSTRATION PROJECT. (a) Purpose.—The purpose of this section is to authorize the establishment of a grant program to encourage State demonstration projects designed to— (1) provide resources to persons who are nutritionally at risk in the form of fresh nutritious unprepared foods (such as fruits and vegetables), from farmers’ markets; and (2) expand the awareness and use of farmers’ markets and increase sales at such markets. (b) General Authority.—Section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786) is amended by adding at the end thereof the following new subsection: “(m) (1) Subject to the availability of funds appropriated for purposes of this subsection, the Secretary shall award a 3-year grant to up to 10 States that submit applications that are approved for the establishment of demonstration projects designed to provide recipi-102 STAT. 1669ents of assistance under subsection (c) with coupons that may be exchanged for foods at farmers’ markets. “(2) A grant provided to any State under this subsection shall be provided to the chief executive officer of the State, who shall— “(A) designate the appropriate State agency or agencies to administer the program in conjunction with the appropriate nonprofit organizations; and “(B) assure coordination of the program among the appropriate agencies and organizations. “(3) The Secretary shall not make a grant to any State under this subsection unless such State agrees to provide State funds for the demonstration project in an amount that is equal to not less than 30 percent of the total cost of the demonstration project which may be satisfied from State contributions that are made for similar projects. “(4) (A) The Secretary shall establish a formula for determining the amount of the grant to be awarded under this subsection to each State for which an application is approved under paragraph (6), according to the number of recipients proposed to participate as specified in the application of the State. “(B) If the sums appropriated for any fiscal year pursuant to the authorization contained in paragraph (10) for grants under this subsection are not sufficient to pay to each State for which an application is approved under paragraph (6) the amount which the Secretary determines each such State is entitled to under this subsection, each State’s grant shall be ratably reduced. “(5) Each State that receives a grant under this subsection shall ensure that the demonstration project for which the grant is received complies with the following requirements: “(A) Persons who are eligible to receive Federal benefits under the project shall only be persons who are receiving assistance under subsection (c). “(B) Construction or operation of a farmers’ market may not be carried out using funds— “(i) provided under the grant; or “(ii) required to be provided by the State under paragraph (3). “(C) The value of the Federal share of the benefit received by any recipient under the project may not be— “(i) less than $10 per year; or “(ii) more than $20 per year. “(D) The coupon issuance process under the project shall be designed to ensure that coupons target areas with— “(i) the highest concentration of eligible persons; “(ii) the greatest access to farmers’ markets; and “(iii) certain characteristics, in addition to those described in clauses (i) and (ii), that are determined to be relevant by the Secretary that maximize the availability of benefits to eligible persons. “(E) The coupon redemption process under the project shall be designed to ensure that coupons may be— “(i) redeemed only by producers authorized by the State to participate in the project; and “(ii) redeemed only to purchase unprepared food for human consumption. “(F) (i) Except as provided in clauses (ii) and (iii), the State may not use for administration of such project for any fiscal year more than 10 percent of the total amount of project funds. 102 STAT. 1670 “(ii) On the showing by the State of substantial need, the Secretary may permit a State to use up to an additional two percent of the total project funds for administration of such project for any fiscal year. “(iii) The provisions of clauses (i) and (ii) with respect to the use of project funds for the administration of the project shall not apply to any funds that a State may contribute in excess of the funds used by the State to meet the requirements under subparagraph (B). “(G) The State shall ensure that no State or local taxes are collected within the State on purchases of food with coupons distributed under the project. “(6) (A) A State that desires to receive a grant under this subsection shall submit an application to the Secretary at such time and in such manner as the Secretary may reasonably require. “(B) (i) Each application submitted under this paragraph shall contain— “(I) the estimated cost of the program and the estimated number of individuals to be served by such program; “(II) a description of the State plan for complying with the requirements established in paragraph (5); and “(III) criteria developed by the State with respect to authorization of producers to participate in the program. “(ii) The criteria developed by the State as required by clause (i)(III) shall require any authorized producer to sell fresh nutritious unprepared foods (such as fruits and vegetables) to recipients, in exchange for coupons distributed under the project. “(C) The Secretary shall establish objective criteria for the approval of applications submitted under this paragraph. “(D) In approving applications submitted under this paragraph, the Secretary shall— “(i) favorably consider a State’s prior experiences with programs in existence as of the date of enactment of the Hunger Prevention Act of 1988; “(ii) favorably consider a State’s operation of a similar project with State or local funds that can present data concerning the value of such project, and such data can be of assistance to other States interested in developing such farmers’ market coupons projects; “(iii) award a grant to at least one applicant that proposes to operate the program on a Statewide basis; “(iv) give preference to applications from States that propose projects that are determined by the Secretary to— “(I) have possible national significance; or “(II) show unusual promise in promoting similar projects; “(v) give preference to applications that show promise of continued operation of the project for which the grant is requested after the grant expires; “(vi) require that if a State receives a grant under this section and that State is operating a similar project with State or local funds, that State shall not reduce in any fiscal year the amount of State and local funds available to the project in the preceding fiscal year after receiving funds for the project under this subsection; and “(vii) give preference to applications for projects that would serve areas in the State that have— “(I) the highest concentration of eligible persons; 102 STAT. 1671 “(II) the greatest access to farmers’ markets; “(III) broad geographical area; “(IV) the greatest number of participants in the broadest geographical area within the State; and “(V) any other characteristics, as determined appropriate by the Secretary, that maximize the availability of benefits to eligible persons. “(7) (A) The value of the benefit received by any recipient under any project for which a grant is received under this subsection may not affect the eligibility or benefit levels for assistance under any other State or Federal program. “(B) Any projects for which a grant is received under this subsection shall be supplementary to the food stamp program carried out under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) and to any other Federal or State program under which foods are distributed to needy families in lieu of food stamps. “(8) Each State that receives a grant under this subsection shall submit a report to the Secretary for each year of the grant period. Each such report shall include— “(A) the number of recipients served under the project for which the grant is received; “(B) the rate of redemption of coupons distributed under the project; “(C) the types of foods purchased with the coupons; “(D) the average amount distributed in coupons to each recipient; “(E) any change in the amount of food purchased at farmers’ markets after the establishment of the project; “(F) any change in the number of farmers participating in farmers’ markets after the establishment of the project; “(G) a description of how coupons were distributed to and redeemed by recipients in the State project; and “(H) any other information determined to be necessary by the Secretary. “(9) (A) The Secretary shall evaluate the projects for which grants are received under this subsection and submit to the Committee on Agriculture of the House of Representatives, the Committee on Education and Labor of the House of Representatives, and the Committee on Agriculture, Nutrition, and Forestry of the Senate, a report on such evaluations. “(B) Such report shall be submitted before the end of the 2-year period beginning on the date that the last grant is awarded under this subsection. “(10) There are authorized to be appropriated to carry out this subsection $2,000,000 for fiscal year 1989, $2,800,000 for fiscal year 1990, and $3,500,000 for fiscal year 1991. “(11) For purposes of this subsection: “(A) The term ’recipient’ means a person who is chosen by a State to receive benefits under a project. “(B) The term ‘State agency’ has the meaning provided in subsection (b)(13), except that such term also includes the agriculture department of each State.”.