83R7481 AED-D
By: Zaffirini S.B. No. 403
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of a community development grocery
store and healthy corner store revolving loan fund program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. It is the intent of the legislature to support
revitalization in food deserts, reduce the cost of financing
agricultural development projects, and increase the number of food
markets providing affordable and nutritious foods in underserved
areas.
SECTION 2. Title 2, Agriculture Code, is amended by adding
Chapter 26 to read as follows:
CHAPTER 26. TEXAS COMMUNITY DEVELOPMENT GROCERY STORE AND HEALTHY
CORNER STORE REVOLVING LOAN FUND
Sec. 26.001. DEFINITIONS. In this chapter:
(1) "Community development financial institution" has
the meaning assigned by 12 U.S.C. Section 4702.
(2) "Corner store" means a store that:
(A) is certified to accept the supplemental
nutrition assistance program and WIC program;
(B) has less than 2,000 square feet of retail
space;
(C) has fewer than five aisles; and
(D) has only one cash register.
(3) "Food desert" means a census tract, based on the
most recent information published by the United States Bureau of
the Census, in which:
(A) the poverty rate is 20 percent or higher or
the median family income is at or below 80 percent of the area
median family income; and
(B) at least 500 people or at least 33 percent of
the census area's population reside more than:
(i) one mile from a grocery store, in the
case of a census tract other than a rural census tract; or
(ii) 10 miles from a grocery store, in the
case of a rural census tract.
(4) "Fund" means the community development grocery
store and healthy corner store revolving loan fund established by
this chapter.
(5) "Grocery store" means a store that has at least:
(A) 66 percent of the store's retail space
reserved for the sale of food products;
(B) 50 percent of the store's food retail space
reserved for the sale of non-prepared foods or foods intended for
home preparation and consumption; and
(C) 30 percent of the store's food retail space
reserved for the sale of perishable foods, including dairy
products, fresh produce, fresh meats, poultry, and fish, and frozen
foods.
(6) "Healthy corner store" means a corner store
offering a wide variety of fresh produce for sale.
(7) "Program" means the loan program authorized by
this chapter.
(8) "Supplemental nutrition assistance program" means
the nutritional assistance program formerly referred to as the food
stamp program.
(9) "WIC program" means the federal special
supplemental nutrition program for women, infants, and children
authorized by 42 U.S.C. Section 1786.
Sec. 26.002. TRUST FUND. (a) The community development
grocery store and healthy corner store revolving loan fund is a
trust fund outside the state treasury held by a community
development financial institution and administered by the
department as trustee on behalf of entities operating grocery
stores or healthy corner stores located in food deserts in this
state.
(b) The fund is composed of:
(1) money appropriated to the fund by the legislature;
(2) gifts or grants received from public or private
sources; and
(3) income from other money in the fund.
(c) The department may accept on behalf of the fund gifts
and grants for the use and benefit of the program.
Sec. 26.003. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION.
(a) The department shall contract with and award money to a
community development financial institution to carry out the
purposes of this chapter.
(b) In selecting a community development financial
institution, the department shall consider the financial
institution's:
(1) demonstrated success in implementing similar
economic development projects;
(2) ability to raise additional capital; and
(3) solvency.
(c) The community development financial institution shall:
(1) provide revolving loan funds to entities proposing
to operate grocery stores or healthy corner stores in food deserts;
(2) develop, in consultation with the department, a
scoring system used to score loan applications;
(3) provide training on business management and the
profitable sale of healthy foods to corner store owners receiving
grant money from the program;
(4) accept gifts and grants; and
(5) seek funding from various government and private
sources.
Sec. 26.004. INVESTMENT COMMITTEE. (a) Before contracting
with a community development financial institution, the department
shall require the financial institution to establish an investment
committee to approve loan requests of entities proposing to operate
grocery stores or healthy corner stores.
(b) The investment committee may not approve a loan request
of an entity proposing to operate a grocery store or healthy corner
store unless the proposed grocery store or healthy corner store:
(1) will be located in a food desert; and
(2) will accept benefits under the WIC program and the
supplemental nutrition assistance program.
Sec. 26.005. LOANS TO GROCERY STORES OR CORNER STORES. (a)
The community development financial institution may not make a loan
to an entity proposing to operate a grocery store or healthy corner
store in a food desert unless the investment committee has approved
the loan.
(b) A loan made by the community development financial
institution may be subordinated debt.
(c) The community development financial institution may
make a loan under the program through a partnership or joint
investment with one or more financial institutions or federal or
state programs.
(d) Payments on grocery store or healthy corner store loans
shall be made to the community development financial institution.
The community development financial institution shall use the loan
payment money received from entities operating grocery stores or
healthy corner stores to make new loans as provided by this chapter.
(e) A loan provided under this chapter to an entity
proposing to operate a grocery store or healthy corner store may not
exceed $250,000.
Sec. 26.006. SELF-FUNDING. The department shall develop the
fund program as a revolving loan fund that will become self-funding
over the life of the program.
Sec. 26.007. INCOME FROM LOAN. All income received on a
loan made with money received under the program is the property of
the community development financial institution. Income received
on a loan includes the payment of interest by a borrower and the
administrative fees assessed by the community development
financial institution.
Sec. 26.008. RULES. (a) The department shall adopt rules
to administer this chapter, including rules that require:
(1) the department to review the lending and servicing
practices of a community development financial institution to
ensure the practices conform to generally accepted accounting
principles;
(2) an eligible entity proposing to operate a grocery
store or healthy corner store to enter into an agreement with the
community development financial institution that states the terms
of the loan made to the entity;
(3) the community development financial institution
to provide to the department semiannual reports giving details of
the status of each loan made under the program;
(4) the community development financial institution
to perform annual audits of grocery stores or healthy corner stores
for which loans are made under the program; and
(5) the department to provide oversight of the
community development financial institution as necessary to
qualify the community development financial institution for loan
guarantees from federal and state programs.
(b) Under rules adopted by the department, the community
development financial institution may:
(1) make grants to eligible entities proposing to
operate grocery stores or healthy corner stores from money other
than money that is received from the fund and that was derived from
a legislative appropriation; or
(2) seek funds from state or federal agencies or
private sources to supplement and complement the funds received
under the program.
(c) The department may adopt other rules as necessary to
accomplish the purposes of this chapter.
Sec. 26.009. ANNUAL REPORT. (a) Not later than December 1
of each even-numbered year, the department, in coordination with
the community development financial institution, shall submit a
report to the House Appropriations Committee, the Senate Finance
Committee, the governor, and the Legislative Budget Board.
(b) The report must include for the preceding two state
fiscal years:
(1) the number of entities receiving loans or grants
under this chapter;
(2) repayment rates on loans;
(3) the total amount of money loaned or awarded by
grants;
(4) the amount of square footage of commercial space
created;
(5) the number of jobs created or retained;
(6) the average wages of the jobs created or retained;
and
(7) the additional property tax revenue gained by
local entities.
SECTION 3. Not later than December 1, 2013, the Department
of Agriculture shall adopt rules to administer Chapter 26,
Agriculture Code, as added by this Act.
SECTION 4. Not later than December 15, 2013, the Department
of Agriculture shall designate a community development financial
institution as provided by Section 26.003, Agriculture Code, as
added by this Act.
SECTION 5. Not later than January 15, 2014, the Department
of Agriculture shall transfer money in the community development
grocery store and healthy corner store revolving loan fund to the
community development financial institution.
SECTION 6. This Act takes effect September 1, 2013.