Texas 2017 - 85th Regular

Texas House Bill HB1047 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R1796 DDT-D
2	2	By: Thierry H.B. No. 1047
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the establishment of a community development grocery
8	8	store and healthy corner store revolving loan fund program.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. It is the intent of the legislature to support
11	11	revitalization in food deserts, reduce the cost of financing
12	12	agricultural development projects, and increase the number of food
13	13	markets providing affordable and nutritious foods in underserved
14	14	areas.
15	15	SECTION 2. Title 2, Agriculture Code, is amended by adding
16	16	Chapter 26 to read as follows:
17	17	CHAPTER 26. TEXAS COMMUNITY DEVELOPMENT GROCERY STORE AND HEALTHY
18	18	CORNER STORE REVOLVING LOAN FUND
19	19	Sec. 26.001. DEFINITIONS. In this chapter:
20	20	(1) "Community development financial institution" has
21	21	the meaning assigned by 12 U.S.C. Section 4702.
22	22	(2) "Corner store" means a store that has less than
23	23	2,000 square feet of retail space.
24	24	(3) "Food desert" means a geographic area determined
25	25	by the department to be an area that:
26	26	(A) has limited access to healthy food retailers
27	27	and is located in a lower-income or high-poverty area; or
28	28	(B) otherwise has serious healthy food access
29	29	limitations.
30	30	(4) "Fund" means the community development grocery
31	31	store and healthy corner store revolving loan fund established by
32	32	this chapter.
33	33	(5) "Grocery store" means a store that has at least:
34	34	(A) 66 percent of the store's retail space
35	35	reserved for the sale of food products;
36	36	(B) 50 percent of the store's food retail space
37	37	reserved for the sale of non-prepared foods or foods intended for
38	38	home preparation and consumption; and
39	39	(C) 30 percent of the store's food retail space
40	40	reserved for the sale of perishable foods, including dairy
41	41	products, fresh produce, fresh meats, poultry, and fish, and frozen
42	42	foods.
43	43	(6) "Healthy corner store" means a corner store that:
44	44	(A) offers a wide variety of fresh produce for
45	45	sale; and
46	46	(B) allocates at least 20 percent of the store's
47	47	retail space to fresh produce and other perishable foods, including
48	48	dairy products.
49	49	(7) "Program" means the loan program authorized by
50	50	this chapter.
51	51	(8) "Supplemental nutrition assistance program" means
52	52	the nutritional assistance program formerly referred to as the food
53	53	stamp program.
54	54	(9) "WIC program" means the federal special
55	55	supplemental nutrition program for women, infants, and children
56	56	authorized by 42 U.S.C. Section 1786.
57	57	Sec. 26.002. TRUST FUND. (a) The community development
58	58	grocery store and healthy corner store revolving loan fund is a
59	59	trust fund outside the state treasury held by a community
60	60	development financial institution and overseen by the department as
61	61	trustee on behalf of entities operating grocery stores or healthy
62	62	corner stores located in food deserts in this state.
63	63	(b) The fund is composed of:
64	64	(1) gifts or grants received from public or private
65	65	sources; and
66	66	(2) income from other money in the fund.
67	67	(c) The department may accept on behalf of the fund gifts
68	68	and grants for the use and benefit of the program.
69	69	Sec. 26.003. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.
70	70	(a) The department shall contract with and award money, if
71	71	available, to not more than five community development financial
72	72	institutions to carry out the purposes of this chapter.
73	73	(b) In selecting a community development financial
74	74	institution, the department shall consider the financial
75	75	institution's:
76	76	(1) demonstrated success in implementing similar
77	77	economic development projects;
78	78	(2) ability to raise additional capital; and
79	79	(3) solvency.
80	80	(c) The community development financial institution shall:
81	81	(1) provide revolving loan funds to entities proposing
82	82	to operate or operating grocery stores or healthy corner stores in
83	83	food deserts;
84	84	(2) develop, in consultation with the department, a
85	85	system used to underwrite loan applications;
86	86	(3) provide training on business management and the
87	87	profitable sale of healthy foods to corner store owners receiving a
88	88	loan or grant money from the program;
89	89	(4) accept gifts and grants; and
90	90	(5) seek funding from various government and private
91	91	sources.
92	92	Sec. 26.004. LOAN REVIEW COMMITTEE. (a) Before
93	93	contracting with a community development financial institution,
94	94	the department shall require the financial institution to establish
95	95	or make use of an existing loan review committee to approve loan
96	96	requests of entities proposing to operate or operating grocery
97	97	stores or healthy corner stores.
98	98	(b) The loan review committee may not approve a loan request
99	99	of an entity proposing to operate or operating a grocery store or
100	100	healthy corner store unless the grocery store or healthy corner
101	101	store:
102	102	(1) will be or currently is located in a food desert;
103	103	(2) will be or currently is located in a low and
104	104	moderate income area, as determined by the United States Department
105	105	of Housing and Urban Development, or will serve or currently is
106	106	serving a customer base living in a low and moderate income area;
107	107	(3) will accept benefits under the WIC program and the
108	108	supplemental nutrition assistance program not later than the 90th
109	109	day after the date the store opens, or currently accepts benefits
110	110	under those programs; and
111	111	(4) will be or currently is open year-round.
112	112	Sec. 26.005. CONSIDERATION OF OTHER RESOURCES. The loan
113	113	review committee in approving a loan request shall give preference
114	114	to an entity proposing to operate or operating a grocery store or
115	115	healthy corner store that uses additional public and private
116	116	resources to fund the grocery store or healthy corner store,
117	117	including cash or in-kind matches.
118	118	Sec. 26.006. LOANS TO GROCERY STORES OR CORNER STORES. (a)
119	119	The community development financial institution may not make a loan
120	120	to an entity proposing to operate or operating a grocery store or
121	121	healthy corner store in a food desert unless the loan review
122	122	committee has approved the loan.
123	123	(b) A loan made by the community development financial
124	124	institution may be subordinated debt.
125	125	(c) The community development financial institution may
126	126	make a loan under the program through a partnership or joint
127	127	investment with one or more financial institutions or federal or
128	128	state programs.
129	129	(d) Payments on grocery store or healthy corner store loans
130	130	shall be made to the community development financial institution.
131	131	The community development financial institution shall use the
132	132	repayments of loan principal by entities operating grocery stores
133	133	or healthy corner stores to make new loans as provided by this
134	134	chapter.
135	135	(e) The community development financial institution may
136	136	make a forgivable loan at a zero percent interest rate for a period
137	137	of five years to an entity proposing to operate or operating a
138	138	grocery store or healthy corner store in a food desert. The
139	139	community development financial institution that makes a
140	140	forgivable loan under this subsection:
141	141	(1) may not make a forgivable loan to an entity that
142	142	exceeds $500,000;
143	143	(2) may not forgive an amount greater than one-fifth
144	144	of the forgivable loan amount each year;
145	145	(3) shall annually evaluate an entity that receives a
146	146	forgivable loan under this subsection to ensure that the entity is
147	147	in compliance with the requirements of this chapter; and
148	148	(4) if the community development financial
149	149	institution determines that the entity is not in compliance with
150	150	the requirements of this chapter, shall require the entity to repay
151	151	the remaining balance of the forgivable loan.
152	152	(f) A loan provided under this chapter must be made from
153	153	available funds that must be used for that purpose.
154	154	Sec. 26.007. INCREASE IN INTEREST RATE; ACCELERATED
155	155	REPAYMENT. If a recipient of a loan does not comply with the
156	156	requirements of this chapter, the community development financial
157	157	institution that made the loan, as provided by department rule,
158	158	may:
159	159	(1) increase the interest rate on the loan;
160	160	(2) accelerate repayment of the principal of and
161	161	interest on the loan; or
162	162	(3) take any other remedy permitted by department rule
163	163	that the institution considers appropriate.
164	164	Sec. 26.008. SELF-FUNDING. The department shall develop
165	165	the fund program as a revolving loan fund that will become
166	166	self-funding over the life of the program.
167	167	Sec. 26.009. INCOME FROM LOAN. All income received on a
168	168	loan made with money received under the program is the property of
169	169	the community development financial institution. Income received
170	170	on a loan includes the payment of interest by a borrower and the
171	171	administrative fees assessed by the community development
172	172	financial institution.
173	173	Sec. 26.010. RULES. (a) The department shall adopt rules
174	174	to administer this chapter, including rules that require:
175	175	(1) the department to review the lending and servicing
176	176	practices of a community development financial institution to
177	177	ensure the practices conform to generally accepted accounting
178	178	principles;
179	179	(2) an eligible entity proposing to operate or
180	180	operating a grocery store or healthy corner store to enter into an
181	181	agreement with the community development financial institution
182	182	that states the terms of the loan made to the entity;
183	183	(3) the community development financial institution
184	184	to provide to the department semiannual reports giving details of
185	185	the status of each loan made under the program;
186	186	(4) the community development financial institution
187	187	to develop rules to regulate financial monitoring and inventory;
188	188	(5) a third-party certified public accountant to
189	189	perform biennial audits of grocery stores for which loans are made
190	190	under the program; and
191	191	(6) the department to provide oversight of the
192	192	community development financial institution as necessary to
193	193	qualify the community development financial institution for loan
194	194	guarantees from federal or state programs.
195	195	(b) Under rules adopted by the department, the community
196	196	development financial institution may:
197	197	(1) make grants to eligible entities proposing to
198	198	operate or operating grocery stores or healthy corner stores from
199	199	money other than money that may be received from the fund; or
200	200	(2) seek funds from state or federal agencies or
201	201	private sources to supplement and complement any funds received
202	202	under the program.
203	203	(c) The department may adopt other rules as necessary to
204	204	accomplish the purposes of this chapter.
205	205	Sec. 26.011. BIENNIAL REPORT. (a) Not later than December
206	206	1 of each even-numbered year, the department, in coordination with
207	207	the community development financial institution, shall submit a
208	208	report to the House Appropriations Committee, the Senate Finance
209	209	Committee, the governor, and the Legislative Budget Board.
210	210	(b) The report must include for the preceding two state
211	211	fiscal years:
212	212	(1) the number of entities receiving loans or grants
213	213	under this chapter;
214	214	(2) repayment rates on loans;
215	215	(3) the total amount of money loaned or awarded by
216	216	grants;
217	217	(4) the amount of square footage of commercial space
218	218	created;
219	219	(5) the number of jobs created or retained;
220	220	(6) the average wages of the jobs created or retained;
221	221	and
222	222	(7) the additional property tax revenue gained by
223	223	local entities.
224	224	SECTION 3. Not later than November 15, 2017, the Department
225	225	of Agriculture shall adopt rules to administer Chapter 26,
226	226	Agriculture Code, as added by this Act.
227	227	SECTION 4. Not later than January 15, 2018, the Department
228	228	of Agriculture shall designate community development financial
229	229	institutions as provided by Section 26.003, Agriculture Code, as
230	230	added by this Act, to carry out the purposes of Chapter 26,
231	231	Agriculture Code, as added by this Act.
232	232	SECTION 5. Not later than February 15, 2018, the Department
233	233	of Agriculture shall transfer money in the community development
234	234	grocery store and healthy corner store revolving loan fund to a
235	235	community development financial institution.
236	236	SECTION 6. This Act takes effect September 1, 2017.