By: Bernal H.B. No. 821
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of a grocery access investment fund
program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 2, Agriculture Code, is amended by adding
Chapter 26 to read as follows:
CHAPTER 26. TEXAS GROCERY ACCESS INVESTMENT 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) "Financing" means a loan, grant, or forgivable
loan.
(3) "Fund" means the Texas grocery access investment
fund established by this chapter.
(4) "Grocery store" means a self-service retail store
that primarily sells meat, seafood, fruits, vegetables, dairy
products, dry groceries, household products, and sundries.
(5) "Low-income area" means a census tract, based on
the most recent information published by the United States Bureau
of the Census, in which the poverty rate is 20 percent or higher or
the median family income is at or below 81 percent of the median
family income for the state or the metropolitan statistical area.
(6) "Moderate-income area" means a census tract, based
on the most recent information published by the United States
Bureau of the Census, in which the median family income is above 81
percent and at or below 95 percent of the median family income for
the state or the metropolitan statistical area.
(7) "Program" means the Texas grocery access
investment fund program authorized by this chapter.
(8) "Supplemental nutrition assistance program" means
the nutritional assistance program operated under Chapter 33, Human
Resources Code, and formerly referred to as the food stamp program.
(9) "Underserved area" means a census tract, based on
the most recent information published by the United States Bureau
of the Census, that has been determined to be an area with low
supermarket access by:
(A) the United States Department of Agriculture,
as identified in the Food Access Research Atlas published by that
department; or
(B) another governmental or philanthropic
healthy food initiative.
(10) "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. TEXAS GROCERY ACCESS INVESTMENT FUND PROGRAM.
(a) The department, in cooperation with public and private sector
partners, shall establish the Texas grocery access investment fund
program to provide financing to construct, rehabilitate, or expand
grocery stores in underserved low-income and moderate-income areas
in this state.
(b) The fund is a trust fund outside the treasury with the
comptroller and administered by the department.
(c) The fund is composed of:
(1) money appropriated to the fund by the legislature;
(2) federal, state, or private grants or loans
deposited to the credit of the fund;
(3) money received as a result of federal tax credits
deposited to the credit of the fund;
(4) other money deposited to the credit of the fund, as
provided by law; and
(5) any other type of financial assistance.
(d) The department may use money appropriated to the
department for the purposes of establishing the program authorized
by this chapter. Not less than 25 percent of the money in the fund
shall be used to provide grants or forgivable loans distributed
under the program. Not more than 10 percent of the money in the fund
may be reserved for administrative or operational costs of
operating the program, unless the costs are covered by another
budget or in-kind contributions.
(e) The department may deposit to the credit of the fund any
money available to the department for the purpose of the program,
including appropriated money.
Sec. 26.003. ADMINISTRATION OF TEXAS GROCERY ACCESS
INVESTMENT FUND PROGRAM. (a) The department shall contract with
one or more qualified nonprofit organizations or community
development financial institutions to administer the program
through a public-private partnership.
(b) A nonprofit organization or community development
financial institution contracted under Subsection (a) shall
establish program guidelines, raise matching funds, promote the
program statewide, evaluate applicants, underwrite and disburse
grants and loans, and monitor compliance with and the impact of the
program.
(c) The department shall establish rules or other
procedures as necessary to administer this chapter.
(d) The department shall establish monitoring and
accountability mechanisms for projects receiving financing under
the program and shall report annually to the legislature. The
report must include information regarding the projects that are
funded, the geographic distribution of the projects, the costs of
start-up and administration of the program, and the outcomes of the
projects, including the number and types of jobs created as a result
of the program and the health impact of the program.
(e) The department shall create project eligibility
guidelines and provide financing through an application process.
Projects must be located in an underserved area and primarily serve
low-income or moderate-income areas. Projects eligible for
financing include:
(1) constructing a new grocery store; and
(2) improving an existing grocery store, including
upgrading the store's infrastructure, renovating the store, or
expanding the store to improve the availability and quality of
fresh produce and other healthy food.
(f) An applicant for financing may be a for-profit or
nonprofit entity, including a sole proprietorship, partnership,
limited liability company, corporation, cooperative, nonprofit
organization, nonprofit community development entity, university,
or government entity. An applicant for financing must:
(1) demonstrate the capacity to successfully
implement the project and the likelihood that the project will be
economically self-sustaining;
(2) demonstrate the ability to repay any loan required
to be repaid; and
(3) agree, for a period of five years, to:
(A) accept benefits under the WIC program and the
supplemental nutrition assistance program;
(B) allocate 30 percent of the retail space for
the sale of perishable foods, which may include whole grains, fresh
produce, meat, poultry, seafood, and fresh or frozen dairy
products;
(C) comply with all data collection and reporting
requirements established by the department;
(D) promote the sale of fresh produce, including
Texas-grown fruits and vegetables, and fresh Texas-raised meat,
poultry, and seafood products; and
(E) promote the hiring of local residents.
(g) In determining which qualified projects to finance, the
department shall consider:
(1) the level of need in the area to be served;
(2) the amount of public funding required to make the
project move forward, create impact, or be competitive;
(3) the degree to which the project will have a
positive economic impact on the underserved area, including by
creating or retaining jobs for local residents;
(4) the degree to which the project will participate
in state and local health initiatives to educate consumers on
nutrition and promote healthy eating, including Texas A&M AgriLife
Extension Service initiatives; and
(5) any other criteria the department considers
necessary or appropriate.
(h) A recipient of financing may use funds received for the
following purposes:
(1) site acquisition and preparation;
(2) construction and build-out costs;
(3) equipment and furnishings;
(4) employee training and security;
(5) predevelopment costs, including market studies
and appraisals;
(6) energy efficiency measures; and
(7) working capital for initial inventory and start-up
costs.
SECTION 2. Not later than December 1, 2025, the Department
of Agriculture shall adopt rules to administer Chapter 26,
Agriculture Code, as added by this Act.
SECTION 3. Not later than December 15, 2025, the Department
of Agriculture shall contract with one or more nonprofit
organizations or community development financial institutions as
provided by Section 26.003, Agriculture Code, as added by this Act.
SECTION 4. Not later than January 15, 2026, the Department
of Agriculture shall transfer money to the Texas grocery access
investment fund.
SECTION 5. This Act takes effect September 1, 2025.