83R2728 AED-D
 
  By: Burnam H.B. No. 3616
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment of a community development grocery
  store revolving loan 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 COMMUNITY DEVELOPMENT GROCERY 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)  "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.
               (3)  "Fund" means the community development grocery
  store revolving loan fund established by this chapter.
               (4)  "Program" means the loan program authorized by
  this chapter.
               (5)  "Supplemental nutrition assistance program" means
  the nutritional assistance program formerly referred to as the food
  stamp program.
               (6)  "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 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 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 in food deserts;
               (2)  develop, in consultation with the department, a
  scoring system used to score loan applications;
               (3)  accept gifts and grants; and
               (4)  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.
         (b)  The investment committee may not approve a loan request
  of an entity proposing to operate a grocery store unless the
  proposed grocery 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. (a) The community
  development financial institution may not make a loan to an entity
  proposing to operate a grocery 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 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 to make new loans
  as provided by this chapter.
         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 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 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 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.
         SECTION 2.  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 3.  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 4.  Not later than January 15, 2014, the Department
  of Agriculture shall transfer money in the community development
  grocery store revolving loan fund to the community development
  financial institution.
         SECTION 5.  This Act takes effect September 1, 2013.