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A BILL TO BE ENTITLED
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AN ACT
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relating to the establishment of a community development grocery |
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store revolving loan fund program. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 2, Agriculture Code, is amended by adding |
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Chapter 26 to read as follows: |
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CHAPTER 26. TEXAS COMMUNITY DEVELOPMENT GROCERY STORE REVOLVING |
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LOAN FUND |
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Sec. 26.001. DEFINITIONS. In this chapter: |
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(1) "Community development financial institution" has |
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the meaning assigned by 12 U.S.C. Section 4702. |
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(2) "Food desert" means a census tract, based on the |
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most recent information published by the United States Bureau of |
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the Census, in which: |
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(A) the poverty rate is 20 percent or higher or |
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the median family income is at or below 80 percent of the area |
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median family income; and |
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(B) at least 500 people or at least 33 percent of |
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the census area's population reside more than: |
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(i) one mile from a grocery store, in the |
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case of a census tract other than a rural census tract; or |
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(ii) 10 miles from a grocery store, in the |
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case of a rural census tract. |
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(3) "Fund" means the community development grocery |
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store revolving loan fund established by this chapter. |
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(4) "Program" means the loan program authorized by |
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this chapter. |
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(5) "Supplemental nutrition assistance program" means |
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the nutritional assistance program formerly referred to as the food |
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stamp program. |
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(6) "WIC program" means the federal special |
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supplemental nutrition program for women, infants, and children |
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authorized by 42 U.S.C. Section 1786. |
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Sec. 26.002. TRUST FUND. (a) The community development |
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grocery store revolving loan fund is a trust fund outside the state |
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treasury held by a community development financial institution and |
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administered by the department as trustee on behalf of entities |
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operating grocery stores located in food deserts in this state. |
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(b) The fund is composed of: |
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(1) money appropriated to the fund by the legislature; |
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(2) gifts or grants received from public or private |
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sources; and |
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(3) income from other money in the fund. |
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(c) The department may accept on behalf of the fund gifts |
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and grants for the use and benefit of the program. |
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Sec. 26.003. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION. |
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(a) The department shall contract with and award money to a |
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community development financial institution to carry out the |
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purposes of this chapter. |
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(b) In selecting a community development financial |
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institution, the department shall consider the financial |
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institution's: |
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(1) demonstrated success in implementing similar |
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economic development projects; |
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(2) ability to raise additional capital; and |
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(3) solvency. |
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(c) The community development financial institution shall: |
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(1) provide revolving loan funds to entities proposing |
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to operate grocery stores in food deserts; |
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(2) develop, in consultation with the department, a |
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scoring system used to score loan applications; |
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(3) accept gifts and grants; and |
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(4) seek funding from various government and private |
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sources. |
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Sec. 26.004. INVESTMENT COMMITTEE. (a) Before contracting |
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with a community development financial institution, the department |
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shall require the financial institution to establish an investment |
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committee to approve loan requests of entities proposing to operate |
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grocery stores. |
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(b) The investment committee may not approve a loan request |
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of an entity proposing to operate a grocery store unless the |
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proposed grocery store: |
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(1) will be located in a food desert; and |
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(2) will accept benefits under the WIC program and the |
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supplemental nutrition assistance program. |
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Sec. 26.005. LOANS TO GROCERY STORES. (a) The community |
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development financial institution may not make a loan to an entity |
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proposing to operate a grocery store in a food desert unless the |
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investment committee has approved the loan. |
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(b) A loan made by the community development financial |
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institution may be subordinated debt. |
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(c) The community development financial institution may |
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make a loan under the program through a partnership or joint |
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investment with one or more financial institutions or federal or |
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state programs. |
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(d) Payments on grocery store loans shall be made to the |
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community development financial institution. The community |
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development financial institution shall use the loan payment money |
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received from entities operating grocery stores to make new loans |
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as provided by this chapter. |
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Sec. 26.006. SELF-FUNDING. The department shall develop the |
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fund program as a revolving loan fund that will become self-funding |
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over the life of the program. |
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Sec. 26.007. INCOME FROM LOAN. All income received on a |
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loan made with money received under the program is the property of |
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the community development financial institution. Income received |
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on a loan includes the payment of interest by a borrower and the |
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administrative fees assessed by the community development |
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financial institution. |
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Sec. 26.008. RULES. (a) The department shall adopt rules |
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to administer this chapter, including rules that require: |
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(1) the department to review the lending and servicing |
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practices of a community development financial institution to |
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ensure the practices conform to generally accepted accounting |
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principles; |
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(2) an eligible entity proposing to operate a grocery |
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store to enter into an agreement with the community development |
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financial institution that states the terms of the loan made to the |
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entity; |
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(3) the community development financial institution |
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to provide to the department semiannual reports giving details of |
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the status of each loan made under the program; |
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(4) the community development financial institution |
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to perform annual audits of grocery stores for which loans are made |
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under the program; and |
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(5) the department to provide oversight of the |
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community development financial institution as necessary to |
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qualify the community development financial institution for loan |
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guarantees from federal and state programs. |
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(b) Under rules adopted by the department, the community |
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development financial institution may: |
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(1) make grants to eligible entities proposing to |
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operate grocery stores from money other than money that is received |
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from the fund and that was derived from a legislative |
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appropriation; or |
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(2) seek funds from state or federal agencies or |
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private sources to supplement and complement the funds received |
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under the program. |
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(c) The department may adopt other rules as necessary to |
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accomplish the purposes of this chapter. |
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SECTION 2. Not later than December 1, 2013, the Department |
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of Agriculture shall adopt rules to administer Chapter 26, |
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Agriculture Code, as added by this Act. |
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SECTION 3. Not later than December 15, 2013, the Department |
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of Agriculture shall designate a community development financial |
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institution as provided by Section 26.003, Agriculture Code, as |
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added by this Act. |
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SECTION 4. Not later than January 15, 2014, the Department |
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of Agriculture shall transfer money in the community development |
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grocery store revolving loan fund to the community development |
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financial institution. |
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SECTION 5. This Act takes effect September 1, 2013. |