The bill would amend the Agriculture Code to establish the Texas Grocery Access Investment Fund and program. The program would provide financing for construction of new grocery stores; and renovation, expansion, and infrastructure upgrades of existing stores. The grocery stores must be located in an underserved community, and must primarily serve low and moderate income areas, as defined in the bill.
Under the provisions of the bill, the fund would consist of money appropriated by the Legislature; federal, state, and private grants and loans; federal tax credits; and other financial assistance. In any one fiscal year, no more than 10 percent of the fund shall be used for administrative costs; and no less than 25 percent of the fund balance shall be used for loans, grants and/or forgivable loans.
The bill would require the Texas Department of Agriculture (TDA), to adopt rules to administer the program by December 1, 2015, and to contract with one or more nonprofit organizations or community development financial institutions to administer the program.
The bill would require TDA to report annually to the Legislature on the projects funded, geographic distribution of the projects, costs of startup and administration of the program, and the outcomes.
This legislation would do one or more of the following: create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either with or outside of the Treasury, or create a dedicated revenue source. The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.
The bill would take effect September 1, 2015.
Initial Capitalization:
This analysis assumes an initial capitalization of $10 million from General Revenue to establish the Texas Grocery Access Investment Fund. Although the Texas Grocery Access Investment Fund would be a revolving loan fund, for purposes of this analysis no loan repayments are assumed to be credited to the fund. Should any repayments be accrued, or should administrative costs be less than 10 percent, the life of the fund beyond fiscal year 2020 would be extended.
Administrative Costs:
This analysis assumes the full allocation of up to 10 percent in fund balances would be used in each fiscal year for administrative costs: $1,000,000 in fiscal year 2016; $650,000 in fiscal year 2017; $422,500 in fiscal year 2018; $274,625 in fiscal year 2019, and $178,506 in fiscal year 2020.
Of this amount, in fiscal year 2016 and each year thereafter TDA would need one FTE (a financial analyst paid $62,653) with related benefits ($20,287) and travel and operating costs ($4,489). In fiscal year 2016 TDA would also incur one-time costs for rule-making ($50,254).
The balance of the 10 percent administrative allocation would be available for nonprofit or community development financial institution costs: $862,317 in fiscal year 2016, $562,571 in fiscal year 2017; $335,071 in fiscal year 2018; $187,196 in fiscal year 2019, and $91,077 in fiscal year 2020.
Amounts available for Loans, Grants, and/or Forgivable Loans:
Assuming that at least 25 percent of fund balances are used for grants or forgivable loans each fiscal year, amounts available for those purposes would be $2,500,000 in fiscal year 2016; $1,625,000 in fiscal year 2017; $1,056,250 in fiscal year 2018; $686,563 in fiscal year 2019; and $446,266 in fiscal year 2020.
In addition to these amounts, at least 25 percent of any loan repayments in each fiscal year would be made available for new loans, grants, and/or forgivable loans. For the purposes of this analysis, this amount is estimated to be $0 each fiscal year from 2016 - 2020.
No significant fiscal implication to units of local government is anticipated.