BILL ANALYSIS

C.S.H.B. 2509

By: Bernal

Agriculture & Livestock

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Federal data indicates that millions of Texans live in food deserts where access to supermarkets is severely limited. Food deserts lack adequate access to affordable, healthy food choices and may lead to higher risks of hunger. C.S.H.B. 2509 seeks to address this issue by requiring the Department of Agriculture, in cooperation with public and private sector partners, to 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 Texas.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the Department of Agriculture in SECTION 1 of this bill.

ANALYSIS

C.S.H.B. 2509 amends the Agriculture Code to require the Department of Agriculture (TDA), in cooperation with public and private sector partners, to 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 Texas. The bill establishes the Texas grocery access investment fund as a trust fund outside the treasury with the comptroller of public accounts to be administered by TDA and composed of the following:

· money appropriated to the fund by the legislature;

· federal, state, or private grants or loans deposited to the fund's credit;

· money received as a result of federal tax credits deposited to the fund's credit;

· other money deposited to the fund's credit, as provided by law; and

· any other type of financial assistance.

The bill authorizes TDA to use money appropriated to TDA for the purposes of establishing the program. The bill requires a minimum of 25 percent of the money in the fund to be used to provide grants or forgivable loans distributed under the program and caps at 10 percent of the money in the fund the amount that may be reserved for administrative or operational costs of operating the program, unless the costs are covered by another budget or in-kind contributions. The bill authorizes TDA to deposit to the fund's credit any money available to TDA for the program's purpose, including appropriated money. The bill requires TDA, not later than January 15, 2024, to transfer money to the fund.

C.S.H.B. 2509 requires TDA, not later than December 15, 2023, to contract with one or more qualified nonprofit organizations or community development financial institutions to administer the program through a public-private partnership. The bill requires a contracted organization or institution to 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. The bill requires TDA to establish procedures or, not later than December 1, 2023, adopt rules as necessary to administer the program.

C.S.H.B. 2509 requires TDA to establish monitoring and accountability mechanisms for projects receiving financing under the program and to report annually to the legislature and sets out required content for the report. The bill requires TDA to create project eligibility guidelines and provide financing through an application process. The bill requires projects to be located in an underserved area and primarily serve low-income or moderate-income areas and specifies that projects eligible for financing include the construction of a new grocery store and the improvement of an existing grocery store, including specified grocery store improvements. The bill establishes that an applicant for financing may be a for-profit or nonprofit entity, including specified entities, and sets out the following:

· required applicant qualifications;

· considerations TDA is required to make in determining which qualified projects to finance; and

· the purposes for which a recipient of financing may use received funds.

EFFECTIVE DATE

September 1, 2023.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 2509 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

With regard to the federal, state, or private grants or loans and money received as a result of federal tax credits of which the fund is partly composed, the substitute specifies that such grants, loans, and money are grants, loans, and money deposited to the fund's credit, whereas the introduced did not include this specification. The substitute includes a provision absent in the introduced that includes in the fund's composition other money deposited to the fund's credit, as provided by law.

The substitute omits a provision present in the introduced that restricted the appropriation of money in the fund only to TDA for the purposes of establishing the program. The substitute includes provisions absent in the introduced that authorize TDA to do the following:

· use money appropriated to TDA for the purposes of establishing the program; and

· deposit to the fund's credit any money available to TDA for the program's purpose, including appropriated money.