SENATE FINANCE COMMITTEE SUBSTITUTE FOR

SENATE BILL 229

55th legislature - STATE OF NEW MEXICO - first session, 2021

 

 

 

 

 

 

 

AN ACT

RELATING TO ECONOMIC DEVELOPMENT; ENACTING THE HEALTHY FOOD FINANCING ACT; CREATING THE HEALTHY FOOD FINANCING PROGRAM IN THE ECONOMIC DEVELOPMENT DEPARTMENT; CREATING THE EQUITABLE FOOD-ORIENTED DEVELOPMENT ADVISORY BOARD; ESTABLISHING POWERS AND DUTIES.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Healthy Food Financing Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Healthy Food Financing Act:

          A. "community development financial institution" means a specialized organization, certified by the federal department of the treasury, that provides financial services in low-income communities and to people who lack access to financing, including through community development banks, credit unions and loan and venture capital funds;

          B. "department" means the economic development department;

          C. "grocery store" means a for-profit or nonprofit self-service retail establishment that sells fresh fruits, vegetables, meat, seafood, dairy products, dry groceries and household products;

          D. "healthy food" means nutrient-dense food, as determined by the equitable food-oriented development advisory board;

          E. "healthy soil" means soil cared for using practices that enhance the soil's continuing capacity to function as a biological system, increase the soil's organic matter and improve its structure and water- and nutrient-holding capacity pursuant to the Healthy Soil Act;

          F. "low-income community" means a census tract that, according to the most recent federal decennial census, has a poverty rate of at least twenty percent or in which the median family income does not exceed eighty percent of the greater of the statewide or metropolitan median family income;

          G. "moderate-income community" means a census tract that, according to the most recent federal decennial census, has a median family income that is between eighty-one and ninety-five percent of the statewide median family income;

          H. "socially disadvantaged group" means a group whose members have been subjected to racial, ethnic or gender prejudice because of their identity as members of a group without regard to their individual qualities; and

          I. "underserved community" means a census tract that is determined to be an area with low supermarket access by:

                (1) the United States department of agriculture, pursuant to its food access research atlas; or

                (2) the equitable food-oriented development advisory board, pursuant to a methodology that the board adopts and that is used by a government entity or philanthropic healthy food initiative.

     SECTION 3. [NEW MATERIAL] HEALTHY FOOD FINANCING PROGRAM--CREATED--ADMINISTRATION.--The "healthy food financing program" is created in the department. The department shall administer the program and shall, to the extent permitted by the Procurement Code, enter into a contract with a community development financial institution to:

          A. market the program statewide;

          B. develop and recommend guidelines for the operation of the program;

          C. develop and recommend guidelines for applicants seeking grants or loans;

          D. make financing award decisions;

          E. originate and underwrite projects for grants and loans;

          F. monitor compliance with the Healthy Food Financing Act and rules issued pursuant to that act; and

          G. assess any economic effects in each low- or moderate-income community in which a project for which a grant or loan is made pursuant to the Healthy Food Financing Act is located.

     SECTION 4. [NEW MATERIAL] HEALTHY FOOD FINANCING PROGRAM GRANTS AND LOANS.--

          A. Each fiscal year, competitive grants or loans shall be made by the community development financial institution pursuant to recommendations of the equitable food-oriented development advisory board. Grants or loans shall be made to applicants for the following eligible projects:

                (1) new grocery store construction;

                (2) store renovation, expansion and infrastructure upgrades proposed to improve the availability and quality of healthy food;

                (3) establishment of farmers' markets, food cooperatives, community gardening projects and mobile food markets;

                (4) food production, aggregation, processing and distribution projects, including hub distribution projects proposed to benefit local food producers and to improve food retailer access to fresh produce and healthy food; and

                (5) analysis and study of methods to increase market opportunities for projects that promote access to healthy food.

          B. A grant or loan made pursuant to this section for an eligible project may be used for the following project-related costs:

                (1) site acquisition and preparation;

                (2) construction costs and property improvements;

                (3) equipment and furnishings;

                (4) workforce training;

                (5) predevelopment costs, including market studies and appraisals;

                (6) working capital for first-time inventory and start-up costs;

                (7) business process upgrades; and

                (8) marketing.

          C. Political subdivisions of the state, Indian nations, tribes and pueblos and for-profit and nonprofit entities may apply for loans and grants pursuant to this section.

          D. To be eligible for a grant or loan pursuant to this section, an applicant shall provide to the equitable food-oriented development advisory board documentation supporting:

                (1) the applicant's ability to implement the project for which the grant is sought;

                (2) the ability for the project to become economically self-sustaining;

                (3) the applicant's likelihood to repay any loan the applicant receives pursuant to this section;

                (4) the applicant's plan to promote, for at least five years, the hiring of local residents in a manner representative of the community that the applicant proposes to serve;

                (5) the applicant's:

                     (a) plan to accept, for at least five years, benefits from consumers pursuant to the federal supplemental nutrition assistance program or the special supplemental nutrition program for women, infants, and children; or

                     (b) plan, approved by the department, to increase affordability of healthy food for low-income households;

                (6) the applicant's plan to allocate at least thirty percent of food retail space for the sale of perishable foods, if the loan or grant sought is for a grocery store; and

                (7) the applicant's plan to use the grant or loan to expand capacity for the sale of perishable foods, if the loan or grant is not for a grocery store.

          E. In addition to the requirements provided in Subsection D of this section, to be eligible for a loan or grant pursuant to this section, an applicant shall demonstrate to the equitable food-oriented development advisory board that the project for which funding is sought will primarily serve underserved low-income or moderate-income communities.

     SECTION 5. [NEW MATERIAL] EQUITABLE FOOD-ORIENTED DEVELOPMENT ADVISORY BOARD--MEMBERSHIP--POWERS AND DUTIES.--

          A. The "equitable food-oriented development advisory board" is created. The board consists of five members appointed by the secretary of economic development, in consultation with the community development financial institution. Board members shall serve three-year terms. Members shall be:

                (1) low- or moderate-income farmers, food entrepreneurs, value-added food producers and food retailers from low- or moderate-income communities; and

                (2) members of a socially disadvantaged group.

          B. A majority of the members of the equitable food-oriented development advisory board constitutes a quorum for the transaction of business. The board shall elect a chair from among its members.

          C. The equitable food-oriented development advisory board shall meet on an as-needed basis, but no more than eight times per year, to review applications for grants and loans from eligible applicants pursuant to the Healthy Food Financing Act and make recommendations to the community development financial institution on loans or grants, including the applicants for which loans or grants are recommended, the amounts of the recommended loans or grants and the projects for which the loans or grants are recommended. The board shall additionally provide findings to the community development financial institution regarding eligibility of the applicants for which the loans or grants are recommended.

          D. In determining which applicants and projects to recommend to the community development financial institution for grants or loans, the equitable food-oriented development advisory board shall consider:

                (1) the applicant's demonstrated capacity to implement a proposed project, including the likelihood that the project will be economically self-sustaining;

                (2) the economic need in the community where the proposed project will be located;

                (3) the availability of healthy food in the community where the proposed project will be located;

                (4) the degree to which the proposed project will economically impact an underserved community, including the degree to which jobs will be created or retained in that community that provide employees with a living wage that adjusts to compensate for inflation, paid sick leave, career-building opportunities that help employees develop networks and skills, provide access to training and mentorship and advancement within the business;

                (5) whether the applicant resides within a thirty-mile radius of the location of the proposed project;

                (6) the degree to which the applicant will participate in state and local health initiatives to provide information about nutrition and wellness to members of the public;

                (7) the degree to which the proposed project will promote sales of fresh produce;

                (8) the degree to which the proposed project will promote sales of fresh produce grown in New Mexico; and

                (9) the degree to which the proposed project will promote sales of fresh produce grown in healthy soil.

          E. The equitable food-oriented development advisory board may give priority to applicants who are members of a socially disadvantaged group.

     SECTION 6. [NEW MATERIAL] RULEMAKING.--The department shall issue rules necessary to administer the provisions of the Healthy Food Financing Act.

     SECTION 7. [NEW MATERIAL] REPORTING AND ACCOUNTABILITY.--The community development financial institution shall:

          A. establish monitoring and accountability mechanisms for projects receiving financing; and

          B. provide a report before December 1 of each year to the legislative health and human services committee describing the:

                (1) applicants and projects that received grants and loans pursuant to the Healthy Food Financing Act during the previous fiscal year;

                (2) applicants and projects for which loans are outstanding at the time of each report;

                (3) effects of the healthy food financing program on job creation, job security and community health; and

                (4) recommendations of the equitable food-oriented development advisory board.

     SECTION 8. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2021.

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