SENATE BILL 229

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

INTRODUCED BY

Carrie Hamblen and Angelica Rubio and Gay G. Kernan

 

 

 

 

 

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; CREATING A FUND; MAKING AN APPROPRIATION.

 

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. "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;

          F. "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;

          G. "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

          H. "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.--

          A. 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 food access organization and one or more community development financial institutions, subject to the limitations provided in Subsection B of this section, to:

                (1) market the program statewide;

                (2) raise funds for the healthy food financing fund;

                (3) develop and recommend guidelines for the operation of the program;

                (4) develop and recommend guidelines for applicants seeking grants or loans from the healthy food financing fund;

                (5) make financing award decisions;

                (6) originate and underwrite projects for grants and loans;

                (7) monitor compliance with the Healthy Food Financing Act and rules issued pursuant to that act; and

                (8) assess any economic effects in each community in which a project for which a grant or loan is made pursuant to the Healthy Food Financing Act is located.

          B. The department may enter into a contract with a community development financial institution only if the department first determines that the institution has:

                (1) experience lending to first-time loan recipients and small-scale enterprises operating in low- or moderate-income, underserved communities;

                (2) the ability to underwrite loans and grants to food retailers, distributors or other food and agriculture enterprises; and

                (3) the ability to raise funds to leverage appropriations to the healthy food financing fund.

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

          A. Each fiscal year, competitive grants or loans shall be made by the department pursuant to recommendations of the equitable food-oriented development advisory board. Grants or loans shall be made from the healthy food financing fund 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 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 of:

                (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 ability to repay to the healthy food financing fund 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] HEALTHY FOOD FINANCING FUND.--The "healthy food financing fund" is created as a nonreverting fund in the state treasury. The department shall administer the fund. The fund consists of appropriations, gifts, grants, donations and income from investment of the fund. Money in the fund is subject to appropriation by the legislature for the purpose of making grants and loans pursuant to the Healthy Food Financing Act and for administration of that act. Money in the fund shall be disbursed on warrants of the secretary of finance and administration pursuant to vouchers signed by the secretary of economic development. Not more than ten percent of the fund shall be used for administration of the Healthy Food Financing Act.

     SECTION 6. [NEW MATERIAL] EQUITABLE FOOD-ORIENTED DEVELOPMENT ADVISORY BOARD--MEMBERSHIP--POWERS AND DUTIES.--

          A. The "equitable food-oriented development advisory board" is created and is administratively attached to the department. The board consists of five members appointed by the secretary of economic development. Board members shall serve three-year terms. The secretary shall appoint members that are:

                (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 quarterly to review applications for grants and loans from eligible applicants pursuant to the Healthy Food Financing Act and make recommendations to the department on loans or grants to be made from the healthy food financing fund, 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 department regarding eligibility of the applicants for which the loans or grants are recommended.

          D. In determining which applicants and projects to recommend to the department 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 or has a business location in the area in which the proposed project will be located;

                (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, using practices that enhance the soil's continuing capacity to function as a biological system, increase its organic matter and improve its structure and water- and nutrient-holding capacity.

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

     SECTION 7. [NEW MATERIAL] RULEMAKING.--The department shall issue rules necessary to administer the provisions of the Healthy Food Financing Act.

     SECTION 8. [NEW MATERIAL] REPORTING AND ACCOUNTABILITY.--The department 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 9. APPROPRIATION.--Two hundred thousand dollars ($200,000) is appropriated from the general fund to the healthy food financing fund for expenditure in fiscal year 2022 and subsequent fiscal years for the purposes of the Healthy Food Financing Act. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.

     SECTION 10. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2021.

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