House File 2176 - Introduced HOUSE FILE 2176 BY LOHSE A BILL FOR An Act creating a grocer reinvestment fund and program under 1 the purview of the economic development authority, modifying 2 the local food and farm program, and making appropriations. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5268YH (9) 90 jm/ko

H.F. 2176 DIVISION I 1 GROCER REINVESTMENT FUND AND PROGRAM 2 Section 1. NEW SECTION . 15.413 Grocer reinvestment fund 3 and program. 4 1. As used in this section: 5 a. “Financial assistance” means assistance, in the form 6 of grants, provided only from the funds and assets legally 7 available to the authority pursuant to this section. 8 b. “Grocery store” means an establishment also known as a 9 supermarket that primarily engages in retailing a general line 10 of food including canned and frozen food; fresh fruits and 11 vegetables; and fresh and prepared meat, fish, and poultry. 12 c. “Low or moderate income community” means a census tract, 13 as reported by the most recent federal decennial census, in 14 which fifty-one percent of the persons residing in the census 15 tract are at or below eighty percent of the area median income 16 as determined by the United States department of housing and 17 urban development. 18 d. “Program” means the grocer reinvestment program. 19 e. “Underserved community” means a census tract, as reported 20 in the most recent federal decennial census, determined to 21 be an area with low grocery store access as identified in 22 the food access research atlas prepared by the United States 23 department of agriculture, or by a methodology adopted by 24 another governmental healthy food initiative. 25 2. a. (1) A grocer reinvestment fund is created in the 26 state treasury under the control of the authority. The fund 27 shall consist of moneys appropriated to the authority and any 28 other moneys available to, obtained by, or accepted by the 29 authority for placement in the fund. The fund shall be used to 30 award financial assistance as provided under the program. The 31 authority shall use any moneys specifically appropriated for 32 purposes of this section only for the purposes of the program. 33 (2) The authority may use not more than five percent of 34 the moneys in the fund at the beginning of the fiscal year 35 -1- LSB 5268YH (9) 90 jm/ko 1/ 7

H.F. 2176 for purposes of administrative costs, marketing, technical 1 assistance, and other program support. 2 b. Notwithstanding section 8.33, moneys in the fund 3 that remain unencumbered or unobligated at the close of the 4 fiscal year shall not revert but shall remain available for 5 expenditure for the purposes designated until the close of 6 the succeeding fiscal year. Notwithstanding section 12C.7, 7 interest or earnings on moneys in the fund shall be credited 8 to the fund. 9 3. The authority shall establish and administer the program 10 for the purpose of awarding financial assistance to eligible 11 grocery stores for the following projects at existing grocery 12 stores, or new grocery stores to be located in this state: 13 a. Capital improvements to establish or expand capacity, 14 including expansions and modifications. 15 b. Upgrades to utilities, including water, electric, heat, 16 refrigeration, and freezing units. 17 c. Purchases of equipment and furnishings. 18 d. Expenditures for professional services. 19 e. Technology that allows increased capacity or business 20 resilience, including software and hardware related to business 21 functions, logistics, inventory management, temperature 22 monitoring controls, cybersecurity, and internet site design 23 that enables electronic commerce. 24 4. The authority shall establish eligibility criteria for 25 the program by rule. The eligibility criteria must include all 26 of the following: 27 a. The grocery store has filed all required documents with 28 the secretary of state under the relevant filing statute as 29 described in section 9.11. 30 b. The grocery store is organized as a sole proprietorship, 31 partnership, limited liability company, corporation, 32 cooperative, nonprofit organization, or nonprofit community 33 development entity. 34 c. The grocery store owns ten or fewer grocery stores. 35 -2- LSB 5268YH (9) 90 jm/ko 2/ 7

H.F. 2176 d. The grocery store has the capacity to successfully 1 implement or complete the project, and demonstrates a plan for 2 sustainability. 3 5. In order to be awarded financial assistance under the 4 program, a grocery store must provide matching funds for the 5 project equal to the amount of the financial assistance award. 6 Financial assistance awarded under the program shall not be 7 less than fifty thousand dollars and shall not exceed five 8 hundred thousand dollars. 9 6. The authority shall evaluate applications, and priority 10 shall be given to the grocery stores that commit to all of the 11 following: 12 a. Locating the project in an underserved community that 13 primarily serves the residents of low or moderate income 14 communities. 15 b. Accepting benefits under the United States department 16 of agriculture supplemental nutrition assistance program and 17 the special supplemental nutrition program for women, infants, 18 and children. 19 c. Creating or retaining jobs for local residents. 20 d. Other criteria determined by the authority. 21 7. By November 1, 2025, and each November 1 thereafter, 22 if financial assistance has been provided in the immediately 23 preceding fiscal year, the director shall submit a report to 24 the general assembly describing the activities of the program 25 including the geographic distribution of the projects, the 26 identity of the applicants, and the new investments or new jobs 27 created as a result of the financial assistance provided under 28 the program. 29 Sec. 2. Section 15.106B, Code 2024, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 6. The authority may enter into a contract 32 with a nonprofit organization organized under chapter 504 or 33 similar laws of another jurisdiction, or with a community 34 development financial institution, to administer the grocer 35 -3- LSB 5268YH (9) 90 jm/ko 3/ 7

H.F. 2176 reinvestment program under section 15.413. 1 DIVISION II 2 LOCAL FOOD AND FARM PROGRAM —— GROCERY STORES 3 Sec. 3. Section 267A.1, subsection 1, Code 2024, is amended 4 to read as follows: 5 1. The purpose of this chapter is to empower farmers , and 6 food entrepreneurs , and grocery stores to provide for strong 7 local food economies that promote self-sufficiency and job 8 growth in the agricultural sector and allied sectors of the 9 economy. 10 Sec. 4. Section 267A.1, subsection 2, paragraph d, Code 11 2024, is amended to read as follows: 12 d. Increase the number of jobs in this state’s farm and 13 business economies associated with producing, processing, 14 distributing, retailing, and marketing local food. 15 Sec. 5. Section 267A.1, subsection 2, Code 2024, is amended 16 by adding the following new paragraph: 17 NEW PARAGRAPH . e. Increase the availability and viability 18 of grocery stores in this state. 19 Sec. 6. Section 267A.2, Code 2024, is amended by adding the 20 following new subsection: 21 NEW SUBSECTION . 4A. “Grocery store” means the same as 22 defined in section 15.413. 23 Sec. 7. Section 267A.6, subsection 2, paragraphs a and c, 24 Code 2024, are amended to read as follows: 25 a. Improve communication and cooperation between and among 26 farmers, food entrepreneurs, grocers, and consumers. 27 c. Demonstrate the value of processing, distributing, 28 retailing, and marketing local foods. A demonstration project 29 must be capable of being replicated on a statewide basis. 30 DIVISION III 31 APPROPRIATIONS 32 Sec. 8. GROCER REINVESTMENT FUND —— FY 2024-2025. There 33 is appropriated from the general fund of the state to the 34 economic development authority for the fiscal year beginning 35 -4- LSB 5268YH (9) 90 jm/ko 4/ 7

H.F. 2176 July 1, 2024, and ending June 30, 2025, the following amount, 1 or so much thereof as is necessary, to be used for the purposes 2 designated: 3 For deposit in the grocer reinvestment fund created in 4 section 15.413: 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000,000 6 Sec. 9. GROCER REINVESTMENT FUND —— FY 2025-2026. There 7 is appropriated from the general fund of the state to the 8 economic development authority for the fiscal year beginning 9 July 1, 2025, and ending June 30, 2026, the following amount, 10 or so much thereof as is necessary, to be used for the purposes 11 designated: 12 For deposit in the grocer reinvestment fund created in 13 section 15.413: 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000,000 15 EXPLANATION 16 The inclusion of this explanation does not constitute agreement with 17 the explanation’s substance by the members of the general assembly. 18 This bill creates a grocer reinvestment fund (fund) and 19 program (program) under the purview of the economic development 20 authority (authority), modifies the local food and farm 21 program, and makes appropriations to the fund. 22 DIVISION I —— GROCER REINVESTMENT FUND AND PROGRAM. The 23 bill provides the fund shall consist of moneys appropriated to 24 the authority, and any other moneys placed or accepted into the 25 fund. The fund shall be used to award financial assistance to 26 eligible grocery stores under the program. 27 The bill defines “grocery store” to mean an establishment 28 also known as a supermarket that primarily engages in retailing 29 a general line of food including canned and frozen food; fresh 30 fruits and vegetables; and fresh and prepared meat, fish, and 31 poultry. 32 The bill defines “financial assistance” to mean assistance 33 provided in the form of a grant. 34 Under the bill, the authority shall administer the program 35 -5- LSB 5268YH (9) 90 jm/ko 5/ 7

H.F. 2176 for the purpose of awarding financial assistance to eligible 1 grocery stores for projects located in this state including 2 capital improvements, utility upgrades, equipment and 3 furnishings, professional services, and technology. 4 The bill allows the authority to establish the eligibility 5 criteria for the program by rule. The eligibility criteria 6 must include compliance with any documents required to be filed 7 with the secretary of state; an organizational structure that 8 is either a sole proprietorship, partnership, limited liability 9 company, corporation, cooperative, nonprofit organization, or 10 nonprofit community development entity; and ownership of 10 or 11 fewer grocery stores. 12 In order to be awarded financial assistance pursuant to 13 the bill, a grocery store must provide matching funds for the 14 project that equal the amount of the financial assistance 15 award. The bill specifies a financial assistance award shall 16 not be less than $50,000 or more than $500,000. 17 Under the bill, priority shall be given to projects located 18 in an underserved community that primarily serves residents of 19 low or moderate income communities; accepts benefits under the 20 United States department of agriculture supplemental nutrition 21 assistance program, and special supplemental nutrition program 22 for women, infants, and children; creates or retains jobs; and 23 any other criteria determined by the authority. 24 The authority is required to submit a report to the general 25 assembly describing the activities of the program by November 26 1, 2025, and each November 1 thereafter, if applicable. The 27 report shall include the geographic distribution of the 28 projects, the identity of the applicants, and new investments 29 or new jobs created. 30 DIVISION II —— LOCAL FOOD AND FARM PROGRAM —— GROCERY STORES. 31 The bill changes the purpose and goals of the local food and 32 farm program in Code chapter 267A to include the retailing of 33 local food, and increasing the availability and viability of 34 grocery stores in this state. 35 -6- LSB 5268YH (9) 90 jm/ko 6/ 7

H.F. 2176 DIVISION III —— APPROPRIATIONS. The bill appropriates $2 1 million each of the next two fiscal years (FY 2024-2025 and FY 2 2025—2026) from the general fund of the state to the fund to 3 provide financial assistance to eligible grocery stores under 4 the program. 5 -7- LSB 5268YH (9) 90 jm/ko 7/ 7