House File 1032 - Introduced HOUSE FILE 1032 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO HF 550) (SUCCESSOR TO HF 59) A BILL FOR An Act creating a grocer reinvestment program, a local produce 1 processing grant program, and a grocer reinvestment and 2 local food processing fund under the purview of the economic 3 development authority, and modifying the local food and farm 4 program. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1325HZ (4) 91 nls/ko

H.F. 1032 DIVISION I 1 GROCER REINVESTMENT AND LOCAL PRODUCE PROCESSING 2 Section 1. NEW SECTION . 15.413 Grocer reinvestment program. 3 1. As used in this section: 4 a. “Financial assistance” means assistance, in the form 5 of grants, provided only from the funds and assets legally 6 available to the authority pursuant to this section. 7 b. “Grocery store” means an establishment also known as a 8 supermarket that primarily engages in retailing a general line 9 of food including canned and frozen food; fresh fruits and 10 vegetables; and fresh and prepared meat, fish, and poultry. 11 c. “Program” means the grocer reinvestment program. 12 2. The authority shall establish and administer the program 13 for the purpose of awarding financial assistance to eligible 14 grocery stores for the following projects at existing grocery 15 stores, or new grocery stores to be located in this state: 16 a. Capital improvements to establish or expand capacity, 17 including expansions and modifications. 18 b. Upgrades to utilities, including water, electric, heat, 19 refrigeration, and freezing units. 20 c. Purchases of equipment and furnishings. 21 d. Expenditures for professional services. 22 e. Technology that allows increased capacity or business 23 resilience, including software and hardware related to business 24 functions, logistics, inventory management, temperature 25 monitoring controls, cybersecurity, and internet site design 26 that enables electronic commerce. 27 3. The authority shall establish eligibility criteria for 28 the program by rule. The eligibility criteria must include all 29 of the following: 30 a. The grocery store has filed all required documents with 31 the secretary of state under the relevant filing statute as 32 described in section 9.11. 33 b. The grocery store is organized as a sole proprietorship, 34 partnership, limited liability company, corporation, 35 -1- LSB 1325HZ (4) 91 nls/ko 1/ 7

H.F. 1032 cooperative, nonprofit organization, or nonprofit community 1 development entity. 2 c. The grocery store owns ten or fewer grocery stores. 3 d. The grocery store has the capacity to successfully 4 implement or complete the project, and demonstrates a plan for 5 sustainability. 6 4. In order to be awarded financial assistance under the 7 program, a grocery store must provide matching funds for the 8 project equal to the amount of the financial assistance award. 9 Financial assistance awarded under the program shall not exceed 10 one hundred thousand dollars. 11 5. The authority shall evaluate applications, and priority 12 shall be given to the grocery stores that commit to all of the 13 following: 14 a. Accepting benefits under the United States department 15 of agriculture supplemental nutrition assistance program and 16 the special supplemental nutrition program for women, infants, 17 and children. 18 b. Creating or retaining jobs for local residents. 19 c. Making efforts to procure and offer local foods for sale. 20 d. Other criteria determined by the authority. 21 6. The authority shall prioritize eligible grocery stores 22 based on the population size of the community in which the 23 eligible grocery store is located. Priority shall be given 24 to eligible grocery stores located in the least-populated 25 communities. 26 7. By November 1, 2026, and each November 1 thereafter, 27 if financial assistance has been provided in the immediately 28 preceding fiscal year, the director shall submit a report to 29 the general assembly describing the activities of the program 30 including the geographic distribution of the projects, the 31 identity of the applicants, and the new investments or new jobs 32 created as a result of the financial assistance provided under 33 the program. 34 Sec. 2. NEW SECTION . 15.414 Local produce processing grant 35 -2- LSB 1325HZ (4) 91 nls/ko 2/ 7

H.F. 1032 program. 1 1. As used in this section: 2 a. “Local produce” means fruits and vegetables grown in this 3 state. 4 b. “Local produce and processing” means the preparation of 5 local produce for human consumption. 6 2. a. The authority shall establish and administer 7 the local produce processing grant program for the purpose 8 of awarding grants to Iowa-based entities to increase the 9 availability of local produce processing. In administering the 10 program, the authority shall prioritize grants to Iowa-based 11 entities that will increase any of the following as it relates 12 to local produce processing: 13 (1) Availability. 14 (2) Access. 15 (3) Efficiency. 16 (4) Capacity. 17 b. A grant shall not be awarded to an entity unless the 18 local produce processing includes local produce from multiple 19 Iowa-based farms. 20 3. The authority may adopt rules pursuant to chapter 17A to 21 administer this section. 22 Sec. 3. NEW SECTION . 15.415 Grocer reinvestment and local 23 food processing fund. 24 1. a. A grocer reinvestment and local food processing 25 fund is created in the state treasury under the control of the 26 authority. The fund shall consist of moneys appropriated by 27 the general assembly to the authority and any other moneys 28 available to, obtained by, or accepted by the authority 29 for placement in the fund. The fund shall be used to award 30 financial assistance as provided under the grocer reinvestment 31 program established in section 15.413 and the local produce 32 processing grant program established in section 15.414. 33 b. Commencing with the fiscal year beginning July 1, 2025, 34 and each fiscal year thereafter, one hundred thousand dollars 35 -3- LSB 1325HZ (4) 91 nls/ko 3/ 7

H.F. 1032 of the annual appropriation to the fund, or ten percent of the 1 moneys in the fund available on July 1, whichever is less, 2 shall be allocated to the local produce processing grant 3 program established in section 15.414. 4 c. The authority may use not more than five percent of 5 the moneys in the fund at the beginning of the fiscal year 6 for purposes of administrative costs, marketing, technical 7 assistance, and other program support. 8 2. Notwithstanding section 8.33, moneys in the fund 9 that remain unencumbered or unobligated at the close of the 10 fiscal year shall not revert but shall remain available for 11 expenditure for the purposes designated until the close of 12 the succeeding fiscal year. Notwithstanding section 12C.7, 13 interest or earnings on moneys in the fund shall be credited 14 to the fund. 15 DIVISION II 16 LOCAL FOOD AND FARM PROGRAM —— GROCERY STORES 17 Sec. 4. Section 267A.1, subsection 1, Code 2025, is amended 18 to read as follows: 19 1. The purpose of this chapter is to empower farmers , and 20 food entrepreneurs , and grocery stores to provide for strong 21 local food economies that promote self-sufficiency and job 22 growth in the agricultural sector and allied sectors of the 23 economy. 24 Sec. 5. Section 267A.1, subsection 2, paragraph d, Code 25 2025, is amended to read as follows: 26 d. Increase the number of jobs in this state’s farm and 27 business economies associated with producing, processing, 28 distributing, retailing, and marketing local food. 29 Sec. 6. Section 267A.1, subsection 2, Code 2025, is amended 30 by adding the following new paragraph: 31 NEW PARAGRAPH . e. Increase the availability and viability 32 of grocery stores in this state. 33 Sec. 7. Section 267A.2, Code 2025, is amended by adding the 34 following new subsection: 35 -4- LSB 1325HZ (4) 91 nls/ko 4/ 7

H.F. 1032 NEW SUBSECTION . 4A. “Grocery store” means the same as 1 defined in section 15.413. 2 Sec. 8. Section 267A.6, subsection 2, paragraphs a and c, 3 Code 2025, are amended to read as follows: 4 a. Improve communication and cooperation between and among 5 farmers, food entrepreneurs, grocers, and consumers. 6 c. Demonstrate the value of processing, distributing, 7 retailing, and marketing local foods. A demonstration project 8 must be capable of being replicated on a statewide basis. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 This bill creates a grocer reinvestment program (grocer 13 program), a local produce processing grant program (processing 14 program), a grocer reinvestment and local food processing fund 15 (fund). 16 DIVISION I. The bill defines “grocery store” to mean an 17 establishment also known as a supermarket that primarily 18 engages in retailing a general line of food including canned 19 and frozen food; fresh fruits and vegetables; and fresh and 20 prepared meat, fish, and poultry. 21 The bill defines “financial assistance” to mean assistance 22 provided in the form of a grant. 23 Under the bill, the economic development authority 24 (authority) shall administer the grocer program for the purpose 25 of awarding financial assistance to eligible grocery stores for 26 projects located in this state including capital improvements, 27 utility upgrades, equipment and furnishings, professional 28 services, and technology. 29 The bill allows the authority to establish the eligibility 30 criteria for the grocer program by rule. The eligibility 31 criteria must include compliance with any documents required 32 to be filed with the secretary of state; an organizational 33 structure that is a sole proprietorship, partnership, limited 34 liability company, corporation, cooperative, nonprofit 35 -5- LSB 1325HZ (4) 91 nls/ko 5/ 7

H.F. 1032 organization, or nonprofit community development entity; 1 ownership of 10 or fewer grocery stores; and the capacity to 2 successfully complete the project and demonstrate a plan for 3 sustainability. 4 In order to be awarded financial assistance pursuant to 5 the bill, a grocery store must provide matching funds for the 6 project that equal the amount of the financial assistance 7 award. The bill specifies a financial assistance award shall 8 not exceed $100,000. 9 Under the bill, priority shall be given to projects 10 that accept benefits under the United States department of 11 agriculture supplemental nutrition assistance program, and 12 special supplemental nutrition program for women, infants, and 13 children; create or retain jobs; make efforts to procure and 14 offer local foods for sale; and any other criteria determined 15 by the authority. The authority shall prioritize eligible 16 grocery stores based on the population of the community in 17 which the eligible grocery store is located, with priority 18 given to eligible grocery stores located in the least-populated 19 communities. 20 The authority is required to submit a report to the general 21 assembly describing the activities of the grocer program 22 by November 1, 2026, and each November 1 thereafter, if 23 financial assistance has been provided in the immediately 24 preceding fiscal year. The report shall include the geographic 25 distribution of the projects, the identity of the applicants, 26 and new investments or new jobs created. 27 The bill also establishes the processing program. Under the 28 bill, the authority shall administer the processing program 29 for the purpose of awarding grants to Iowa-based entities to 30 increase the availability of local produce processing. The 31 bill defines both “local produce” and “local produce and 32 processing”. The bill requires the authority to prioritize 33 grants to entities that increase the availability, access, 34 efficiency, or capacity of local produce processing. The bill 35 -6- LSB 1325HZ (4) 91 nls/ko 6/ 7

H.F. 1032 prohibits grants to an entity unless the entity processes local 1 produce from multiple Iowa-based farms. 2 The bill establishes the fund under the control of the 3 authority for the purpose of awarding financial assistance to 4 eligible grocery stores under the grocer program and awarding 5 grants to entities that increase local produce processing 6 under the processing program. Commencing with the fiscal 7 year beginning July 1, 2025, and each fiscal year thereafter, 8 $100,000 of the annual appropriation, or 10 percent of the 9 moneys available in the fund on July 1, whichever is less, 10 shall be allocated to the processing program created in the 11 bill. 12 DIVISION II. The bill changes the purpose and goals of the 13 local food and farm program in Code chapter 267A to include the 14 retailing of local food, and increasing the availability and 15 viability of grocery stores in this state. 16 -7- LSB 1325HZ (4) 91 nls/ko 7/ 7