House File 550 - Introduced HOUSE FILE 550 BY COMMITTEE ON ECONOMIC GROWTH AND TECHNOLOGY (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, modifying the local food and farm 4 program, and making appropriations. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1325HV (2) 91 nls/ko

H.F. 550 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 1325HV (2) 91 nls/ko 1/ 8

H.F. 550 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 e. The grocery store is located in a community with a 7 population of twenty thousand or fewer and is not contiguous to 8 a city with a population of forty thousand or greater. 9 4. In order to be awarded financial assistance under the 10 program, a grocery store must provide matching funds for the 11 project equal to the amount of the financial assistance award. 12 Financial assistance awarded under the program shall not exceed 13 one hundred thousand dollars. 14 5. The authority shall evaluate applications, and priority 15 shall be given to the grocery stores that commit to all of the 16 following: 17 a. Accepting benefits under the United States department 18 of agriculture supplemental nutrition assistance program and 19 the special supplemental nutrition program for women, infants, 20 and children. 21 b. Creating or retaining jobs for local residents. 22 c. Making efforts to procure and offer local foods for sale. 23 d. Other criteria determined by the authority. 24 6. By November 1, 2026, and each November 1 thereafter, 25 if financial assistance has been provided in the immediately 26 preceding fiscal year, the director shall submit a report to 27 the general assembly describing the activities of the program 28 including the geographic distribution of the projects, the 29 identity of the applicants, and the new investments or new jobs 30 created as a result of the financial assistance provided under 31 the program. 32 Sec. 2. NEW SECTION . 15.414 Local produce processing grant 33 program. 34 1. As used in this section: 35 -2- LSB 1325HV (2) 91 nls/ko 2/ 8

H.F. 550 a. “Local produce” means fruits and vegetables grown in this 1 state. 2 b. “Local produce and processing” means the preparation of 3 local produce for human consumption. 4 2. a. The authority shall establish and administer 5 the local produce processing grant program for the purpose 6 of awarding grants to Iowa-based entities to increase the 7 availability of local produce processing. In administering the 8 program, the authority shall prioritize grants to Iowa-based 9 entities that will increase any of the following as it relates 10 to local produce processing: 11 (1) Availability. 12 (2) Access. 13 (3) Efficiency. 14 (4) Capacity. 15 b. A grant shall not be awarded to an entity unless the 16 local produce processing includes local produce from multiple 17 Iowa-based farms. 18 3. The authority may adopt rules pursuant to chapter 17A to 19 administer this section. 20 Sec. 3. NEW SECTION . 15.415 Grocer reinvestment and local 21 food processing fund. 22 1. a. A grocer reinvestment and local food processing 23 fund is created in the state treasury under the control of 24 the authority. The fund shall consist of moneys appropriated 25 to the authority and any other moneys available to, obtained 26 by, or accepted by the authority for placement in the fund. 27 The fund shall be used to award financial assistance as 28 provided under the grocer reinvestment program established in 29 section 15.413 and the local produce processing grant program 30 established in section 15.414. 31 b. Commencing with the fiscal year beginning July 1, 2025, 32 and each fiscal year thereafter, one hundred thousand dollars 33 of the annual appropriation to the fund, or ten percent of the 34 moneys in the fund available on July 1, whichever is less, 35 -3- LSB 1325HV (2) 91 nls/ko 3/ 8

H.F. 550 shall be allocated to the local produce processing grant 1 program established in section 15.414. 2 c. The authority may use not more than five percent of 3 the moneys in the fund at the beginning of the fiscal year 4 for purposes of administrative costs, marketing, technical 5 assistance, and other program support. 6 2. Notwithstanding section 8.33, moneys in the fund 7 that remain unencumbered or unobligated at the close of the 8 fiscal year shall not revert but shall remain available for 9 expenditure for the purposes designated until the close of 10 the succeeding fiscal year. Notwithstanding section 12C.7, 11 interest or earnings on moneys in the fund shall be credited 12 to the fund. 13 DIVISION II 14 LOCAL FOOD AND FARM PROGRAM —— GROCERY STORES 15 Sec. 4. Section 267A.1, subsection 1, Code 2025, is amended 16 to read as follows: 17 1. The purpose of this chapter is to empower farmers , and 18 food entrepreneurs , and grocery stores to provide for strong 19 local food economies that promote self-sufficiency and job 20 growth in the agricultural sector and allied sectors of the 21 economy. 22 Sec. 5. Section 267A.1, subsection 2, paragraph d, Code 23 2025, is amended to read as follows: 24 d. Increase the number of jobs in this state’s farm and 25 business economies associated with producing, processing, 26 distributing, retailing, and marketing local food. 27 Sec. 6. Section 267A.1, subsection 2, Code 2025, is amended 28 by adding the following new paragraph: 29 NEW PARAGRAPH . e. Increase the availability and viability 30 of grocery stores in this state. 31 Sec. 7. Section 267A.2, Code 2025, is amended by adding the 32 following new subsection: 33 NEW SUBSECTION . 4A. “Grocery store” means the same as 34 defined in section 15.413. 35 -4- LSB 1325HV (2) 91 nls/ko 4/ 8

H.F. 550 Sec. 8. Section 267A.6, subsection 2, paragraphs a and c, 1 Code 2025, are amended to read as follows: 2 a. Improve communication and cooperation between and among 3 farmers, food entrepreneurs, grocers, and consumers. 4 c. Demonstrate the value of processing, distributing, 5 retailing, and marketing local foods. A demonstration project 6 must be capable of being replicated on a statewide basis. 7 DIVISION III 8 APPROPRIATIONS 9 Sec. 9. GROCER REINVESTMENT FUND —— FY 2025-2026. There 10 is appropriated from the general fund of the state to the 11 economic development authority for the fiscal year beginning 12 July 1, 2025, and ending June 30, 2026, the following amount, 13 or so much thereof as is necessary, to be used for the purposes 14 designated: 15 For deposit in the grocer reinvestment and local food 16 processing fund created in section 15.415: 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000,000 18 Sec. 10. GROCER REINVESTMENT FUND —— FY 2026-2027. There 19 is appropriated from the general fund of the state to the 20 economic development authority for the fiscal year beginning 21 July 1, 2026, and ending June 30, 2027, the following amount, 22 or so much thereof as is necessary, to be used for the purposes 23 designated: 24 For deposit in the grocer reinvestment and local food 25 processing fund created in section 15.415: 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000,000 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill creates a grocer reinvestment program (grocer 31 program), a local produce processing grant program (processing 32 program), a grocer reinvestment and local food processing fund 33 (fund), and makes appropriations. 34 DIVISION I. The bill defines “grocery store” to mean an 35 -5- LSB 1325HV (2) 91 nls/ko 5/ 8

H.F. 550 establishment also known as a supermarket that primarily 1 engages in retailing a general line of food including canned 2 and frozen food; fresh fruits and vegetables; and fresh and 3 prepared meat, fish, and poultry. 4 The bill defines “financial assistance” to mean assistance 5 provided in the form of a grant. 6 Under the bill, the economic development authority 7 (authority) shall administer the grocer program for the purpose 8 of awarding financial assistance to eligible grocery stores for 9 projects located in this state including capital improvements, 10 utility upgrades, equipment and furnishings, professional 11 services, and technology. 12 The bill allows the authority to establish the eligibility 13 criteria for the grocer program by rule. The eligibility 14 criteria must include compliance with any documents required 15 to be filed with the secretary of state; an organizational 16 structure that is either a sole proprietorship, partnership, 17 limited liability company, corporation, cooperative, nonprofit 18 organization, or nonprofit community development entity; 19 ownership of ten or fewer grocery stores; the capacity to 20 successfully complete the project and demonstrate a plan for 21 sustainability; and the grocery store is located in a community 22 with a population of 20,000 or fewer that is not contiguous to 23 a city with a population of 40,000 or greater. 24 In order to be awarded financial assistance pursuant to 25 the bill, a grocery store must provide matching funds for the 26 project that equal the amount of the financial assistance 27 award. The bill specifies a financial assistance award shall 28 not exceed $100,000. 29 Under the bill, priority shall be given to projects 30 that accept benefits under the United States department of 31 agriculture supplemental nutrition assistance program, and 32 special supplemental nutrition program for women, infants, and 33 children; create or retain jobs; make efforts to procure and 34 offer local foods for sale; and any other criteria determined 35 -6- LSB 1325HV (2) 91 nls/ko 6/ 8

H.F. 550 by the authority. 1 The authority is required to submit a report to the 2 general assembly describing the activities of the grocer 3 program by November 1, 2026, and each November 1 thereafter, 4 if applicable. The report shall include the geographic 5 distribution of the projects, the identity of the applicants, 6 and new investments or new jobs created. 7 The bill also establishes the processing program. Under the 8 bill, the authority shall administer the processing program 9 for the purpose of awarding grants to Iowa-based entities to 10 increase the availability of local produce processing. The 11 bill defines both “local produce” and “local produce and 12 processing”. The bill requires the authority to prioritize 13 grants to entities that increase the availability, access, 14 efficiency, or capacity of local produce processing. The bill 15 prohibits grants to an entity unless the entity processes local 16 produce from multiple Iowa-based farms. 17 The bill establishes the fund under the control of the 18 authority for the purpose of awarding financial assistance to 19 eligible grocery stores under the grocer program and awarding 20 grants to entities that increase local produce processing 21 under the processing program. Commencing with the fiscal 22 year beginning July 1, 2025, and each fiscal year thereafter, 23 $100,000 of the annual appropriation, or 10 percent of the 24 moneys available in the fund on July 1, whichever is less, 25 shall be allocated to the processing program created in the 26 bill. 27 DIVISION II. The bill changes the purpose and goals of the 28 local food and farm program in Code chapter 267A to include the 29 retailing of local food, and increasing the availability and 30 viability of grocery stores in this state. 31 DIVISION III. The bill appropriates $2 million each of the 32 next two fiscal years (FY 2025-2026 and FY 2026-2027) from 33 the general fund of the state to the fund to award financial 34 assistance to eligible grocery stores under the grocer program, 35 -7- LSB 1325HV (2) 91 nls/ko 7/ 8