HF 1032 (LSB 1325HZ (5) 91)

HOUSE FILE 1032

BY  COMMITTEE ON APPROPRIATIONS

(SUCCESSOR TO HF 550)
(SUCCESSOR TO HF 59)

(As Amended and Passed by the House 2025-04-24)

A BILL FOR

An Act creating a grocer reinvestment program, a local produce processing grant program, and a grocer reinvestment and local food processing fund under the purview of the economic development authority, and modifying the local food and farm program.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
GROCER REINVESTMENT AND LOCAL PRODUCE PROCESSING

    Section 1.  NEW SECTION.  15.413  Grocer reinvestment program.
   1.  As used in this section:
   a.  “Financial assistance” means assistance, in the form of grants, provided only from the funds and assets legally available to the authority pursuant to this section.
   b.  “Grocery store” means an establishment also known as a supermarket that primarily engages in retailing a general line of food including canned and frozen food; fresh fruits and vegetables; and fresh and prepared meat, fish, and poultry, and the establishment meets either of the following requirements:
   (1)  A minimum of fifty percent of the retail space in the establishment is dedicated to retailing a general line of food.
   (2)  A minimum of thirty percent of the establishment’s revenue derives from retailing a general line of food.
   c.  “Program” means the grocer reinvestment program.
   2.  The authority shall establish and administer the program for the purpose of awarding financial assistance to eligible grocery stores for the following projects at existing grocery stores, or new grocery stores to be located in this state:
   a.  Capital improvements to establish or expand capacity, including expansions and modifications.
   b.  Upgrades to utilities, including water, electric, heat, refrigeration, and freezing units.
   c.  Purchases of equipment and furnishings.
   d.  Expenditures for professional services.
   e.  Technology that allows increased capacity or business resilience, including software and hardware related to business functions, logistics, inventory management, temperature monitoring controls, cybersecurity, and internet site design that enables electronic commerce.
   3.  The authority shall establish eligibility criteria for the program by rule. The eligibility criteria must include all of the following:
   a.  The grocery store has filed all required documents with the secretary of state under the relevant filing statute as described in section 9.11.
   b.  The grocery store is organized as a sole proprietorship, partnership, limited liability company, corporation, cooperative, nonprofit organization, or nonprofit community development entity.
   c.  The grocery store owns ten or fewer grocery stores.
   d.  The grocery store has the capacity to successfully implement or complete the project, and demonstrates a plan for sustainability.
   4.  In order to be awarded financial assistance under the program, a grocery store must provide matching funds for the project equal to the amount of the financial assistance award. Financial assistance awarded under the program shall not exceed one hundred thousand dollars.
   5.  The authority shall evaluate applications, and priority shall be given to the grocery stores that commit to all of the following:
   a.  Accepting benefits under the United States department of agriculture supplemental nutrition assistance program and the special supplemental nutrition program for women, infants, and children.
   b.  Creating or retaining jobs for local residents.
   c.  Making efforts to procure and offer local foods for sale.
   d.  Other criteria determined by the authority.
   6.  The authority shall prioritize eligible grocery stores based on the population size of the community in which the eligible grocery store is located. Priority shall be given to eligible grocery stores located in the least-populated communities.
   7.  By November 1, 2026, and each November 1 thereafter, if financial assistance has been provided in the immediately preceding fiscal year, the director shall submit a report to the general assembly describing the activities of the program including the geographic distribution of the projects, the identity of the applicants, and the new investments or new jobs created as a result of the financial assistance provided under the program.
    Sec. 2.  NEW SECTION.  15.415  Grocer reinvestment and local food processing fund.
   1.  a.  A grocer reinvestment and local food processing fund is created in the state treasury under the control of the authority. The fund shall consist of moneys appropriated by the general assembly to the authority and any other moneys available to, obtained by, or accepted by the authority for placement in the fund. The fund shall be used to award financial assistance as provided under the grocer reinvestment program established in section 15.413 and the local produce processing grant program established in section 187.331.
   b.  Commencing with the fiscal year beginning July 1, 2025, and each fiscal year thereafter, one hundred thousand dollars of the annual appropriation to the fund, or ten percent of the moneys in the fund available on July 1, whichever is less, shall be allocated to the local produce processing grant program established in section 187.331.
   c.  The authority may use not more than five percent of the moneys in the fund at the beginning of the fiscal year for purposes of administrative costs, marketing, technical assistance, and other program support.
   2.  Notwithstanding section 8.33, moneys in the fund that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year. Notwithstanding section 12C.7, interest or earnings on moneys in the fund shall be credited to the fund.
    Sec. 3.  NEW SECTION.  187.331  Local produce processing grant program.
   1.  As used in this section:
   a.  “Local produce” means fruits and vegetables grown in this state.
   b.  “Local produce processing” means the preparation of local produce for human consumption.
   2.  The department shall establish and administer the local produce processing grant program for the purpose of awarding grants to Iowa-based entities to increase the availability of local produce processing. In administering the program, the department shall prioritize grants to all of the following:
   a.  Iowa-based entities that will increase any of the following as it relates to local produce processing:
   (1)  Availability.
   (2)  Access.
   (3)  Efficiency.
   (4)  Capacity.
   b.  Iowa-based entities that process local produce from three or more Iowa farms.
   c.  A person participating in the choose Iowa promotional program under section 187.303.
   d.  Iowa-based entities whose local produce is sold or distributed to a grocery store eligible for the grocer reinvestment program under section 15.413.
   3.  An Iowa-based entity whose local produce processing includes local produce from three or more Iowa farms shall be eligible for a grant under the program in an amount that is two times the maximum grant amount set by the department for the value-added agricultural grant program under section 187.321.
    Sec. 4.  CODE EDITOR DIRECTIVE.  The Code editor is directed to designate section 187.331, as enacted in this division of this Act, as part 4 of subchapter III, chapter 187, entitled “Local Produce Processing Grant Program”.
DIVISION II
LOCAL FOOD AND FARM PROGRAM —— GROCERY STORES

    Sec. 5.  Section 267A.1, subsection 1, Code 2025, is amended to read as follows:
   1.  The purpose of this chapter is to empower farmers, and food entrepreneurs, and grocery stores to provide for strong local food economies that promote self-sufficiency and job growth in the agricultural sector and allied sectors of the economy. 
    Sec. 6.  Section 267A.1, subsection 2, paragraph d, Code 2025, is amended to read as follows:
   d.  Increase the number of jobs in this state’s farm and business economies associated with producing, processing, distributing, retailing, and marketing local food.
    Sec. 7.  Section 267A.1, subsection 2, Code 2025, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  e.  Increase the availability and viability of grocery stores in this state.
    Sec. 8.  Section 267A.2, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  4A.  “Grocery store” means the same as defined in section 15.413.
    Sec. 9.  Section 267A.6, subsection 2, paragraphs a and c, Code 2025, are amended to read as follows:
   a.  Improve communication and cooperation between and among farmers, food entrepreneurs, grocers, and consumers.
   c.  Demonstrate the value of processing, distributing, retailing, and marketing local foods. A demonstration project must be capable of being replicated on a statewide basis.