Trial Engrossment of Amendment A01056 to House Bill 0580 P.N. 1456, Regular Session 2023-2024

A01056

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

580

Session of

2023

INTRODUCED BY KINSEY, BURGOS, CEPHAS, MADDEN, HOHENSTEIN,

CIRESI, SANCHEZ, HILL-EVANS, STURLA, SHUSTERMAN, PARKER,

HOWARD, D. WILLIAMS, GALLOWAY, KRAJEWSKI, PASHINSKI, FREEMAN,

KINKEAD, N. NELSON, CONKLIN, BULLOCK, ABNEY, GREEN AND KHAN,

MARCH 20, 2023

AS REPORTED FROM COMMITTEE ON AGRICULTURE AND RURAL AFFAIRS,

HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 6, 2023

AN ACT

Providing for the Pennsylvania Fresh Food Financing Initiative;

and imposing powers and duties on the Department of

Agriculture.

AMENDING TITLE 3 (AGRICULTURE) OF THE PENNSYLVANIA CONSOLIDATED

STATUTES, PROVIDING FOR THE FRESH FOOD FINANCING INITIATIVE;

ESTABLISHING THE FRESH FOOD FINANCING INITIATIVE RESTRICTED

ACCOUNT; AND IMPOSING DUTIES ON THE DEPARTMENT OF

AGRICULTURE.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Fresh Food

Financing Initiative Act.

Section 2. Purpose.

The purpose of this act is to establish financing for a State

program designed to increase the availability of fresh and

nutritious food, known as the Pennsylvania Fresh Food Financing

Initiative, by stimulating investment of capital, job creation,

economic vitality and financing for the construction,

rehabilitation or expansion of grocery stores, farmers markets

or other healthy food retail establishments in underserved and

low-income or moderate-income communities in this Commonwealth.

Section 3. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"CDFI." A community development financial institution that

is certified by the United States Department of the Treasury

and provides credit and financial services for underserved

communities.

"Department." The Department of Community and Economic

Development of the Commonwealth.

"Financing." A loan, grant or loan in which repayment may be

waived if certain conditions or criteria established by the

lender are satisfied.

"Food access organization" or "FAO." A nonprofit

organization with expertise in improving access to healthy food

in underserved communities.

"Grocery store." A for-profit or not-for-profit self-service

retail establishment that primarily sells meat, seafood, fruits,

vegetables, dairy products, dry groceries, household products

and sundries.

"Healthy food retail establishment." The term includes, but

is not limited to, a small-scale store, corner store,

convenience store, neighborhood store, bodega, food hub, mobile

market, farmers market and food aggregation and processing

center.

"Low-income or moderate-income community." A census tract as

reported in the most recently completed Federal decennial census

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published by the United States Census Bureau that has a poverty

rate of at least 20% or in which the median family income does

not exceed 80% of the greater of the Statewide or metropolitan

median family income.

"Program." The Pennsylvania Fresh Food Financing Initiative

established under section 4.

"Program administrator." The department or CDFIs selected by

the department.

"Underserved community." A census tract determined to be an

area with low supermarket access by either the United States

Department of Agriculture as identified in the Food Access

Research Atlas or through a methodology that has been adopted

for use by another governmental or philanthropic healthy food

initiative.

Section 4. Establishment.

The Pennsylvania Fresh Food Financing Initiative is

established.

Section 5. Administration of program.

(a) General rule.--The program shall be administered by the

department in collaboration with the Department of Agriculture,

or CDFIs selected by the department, to improve food access in

this Commonwealth.

(b) CDFIs as program administrator.--CDFIs may apply to

perform the duties of program administrator. The department may

select eligible CDFIs to perform the role of program

administrator. CDFI applicants shall be evaluated under the

eligibility requirements under subsection (c) which also may be

required in rules and regulations or request for proposals

issued by the department. Program administrators shall be

required to enter into a contract with the department.

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demonstrate the following:

(1) The ability to administer financing programs in

accordance with Federal and State rules and accounting

principles.

(2) Business activity throughout this Commonwealth.

(3) Experience in food-based lending.

(4) Experience leveraging private and philanthropic

funding.

(d) Program administrator duties.--The program administrator

shall:

(1) Raise capital to leverage State funds.

(2) Evaluate projects.

(3) Underwrite and disburse financing to projects.

(4) Establish monitoring and accountability mechanisms

for projects that receive financing.

(5) Report the following information annually to the

department:

(i) The number of projects that receive funding.

(ii) The geographic distribution of the projects.

(iii) The administrative and financing costs of the

program.

(iv) The outcomes, including, but not limited to,

the number and type of jobs created and health

initiatives associated with the program.

(e) Program management.--The program administrator shall

identify and partner with a food access organization to manage

the program. The FAO, in partnership with the program

administrator, shall develop and establish program guidelines

and eligibility criteria to meet the needs of program applicants

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and the communities served. The FAO shall conduct outreach and

marketing of the program to the following:

(1) Food producers.

(2) Retailers.

(3) Business entrepreneurs.

(4) Local governments.

(5) Communities in need of improved access.

(6) Other operators in communities where infrastructure

costs and credit needs are not met by conventional financial

institutions.

(f) Program priority.--The program shall promote local

agricultural products by allowing for priority to be given for

projects producing, aggregating, sourcing and selling

Pennsylvania farmed products, including the department's

Pennsylvania Preferred program. The program may track the sale

of Pennsylvania farmed products through supported retailers.

(g) Program applicant eligibility.--The FAO shall determine

applicant eligibility using maps, data tools and other forms of

market research to ensure projects are supported by the

community. The FAO shall:

(1) Offer grocery stores or healthy food retail

establishments developing in underserved communities

technical assistance and expertise in areas such as in-store

marketing, community engagement and local food procurement.

(2) Facilitate connections between wholesalers, grocers

and other technical assistance providers.

(3) Develop a framework for evaluating community impact.

(h) Administrative or operational costs.--No more than 10%

of the funding in section 7 may be reserved for administrative

and operational costs to manage the program.

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Section 6. Financing eligibility.

(a) Eligible projects.--An eligible project for financing

includes any of the following:

(1) A for-profit business enterprise, including a

corporation, limited liability company, sole proprietor,

cooperative or partnership.

(2) A not-for-profit corporation.

(3) An agricultural cooperative corporation.

(4) A public benefit corporation municipal corporation.

(5) A regional market facility or cooperative.

(b) Eligible uses.--An eligible use for financing includes

any of the following:

(1) Predevelopment costs for project feasibility.

(2) Land assembly, including demolition and

environmental remediation.

(3) Site development.

(4) Infrastructure improvement, including renovation,

new construction or adaptive reuse.

(5) Equipment purchases that improve the availability

and quality of fresh produce.

(6) Funding of debt service.

(7) Innovative food access technology that assists an

existing or new grocery store.

(8) Innovative food access technology that assists the

healthy food efforts of a food retail establishment.

(9) Other healthy food initiatives.

Section 7. Financing.

(a) Establishment of account.--A restricted account is

established in the General Fund and shall be used exclusively

for the program in accordance with this act. The money in the

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account is appropriated on a continuing basis to the department

for the purposes of this act.

(b) Transfer.--Beginning July 1, 2023, and each fiscal year

thereafter, the sum of $5,000,000 shall be transferred from the

General Fund to the restricted account established in subsection

(a).

donations, legacies and other revenues, including Federal

appropriations, for deposit into the restricted account.

Section 8. Effective date.

This act shall take effect in 60 days.

SECTION 1. TITLE 3 OF THE PENNSYLVANIA CONSOLIDATED STATUTES

IS AMENDED BY ADDING A PART TO READ:

PART XI

FOOD SECURITY

CHAPTER

121. FRESH FOOD FINANCING INITIATIVE

CHAPTER 121

FRESH FOOD FINANCING INITIATIVE

SEC.

12101. SCOPE OF CHAPTER.

12102. PURPOSE.

12103. DEFINITIONS.

12104. ESTABLISHMENT.

12105. ADMINISTRATION OF PROGRAM.

12106. GRANT FUND ELIGIBILITY.

12107. REGULATIONS.

12108. GRANT MONEY.

§ 12101. SCOPE OF CHAPTER.

THIS CHAPTER RELATES TO THE FRESH FOOD FINANCING INITIATIVE.

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§ 12102. PURPOSE.

THE PURPOSE OF THIS CHAPTER IS TO STRENGTHEN LOCAL FOOD

SYSTEMS AND INCREASE MARKET OPPORTUNITIES FOR PENNSYLVANIA

FARMERS BY PROVIDING GRANT MONEY FOR:

(1) A STATE PROGRAM DESIGNED TO INCREASE THE

AVAILABILITY OF FRESH AND NUTRITIOUS FOOD, KNOWN AS THE

PENNSYLVANIA FRESH FOOD FINANCING INITIATIVE, THAT WILL

STIMULATE CAPITAL, JOB CREATION AND ECONOMIC VITALITY.

(2) CONSTRUCTION, REHABILITATION OR EXPANSION OF GROCERY

STORES, FARMERS' MARKETS OR RETAIL FOOD ESTABLISHMENTS IN

UNDERSERVED AND LOW-INCOME OR MODERATE-INCOME COMMUNITIES IN

THIS COMMONWEALTH.

§ 12103. DEFINITIONS.

THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER

SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE

CONTEXT CLEARLY INDICATES OTHERWISE:

"BLACK, INDIGENOUS AND PERSON OF COLOR COMMUNITIES" OR "BIPOC

COMMUNITIES." MUNICIPALITIES WITH:

(1) A BLACK, INDIGENOUS AND PERSON OF COLOR POPULATION

OF 50% OR HIGHER; OR

(2) A BLACK, INDIGENOUS AND PERSON OF COLOR POPULATION

GREATER THAN 700 PEOPLE.

"FARMERS' MARKET." A BUILDING, STRUCTURE OR PLACE OWNED,

LEASED OR OTHERWISE IN POSSESSION BY A PERSON, MUNICIPAL

CORPORATION OR PUBLIC OR PRIVATE ORGANIZATION, USED OR INTENDED

TO BE USED BY TWO OR MORE FARMERS OR AN ASSOCIATION OF FARMERS

FOR THE PURPOSE OF SELLING AGRICULTURAL COMMODITIES DIRECTLY TO

CONSUMERS AND WHICH IS PHYSICALLY LOCATED WITHIN THIS

COMMONWEALTH.

"FOOD ACCESS ORGANIZATION." A NONPROFIT ORGANIZATION WITH

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EXPERTISE IN IMPROVING ACCESS TO FOOD IN UNDERSERVED

COMMUNITIES.

"GROCERY STORE." A FOR-PROFIT OR NOT-FOR-PROFIT SELF-SERVICE

RETAIL ESTABLISHMENT THAT PRIMARILY SELLS MEAT, SEAFOOD, FRUITS,

VEGETABLES, DAIRY PRODUCTS, DRY GROCERIES, HOUSEHOLD PRODUCTS

AND SUNDRIES.

"LOW-INCOME OR MODERATE-INCOME COMMUNITY." A CENSUS TRACT AS

REPORTED IN THE MOST RECENTLY COMPLETED FEDERAL DECENNIAL CENSUS

PUBLISHED BY THE UNITED STATES CENSUS BUREAU THAT HAS A POVERTY

RATE OF AT LEAST 20% OR IN WHICH THE MEDIAN FAMILY INCOME DOES

NOT EXCEED 80% OF THE GREATER OF THE STATEWIDE OR METROPOLITAN

MEDIAN FAMILY INCOME.

"PROGRAM." THE PENNSYLVANIA FRESH FOOD FINANCING INITIATIVE

ESTABLISHED UNDER SECTION 12104 (RELATING TO ESTABLISHMENT).

"REGIONAL ANCHOR SUPERMARKET." A COMPANY THAT OWNS MULTIPLE

GROCERY STORES WITHIN A GIVEN REGION.

"RETAIL FOOD ESTABLISHMENT." AS DEFINED UNDER SECTION 5702

(RELATING TO DEFINITIONS).

"UNDERSERVED COMMUNITY." A CENSUS TRACT DETERMINED TO BE AN

AREA WITH LOW GROCERY STORE ACCESS BY EITHER THE UNITED STATES

DEPARTMENT OF AGRICULTURE AS IDENTIFIED IN THE FOOD ACCESS

RESEARCH ATLAS OR THROUGH A METHODOLOGY THAT HAS BEEN ADOPTED

FOR USE BY ANOTHER GOVERNMENTAL ENTITY OR FOOD ACCESS

ORGANIZATION.

"USDA-DESIGNATED FOOD DESERT." A CENSUS TRACT DECLARED TO BE

A FOOD DESERT BY THE UNITED STATES DEPARTMENT OF AGRICULTURE'S

ECONOMIC RESEARCH SERVICE.

§ 12104. ESTABLISHMENT.

THE PENNSYLVANIA FRESH FOOD FINANCING INITIATIVE IS

ESTABLISHED.

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§ 12105. ADMINISTRATION OF PROGRAM.

(A) ADMINISTRATION.--THE PROGRAM SHALL BE ADMINISTERED BY

THE DEPARTMENT. THE DEPARTMENT MAY COLLABORATE WITH THE

DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT TO IMPROVE FOOD

ACCESS IN THIS COMMONWEALTH.

(B) PROGRAM MANAGEMENT.--THE DEPARTMENT SHALL DEVELOP AND

ESTABLISH PROGRAM GUIDELINES AND ELIGIBILITY CRITERIA TO MEET

THE NEEDS OF PROGRAM APPLICANTS AND THE COMMUNITIES SERVED.

(1) THE PROGRAM SHALL PROMOTE LOCAL AGRICULTURAL

PRODUCTS BY PLACING PRIORITY ON PROJECTS PRODUCING,

AGGREGATING, SOURCING OR SELLING PENNSYLVANIA AGRICULTURAL

COMMODITIES, INCLUDING THE DEPARTMENT'S PENNSYLVANIA

PREFERRED® PROGRAM, THAT :

(I) ARE LOCATED IN, OWNED BY OR PRIMARILY SERVE

BIPOC COMMUNITIES. ELIGIBILITY FOR THIS PRIORITIZATION

SHALL BE DETERMINED BY THE CENTER FOR RURAL

PENNSYLVANIA'S MUNICIPAL DATA;

(II) PROMOTE SUPPLIER DIVERSITY AND, WHERE POSSIBLE,

INCREASE BUSINESS OPPORTUNITIES FOR BUSINESSES RECOGNIZED

BY THE DEPARTMENT OF GENERAL SERVICES AS VERIFIED AS A

SMALL DIVERSE BUSINESS OR A SMALL VETERAN BUSINESS; OR

(III) ARE LOCATED IN OR SERVE A USDA-DESIGNATED FOOD

DESERT.

(2) FOR REGIONAL ANCHOR SUPERMARKET PROJECTS, THOSE WITH

MATCHING FUNDS UNDER SUBSECTION (E) SHALL BE PRIORITIZED.

(D) PROJECT CLASS.--THE DEPARTMENT SHALL MAKE GRANTS

AVAILABLE IN THE FOLLOWING CLASSES:

(1) REGIONAL ANCHOR SUPERMARKETS.

(2) GROCERY STORES.

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(3) RETAIL FOOD ESTABLISHMENTS.

(E) MATCHING FUNDS.--GRANTS IN AN AMOUNT NOT TO EXCEED 15%

OF THE FUNDING FOR ANY OF THE PROJECT CLASSES ESTABLISHED UNDER

SUBSECTION (D) SHALL BE AWARDED TO QUALIFYING APPLICANTS

SELECTED TO RECEIVE THE AWARDS FOR THE PURPOSES OF CAPITAL

PROJECTS. GRANTS FOR CAPITAL PROJECTS MUST BE MATCHED BY PRIVATE

MONEY IN AN AMOUNT EQUAL TO THE STATE GRANT.

(F) ADMINISTRATIVE OR OPERATIONAL COSTS.--NO MORE THAN 10%

2.5% OF THE FUNDING UNDER SECTION 12108 (RELATING TO GRANT

MONEY) MAY BE RESERVED FOR ADMINISTRATIVE AND OPERATIONAL COSTS

TO MANAGE THE PROGRAM. COSTS FOR PERSONNEL MAY For the purpose

of ensuring that the maximum amount of funding is available for

grant recipient projects, costs for personnel may not BE

INCLUDED AS PART OF THE DEPARTMENT'S ADMINISTRATIVE OR

OPERATIONAL COSTS.

§ 12106. GRANT FUND ELIGIBILITY.

(A) ELIGIBLE APPLICANTS.--A FOR-PROFIT, NONPROFIT OR

COOPERATIVE ENTITY THAT MEETS THE FOLLOWING CRITERIA SHALL BE

ELIGIBLE TO APPLY FOR A GRANT UNDER THE PROGRAM:

(1) THE PRIMARY BUSINESS, MEASURED AS BEING GREATER THAN

OR EQUAL TO 50% OF THE ENTITY'S PREVIOUS YEAR'S ANNUAL

REVENUE, IS FROM THE SALE OF STAPLE AND PERISHABLE FOOD TO

CONSUMERS OR DIRECT TO RETAIL SETTINGS.

(2) THE ENTITY OPERATES AND PROVIDES SERVICE IN THIS

COMMONWEALTH.

(3) THE ENTITY SERVES CUSTOMERS THAT LIVE IN A LOW-

INCOME OR MODERATE-INCOME COMMUNITY.

(4) THE ENTITY PROVIDES ACCESS TO AFFORDABLE, HIGH-

QUALITY FRESH PRODUCE, MEAT AND DAIRY PRODUCTS AND OTHER

GROCERY ITEMS FOR LOW-TO-MODERATE INCOME SHOPPERS.

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(5) ELIGIBLE PROJECTS ARE SUPPORTED BY THE COMMUNITY AS

DETERMINED BY THE DEPARTMENT USING MAPS, DATA TOOLS AND OTHER

FORMS OF MARKET RESEARCH.

(B) ELIGIBLE USES.--AN ELIGIBLE USE FOR GRANT MONEY INCLUDES

ANY OF THE FOLLOWING:

(1) EQUIPMENT PURCHASES THAT IMPROVE THE AVAILABILITY

AND QUALITY OF FRESH PRODUCE, MEAT AND DAIRY PRODUCTS AND

OTHER GROCERY ITEMS.

(2) INNOVATIVE FOOD ACCESS TECHNOLOGY THAT ASSISTS AN

EXISTING OR NEW GROCERY STORE.

(3) INNOVATIVE FOOD ACCESS TECHNOLOGY THAT ASSISTS THE

FOOD ACCESS EFFORTS OF A RETAIL FOOD ESTABLISHMENT.

(4) INNOVATIVE FOOD ACCESS TECHNOLOGY OR DELIVERY OF

FOOD TO RETAIL THAT ASSISTS THE FOOD ACCESS EFFORTS OF AN

ELIGIBLE APPLICANT.

DEVISE, AWARD AND ADMINISTER GRANTS TO ELIGIBLE APPLICANTS.

(D) STANDARDS AND REQUIREMENTS.--

(1) THE DEPARTMENT SHALL ESTABLISH GRANT PROGRAM

STANDARDS AND REQUIREMENTS FOR A GRANT PROGRAM UNDER THIS

CHAPTER AND SHALL TRANSMIT NOTICE OF THE GRANT PROGRAM

STANDARDS AND REQUIREMENTS TO THE LEGISLATIVE REFERENCE

BUREAU FOR PUBLICATION IN THE NEXT AVAILABLE ISSUE OF THE

PENNSYLVANIA BULLETIN.

(2) GRANT PROGRAM STANDARDS AND REQUIREMENTS MUST DO THE

FOLLOWING:

(I) ESTABLISH ELIGIBILITY STANDARDS FOR APPLICANTS.

(II) DESCRIBE THE OBJECTIVES OF THE GRANT PROGRAM,

WHICH SHALL BE CONSISTENT WITH THIS CHAPTER.

(III) ESTABLISH CAPS, LIMITS AND RESTRICTIONS WITH

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RESPECT TO GRANT AMOUNTS.

(IV) ESTABLISH AN APPLICATION PROCESS AND TIMETABLE.

(V) PRESENT THE CRITERIA UNDER WHICH GRANT

APPLICATIONS SHALL BE EVALUATED BY THE DEPARTMENT.

(VI) ESTABLISH A TIMETABLE WITHIN WHICH THE

DEPARTMENT SHALL AWARD OR DISAPPROVE A COMPLETED GRANT

APPLICATION.

(VII) ESTABLISH PROCEDURES BY WHICH THE DEPARTMENT

SHALL VERIFY EXPENDITURES OF GRANT MONEY BY A GRANT

RECIPIENT.

(E) LIMITATION ON GRANTS.--

(1) GRANTS MAY ONLY BE AWARDED TO THE EXTENT MONEY IS

APPROPRIATED BY THE GENERAL ASSEMBLY.

(2) THE SECRETARY MAY APPROVE A GRANT IN LESS THAN A

REQUESTED AMOUNT. THE SECRETARY MAY ALSO IMPOSE RESTRICTIONS

OR SPECIAL CONDITIONS UPON THE ISSUANCE OF A GRANT.

(F) DISPOSITION OF GRANTS.--

(1) THE DEPARTMENT MAY REQUIRE A WRITTEN AGREEMENT

DESCRIBING THE TERMS AND CONDITIONS OF THE GRANT.

(2) THE DEPARTMENT MAY ESTABLISH CRITERIA UNDER WHICH

THE SECRETARY MAY DEMAND THE RETURN OF ALL OR A PORTION OF

THE GRANT MONEY.

§ 12107. REGULATIONS.

THE DEPARTMENT MAY PROMULGATE RULES AND REGULATIONS TO

ADMINISTER AND ENFORCE THIS CHAPTER.

§ 12108. GRANT MONEY.

(A) ESTABLISHMENT OF ACCOUNT.--THE FRESH FOOD FINANCING

INITIATIVE RESTRICTED ACCOUNT IS ESTABLISHED IN THE GENERAL FUND

AND SHALL BE USED EXCLUSIVELY FOR THE PROGRAM IN ACCORDANCE WITH

THIS CHAPTER. THE MONEY IN THE ACCOUNT IS APPROPRIATED ON A

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CONTINUING BASIS TO THE DEPARTMENT FOR THE PURPOSES OF THIS

CHAPTER.

(B) SUPPLEMENTS TO ACCOUNT.--IN ADDITION TO STATE MONEY

APPROPRIATED TO THE DEPARTMENT FOR THE PROGRAM, THE DEPARTMENT

MAY ALSO ACCEPT GIFTS, DONATIONS, LEGACIES AND OTHER REVENUES,

INCLUDING FEDERAL APPROPRIATIONS, FOR DEPOSIT INTO THE

RESTRICTED ACCOUNT.

SECTION 2. THIS ACT SHALL TAKE EFFECT IN 60 DAYS.

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