84(R) - 2015
House Economic & Small Business Development
House Economic & Small Business Development
Health & Human Services
Relating to the establishment of a Texas grocery access investment fund program.
A fiscal note dated April 28, 2015 anticipates a negative two-year net impact to General Revenue Related Funds from CSHB 1485 of $10,000,000 through the biennium ending August 31, 2017.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
House Bill 1485 would amend the Agriculture Code to create the Texas Grocery Access Investment Fund.
House Bill 1485 would require that the Department of Agriculture partner with public and private sector partners to establish the Texas grocery access investment fund program to provide financing for the construction, rehabilitation, or expansion of grocery stores in underserved low-income and moderate-income areas in Texas.
The Texas Grocery Access Investment Fund would be a trust fund outside of the treasury with the comptroller, administered by the Department of Agriculture and composed of money appropriated by the legislature, federal, state, or private grants or loans, federal tax credits and any other type of financial assistance.
The money could only be appropriated to the fund for the purposes of establishing the program, and at least 25 percent of the money would have to be used to provide grants or forgivable loans. A maximum of 10 percent could be used for administrative and operational costs.
The program would be a public-private partnership n which the Department of Agriculture would contract with nonprofit organizations or community development financial institutions. The partner organizations would have to establish program guidelines, raise matching funds, promote the program statewide, evaluate applicants, underwrite and disburse grants and loans, and monitor compliance with and the impact of the program.
The department of Agriculture would have to monitor and report annually on projects receiving financing. The report would have to include details on the cost and efficiency of the program, as well as the jobs created as a result.
Projects would have to be located in underserved areas and primarily to serve low- or moderate-income areas. Projects would have to be for the construction of new grocery stores or the improvement of an existing one.
Applicants for project financing could be nonprofits or for-profits and would have to demonstrate the economic sustainability of the project, the ability to repay loans and would have to agree for 5 years to accept benefits from the WIC program and the supplemental nutrition assistance program, allocate 30 percent of their retail space for perishable foods, promote the sale of fresh produce, promote the hiring of local residents, and comply with data collection and reporting requirements.
Projects would be chosen depending on the level of need of areas to be served, the amount of funding necessary, the economic and health impact on underserved areas, and how the project could be part of state and local health initiatives.
Project recipients would be able to use the money for site acquisition and preparation, construction and build-out costs, equipment and furnishings, employee training or security, predevelopment costs, including market studies and appraisals, energy efficiency measures, and working capital for initial inventory and start-up costs.
Vote Recommendation Notes
House Bill 1485 seeks to remedy the lack of grocery stores in underserved areas of Texas, which according to the statement of purpose for the bill, is forcing Texans to rely on unhealthy foods by virtue of where they live, resulting in an increase of costly chronic diseases such as obesity.
Although well intentioned, the goal behind House Bill 1485, and the solution it offers are problematic in several ways.
The program would work as a public-private partnership. Money would be appropriated in order to finance the construction of new grocery stores or the improvement of exiting ones, based on the argument that some areas desperately need access to fresh and healthy products. Concretely, the program would use taxpayers' money to subsidize certain grocery stores in certain areas of the state. But the needs of some is not a right on the property of others: the role of a limited government is not to use taxpayers' money to subsidize a particular group of people or businesses. Similarly, the role of government is not to aim at creating jobs. Such programs only result in allowing government to pick winners and losers by deciding who will receive taxpayer money.
Only a limited government can play a role in economic development, by focusing on its core functions and getting out of the way of the free market system. By keeping the market as free as possible of regulations and the of the burden of taxation, government can free up entrepreneurial minds that create solutions where there are needs such as the ones House Bill 1485 tries to remedy. Government agencies do not have the knowledge necessary, knowledge that is available in a free market system, to engineer economic development.
The program would also somewhat dictate what the grocery stores would have to sell. The role of Government is not to substitute itself to the demands that exist. That people may need to eat healthier foods does not mean that this is what they will be asking for. It is everyone's own responsibility to decide what type of food is best for oneself, not Government's. You cannot force self responsibility on an individual. In fact, research has shown that despite having healthy food options some people still choose to indulge in less healthy choices instead.
Finally, beneficiaries of the program would also be required to accept benefits from federal programs for five years. The reliance on governmental benefit programs discourages self responsibility.
As a consequence of all these problems, we oppose House Bill 1485.