Assembly Committee Statement to Assembly, No. 3742, with Committee Amendments (New Jersey, June 12, 2025)

Summary

Assembly Commerce, Economic Development and Agriculture Committee Statement to Assembly, No. 3742, with committee amendments, State of New Jersey, dated June 12, 2025. The committee reports favorably on Assembly Bill No. 3742, which as amended would require the Secretary of Agriculture to establish and operate a Farm to School Local Food Procurement Reimbursement Grant Program. The statement describes annual grants for school districts of not less than $10,000 and not more than $50,000 for a small district, and an initial appropriation of $4,500,000, of which $4,000,000 goes to the Reimbursement Fund and $500,000 to administrative costs. It lists the committee amendments, which include replacing applications with an attestation form and awarding grants on a pro rata basis instead of a competitive basis.

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ASSEMBLY COMMERCE, ECONOMIC DEVELOPMENT AND
           AGRICULTURE COMMITTEE

                           STATEMENT TO

                      ASSEMBLY, No. 3742
                          with committee amendments



       STATE OF NEW JERSEY
                              DATED: JUNE 12, 2025

          The Assembly Commerce, Economic Development and
      Agriculture Committee reports favorably and with committee
      amendments Assembly Bill No. 3742.
          As amended and reported, this bill would require the Secretary of
      Agriculture (secretary) to establish and operate a Farm to School Local
      Food Procurement Reimbursement Grant Program (program). The
      purpose of the program is to provide sufficient reimbursement
      financing to eligible school districts in the State, as necessary to allow
      such districts to implement or undertake new, expanded, or modified
      local food procurement policies, practices, standards, processes,
      systems, and activities at their own pace, and to whatever extent that
      such policies, standards, processes, systems, and activities are capable
      of being so expanded or modified, as may be necessary to increase the
      types or amounts of local foods being procured for students, the meal
      periods during which such local foods are served to students, or the
      total number or type of students being offered such local foods, during
      either the school year or the summer months, or both. A school
      district is eligible for a program grant if all of the schools participating
      in, or directly benefitting from, the district’s new, expanded, or
      modified local food procurement policies, standards, processes,
      systems, or activities (i.e., “participating partner schools”) are schools
      that provide subsidized meals to eligible students.
          A school district that wishes to obtain a program grant is required
      to submit, to the secretary, an attestation form that includes:
          (1) a statement certifying the total number of participating partner
      schools in the district;
          (2) a statement certifying the district’s status as a small district, a
      medium-sized district, or a large district, as defined by the bill, and
      identifying the total amount of program grant funding being sought by
      the district, within the appropriate minimum and maximum funding
      range established under the bill for similarly sized districts;
          (3) a statement certifying, and briefly describing, the purposes for
      which the awarded program grant funds will be used in the upcoming
      program year;
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    (4) a statement certifying whether, and to what extent, the district
is seeking the Department of Agriculture’s (department) discretionary
authorization, as provided by the bill, in order to enable a portion of
the district’s program grant award to be used for technical assistance
expense purposes in the upcoming program year, and specifying the
proportion of the total requested program funding award, by
percentage and dollar amount, which is being sought for such
discretionary purposes;
    (5) a certified copy of the district’s proposed local food
procurement plan, as well as a brief summary describing the district’s
current baseline local food sourcing activities and approximate local
food budget, if any, and identifying the extent to which farmers have
provided local foods to the district’s students during the immediately
preceding school year; and
    (6) any other information or attachments required by the secretary.
    Each school district submitting an attestation form, as provided by
the bill, is authorized to receive a grant award in the upcoming
program year, in an amount consistent with the following minimum
and maximum annual funding allowances: (1) for a small school
district, which has less than 5,000 students enrolled at partner schools,
an annual program grant of not less than $10,000 and not more than
$50,000; (2) for a medium-sized school district, which has not less
than 5,000 and not more than 10,000 students enrolled at partner
schools, an annual program grant of not less than $20,000 and not
more than $125,000; and (3) for a large school district, which has
10,000 or more students enrolled at partner schools, an annual program
grant of not less than $44,000 and not more than $250,000.
    Grants under the program are to be allocated and awarded, on an
equitable, pro rata basis, to and among eligible school districts in the
State, within the limits of moneys annually appropriated or otherwise
made available to the department. Moneys appropriated by the
Legislature, for these purposes, are to be deposited in the Farm to
School Local Food Procurement Reimbursement Fund (newly
established by the bill). The proportional amount of reimbursement
grant funding which is to be awarded to each eligible school district, in
each program year, is to be determined by the department, in
accordance with a funding formula developed thereby, and is to be
sufficient to reimburse all, or a portion of, the district’s eligible costs at
a rate that is proportional to the reimbursement rate applied by the
department, in the same program year, to other, similarly sized and
situated school districts. The funding formula that is developed and
used, by the department, for these purposes, is also required to provide
for a proportional adjustment in the pro rata shares that are allocated,
in each program year, to school districts that: (1) have a high number
or percentage of subsidized students enrolled at partner schools and
will use awarded grant funds to increase subsidized students’ access to
local foods; (2) are located, or have one or more partner schools
                                    3

located, in a food desert area; (3) will use or encourage or require their
local food procurement partners (i.e., all partner schools and school
food authorities participating in the district’s local food procurement
program) to use the awarded grant funds to facilitate or mandate the
increased sourcing and procurement of local foods produced by small
or mid-sized family farms or socially disadvantaged farmers in the
State; or ( 4) were recipients of a program grant award in one or more
prior program years, the full amount of which has been exhausted, in
compliance with all applicable program requirements.
    Although the bill generally provides for 100 percent of the
program funds, annually awarded to each eligible district, to be used
solely for the purpose of reimbursing the eligible costs that are
expended in association with the sourcing and procurement of the
increased types or amounts of local foods served in the district, during
the program year, the bill also permits the department, acting on a
discretionary and individual case basis, and upon the documented
request of an eligible school district, to authorize the school district to
use up to 20 percent of the funds annually awarded thereto for the
purpose of reimbursing technical assistance expenditures that are
deemed, by the department, to be necessary to facilitate the effective
implementation of the district’s proposed local food procurement plan.
    The bill prohibits a school district from using awarded program
grant funds to reimburse any ineligible costs, or to reimburse any
eligible costs that are already being paid for or reimbursed with other
State or federal funds. The bill further requires the department, to the
greatest extent practicable, to: 1) maximize the receipt and use of
federal funds that are made available to the State, under the Local
Food for Schools Cooperative Agreement Program or other, similar
federal programs or laws, for the purposes of procuring local or
regional food products under the program; and 2) fully expend, in each
year, and for the purposes of the program, all federal funding that has
been annually allocated to the State for such purposes, whether
pursuant to the Local Food Local Food for Schools Cooperative
Agreement Program or otherwise, to facilitate the State-level
procurement of local or regional foods for schools, before moving to
expend any State-level funding that has been appropriated and
allocated, for those purposes, in the same program year.
    Except as otherwise provided by the bill, any program grant funds
that are awarded to a school district, but which remain unclaimed or
unexpended at the end of the annual disbursement period, are to be
reclaimed by the secretary and used to finance future grant awards
under the program. Although the bill authorizes eligible school
districts to apply for program funds in multiple program years, the bill
prohibits the roll-over of awarded, but unused, program grant funds,
from one program year to the next, except in the case of hardship
beyond the district’s control.
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     The bill provides for an initial appropriation of $4,500,000, from
the General Fund to the department, in order to facilitate the program’s
initial establishment and finance the first year of program operations.
Of that initial amount, the bill provides for $4,000,000 to be deposited
into the Farm to School Local Food Procurement Reimbursement
Fund, newly established by the bill, and dedicated for use in the
financing of grant awards under the program, and it provides for an
additional $500,000 to be appropriated, to the department, for use in
financing the administrative costs associated with the department’s
initial establishment of, and commencement of initial operations
under, the program.
     The bill further requires the department to include, in each annual
budget request submitted in each year next following the program’s
initial establishment, and provides for the Legislature to annually
approve, a request for the appropriation of funds in an amount, not
exceeding $4.5 million, which is deemed by the department to be
sufficient to support and continue the reimbursement program in the
next upcoming program year.

COMMITTEE AMENDMENTS:
    The committee amended the bill to make the following changes:
    (1) remove the provisions of the bill which would have required
school districts to submit an application to the department in order to
receive program funding, and which additionally described the
information required to be included in such applications; and insert
new provisions authorizing a school district to receive program
funding upon the submission of an attestation form only, and
describing the requisite components to be included in such attestation;
    (2) insert a new definition of, and references to, “program year”;
    (3) remove references to “participating schools” and replace with
references to “participating partner schools” and “partner schools,” in
order to avoid potential conflicts with the existing terminology used in
the State’s school meals program laws;
    (4) remove references to “district-operated or third party-
contracted food service providers or vendors” and insert a new
definition of, and new references to, “school food authorities,” which
is more consistent with terminology used in federal law;
    (5) insert a new definition of, and references to, “local food
procurement partners,” in order to allow for the collective referencing
of those partner schools and school food authorities that are
participating in the implementation of a school district’s local food
procurement plan;
    (6) remove the provisions of the bill that would have provided for
program grants to be awarded on a competitive basis; insert new
provisions providing for program grants to be awarded on an
equitable, pro rata basis, in accordance with a funding formula
developed by the department; and insert new provisions requiring the
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department’s funding formula to be designed in a manner that
facilitates the department’s consideration of certain district-specific
characteristics and conditions, when making program funding
determinations, and that provides for the department to make
proportional adjustments in the pro rata shares of program funding
annually awarded to school districts that are determined to have certain
specified characteristics or to satisfy certain specified conditions;
     (7) remove the provisions of the bill that would have provided for
at least 80 percent of an annual program grant award to be used for the
sourcing and procurement of increased types or amounts of local foods
which are needed to implement the district’s proposed local food
procurement plan, and which would have further authorized up to 20
percent of the awarded grant funds to be used for certain
administrative and technical expenses; insert new provisions requiring
100 percent of an annual program grant award to be used for the
sourcing and procurement of increased types or amounts of local foods
which are needed to implement the district’s proposed local food
procurement plan, additionally authorizing the department, acting on a
discretionary and individual case basis, upon the request of an attesting
district, to allow each eligible district to use up to 20 percent of the
funds awarded thereto, in any program year, for the reimbursement of
technical assistance expenditures that are deemed, by the department,
to be necessary to facilitate the effective implementation of the
district’s proposed local food procurement plan;
     (8) modify the bill’s provisions regarding the submission of
invoice and accounting statements and the disbursement of awarded
program grant funding, so as to provide for such statements to be
submitted, and for such awarded program funding to be disbursed to
school districts, on a monthly, quarterly, or other periodic installment
basis throughout the program year, as specified by department rule or
regulation instead of providing for such statements to be submitted on
a monthly basis only;
     (9) insert a new provision requiring the department to utilize an
automated system for expense invoicing and tracking purposes, and
authorizing the department to either develop a new automated system,
or use an existing automated system, for such purposes;
     (10) insert new provisions providing for the department to recoup
and reclaim unclaimed or unexpended program funds, for use in future
program grant awards, in certain cases;
     (11) insert a new section establishing the Farm to School Local
Food Procurement Reimbursement Fund, in the Department of
Agriculture, to serve as a repository of funds appropriated or otherwise
made available for the program’s purposes;
     (12) insert new provisions requiring the department to maximize
the receipt and use of federal funding available for the program’s
purposes, and to fully expend all federal funds made available thereto,
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for program purposes, before moving to expend State funds annually
appropriated for the same purposes;
     (13) delete the provisions of the bill which would have provided
for an initial State-level appropriation of $6.5 million for program
grant financing purposes; and insert new provisions providing for an
initial State-level appropriation of $4 million, to the Farm to School
Local Food Procurement Reimbursement Fund, for the financing of
program grant awards, and an initial State-level appropriation of
$500,000, to the department, for program-related administrative
expenses;
     (14) insert a new section requiring the department to annually
submit a budget request for, and providing for the Legislature to
annually appropriate as requested, new program funding, in an amount
not exceeding $4.5 million, to facilitate program operations and
finance program grants in the second, and in each subsequent, year of
program operations;
     (15) insert new provisions requiring the department to annually
submit a program status report, to the Governor and Legislature,
contemporaneously with the submission of its annual program-related
budget request;
     (16) revise the bill’s effective date section to provide for section 7
of the bill, appropriating an initial $500,000 for program-related
administrative expenses, to take effect immediately, and for the
remaining sections of the bill to take effect on the first day of the
thirteenth month next following the date of enactment, or on January 1
of the second full calendar year next following the date of enactment,
whichever date is later;
     (17) update the bill’s synopsis to reflect the changes incorporated
through these amendments; and
     (18) incorporate other, minor technical changes to correct
subdivision lettering and numbering, to ensure the clarity of language,
and to otherwise properly incorporate, into the existing bill text, the
substantive amendments described above.


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