Assembly Commerce, Economic Development and Agriculture Committee Statement to Assembly, No. 3742 (2025)

Summary

An Assembly Commerce, Economic Development and Agriculture Committee statement to Assembly, No. 3742, State of New Jersey, dated June 12, 2025, reporting the bill favorably with committee amendments. The bill would require the Secretary of Agriculture to establish a Farm to School Local Food Procurement Reimbursement Grant Program for school districts whose partner schools provide subsidized meals, with annual grants ranging by district size up to not more than $250,000 for a large district. Grants are to be awarded on an equitable, pro rata basis, and the department may allow up to 20 percent of an award for technical assistance. The bill provides an initial appropriation of $4,500,000, of which $4,000,000 goes to a new reimbursement fund and $500,000 to administrative costs.

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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;

(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
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.

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 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, 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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