TEXAS DEPARTMENT OF AGR ICULTURE

MEMORANDUM

Date: February 4, 2010

To: Select Committee on Federal Economic Stabilization Funding
From: Commissioner Todd Staples
Subject: Department Managed ARRA Funding

Thank you for your service to Texas and diligent review of this critical issue. In response to your
letter dated Jan. 22, 2010, I have developed the following report regarding programs established
and/or expanded by the American Recovery and Reinvestment Act of 2009. Each program is
administered, at least in part, by the Texas Department of Agriculture.

I. Agency Contact Information:

Name Telephone Email
@TexasAgriculture.Gov
Agency Head Commissioner Todd Staples 463-1408 Todd.Staples
ARRA Contact Heather Griffith Peterson, 463-3640 Heather.Griffith.Peterson
Assistant Commissioner for
Financial Services
External Catherine Wright Steele, 463-7700 Catherine.Steele
Relations Governmental Affairs Director

II. Total Stimulus Funds Spent to Date:

TDA ARRA Aquaculture Assistance Grants Program CFDA #10.086 $ 1,553,271.45
TDA - National Telecommunications and Information Administration (NTIA)
Broadband Technology Opportunities Program CFDA #11.557 $0 .00
TDA - NTIA State Broadband Data and Development Grant Program CFDA #11.558 $0.00
TDA ARRA Emergency Food Assistance Program (Administrative Costs) CFDA #10.568 $1,373,402.09
TDA ARRA Emergency Food Assistance Program (Food Commodities) CFDA #10.569 $8,169,424.96
TDA ARRA Equipment Assistance to Schools CFDA #10.579 $7,083,518.79
TDA ARRA Fair Park Agriculture Buildings CFDA #84.397 $0.00

III. Total Stimulus Funds Spent Since the Last Report:

TDA ARRA Aquaculture Assistance Grants Program CFDA #10.086 $ 1,553,271.45
TDA - National Telecommunications and Information Administration (NTIA)
Broadband Technology Opportunities Program CFDA #11.557 $0 .00
TDA - NTIA State Broadband Data and Development Grant Program CFDA #11.558 $0.00
TDA ARRA Emergency Food Assistance Program (Administrative Costs) CFDA #10.568 $1,373,402.09
TDA ARRA Emergency Food Assistance Program (Food Commodities) CFDA #10.569 $8,169,424.96
TDA ARRA Equipment Assistance to Schools CFDA #10.579 $7,083,518.79
TDA ARRA Fair Park Agriculture Buildings CFDA #84.397 $0.00

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IV. Description of Ongoing Programs:
Aquaculture Assistance Grant Program
Background: The program is intended to assist aquaculture producers with losses associated with high feed
input costs during the 2008 calendar year. Grant amounts are determined by subtracting the producers
average price/unit from the state's 2003-2007 five-year average price per unit, multiplied by the number of
units the producer purchased during 2008.
TDA Action: TDA is administering the program through a feed credit system. Credits may only be used for
the purchase of feed at cooperating feed suppliers. Any feed supplier can participate by entering into an
agreement with TDA. Credits may not be traded, sold, or redeemed for cash. Texas was appropriated
$1,732,244 in federal funds including an additional $45,043 received in October 2009.
Status: As of the end of January 2010, TDA paid out $1,566,240 to feed mills on behalf of qualified
producers. Approximately $166,000 remains for payout.

Broadband Technology Opportunity Program

Background: The American Recovery and Reinvestment Act of 2009 (ARRA) established the following
programs to support the deployment of broadband infrastructure in underserved areas, enhance broadband
capacity at public computer centers, and to encourage sustainable adoption of broadband service:
$2.5 billion for the Broadband Initiatives Program (BIP) to be administered by the Rural Utility Service
division of the U.S. Department of Agriculture.
$4.7 billion for the Broadband Technology Opportunities Program (BTOP) to be administered by the
National Telecommunications and Data Administration (NTIA).
TDA Action: Gov. Rick Perry designated the Texas Department of Agriculture (TDA), in consultation with
the Public Utility Commission (PUC) and the Texas Public Safety Commission (PSC), as the lead agency in
coordinating the states broadband expansion activities. In this role, TDA will assist in reviewing and
recommending federal stimulus grant applications for projects located in Texas. The application deadline for
the first grant cycle was August 14, 2009. To assist the agency in this role, Commissioner Staples
established the Texas Broadband Task Force on July 8, 2009. The Task Force has met and endorsed efforts
to pursue federal funding for statewide mapping. Through an RFP process, Connected Nation, a non-profit
corporation, was selected to measure and map the availability and use of broadband across the state.
Status: The announcement of funding for the initial phase of broadband funding for Texas was made on
January 12, 2010. Connected Nation, the designated entity for the State of Texas, was awarded
$3,028,165.00. $500,000 of that amount will be utilized for planning purposes with the remainder expended
on creating a broadband map. These dollars are awarded directly to Connected Nation.

Equipment Assistance to Schools

Background: Under the ARRA, Texas was allocated $11.5 million for equipment assistance to school food
authorities (SFAs) participating in the National School Lunch Program (NSLP). Equipment is defined as
articles of nonexpendable, tangible personal property with a useful life of more than one year and a per unit
acquisition cost of $5,000 or more. Equipment had to be reasonable, necessary, allocable and allowable in
order to be a permissible cost.
TDA Action: TDA is charged with the distribution of the grants and more than 3,000 schools applied. The
applications included requests for nearly 10,000 separate pieces of equipment totaling over $135 million. A
review panel scored applications, with consideration given to how the purchase would do the following:
improve the quality of the school foodservice meals that meet dietary guidelines,
improve the safety of food served in the school meals programs,
improve the overall energy efficiency of the school foodservice operations and/or
allow the SFAs to support expanded participation in the school meals programs.

Status: TDA awarded grants to 381 Texas schools in June, 2009 for the purchase of 939 pieces of new
kitchen equipment including ovens, freezers, steam tables, and food processors. Over $700,000 of the
original grants were not utilized by the awarded schools due to cost savings realized during the bidding
process. Therefore, TDA will re-allocate these funds for over 60 additional pieces of equipment. A
complete list of recipients and equipment can be found at www.SquareMeals.org/ARRA.

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IV. Description of Ongoing Programs Continued.

Texas Emergency Food Assistance Program

Background: The ARRA appropriated an additional $8.2 million for food and $2 million for administration
of the Texas Emergency Food Assistance Program (TEFAP). The funding will be administered by TDA
through the Texas Commodity Assistance Program (TEXCAP). The program coordinates the distribution of
USDA-donated commodities to emergency feeding organizations such as food pantries, soup kitchens, and
housing authorities. These organizations supply the commodities to participants through prepared meals that
are served on-site and food packages that may be used for home consumption.

TDA Action: The funding will increase the amount of food purchased by USDA for distribution to food
banks throughout the state. Each food bank contractor's share of funds for commodities and share of funds
for administration was determined on a 60/40 formula (i.e. 60 percent on poverty and 40 percent
unemployment). TDA has notified food banks of their food allocation

Status: TDA has reimbursed food banks $1.3 million to date or 67% of the $2 million for administration of
the ARRA TEFAP. The remaining $678,000 (33%) will be allocated to the food banks on a pro-rata basis.
In Award Year 2010 TDA will receive AN ADDITIONAL $1.9 million in ARRA TEFAP funding. This
will be allocated to the food banks following the same process as the AY2009 ARRA TEFAP
Administration funds.

Fair Park Agriculture Buildings

Background: TDA was appropriated $1 million in the 81 st Legislative GAA for the purpose of contracting
with the City of Dallas for structural building improvements to the Fair Park Agriculture Buildings, in
Dallas, Texas. Upon further examination and review of the implementation guidelines and requirements
associated with ARRA funds from construction, the Texas Higher Education Coordinating Board (THECB),
TDA and the City of Dallas determined the administrative requirements associated with construction
expenditures, though achievable, are time consuming and would unnecessarily delay the implementation of
this project, and would consequently fail to contribute to an immediate economic stimulus.

TDA Action: TDA is in the process of requesting the LBB and Governor's Office to approve the
repurposing of these ARRA funds to be used for security and utility expenditures associated with the Fair
Park. If approval is granted for the repurposing, TDA, on behalf of the City of Dallas as its grantee, will
apply to the Texas Higher Education Coordinating Board for $1 million to pay for utility and security costs
incurred in connection with operation of the Fair Park facility in Dallas, Texas.
Upon award from the THECB, TDA will enter into an agreement with the City of Dallas to sub-grant funds
for the proposed expenditures. As a condition of the sub-agreement, the City of Dallas will be required to
complete rehabilitation and modernization work of the Pan American Arena in Fair Park. The rehabilitation
work should focus on life-safety and electrical issues within the Pan American Arena, as originally planned.

Status: TDA is in the process of requesting authorization to repurpose funds from the LBB and Governor's
Office.

V. Description of Future Projects:

All projects identified in paragraph IV. Remain active. Presently no new projects are anticipated.

VI. New Stimulus Funding Received:

With the exception of $45,043.00 for the Aquaculture grant and $1,979,046.00 for the Emergency Food
Assistance Program (Administrative Costs) for program year 2010, no new stimulus funding has been
received by TDA.

VII. New Hires for Auditing and Accounting of Stimulus Funds:

None

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VIII. Compliance Issues:
TDA continues to clarify and seek guidance regarding reporting requirements to ensure the agency has
fully complied with the requirements of the ARRA reporting. Initially, sister agencies compliance
guidance and ARRA rules did have some confusing and conflicting information. After receiving
clarification from auditors, these measures have been addressed at the agency. Most specifically, the
requirements related to the CCR and DUNS identification information and disbursement notifications;
however, there have been no concerns regarding the awarding of ARRA dollars. All CCR, DUNS and
notification questions have been resolved.

IX. How the Agency addressed Compliance Issues:

N/A

X. Challenges the Agency is Facing in Utilizing or Applying for Stimulus Funds:

None

XI. Upcoming Deadlines for Stimulus Dollars and Plans to Apply:

Federal fiscal year end, State fiscal year end deadlines for expending prior program year funds are the only
deadlines we currently face. We are not anticipating applying for any additional or new stimulus program
funds.