By Patterson, et al. H.B. No. 1287
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the establishment and funding of a young farmer loan
1-3 guarantee program.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 253, Agriculture Code, is amended to read
1-6 as follows:
1-7 CHAPTER 253. YOUNG FARMER LOAN GUARANTEE PROGRAM
1-8 Sec. 253.001. DEFINITIONS. In this chapter:
1-9 (1) "Board" means the board of directors of the Texas
1-10 Agricultural Finance Authority.
1-11 (2) "Commercial lender" means a commercial lending
1-12 institution chartered by the state or federal government, including
1-13 a savings and loan association, a credit union, and a Farm Credit
1-14 System institution.
1-15 (3) "Eligible applicant" means a person applying for a
1-16 loan guarantee under this chapter who:
1-17 (A) is at least 18 years of age but younger than
1-18 40 years of age;
1-19 (B) has four years of practical farm or ranch
1-20 experience, with not more than two years of participation in a 4-H
1-21 or an agricultural science and technology program counting as
1-22 practical farm or ranch experience; and
1-23 (C) complies with the application procedures
1-24 prescribed by this chapter.
2-1 (4) "Plan" means a cash flow, production, or
2-2 management plan.
2-3 Sec. 253.002. YOUNG FARMER LOAN GUARANTEE PROGRAM. (a) The
2-4 board shall administer a loan guarantee program that benefits
2-5 eligible applicants who desire to establish their first farming or
2-6 ranching operation.
2-7 (b) The board may grant to an eligible applicant a guarantee
2-8 of a loan made by a commercial lender for the purposes prescribed
2-9 by this chapter. The guarantee amount may not exceed the lesser of
2-10 $50,000 or 90 percent of the total loan amount.
2-11 (c) The aggregate amount guaranteed under this chapter may
2-12 not exceed twice the amount of current appropriations from the
2-13 young farmer loan guarantee account.
2-14 (d) A loan guarantee recipient may use proceeds from the
2-15 loan only for feed, seed, fertilizer, livestock, poultry, farm or
2-16 ranch equipment, farm or ranch facilities, or leases of farmland or
2-17 rangeland. A loan guarantee is voidable by the board if the
2-18 recipient uses loan proceeds for a purpose other than those listed
2-19 by this subsection. The board shall include this restriction as a
2-20 condition in each loan guarantee instrument executed under this
2-21 chapter.
2-22 Sec. 253.003. APPLICATION FOR LOAN GUARANTEE. (a) An
2-23 eligible applicant must present to the department for the board's
2-24 review:
2-25 (1) a five-year plan for the applicant's proposed farm
2-26 or ranch that has been reviewed and approved by an individual who:
2-27 (A) teaches agricultural science and technology
3-1 in the applicant's school district; or
3-2 (B) is a county extension agent-agriculture
3-3 program leader of the Texas Agricultural Extension Service;
3-4 (2) a completed application for a loan from a
3-5 commercial lender on which the eligible applicant has indicated
3-6 that the loan proceeds will be used to implement the applicant's
3-7 five-year plan; and
3-8 (3) the signed statement of a loan officer of the
3-9 commercial lender that a loan guarantee is required for approval of
3-10 the loan application.
3-11 (b) A district agricultural economist employed by the Texas
3-12 Agricultural Extension Service shall assist with review and
3-13 approval of a plan under Subsection (a)(1) of this section if
3-14 requested to do so by the individual responsible for the review and
3-15 approval.
3-16 (c) The department may charge a reasonable application fee
3-17 for processing an application filed under this section.
3-18 Sec. 253.004. BOARD CONSIDERATION OF LOAN GUARANTEE
3-19 APPLICATION. After reviewing the materials submitted under Section
3-20 253.003 of this chapter, the board shall consider the following
3-21 factors in deciding whether to approve an application for a loan
3-22 guarantee:
3-23 (1) the anticipated benefits from granting a loan
3-24 guarantee to the applicant, including both potential job creation
3-25 and commercial benefits to the agricultural industry;
3-26 (2) the applicant's qualifications;
3-27 (3) the feasibility of the applicant's plan; and
4-1 (4) other funding sources available to the applicant.
4-2 Sec. 253.005. DEFAULT. If the recipient of a loan guarantee
4-3 defaults on a loan that is guaranteed under this chapter, and the
4-4 department is required to honor its guarantee, the department,
4-5 through its representative, may bring suit against the defaulting
4-6 party. The suit may be brought in the county in which the
4-7 defaulting party resides, in which the commercial lender is
4-8 located, or in Travis County.
4-9 Sec. 253.006. MONEY FOR LOAN GUARANTEE PROGRAM. The
4-10 commissioner may accept gifts and grants of money from the federal
4-11 government, local governments, private corporations, or other
4-12 persons for use in the young farmer loan guarantee program. The
4-13 legislature may appropriate money for the program.
4-14 Sec. 253.007. YOUNG FARMER LOAN GUARANTEE ACCOUNT. (a) The
4-15 young farmer loan guarantee account is an account in the general
4-16 revenue fund. Money in the account may be appropriated only to the
4-17 department for the purpose of making or administering loan
4-18 guarantees under this chapter.
4-19 (b) The account consists of appropriations and transfers
4-20 made to the account, grants and donations made for the purposes of
4-21 the young farmer loan guarantee program, income earned on money in
4-22 the account, and any other money received under this chapter.
4-23 Notwithstanding Section 404.071, Government Code, income and
4-24 interest earned on money in the account shall be deposited to the
4-25 credit of the account. The account is exempt from the application
4-26 of Sections 403.094(h) and (i) and 403.095, Government Code.
4-27 (c) The board may spend not more than $100,000 during each
5-1 fiscal year from income earned on the account and from application
5-2 fees collected by the department under Section 253.003 of this code
5-3 to pay the costs of administering the program.
5-4 (d) The board shall attempt to administer the fund in a
5-5 manner that makes private donations to the fund an eligible
5-6 itemized deduction for federal income taxation.
5-7 (e) The board has the same authority in administering the
5-8 young farmer loan guarantee program as it has in administering
5-9 programs established by the board under Chapter 58 of this code.
5-10 <CHAPTER 253. YOUNG FARMER ENDOWMENT PROGRAM>
5-11 <Sec. 253.001. DEFINITIONS. In this chapter:>
5-12 <(1) "Board" means the board of directors of the Texas
5-13 Agricultural Finance Authority.>
5-14 <(2) "County agent" means a county extension
5-15 agent-agriculture program leader of the Texas Agricultural
5-16 Extension Service.>
5-17 <(3) "District-based agricultural economist" means a
5-18 district agricultural economist employed by the Texas Agricultural
5-19 Extension Service.>
5-20 <(4) "Eligible borrower" means a person who is at
5-21 least 18 years of age but younger than 40 years of age and who has
5-22 four years of practical farm or ranch experience, with not more
5-23 than two years of participation in a 4-H or a vocational
5-24 agriculture program counting as practical farm or ranch experience.>
5-25 <(5) "Plan" means a cash flow, production, or
5-26 management plan.>
5-27 <Sec. 253.002. YOUNG FARMER ENDOWMENT PROGRAM LOANS. (a)
6-1 The board shall administer a loan program supporting eligible
6-2 borrowers who desire to establish their first farming or ranching
6-3 operation.>
6-4 <(b) A young farmer endowment loan applicant may receive a
6-5 loan in an amount not to exceed $50,000.>
6-6 <(c) Except as provided by Section 253.003 of this code, a
6-7 loan recipient may use loan proceeds only for feed, seed,
6-8 fertilizer, livestock, poultry, farm equipment, farm facilities,
6-9 leases of farmland, or to repay loans from other lenders borrowed
6-10 to purchase or lease those items to establish the borrower's first
6-11 farm or ranch operation.>
6-12 <(d) Loans made under this chapter are interest free.>
6-13 <Sec. 253.003. LOAN PROCEEDS AS COLLATERAL. A loan
6-14 recipient may use loan proceeds received under this chapter as
6-15 collateral when applying for a commercial loan. If the loan
6-16 recipient obtains a commercial loan with loan proceeds provided
6-17 under this chapter as collateral, the loan recipient may use the
6-18 commercial loan proceeds only for the purposes for which loan
6-19 proceeds may be used under Section 253.002(c) of this code.>
6-20 <Sec. 253.004. POWERS OF AUTHORITY. The board has the same
6-21 authority in administering the young farmer endowment program as it
6-22 has in administering programs established by the board under
6-23 Chapter 58 of this code.>
6-24 <Sec. 253.005. CRITERIA FOR LOANS. (a) The applicant must
6-25 first present to the applicant's local county agent or to an
6-26 agricultural science teacher who teaches in the applicant's school
6-27 district a 10-year plan for the applicant's proposed farm or ranch
7-1 operation. The county agent or agricultural science teacher shall
7-2 assist in revising the plan and may request the assistance of the
7-3 district-based agricultural economist.>
7-4 <(b) After the county agent or agricultural science teacher
7-5 reviews the plan, the applicant may submit the plan and a loan
7-6 application to the department for review by the board. After the
7-7 board reviews the plan the board shall consider the applicant's
7-8 loan application. The board may consider the following criteria
7-9 before approving a loan:>
7-10 <(1) the anticipated benefits arising from a loan to
7-11 the applicant, including both potential job creation and commercial
7-12 benefits to the agricultural industry;>
7-13 <(2) the qualifications of the applicant;>
7-14 <(3) the reasonableness of the applicant's proposed
7-15 budget;>
7-16 <(4) the extent and level of other funding sources for
7-17 the applicant;>
7-18 <(5) the funding commitments needed for continued
7-19 development; and>
7-20 <(6) the comments of the county agent or agricultural
7-21 science teacher who reviewed the plan.>
7-22 <(c) The board shall establish a reasonable fee and collect
7-23 the fee for each application submitted. The board shall deposit
7-24 fees collected under this section in the state treasury to the
7-25 credit of the young farmer endowment fund.>
7-26 <Sec. 253.006. REPAYMENT SCHEDULE. The board shall
7-27 establish a repayment schedule for each loan recipient. The
8-1 schedule must require the loan recipient to begin payment of the
8-2 loan not later than the second anniversary of the date on which the
8-3 loan was made. The loan recipient shall fully repay the loan not
8-4 later than the 15th anniversary of the date on which the loan was
8-5 made. The board may grant an extension on the deadline imposed by
8-6 this section.>
8-7 <Sec. 253.007. MONEY FOR LOANS. The commissioner may accept
8-8 gifts and grants of money from the federal government, local
8-9 governments, private corporations, or other persons for use in
8-10 making loans under the young farmer endowment program. The
8-11 legislature may appropriate money for loans under this program.>
8-12 <Sec. 253.008. YOUNG FARMER ENDOWMENT FUND. The young
8-13 farmer endowment fund is a fund in the state treasury. Money
8-14 appropriated to the board for use in making loans under the young
8-15 farmer endowment program, other amounts received by the state for
8-16 loans made under the program, and other money received by the board
8-17 for the program and required by the board to be deposited in the
8-18 fund shall be deposited to the credit of the fund. The fund shall
8-19 operate as a revolving fund, the contents of which shall be applied
8-20 and reapplied for the purposes of the young farmer endowment
8-21 program. The board may use not more than $100,000 during each
8-22 fiscal year from the application fees collected under Section
8-23 253.003 and interest earned on the fund to pay the costs to the
8-24 department in administering the young farmer endowment program.
8-25 The board shall attempt to administer the fund in a manner that
8-26 makes private donations to the fund deductible from federal income
8-27 taxes.>
9-1 SECTION 2. Section 6a, Chapter 88, General Laws, Acts of the
9-2 41st Legislature, 2nd Called Session, 1929 (Article 6675a-6a,
9-3 Vernon's Texas Civil Statutes), is amended to read as follows:
9-4 Sec. 6a. <(a)> When a commercial motor vehicle is to be
9-5 used for commercial purposes by the owner thereof only in the
9-6 transportation of his own poultry, dairy, livestock, livestock
9-7 products, timber in its natural state, and farm products to market,
9-8 or to other points for sale or processing, or the transportation by
9-9 the owner thereof of laborers from their place of residence, and
9-10 materials, tools, equipment and supplies, without charge, from the
9-11 place of purchase or storage, to his own farm or ranch exclusively
9-12 for his own use, or use on such farm or ranch, the registration
9-13 license fee shall be fifty per cent (50%) of the registration fee
9-14 prescribed for weight classifications in Section 6 of this Act<,
9-15 plus an additional fee of Five Dollars ($5)>; provided, however,
9-16 that the additional use of the vehicle as a means of passenger
9-17 transportation, without charge, of members of the family to attend
9-18 church or school, to visit doctors for medical treatment or
9-19 supplies, and for other necessities of the home or family shall not
9-20 prevent its registration as a farm vehicle. Nothing in the
9-21 foregoing shall be interpreted as permitting the use of a farm
9-22 licensed vehicle in connection with other gainful employment. It
9-23 shall be the duty of the Texas <State> Department of <Highways and
9-24 Public> Transportation to provide license plates for vehicles
9-25 registered under this Section distinguishable from license plates
9-26 used for other commercial vehicles using the highways. If the
9-27 owner of any commercial motor vehicle registered under this Section
10-1 shall use or permit to be used any such vehicle for any other
10-2 purpose than those provided for in this Section, he shall be guilty
10-3 of a misdemeanor and upon conviction shall be fined in any sum not
10-4 less than Twenty-five Dollars ($25) nor more than Two Hundred
10-5 Dollars ($200), and each use of such vehicle and each permission
10-6 for such use of such vehicle shall constitute a separate offense.
10-7 All commercial motor vehicles, truck tractors, road tractors,
10-8 trailers and semi-trailers as defined in Section 1 of Chapter 23 of
10-9 the General Laws of the Fifth Called Session of the Forty-first
10-10 Legislature, not coming within the provisions of this Section,
10-11 shall be required to pay all registration and license fees
10-12 prescribed by other provisions of this Act.
10-13 <(b) The county tax collector shall send the additional Five
10-14 Dollar ($5) fee collected under this section to the state
10-15 treasurer, at the time and in the manner prescribed by the
10-16 treasurer, for deposit in the state treasury to the credit of the
10-17 young farmer endowment fund.>
10-18 SECTION 3. Chapter 88, General Laws, Acts of the 41st
10-19 Legislature, 2nd Called Session, 1929 (Article 6675a-1 et seq.,
10-20 Vernon's Texas Civil Statutes), is amended by adding Section 17 to
10-21 read as follows:
10-22 Sec. 17. (a) At the time a person registers a commercial
10-23 motor vehicle under Section 6a of this Act, the person shall pay a
10-24 voluntary assessment in the amount of $5.
10-25 (b) The county tax collector shall send the $5 assessment
10-26 collected under this section to the state treasurer, at the time
10-27 and in the manner prescribed by the Texas Agricultural Finance
11-1 Authority, for deposit in the general revenue fund to the credit of
11-2 the young farmer loan guarantee account.
11-3 (c) The Texas Agricultural Finance Authority shall prescribe
11-4 procedures under which an assessment collected under this section
11-5 may be refunded. The county tax collector of the county in which
11-6 an assessment is collected shall implement the refund procedures
11-7 prescribed by the authority and shall provide notice of those
11-8 procedures to a person paying an assessment at the time of the
11-9 payment.
11-10 SECTION 4. (a) On the effective date of this Act, the
11-11 comptroller shall transfer all money in the young farmer endowment
11-12 fund in the state treasury to the young farmer loan guarantee
11-13 account established under this Act.
11-14 (b) On or after the effective date of this Act, an
11-15 appropriation made from the young farmer endowment fund is
11-16 considered to be an appropriation made from the young farmer loan
11-17 guarantee account established under this Act.
11-18 SECTION 5. The Texas Agricultural Finance Authority shall
11-19 continue to administer a loan made before the effective date of
11-20 this Act under the young farmer endowment program until the loan is
11-21 fully repaid.
11-22 SECTION 6. An individual who before the effective date of
11-23 this Act paid a $5 fee that was deposited to the credit of the
11-24 young farmer endowment fund under Section 6a, Chapter 88, General
11-25 Laws, Acts of the 41st Legislature, 2nd Called Session, 1929
11-26 (Article 6675a-6a, Vernon's Texas Civil Statutes), may obtain a
11-27 refund of the amount paid by filing an application for refund with
12-1 the comptroller of public accounts not later than the 60th day
12-2 after the effective date of this Act. Notice of the availability
12-3 of the refunds shall be made by publication in local newspapers
12-4 with countywide distribution. Amounts not refunded shall be
12-5 considered donations for the purposes of this Act.
12-6 SECTION 7. The importance of this legislation and the
12-7 crowded condition of the calendars in both houses create an
12-8 emergency and an imperative public necessity that the
12-9 constitutional rule requiring bills to be read on three several
12-10 days in each house be suspended, and this rule is hereby suspended,
12-11 and that this Act take effect and be in force from and after its
12-12 passage, and it is so enacted.