73R2070 MJW-F
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 production
1-14 credit association.
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 a vocational agriculture program counting as practical farm or
1-22 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 the amount of current appropriations from the young
2-13 farmer loan guarantee fund.
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 Sec. 253.004. BOARD CONSIDERATION OF LOAN GUARANTEE
3-17 APPLICATION. After reviewing the materials submitted under Section
3-18 253.003 of this chapter, the board shall consider the following
3-19 factors in deciding whether to approve an application for a loan
3-20 guarantee:
3-21 (1) the anticipated benefits from granting a loan
3-22 guarantee to the applicant, including both potential job creation
3-23 and commercial benefits to the agricultural industry;
3-24 (2) the applicant's qualifications;
3-25 (3) the feasibility of the applicant's plan; and
3-26 (4) other funding sources available to the applicant.
3-27 Sec. 253.005. DEFAULT. If the recipient of a loan guarantee
4-1 defaults on a loan that is guaranteed under this chapter, and the
4-2 department is required to honor its guarantee, the department,
4-3 through its representative, may bring suit against the defaulting
4-4 party. The suit may be brought in the county in which the
4-5 defaulting party resides, in which the commercial lender is
4-6 located, or in Travis County.
4-7 Sec. 253.006. MONEY FOR LOAN GUARANTEE FUND. The
4-8 commissioner may accept gifts and grants of money from the federal
4-9 government, local governments, private corporations, or other
4-10 persons for use in the young farmer loan guarantee program. The
4-11 legislature may appropriate money for the program.
4-12 Sec. 253.007. YOUNG FARMER LOAN GUARANTEE FUND. (a) The
4-13 young farmer loan guarantee fund is a fund in the state treasury.
4-14 Money in the fund may be appropriated only to the department for
4-15 the purpose of making or administering loan guarantees under this
4-16 chapter.
4-17 (b) The fund consists of appropriations and transfers made
4-18 to the fund, grants and donations made for the purposes of the
4-19 young farmer loan guarantee program, income earned on money in the
4-20 fund, and any other money received under this chapter.
4-21 Notwithstanding Section 404.071, Government Code, income and
4-22 interest earned on money in the fund shall be deposited to the
4-23 credit of the fund. The fund is exempt from the application of
4-24 Sections 403.094(h) and (i) and 403.095, Government Code.
4-25 (c) The board may spend not more than $100,000 during each
4-26 fiscal year from income earned on the fund to pay the costs of
4-27 administering the program.
5-1 (d) The board shall attempt to administer the fund in a
5-2 manner that makes private donations to the fund an eligible
5-3 itemized deduction for federal income taxation.
5-4 <CHAPTER 253. YOUNG FARMER ENDOWMENT PROGRAM>
5-5 <Sec. 253.001. DEFINITIONS. In this chapter:>
5-6 <(1) "Board" means the board of directors of the Texas
5-7 Agricultural Finance Authority.>
5-8 <(2) "County agent" means a county extension
5-9 agent-agriculture program leader of the Texas Agricultural
5-10 Extension Service.>
5-11 <(3) "District-based agricultural economist" means a
5-12 district agricultural economist employed by the Texas Agricultural
5-13 Extension Service.>
5-14 <(4) "Eligible borrower" means a person who is at
5-15 least 18 years of age but younger than 40 years of age and who has
5-16 four years of practical farm or ranch experience, with not more
5-17 than two years of participation in a 4-H or a vocational
5-18 agriculture program counting as practical farm or ranch experience.>
5-19 <(5) "Plan" means a cash flow, production, or
5-20 management plan.>
5-21 <Sec. 253.002. YOUNG FARMER ENDOWMENT PROGRAM LOANS. (a)
5-22 The board shall administer a loan program supporting eligible
5-23 borrowers who desire to establish their first farming or ranching
5-24 operation.>
5-25 <(b) A young farmer endowment loan applicant may receive a
5-26 loan in an amount not to exceed $50,000.>
5-27 <(c) Except as provided by Section 253.003 of this code, a
6-1 loan recipient may use loan proceeds only for feed, seed,
6-2 fertilizer, livestock, poultry, farm equipment, farm facilities,
6-3 leases of farmland, or to repay loans from other lenders borrowed
6-4 to purchase or lease those items to establish the borrower's first
6-5 farm or ranch operation.>
6-6 <(d) Loans made under this chapter are interest free.>
6-7 <Sec. 253.003. LOAN PROCEEDS AS COLLATERAL. A loan
6-8 recipient may use loan proceeds received under this chapter as
6-9 collateral when applying for a commercial loan. If the loan
6-10 recipient obtains a commercial loan with loan proceeds provided
6-11 under this chapter as collateral, the loan recipient may use the
6-12 commercial loan proceeds only for the purposes for which loan
6-13 proceeds may be used under Section 253.002(c) of this code.>
6-14 <Sec. 253.004. POWERS OF AUTHORITY. The board has the same
6-15 authority in administering the young farmer endowment program as it
6-16 has in administering programs established by the board under
6-17 Chapter 58 of this code.>
6-18 <Sec. 253.005. CRITERIA FOR LOANS. (a) The applicant must
6-19 first present to the applicant's local county agent or to an
6-20 agricultural science teacher who teaches in the applicant's school
6-21 district a 10-year plan for the applicant's proposed farm or ranch
6-22 operation. The county agent or agricultural science teacher shall
6-23 assist in revising the plan and may request the assistance of the
6-24 district-based agricultural economist.>
6-25 <(b) After the county agent or agricultural science teacher
6-26 reviews the plan, the applicant may submit the plan and a loan
6-27 application to the department for review by the board. After the
7-1 board reviews the plan the board shall consider the applicant's
7-2 loan application. The board may consider the following criteria
7-3 before approving a loan:>
7-4 <(1) the anticipated benefits arising from a loan to
7-5 the applicant, including both potential job creation and commercial
7-6 benefits to the agricultural industry;>
7-7 <(2) the qualifications of the applicant;>
7-8 <(3) the reasonableness of the applicant's proposed
7-9 budget;>
7-10 <(4) the extent and level of other funding sources for
7-11 the applicant;>
7-12 <(5) the funding commitments needed for continued
7-13 development; and>
7-14 <(6) the comments of the county agent or agricultural
7-15 science teacher who reviewed the plan.>
7-16 <(c) The board shall establish a reasonable fee and collect
7-17 the fee for each application submitted. The board shall deposit
7-18 fees collected under this section in the state treasury to the
7-19 credit of the young farmer endowment fund.>
7-20 <Sec. 253.006. REPAYMENT SCHEDULE. The board shall
7-21 establish a repayment schedule for each loan recipient. The
7-22 schedule must require the loan recipient to begin payment of the
7-23 loan not later than the second anniversary of the date on which the
7-24 loan was made. The loan recipient shall fully repay the loan not
7-25 later than the 15th anniversary of the date on which the loan was
7-26 made. The board may grant an extension on the deadline imposed by
7-27 this section.>
8-1 <Sec. 253.007. MONEY FOR LOANS. The commissioner may accept
8-2 gifts and grants of money from the federal government, local
8-3 governments, private corporations, or other persons for use in
8-4 making loans under the young farmer endowment program. The
8-5 legislature may appropriate money for loans under this program.>
8-6 <Sec. 253.008. YOUNG FARMER ENDOWMENT FUND. The young
8-7 farmer endowment fund is a fund in the state treasury. Money
8-8 appropriated to the board for use in making loans under the young
8-9 farmer endowment program, other amounts received by the state for
8-10 loans made under the program, and other money received by the board
8-11 for the program and required by the board to be deposited in the
8-12 fund shall be deposited to the credit of the fund. The fund shall
8-13 operate as a revolving fund, the contents of which shall be applied
8-14 and reapplied for the purposes of the young farmer endowment
8-15 program. The board may use not more than $100,000 during each
8-16 fiscal year from the application fees collected under Section
8-17 253.003 and interest earned on the fund to pay the costs to the
8-18 department in administering the young farmer endowment program.
8-19 The board shall attempt to administer the fund in a manner that
8-20 makes private donations to the fund deductible from federal income
8-21 taxes.>
8-22 SECTION 2. Section 6a, Chapter 88, General Laws, Acts of the
8-23 41st Legislature, 2nd Called Session, 1929 (Article 6675a-6a,
8-24 Vernon's Texas Civil Statutes), is amended to read as follows:
8-25 Sec. 6a. <(a)> When a commercial motor vehicle is to be
8-26 used for commercial purposes by the owner thereof only in the
8-27 transportation of his own poultry, dairy, livestock, livestock
9-1 products, timber in its natural state, and farm products to market,
9-2 or to other points for sale or processing, or the transportation by
9-3 the owner thereof of laborers from their place of residence, and
9-4 materials, tools, equipment and supplies, without charge, from the
9-5 place of purchase or storage, to his own farm or ranch exclusively
9-6 for his own use, or use on such farm or ranch, the registration
9-7 license fee shall be fifty per cent (50%) of the registration fee
9-8 prescribed for weight classifications in Section 6 of this Act<,
9-9 plus an additional fee of Five Dollars ($5)>; provided, however,
9-10 that the additional use of the vehicle as a means of passenger
9-11 transportation, without charge, of members of the family to attend
9-12 church or school, to visit doctors for medical treatment or
9-13 supplies, and for other necessities of the home or family shall not
9-14 prevent its registration as a farm vehicle. Nothing in the
9-15 foregoing shall be interpreted as permitting the use of a farm
9-16 licensed vehicle in connection with other gainful employment. It
9-17 shall be the duty of the Texas <State> Department of <Highways and
9-18 Public> Transportation to provide license plates for vehicles
9-19 registered under this Section distinguishable from license plates
9-20 used for other commercial vehicles using the highways. If the
9-21 owner of any commercial motor vehicle registered under this Section
9-22 shall use or permit to be used any such vehicle for any other
9-23 purpose than those provided for in this Section, he shall be guilty
9-24 of a misdemeanor and upon conviction shall be fined in any sum not
9-25 less than Twenty-five Dollars ($25) nor more than Two Hundred
9-26 Dollars ($200), and each use of such vehicle and each permission
9-27 for such use of such vehicle shall constitute a separate offense.
10-1 All commercial motor vehicles, truck tractors, road tractors,
10-2 trailers and semi-trailers as defined in Section 1 of Chapter 23 of
10-3 the General Laws of the Fifth Called Session of the Forty-first
10-4 Legislature, not coming within the provisions of this Section,
10-5 shall be required to pay all registration and license fees
10-6 prescribed by other provisions of this Act.
10-7 <(b) The county tax collector shall send the additional Five
10-8 Dollar ($5) fee collected under this section to the state
10-9 treasurer, at the time and in the manner prescribed by the
10-10 treasurer, for deposit in the state treasury to the credit of the
10-11 young farmer endowment fund.>
10-12 SECTION 3. Chapter 88, General Laws, Acts of the 41st
10-13 Legislature, 2nd Called Session, 1929 (Article 6675a-1 et seq.,
10-14 Vernon's Texas Civil Statutes), is amended by adding Section 17 to
10-15 read as follows:
10-16 Sec. 17. (a) At the time a person registers a commercial
10-17 motor vehicle under Section 6a of this Act, the person shall pay an
10-18 assessment in the amount of $5.
10-19 (b) An assessment under this section is in addition to the
10-20 fee for registering a commercial motor vehicle.
10-21 (c) The county tax collector shall send the $5 assessment
10-22 collected under this section to the state treasurer, at the time
10-23 and in the manner prescribed by the treasurer, for deposit in the
10-24 state treasury to the credit of the young farmer loan guarantee
10-25 fund.
10-26 (d) A person who has paid an assessment may obtain a refund
10-27 of the amount paid by filing an application for refund with the
11-1 comptroller of public accounts not later than the 60th day after
11-2 the date of payment. The comptroller shall adopt rules to
11-3 administer this subsection.
11-4 SECTION 4. (a) On the effective date of this Act, the
11-5 comptroller shall transfer all money in the young farmer endowment
11-6 fund in the state treasury to the young farmer loan guarantee fund
11-7 established under this Act.
11-8 (b) On or after the effective date of this Act, an
11-9 appropriation made from the young farmer endowment fund is
11-10 considered to be an appropriation made from the young farmer loan
11-11 guarantee fund established under this Act.
11-12 SECTION 5. The Texas Agricultural Finance Authority shall
11-13 continue to administer a loan made before the effective date of
11-14 this Act under the young farmer endowment program until the loan is
11-15 fully repaid.
11-16 SECTION 6. An individual who before the effective date of
11-17 this Act paid a $5 fee that was deposited to the credit of the
11-18 young farmer endowment fund under Section 6a, Chapter 88, General
11-19 Laws, Acts of the 41st Legislature, 2nd Called Session, 1929
11-20 (Article 6675a-6a, Vernon's Texas Civil Statutes), may obtain a
11-21 refund of the amount paid by filing an application for refund with
11-22 the comptroller of public accounts not later than the 60th day
11-23 after the effective date of this Act.
11-24 SECTION 7. The importance of this legislation and the
11-25 crowded condition of the calendars in both houses create an
11-26 emergency and an imperative public necessity that the
11-27 constitutional rule requiring bills to be read on three several
12-1 days in each house be suspended, and this rule is hereby suspended,
12-2 and that this Act take effect and be in force from and after its
12-3 passage, and it is so enacted.