1-1 By: Patterson, et al. (Senate Sponsor - Sims) H.B. No. 1287
1-2 (In the Senate - Received from the House May 5, 1993;
1-3 May 6, 1993, read first time and referred to Committee on Natural
1-4 Resources; May 11, 1993, reported favorably by the following vote:
1-5 Yeas 8, Nays 0; May 11, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Sims x
1-9 Truan x
1-10 Armbrister x
1-11 Barrientos x
1-12 Bivins x
1-13 Brown x
1-14 Carriker x
1-15 Lucio x
1-16 Montford x
1-17 Ratliff x
1-18 Shelley x
1-19 A BILL TO BE ENTITLED
1-20 AN ACT
1-21 relating to the establishment and funding of a young farmer loan
1-22 guarantee program.
1-23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-24 SECTION 1. Chapter 253, Agriculture Code, is amended to read
1-25 as follows:
1-26 CHAPTER 253. YOUNG FARMER LOAN GUARANTEE PROGRAM
1-27 Sec. 253.001. DEFINITIONS. In this chapter:
1-28 (1) "Board" means the board of directors of the Texas
1-29 Agricultural Finance Authority.
1-30 (2) "Commercial lender" means a commercial lending
1-31 institution chartered by the state or federal government, including
1-32 a savings and loan association, a credit union, and a Farm Credit
1-33 System institution.
1-34 (3) "Eligible applicant" means a person applying for a
1-35 loan guarantee under this chapter who:
1-36 (A) is at least 18 years of age but younger than
1-37 40 years of age;
1-38 (B) has four years of practical farm or ranch
1-39 experience, with not more than two years of participation in a 4-H
1-40 or an agricultural science and technology program counting as
1-41 practical farm or ranch experience; and
1-42 (C) complies with the application procedures
1-43 prescribed by this chapter.
1-44 (4) "Plan" means a cash flow, production, or
1-45 management plan.
1-46 Sec. 253.002. YOUNG FARMER LOAN GUARANTEE PROGRAM. (a) The
1-47 board shall administer a loan guarantee program that benefits
1-48 eligible applicants who desire to establish their first farming or
1-49 ranching operation.
1-50 (b) The board may grant to an eligible applicant a guarantee
1-51 of a loan made by a commercial lender for the purposes prescribed
1-52 by this chapter. The guarantee amount may not exceed the lesser of
1-53 $50,000 or 90 percent of the total loan amount.
1-54 (c) The aggregate amount guaranteed under this chapter may
1-55 not exceed twice the amount of current appropriations from the
1-56 young farmer loan guarantee account.
1-57 (d) A loan guarantee recipient may use proceeds from the
1-58 loan only for feed, seed, fertilizer, livestock, poultry, farm or
1-59 ranch equipment, farm or ranch facilities, or leases of farmland or
1-60 rangeland. A loan guarantee is voidable by the board if the
1-61 recipient uses loan proceeds for a purpose other than those listed
1-62 by this subsection. The board shall include this restriction as a
1-63 condition in each loan guarantee instrument executed under this
1-64 chapter.
1-65 Sec. 253.003. APPLICATION FOR LOAN GUARANTEE. (a) An
1-66 eligible applicant must present to the department for the board's
1-67 review:
1-68 (1) a five-year plan for the applicant's proposed farm
2-1 or ranch that has been reviewed and approved by an individual who:
2-2 (A) teaches agricultural science and technology
2-3 in the applicant's school district; or
2-4 (B) is a county extension agent-agriculture
2-5 program leader of the Texas Agricultural Extension Service;
2-6 (2) a completed application for a loan from a
2-7 commercial lender on which the eligible applicant has indicated
2-8 that the loan proceeds will be used to implement the applicant's
2-9 five-year plan; and
2-10 (3) the signed statement of a loan officer of the
2-11 commercial lender that a loan guarantee is required for approval of
2-12 the loan application.
2-13 (b) A district agricultural economist employed by the Texas
2-14 Agricultural Extension Service shall assist with review and
2-15 approval of a plan under Subsection (a)(1) of this section if
2-16 requested to do so by the individual responsible for the review and
2-17 approval.
2-18 (c) The department may charge a reasonable application fee
2-19 for processing an application filed under this section.
2-20 Sec. 253.004. BOARD CONSIDERATION OF LOAN GUARANTEE
2-21 APPLICATION. After reviewing the materials submitted under Section
2-22 253.003 of this chapter, the board shall consider the following
2-23 factors in deciding whether to approve an application for a loan
2-24 guarantee:
2-25 (1) the anticipated benefits from granting a loan
2-26 guarantee to the applicant, including both potential job creation
2-27 and commercial benefits to the agricultural industry;
2-28 (2) the applicant's qualifications;
2-29 (3) the feasibility of the applicant's plan; and
2-30 (4) other funding sources available to the applicant.
2-31 Sec. 253.005. DEFAULT. If the recipient of a loan guarantee
2-32 defaults on a loan that is guaranteed under this chapter, and the
2-33 department is required to honor its guarantee, the department,
2-34 through its representative, may bring suit against the defaulting
2-35 party. The suit may be brought in the county in which the
2-36 defaulting party resides, in which the commercial lender is
2-37 located, or in Travis County.
2-38 Sec. 253.006. MONEY FOR LOAN GUARANTEE PROGRAM. The
2-39 commissioner may accept gifts and grants of money from the federal
2-40 government, local governments, private corporations, or other
2-41 persons for use in the young farmer loan guarantee program. The
2-42 legislature may appropriate money for the program.
2-43 Sec. 253.007. YOUNG FARMER LOAN GUARANTEE ACCOUNT. (a) The
2-44 young farmer loan guarantee account is an account in the general
2-45 revenue fund. Money in the account may be appropriated only to the
2-46 department for the purpose of making or administering loan
2-47 guarantees under this chapter.
2-48 (b) The account consists of appropriations and transfers
2-49 made to the account, grants and donations made for the purposes of
2-50 the young farmer loan guarantee program, income earned on money in
2-51 the account, and any other money received under this chapter.
2-52 Notwithstanding Section 404.071, Government Code, income and
2-53 interest earned on money in the account shall be deposited to the
2-54 credit of the account. The account is exempt from the application
2-55 of Sections 403.094(h) and (i) and 403.095, Government Code.
2-56 (c) The board may spend not more than $100,000 during each
2-57 fiscal year from income earned on the account and from application
2-58 fees collected by the department under Section 253.003 of this code
2-59 to pay the costs of administering the program.
2-60 (d) The board shall attempt to administer the fund in a
2-61 manner that makes private donations to the fund an eligible
2-62 itemized deduction for federal income taxation.
2-63 (e) The board has the same authority in administering the
2-64 young farmer loan guarantee program as it has in administering
2-65 programs established by the board under Chapter 58 of this code.
2-66 <CHAPTER 253. YOUNG FARMER ENDOWMENT PROGRAM>
2-67 <Sec. 253.001. DEFINITIONS. In this chapter:>
2-68 <(1) "Board" means the board of directors of the Texas
2-69 Agricultural Finance Authority.>
2-70 <(2) "County agent" means a county extension
3-1 agent-agriculture program leader of the Texas Agricultural
3-2 Extension Service.>
3-3 <(3) "District-based agricultural economist" means a
3-4 district agricultural economist employed by the Texas Agricultural
3-5 Extension Service.>
3-6 <(4) "Eligible borrower" means a person who is at
3-7 least 18 years of age but younger than 40 years of age and who has
3-8 four years of practical farm or ranch experience, with not more
3-9 than two years of participation in a 4-H or a vocational
3-10 agriculture program counting as practical farm or ranch experience.>
3-11 <(5) "Plan" means a cash flow, production, or
3-12 management plan.>
3-13 <Sec. 253.002. YOUNG FARMER ENDOWMENT PROGRAM LOANS.
3-14 (a) The board shall administer a loan program supporting eligible
3-15 borrowers who desire to establish their first farming or ranching
3-16 operation.>
3-17 <(b) A young farmer endowment loan applicant may receive a
3-18 loan in an amount not to exceed $50,000.>
3-19 <(c) Except as provided by Section 253.003 of this code, a
3-20 loan recipient may use loan proceeds only for feed, seed,
3-21 fertilizer, livestock, poultry, farm equipment, farm facilities,
3-22 leases of farmland, or to repay loans from other lenders borrowed
3-23 to purchase or lease those items to establish the borrower's first
3-24 farm or ranch operation.>
3-25 <(d) Loans made under this chapter are interest free.>
3-26 <Sec. 253.003. LOAN PROCEEDS AS COLLATERAL. A loan
3-27 recipient may use loan proceeds received under this chapter as
3-28 collateral when applying for a commercial loan. If the loan
3-29 recipient obtains a commercial loan with loan proceeds provided
3-30 under this chapter as collateral, the loan recipient may use the
3-31 commercial loan proceeds only for the purposes for which loan
3-32 proceeds may be used under Section 253.002(c) of this code.>
3-33 <Sec. 253.004. POWERS OF AUTHORITY. The board has the same
3-34 authority in administering the young farmer endowment program as it
3-35 has in administering programs established by the board under
3-36 Chapter 58 of this code.>
3-37 <Sec. 253.005. CRITERIA FOR LOANS. (a) The applicant must
3-38 first present to the applicant's local county agent or to an
3-39 agricultural science teacher who teaches in the applicant's school
3-40 district a 10-year plan for the applicant's proposed farm or ranch
3-41 operation. The county agent or agricultural science teacher shall
3-42 assist in revising the plan and may request the assistance of the
3-43 district-based agricultural economist.>
3-44 <(b) After the county agent or agricultural science teacher
3-45 reviews the plan, the applicant may submit the plan and a loan
3-46 application to the department for review by the board. After the
3-47 board reviews the plan the board shall consider the applicant's
3-48 loan application. The board may consider the following criteria
3-49 before approving a loan:>
3-50 <(1) the anticipated benefits arising from a loan to
3-51 the applicant, including both potential job creation and commercial
3-52 benefits to the agricultural industry;>
3-53 <(2) the qualifications of the applicant;>
3-54 <(3) the reasonableness of the applicant's proposed
3-55 budget;>
3-56 <(4) the extent and level of other funding sources for
3-57 the applicant;>
3-58 <(5) the funding commitments needed for continued
3-59 development; and>
3-60 <(6) the comments of the county agent or agricultural
3-61 science teacher who reviewed the plan.>
3-62 <(c) The board shall establish a reasonable fee and collect
3-63 the fee for each application submitted. The board shall deposit
3-64 fees collected under this section in the state treasury to the
3-65 credit of the young farmer endowment fund.>
3-66 <Sec. 253.006. REPAYMENT SCHEDULE. The board shall
3-67 establish a repayment schedule for each loan recipient. The
3-68 schedule must require the loan recipient to begin payment of the
3-69 loan not later than the second anniversary of the date on which the
3-70 loan was made. The loan recipient shall fully repay the loan not
4-1 later than the 15th anniversary of the date on which the loan was
4-2 made. The board may grant an extension on the deadline imposed by
4-3 this section.>
4-4 <Sec. 253.007. MONEY FOR LOANS. The commissioner may accept
4-5 gifts and grants of money from the federal government, local
4-6 governments, private corporations, or other persons for use in
4-7 making loans under the young farmer endowment program. The
4-8 legislature may appropriate money for loans under this program.>
4-9 <Sec. 253.008. YOUNG FARMER ENDOWMENT FUND. The young
4-10 farmer endowment fund is a fund in the state treasury. Money
4-11 appropriated to the board for use in making loans under the young
4-12 farmer endowment program, other amounts received by the state for
4-13 loans made under the program, and other money received by the board
4-14 for the program and required by the board to be deposited in the
4-15 fund shall be deposited to the credit of the fund. The fund shall
4-16 operate as a revolving fund, the contents of which shall be applied
4-17 and reapplied for the purposes of the young farmer endowment
4-18 program. The board may use not more than $100,000 during each
4-19 fiscal year from the application fees collected under Section
4-20 253.003 and interest earned on the fund to pay the costs to the
4-21 department in administering the young farmer endowment program.
4-22 The board shall attempt to administer the fund in a manner that
4-23 makes private donations to the fund deductible from federal income
4-24 taxes.>
4-25 SECTION 2. Section 6a, Chapter 88, General Laws, Acts of the
4-26 41st Legislature, 2nd Called Session, 1929 (Article 6675a-6a,
4-27 Vernon's Texas Civil Statutes), is amended to read as follows:
4-28 Sec. 6a. <(a)> When a commercial motor vehicle is to be
4-29 used for commercial purposes by the owner thereof only in the
4-30 transportation of his own poultry, dairy, livestock, livestock
4-31 products, timber in its natural state, and farm products to market,
4-32 or to other points for sale or processing, or the transportation by
4-33 the owner thereof of laborers from their place of residence, and
4-34 materials, tools, equipment and supplies, without charge, from the
4-35 place of purchase or storage, to his own farm or ranch exclusively
4-36 for his own use, or use on such farm or ranch, the registration
4-37 license fee shall be fifty per cent (50%) of the registration fee
4-38 prescribed for weight classifications in Section 6 of this Act<,
4-39 plus an additional fee of Five Dollars ($5)>; provided, however,
4-40 that the additional use of the vehicle as a means of passenger
4-41 transportation, without charge, of members of the family to attend
4-42 church or school, to visit doctors for medical treatment or
4-43 supplies, and for other necessities of the home or family shall not
4-44 prevent its registration as a farm vehicle. Nothing in the
4-45 foregoing shall be interpreted as permitting the use of a farm
4-46 licensed vehicle in connection with other gainful employment. It
4-47 shall be the duty of the Texas <State> Department of <Highways and
4-48 Public> Transportation to provide license plates for vehicles
4-49 registered under this Section distinguishable from license plates
4-50 used for other commercial vehicles using the highways. If the
4-51 owner of any commercial motor vehicle registered under this Section
4-52 shall use or permit to be used any such vehicle for any other
4-53 purpose than those provided for in this Section, he shall be guilty
4-54 of a misdemeanor and upon conviction shall be fined in any sum not
4-55 less than Twenty-five Dollars ($25) nor more than Two Hundred
4-56 Dollars ($200), and each use of such vehicle and each permission
4-57 for such use of such vehicle shall constitute a separate offense.
4-58 All commercial motor vehicles, truck tractors, road tractors,
4-59 trailers and semi-trailers as defined in Section 1 of Chapter 23 of
4-60 the General Laws of the Fifth Called Session of the Forty-first
4-61 Legislature, not coming within the provisions of this Section,
4-62 shall be required to pay all registration and license fees
4-63 prescribed by other provisions of this Act.
4-64 <(b) The county tax collector shall send the additional Five
4-65 Dollar ($5) fee collected under this section to the state
4-66 treasurer, at the time and in the manner prescribed by the
4-67 treasurer, for deposit in the state treasury to the credit of the
4-68 young farmer endowment fund.>
4-69 SECTION 3. Chapter 88, General Laws, Acts of the 41st
4-70 Legislature, 2nd Called Session, 1929 (Article 6675a-1 et seq.,
5-1 Vernon's Texas Civil Statutes), is amended by adding Section 17 to
5-2 read as follows:
5-3 Sec. 17. (a) At the time a person registers a commercial
5-4 motor vehicle under Section 6a of this Act, the person shall pay a
5-5 voluntary assessment in the amount of $5.
5-6 (b) The county tax collector shall send the $5 assessment
5-7 collected under this section to the state treasurer, at the time
5-8 and in the manner prescribed by the Texas Agricultural Finance
5-9 Authority, for deposit in the general revenue fund to the credit of
5-10 the young farmer loan guarantee account.
5-11 (c) The Texas Agricultural Finance Authority shall prescribe
5-12 procedures under which an assessment collected under this section
5-13 may be refunded. The county tax collector of the county in which
5-14 an assessment is collected shall implement the refund procedures
5-15 prescribed by the authority and shall provide notice of those
5-16 procedures to a person paying an assessment at the time of the
5-17 payment.
5-18 SECTION 4. (a) On the effective date of this Act, the
5-19 comptroller shall transfer all money in the young farmer endowment
5-20 fund in the state treasury to the young farmer loan guarantee
5-21 account established under this Act.
5-22 (b) On or after the effective date of this Act, an
5-23 appropriation made from the young farmer endowment fund is
5-24 considered to be an appropriation made from the young farmer loan
5-25 guarantee account established under this Act.
5-26 SECTION 5. The Texas Agricultural Finance Authority shall
5-27 continue to administer a loan made before the effective date of
5-28 this Act under the young farmer endowment program until the loan is
5-29 fully repaid.
5-30 SECTION 6. An individual who before the effective date of
5-31 this Act paid a $5 fee that was deposited to the credit of the
5-32 young farmer endowment fund under Section 6a, Chapter 88, General
5-33 Laws, Acts of the 41st Legislature, 2nd Called Session, 1929
5-34 (Article 6675a-6a, Vernon's Texas Civil Statutes), may obtain a
5-35 refund of the amount paid by filing an application for refund with
5-36 the comptroller of public accounts not later than the 60th day
5-37 after the effective date of this Act. Notice of the availability
5-38 of the refunds shall be made by publication in local newspapers
5-39 with countywide distribution. Amounts not refunded shall be
5-40 considered donations for the purposes of this Act.
5-41 SECTION 7. The importance of this legislation and the
5-42 crowded condition of the calendars in both houses create an
5-43 emergency and an imperative public necessity that the
5-44 constitutional rule requiring bills to be read on three several
5-45 days in each house be suspended, and this rule is hereby suspended,
5-46 and that this Act take effect and be in force from and after its
5-47 passage, and it is so enacted.
5-48 * * * * *
5-49 Austin,
5-50 Texas
5-51 May 11, 1993
5-52 Hon. Bob Bullock
5-53 President of the Senate
5-54 Sir:
5-55 We, your Committee on Natural Resources to which was referred H.B.
5-56 No. 1287, have had the same under consideration, and I am
5-57 instructed to report it back to the Senate with the recommendation
5-58 that it do pass and be printed.
5-59 Sims,
5-60 Chairman
5-61 * * * * *
5-62 WITNESSES
5-63 FOR AGAINST ON
5-64 ___________________________________________________________________
5-65 Name: Patrick Cox x
5-66 Representing: Tx Farmers Union
5-67 City: Austin
5-68 -------------------------------------------------------------------
5-69 Name: Guy Finstad x
5-70 Representing: Agriculture Teachers
6-1 City: Austin
6-2 -------------------------------------------------------------------
6-3 Name: Marvin A. Gregory x
6-4 Representing: E. Tx Dairy Corp
6-5 City: Sulphur Springs
6-6 -------------------------------------------------------------------
6-7 Name: Ed Shannon x
6-8 Representing: Tx Farmers Union
6-9 City: Hico
6-10 -------------------------------------------------------------------
6-11 Name: Joe Rankin x
6-12 Representing: Tx Farmers Union
6-13 City: Ralls
6-14 -------------------------------------------------------------------
6-15 Name: Lewis Vail x
6-16 Representing: Hopkins Co. Farmers Union
6-17 City: Piekton
6-18 -------------------------------------------------------------------
6-19 Name: Diana Marquez x
6-20 Representing: Farm Credit Bank of Texas
6-21 City: Austin
6-22 -------------------------------------------------------------------
6-23 Name: Robert Kennedy x
6-24 Representing: Tx Dept. of Agriculture
6-25 City: Austin
6-26 -------------------------------------------------------------------