1-1  By:  Patterson (Senate Sponsor - Carriker)            H.B. No. 1684
    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 farm and ranch finance program; granting the
   1-22  authority to issue bonds; providing penalties.
   1-23        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-24        SECTION 1.  Title 4, Agriculture Code, is amended by adding
   1-25  Chapter 59 to read as follows:
   1-26              CHAPTER 59.  FARM AND RANCH FINANCE PROGRAM
   1-27                   SUBCHAPTER A.  GENERAL PROVISIONS
   1-28        Sec. 59.001.  DEFINITIONS.  In this chapter:
   1-29              (1)  "Authority" means the Texas Agricultural Finance
   1-30  Authority created by Chapter 58 of this code.
   1-31              (2)  "Board" means the Veterans Land Board.
   1-32              (3)  "Bond" means a general obligation bond,
   1-33  certificate, note, or other obligation issued or incurred by the
   1-34  authority under this chapter as provided by Article III, Section
   1-35  49-f, of the Texas Constitution.
   1-36              (4)  "Commissioner" means the commissioner of
   1-37  agriculture.
   1-38              (5)  "Fund" means the farm and ranch finance program
   1-39  fund.
   1-40              (6)  "Program" means the farm and ranch finance
   1-41  program.
   1-42        Sec. 59.002.  DUTIES.  (a)  The authority shall administer
   1-43  the program.
   1-44        (b)  The board shall administer the fund.  At the request of
   1-45  the authority, the board shall make available to the authority
   1-46  money from the fund to pay debt service on the program's bonds and
   1-47  to provide financial assistance to borrowers to purchase farm or
   1-48  ranch land as provided by this chapter.
   1-49        Sec. 59.003.  LIMITED IMMUNITY FROM SUIT OR LIABILITY.  The
   1-50  authority or a member of the board may be sued and held personally
   1-51  liable for damages that result from an official act or omission
   1-52  only if the act or omission is corrupt or malicious.
   1-53            (Sections 59.004-59.010 reserved for expansion
   1-54                         SUBCHAPTER B.  BONDS
   1-55        Sec. 59.011.  BONDS.  (a)  The authority may provide by order
   1-56  or resolution for the issuance and sale of negotiable bonds
   1-57  authorized by Article III, Section 49-f, of the Texas Constitution.
   1-58  The proceeds from the sale of the bonds constitute the fund.
   1-59        (b)  Subchapter D, Chapter 58, Agriculture Code, as it
   1-60  relates to the issuance, sale, and refunding of bonds, applies to
   1-61  the authority's issuance, sale, and refunding of bonds under this
   1-62  chapter to finance the fund.
   1-63        Sec. 59.012.  DISPOSITION OF BOND PROCEEDS.  (a)  Except as
   1-64  provided by Subsections (b) and (c) of this section, proceeds from
   1-65  the sale of the bonds, other than refunding bonds, shall be
   1-66  deposited in the state treasury to the credit of the fund.
   1-67        (b)  The board may provide for transferring to the interest
   1-68  and sinking account from the proceeds of the sale of bonds or from
    2-1  the available money in the fund directly an amount that, together
    2-2  with the accrued interest received, is sufficient to pay interest
    2-3  becoming due during the fiscal year in which the bonds are sold and
    2-4  to establish appropriate reserves.
    2-5        (c)  At the timely request of the authority, the board shall
    2-6  provide for transferring from the proceeds of the sale of bonds or
    2-7  from available money in the fund directly an amount certified by
    2-8  the authority as reasonable and necessary to cover the costs of
    2-9  administering the program.  That amount shall be deposited in the
   2-10  state treasury to the credit of a special fund to be known as the
   2-11  farm and ranch administrative expense fund.
   2-12        Sec. 59.013.  PAYMENT OF PRINCIPAL AND INTEREST.  The
   2-13  authority shall arrange for payment of the principal of bonds as
   2-14  they mature and the interest on the bonds as it becomes payable.
   2-15        Sec. 59.014.  APPROVAL BY ATTORNEY GENERAL.  Before the bonds
   2-16  are delivered to the purchasers, the attorney general shall examine
   2-17  the record relating to the bonds.  If the record demonstrates that
   2-18  the bonds have been issued in accordance with the Texas
   2-19  Constitution and this chapter, the attorney general shall approve
   2-20  the bonds.
   2-21        Sec. 59.015.  USE OF FUND TO PAY COSTS OF ISSUANCE AND DEBT
   2-22  SERVICE.  (a)  The authority may use money in the fund attributable
   2-23  to the issuance and sale of bonds to pay:
   2-24              (1)  legal fees and fees for financial advice the
   2-25  authority finds necessary for the sale of bonds;
   2-26              (2)  the expense of publishing notice of sale of an
   2-27  installment of bonds;
   2-28              (3)  the expense of printing the bonds;
   2-29              (4)  the expense of issuing the bonds, including the
   2-30  actual costs of travel, lodging, and meals of officers, members, or
   2-31  employees of the board, directors or employees of the authority,
   2-32  the comptroller, the state treasurer, or the attorney general that
   2-33  the authority finds necessary to implement the issuance, rating, or
   2-34  delivery of the bonds;
   2-35              (5)  the cost of manually signing the bonds;
   2-36              (6)  remuneration to any agent employed by the
   2-37  authority to pay the principal of and interest on the bonds;
   2-38              (7)  any amount required to be paid to maintain the
   2-39  federal tax exemption of interest on the bonds; or
   2-40              (8)  any other cost, fee, or expense relating to the
   2-41  issuance of the bonds.
   2-42        (b)  If, during the existence of the fund or during the
   2-43  period any bonds are payable from the fund, the authority
   2-44  determines that there will not be sufficient money in the fund
   2-45  during the following fiscal year to pay the principal of or
   2-46  interest on the bonds that is to come due during the following
   2-47  fiscal year, the comptroller shall transfer to the fund from the
   2-48  first money coming into the state treasury not otherwise
   2-49  appropriated by the constitution an amount sufficient to pay the
   2-50  obligations.
   2-51        (c)  The money transferred to the fund under Subsection (b)
   2-52  of this section shall be used to pay the obligations only if at the
   2-53  time the principal or interest becomes due there is not sufficient
   2-54  money in the fund to pay the amount due.
   2-55        Sec. 59.016.  INVESTMENTS.  (a)  The authority shall give
   2-56  timely instruction to the board of the dates on which principal on
   2-57  bonds matures and interest becomes payable.  The board shall
   2-58  administer the fund accordingly.
   2-59        (b)  Except as provided by Subsection (c) of this section,
   2-60  money in the fund that is not immediately committed to paying
   2-61  principal of and interest on the bonds or to paying expenses as
   2-62  provided by Section 59.015 of this code may be invested by the
   2-63  board in:
   2-64              (1)  a direct security repurchase agreement or reverse
   2-65  security repurchase agreement made with a state or national bank
   2-66  domiciled in this state or with a primary dealer approved by the
   2-67  federal reserve system;
   2-68              (2)  a direct obligation of or obligation the principal
   2-69  and interest of which are guaranteed by the United States
   2-70  government;
    3-1              (3)  a direct obligation of or obligation guaranteed by
    3-2  the Federal Home Loan Banks, the Federal National Mortgage
    3-3  Association, the Federal Farm Credit System, the Student Loan
    3-4  Marketing Association, the Federal Home Loan Mortgage Corporation,
    3-5  or a successor to one of those organizations;
    3-6              (4)  a bankers' acceptance that:
    3-7                    (A)  is eligible for purchase by a member of the
    3-8  federal reserve system;
    3-9                    (B)  matures in 270 days or less; and
   3-10                    (C)  is issued by a bank that has received the
   3-11  highest short-term credit rating by a nationally recognized
   3-12  investment rating firm;
   3-13              (5)  commercial paper that:
   3-14                    (A)  matures in 270 days or less; and
   3-15                    (B)  has received the highest short-term credit
   3-16  rating by a nationally recognized investment rating firm;
   3-17              (6)  a contract that is written by the board in which
   3-18  the board grants the purchaser the right to purchase securities in
   3-19  the board's marketable securities portfolio at a specified price
   3-20  over a specified period and for which the board is paid a fee and
   3-21  that specifically prohibits naked-option or uncovered option
   3-22  trading;
   3-23              (7)  an obligation of a state or of an agency, county,
   3-24  city, or other political subdivision of a state or a mutual fund
   3-25  composed of those obligations;
   3-26              (8)  an investment instrument, obligation, or other
   3-27  evidence of indebtedness the payment of which is directly or
   3-28  indirectly guaranteed by the full faith and credit of the United
   3-29  States government;
   3-30              (9)  an investment, account, depository receipt, or
   3-31  deposit that is fully:
   3-32                    (A)  insured by the Federal Deposit Insurance
   3-33  Corporation or a successor to that organization; or
   3-34                    (B)  secured by a security described by
   3-35  Subdivision (2), (3), or (8) of this subsection;
   3-36              (10)  a collateralized mortgage obligation fully
   3-37  secured by securities or mortgages issued or guaranteed by the
   3-38  Government National Mortgage Association (GNMA) or any entity
   3-39  identified by Subdivision (3) of this subsection;
   3-40              (11)  a security or evidence of indebtedness issued by
   3-41  the Farm Credit System Financial Assistance Corporation, the
   3-42  Private Export Funding Corporation, or the Export-Import Bank; and
   3-43              (12)  any other investment authorized for investment of
   3-44  state funds by the state treasurer under Section 404.024,
   3-45  Government Code.
   3-46        (c)  The board may not invest in or purchase obligations of a
   3-47  private corporation or other private business entity doing business
   3-48  in the Republic of South Africa unless the corporation or other
   3-49  entity:
   3-50              (1)  has:
   3-51                    (A)  adopted the Statement of Principles for
   3-52  South Africa as they existed in 1987, as described in the Report on
   3-53  the Signatory Companies to the Statement of Principles for South
   3-54  Africa published by Arthur D. Little, Inc., Cambridge,
   3-55  Massachusetts, and has obtained a performance rating in Category 1
   3-56  or 2 of the Statement of Principles for South Africa rating system
   3-57  as determined by Arthur D. Little, Inc.; or
   3-58                    (B)  agreed to the Code of Conduct that is
   3-59  enforced by the United States Department of State under Section
   3-60  208, Comprehensive Anti-Apartheid Act of 1986 (Pub. L. No. 99-440)
   3-61  and has received a rating of "Making Satisfactory Progress"; and
   3-62              (2)  does not supply strategic products or services for
   3-63  use by the government, military, or police of the Republic of South
   3-64  Africa.
   3-65        (d)  In this section:
   3-66              (1)  "Direct security repurchase agreement" means an
   3-67  agreement under which the board buys, holds for a specified time,
   3-68  and then sells back any of the following securities, obligations,
   3-69  or participation certificates:
   3-70                    (A)  a United States government security;
    4-1                    (B)  a direct obligation of or an obligation the
    4-2  principal and interest of which are guaranteed by the United States
    4-3  government;
    4-4                    (C)  a direct obligation of or an obligation
    4-5  guaranteed by the Federal Home Loan Banks, the Federal National
    4-6  Mortgage Association, the Federal Farm Credit System, the Student
    4-7  Loan Marketing Association, the Federal Home Loan Mortgage
    4-8  Corporation, or a successor to one of those organizations; or
    4-9                    (D)  any other investment instrument, obligation,
   4-10  or other evidence of indebtedness the payment of which is directly
   4-11  or indirectly guaranteed by the full faith and credit of the United
   4-12  States government.
   4-13              (2)  "Doing business in the Republic of South Africa"
   4-14  means conducting or performing manufacturing, assembly, or
   4-15  warehousing operations in the Republic of South Africa or, in the
   4-16  case of a bank or other financial institution, lending money to the
   4-17  government of the Republic of South Africa or any of its agencies
   4-18  or instrumentalities.
   4-19              (3)  "Market value" means the fair and reasonable
   4-20  prevailing price at which a security is being sold on the open
   4-21  market at the time of the appraisement of the security by the
   4-22  board.
   4-23              (4)  "Reverse security repurchase agreement" means an
   4-24  agreement under which the board sells and after a specified time
   4-25  buys back any of the securities, obligations, or participation
   4-26  certificates listed by Subdivision (1) of this subsection.
   4-27              (5)  "Strategic products or services" means articles
   4-28  designated as arms, ammunition, or implements of war as provided by
   4-29  22 C.F.R. Part 121 or data processing equipment or computers sold
   4-30  for military or police use or for use in connection with
   4-31  restriction on travel in the Republic of South Africa by residents
   4-32  of that country.
   4-33            (Sections 59.017-59.020 reserved for expansion
   4-34                     SUBCHAPTER C.  ADMINISTRATION
   4-35        Sec. 59.021.  FUND.  (a)  The farm and ranch finance program
   4-36  fund is a fund in the state treasury.
   4-37        (b)  At the direction of the authority, money received from
   4-38  the state or federal government or from any other person, in
   4-39  addition to proceeds from bonds issued under this chapter, may be
   4-40  deposited to the credit of the fund.
   4-41        (c)  The authority may provide for establishing and
   4-42  maintaining separate accounts in the fund, including program
   4-43  accounts, an interest and sinking account, a reserve account, and
   4-44  any other accounts provided for by resolution of the authority.
   4-45        (d)  Money received as repayment of financial assistance
   4-46  shall be deposited first in the interest and sinking account as
   4-47  provided by resolution of the authority authorizing its bonds until
   4-48  that account is fully funded as provided by resolution of the
   4-49  authority.
   4-50        (e)  The fund and each account in the fund shall be kept and
   4-51  maintained at the direction of the authority and held in trust by
   4-52  the state treasurer for and on behalf of the authority and the
   4-53  owners of the bonds issued under this chapter.
   4-54        (f)  The fund may be used only as provided by this chapter.
   4-55        (g)  Pending its use, money in the fund shall be invested as
   4-56  provided by the resolution authorizing issuance of the bonds.
   4-57        (h)  The authority may receive, and shall deposit in the
   4-58  fund, appropriations, grants, donations, earned federal funds, and
   4-59  the proceeds of any investment pools operated by the state
   4-60  treasurer.
   4-61        Sec. 59.022.  RULES.  (a)  The authority shall adopt rules
   4-62  governing application for financial assistance under this chapter.
   4-63  The authority may adopt rules it considers necessary to administer
   4-64  the program or considers in the best interest of the program.  The
   4-65  authority may adopt rules concerning the sale of land acquired by
   4-66  the authority under this chapter by default, foreclosure,
   4-67  forfeiture, or any other means.  The authority shall adopt
   4-68  collateral or security requirements to ensure the full repayment of
   4-69  financial assistance granted under this chapter.  The authority may
   4-70  approve any extension of financial assistance under this chapter or
    5-1  may delegate that approval authority to the commissioner.
    5-2        (b)  The board may adopt rules it considers necessary to
    5-3  administer the fund or considers in the best interest of the fund,
    5-4  including rules on the investment of the fund.
    5-5        (c)  The authority may set and collect fees the authority
    5-6  considers reasonable and necessary to cover the expenses of
    5-7  administering the program or considers in the best interest of the
    5-8  program.  Those fees shall be deposited in the state treasury to
    5-9  the credit of the farm and ranch administrative expense fund.  An
   5-10  applicant for financial assistance participating in the program
   5-11  shall pay the costs of applying for, participating in, and
   5-12  administering and servicing the program, in amounts the authority
   5-13  considers reasonable and necessary.  Any cost not paid by an
   5-14  applicant shall be paid from the fund.
   5-15        Sec. 59.023.  POWERS OF AUTHORITY.  In addition to the powers
   5-16  granted to the authority under Section 58.022 of this code, the
   5-17  authority has the power necessary to accomplish the purposes and
   5-18  carry out the programs provided by this chapter, including the
   5-19  power:
   5-20              (1)  to adopt and enforce bylaws, rules, and procedures
   5-21  necessary to carry out this chapter;
   5-22              (2)  to establish, charge, and collect a fee, charge,
   5-23  or penalty in connection with a program, service, or activity
   5-24  provided by the authority under this chapter;
   5-25              (3)  to issue bonds, provide for and secure the payment
   5-26  of the bonds, and provide for the rights of the owners of the
   5-27  bonds, in the manner and to the extent permitted by this chapter;
   5-28              (4)  to purchase, hold, cancel, or resell or otherwise
   5-29  dispose of its bonds, subject to any restrictions and any
   5-30  resolution authorizing the issuance of its bonds;
   5-31              (5)  to own, rent, lease, or otherwise acquire, accept,
   5-32  or hold any interest in real, personal, or mixed property, by
   5-33  purchase, exchange, gift, assignment, transfer, foreclosure,
   5-34  mortgage, sale, lease, or otherwise;
   5-35              (6)  to hold, manage, operate, or improve real,
   5-36  personal, or mixed property;
   5-37              (7)  to sell, lease, encumber, mortgage, exchange,
   5-38  donate, convey, or otherwise dispose of any of its property or any
   5-39  interest in its property, deed of trust, or mortgage lien owned by
   5-40  it, under its control or custody, or in its possession and to
   5-41  release or relinquish any right, title, claim, lien, interest,
   5-42  easement, or demand, including any equity or right of redemption in
   5-43  property foreclosed by it, by public or private sale, with or
   5-44  without public bidding;
   5-45              (8)  to lease or rent any improvement, land, or
   5-46  facility from any person;
   5-47              (9)  to make a secured or unsecured loan to provide
   5-48  financial assistance as provided by this chapter, including the
   5-49  refunding of an outstanding obligation, mortgage, or advance used
   5-50  for those purposes, and to charge and collect interest on those
   5-51  loans for loan payments and on terms and conditions the authority
   5-52  considers advisable that are not in conflict with this chapter;
   5-53              (10)  to purchase or acquire, sell, discount, assign,
   5-54  negotiate, or otherwise dispose of notes or other evidence of
   5-55  indebtedness of eligible applicants as the board determines or
   5-56  portions or portfolios of or participations in those evidences of
   5-57  indebtedness; and
   5-58              (11)  to sell and guarantee securities, whether taxable
   5-59  or tax exempt under federal law, in primary and secondary markets.
   5-60        Sec. 59.024.  ELIGIBILITY.  To be eligible to borrow money
   5-61  from the fund, a person, at the time of application, must:
   5-62              (1)  be a member of a household that has derived at
   5-63  least 25 percent of its gross income from a farm or ranch for the
   5-64  preceding three years; and
   5-65              (2)  have a net worth of less than $250,000.
   5-66        Sec. 59.025.  DOWN PAYMENT.  (a)  A loan under this chapter
   5-67  may not exceed $150,000, less the down payment required under this
   5-68  subsection.  If the purchase price of land purchased with financial
   5-69  assistance under this chapter is $150,000 or less, the minimum down
   5-70  payment is equal to five percent of the purchase price.  If the
    6-1  purchase price exceeds $150,000, the minimum down payment is an
    6-2  amount equal to the sum of five percent of the purchase price plus
    6-3  the amount equal to the difference between the purchase price and
    6-4  $150,000.
    6-5        (b)  The authority shall provide by rule for the period
    6-6  during which and the manner in which the down payment provided for
    6-7  under Subsection (a) of this section shall be paid to the
    6-8  authority.
    6-9        (c)  If the sale is not consummated, the authority shall
   6-10  refund the down payment to the borrower.
   6-11        Sec. 59.026.  TRANSFER OF BORROWER'S INTEREST.  (a)  The
   6-12  contract for a loan under this chapter must provide that transfer
   6-13  of ownership of the land without the authority's express written
   6-14  permission before the entire principal and interest due have been
   6-15  paid constitutes default under the contract.
   6-16        (b)  If the borrower dies or becomes financially
   6-17  incapacitated or if the borrower's interest in land is
   6-18  involuntarily transferred by court order or other proceedings,
   6-19  including bankruptcy, sheriff or trustee sale, or divorce, the land
   6-20  may be conveyed by the borrower or the borrower's heirs,
   6-21  administrators, executors, or successors in interest by complying
   6-22  with the rules adopted by the authority and obtaining the
   6-23  authority's written permission.
   6-24        Sec. 59.027.  CHANGES IN USE.  (a)  Before a borrower may use
   6-25  land acquired with financial assistance under this chapter for a
   6-26  primary purpose other than farming or ranching, the borrower must
   6-27  submit to the authority an application for approval of the change
   6-28  of use.
   6-29        (b)  As soon as practicable after an application for a change
   6-30  of use is received, the authority shall approve or deny the
   6-31  application and shall notify the borrower of the authority's
   6-32  decision.
   6-33        (c)  The loan contract must provide that using land acquired
   6-34  under this chapter for a purpose other than farming or ranching
   6-35  without the approval of the authority constitutes default under the
   6-36  contract.
   6-37        Sec. 59.028.  APPRAISAL.  (a)  Before the authority may loan
   6-38  money for the purchase of land under this chapter, the authority
   6-39  must have an appraisal of the property made to determine its value.
   6-40        (b)  An appraiser representing the authority must be
   6-41  qualified to give competent appraisals of land.  The authority may
   6-42  contract with the board to use appraisers employed by the board.
   6-43        Sec. 59.029.  PAYMENTS TO AUTHORITY UNDER CERTAIN LEASES.
   6-44  If, during a period a person is indebted to the authority for land
   6-45  purchased with financial assistance under this chapter, the person
   6-46  executes or there exists a lease or contract of sale of oil, gas,
   6-47  or other minerals, chemicals, hard metals, timber, sand, gravel, or
   6-48  other material that covers the land purchased from the authority
   6-49  that would result in the depletion of the corpus of the land, not
   6-50  less than one-half of all bonus money, delay rentals, or royalties
   6-51  received as consideration for or payment under the oil, gas, or
   6-52  mineral lease and not less than one-half of all money received
   6-53  under a lease or contract of sale of other minerals, chemicals,
   6-54  hard metals, timber, sand, gravel, or other material shall be paid
   6-55  to the authority by the lessee under the lease or the buyer under
   6-56  the contract of sale.  The authority shall apply those payments to
   6-57  the satisfaction of the indebtedness.
   6-58        Sec. 59.030.  TERM OF LEASES.  (a)  A purchaser may not lease
   6-59  land purchased with financial assistance under this chapter for a
   6-60  term longer than 10 years, except:
   6-61              (1)  a lease for oil, gas, or other minerals may be for
   6-62  a term of not longer than 10 years, and as long thereafter as oil,
   6-63  gas, or other minerals are produced from the land in commercial
   6-64  quantities; and
   6-65              (2)  a lease for coal and lignite may be for a term of
   6-66  not longer than 40 years, and as long thereafter as coal and
   6-67  lignite are produced from the land in commercial quantities.
   6-68        (b)  A lease or a separate instrument to take effect in the
   6-69  future may not contain a provision for option or renewal of the
   6-70  lease or re-lease of the property for any term that would result in
    7-1  a fixed term of the lease that exceeds the maximum fixed term
    7-2  authorized under Subsection (a) of this section.  A lease or
    7-3  instrument that contains an option renewal or re-lease agreement in
    7-4  violation of this section is void.
    7-5        Sec. 59.031.  DEATH OF A BORROWER.  (a)  If a borrower
    7-6  receiving financial assistance under this chapter dies while
    7-7  indebted to the state under a contract, the borrower's rights under
    7-8  this chapter and the contract devolve on the borrower's heirs,
    7-9  devisees, or personal representatives under the laws of this state,
   7-10  subject to all rights, claims, and charges of the authority.
   7-11        (b)  Default by an heir, devisee, or personal representative
   7-12  with respect to a right, claim, or charge of the authority has the
   7-13  same effect as default by the borrower before the borrower's death.
   7-14        Sec. 59.032.  UNENCUMBERED TITLE.  The authority may
   7-15  establish a procedure by which a borrower acquiring land with a
   7-16  loan under this chapter may obtain title to a portion of the tract
   7-17  clear of encumbrances.
   7-18            (Sections 59.033-59.045 reserved for expansion
   7-19                  SUBCHAPTER D.  OFFENSES; PENALTIES
   7-20        Sec. 59.046.  FALSE OR FICTITIOUS WRITTEN STATEMENT.  (a)  A
   7-21  person commits an offense if the person knowingly or intentionally
   7-22  makes, publishes, passes, files, or uses any false, fictitious, or
   7-23  forged paper, document, contract, affidavit, application,
   7-24  assignment, or other written instrument relating to the procurement
   7-25  of financial assistance under this chapter or to the purchase,
   7-26  sale, or resale of land under this chapter or in connection with
   7-27  any transaction under this chapter.
   7-28        (b)  An offense under this section is a felony of the third
   7-29  degree.
   7-30        Sec. 59.047.  FRAUD.  (a)  A person commits an offense if the
   7-31  person defrauds a person of rights or benefits under this chapter
   7-32  or uses this chapter to defraud the state by an act of fraud,
   7-33  duress, deceit, coercion, or misrepresentation.
   7-34        (b)  An offense under this section is a felony of the third
   7-35  degree.
   7-36        SECTION 2.  Chapter 163, Natural Resources Code, is repealed.
   7-37        SECTION 3.  Subchapter D, Chapter 59, Agriculture Code, as
   7-38  added by this Act, applies only to an offense committed on or after
   7-39  the effective date of this Act.  For purposes of this section, an
   7-40  offense is committed before the effective date of this Act if any
   7-41  element of the offense occurs before the effective date.
   7-42        SECTION 4.  On the effective date of this Act, the powers,
   7-43  duties, and obligations of the Veterans Land Board relating to the
   7-44  Farm and Ranch Finance Program, other than administration of the
   7-45  farm and ranch finance program fund, are transferred to the Texas
   7-46  Agricultural Finance Authority, and the Veterans Land Board shall
   7-47  transfer all property and records relating to the program in its
   7-48  custody to the Texas Agricultural Finance Authority.
   7-49        SECTION 5.  This Act takes effect September 1, 1993.
   7-50        SECTION 6.  The importance of this legislation and the
   7-51  crowded condition of the calendars in both houses create an
   7-52  emergency and an imperative public necessity that the
   7-53  constitutional rule requiring bills to be read on three several
   7-54  days in each house be suspended, and this rule is hereby suspended.
   7-55                               * * * * *
   7-56                                                         Austin,
   7-57  Texas
   7-58                                                         May 11, 1993
   7-59  Hon. Bob Bullock
   7-60  President of the Senate
   7-61  Sir:
   7-62  We, your Committee on Natural Resources to which was referred H.B.
   7-63  No. 1684, have had the same under consideration, and I am
   7-64  instructed to report it back to the Senate with the recommendation
   7-65  that it do pass and be printed.
   7-66                                                         Sims,
   7-67  Chairman
   7-68                               * * * * *
   7-69                               WITNESSES
   7-70                                                  FOR   AGAINST  ON
    8-1  ___________________________________________________________________
    8-2  Name:  Patrick Cox                               x
    8-3  Representing:  TX Farmers Union
    8-4  City:  Austin
    8-5  -------------------------------------------------------------------
    8-6                                                  FOR   AGAINST  ON
    8-7  ___________________________________________________________________
    8-8  Name:  Marvin Gregory                            x
    8-9  Representing:  E. TX Dairy Marketers Coop
   8-10  City:  Sulphur Springs
   8-11  -------------------------------------------------------------------
   8-12  Name:  Ed Shannon                                x
   8-13  Representing:  T.F.U.
   8-14  City:  Hico
   8-15  -------------------------------------------------------------------
   8-16  Name:  Lewis Vail                                x
   8-17  Representing:  Hopkins Co. Farmers Union
   8-18  City:  Piekton
   8-19  -------------------------------------------------------------------
   8-20  Name:  Joe Rankin                                x
   8-21  Representing:  TX Farmers Union
   8-22  City:  Ralls
   8-23  -------------------------------------------------------------------
   8-24  Name:  Robert Kennedy                                          x
   8-25  Representing:  TX Dept of Agriculture
   8-26  City:  Austin
   8-27  -------------------------------------------------------------------
   8-28  Name:  Guy Finstad                               x
   8-29  Representing:  Agriculture Teachers
   8-30  City:  Austin
   8-31  -------------------------------------------------------------------