BILL ANALYSIS


                                                     C.S.S.B. 699
                                                         By: Sims
                                                Natural Resources
                                                          03-1-95
                                   Committee Report (Substituted)
BACKGROUND

The purpose of the Farm and Ranch Finance Program is to provide
affordable financing to eligible farmers and ranchers in order to
purchase land for a base of operation.  Borrowers are required to
make a down payment of at least five percent, and may not have a
net worth of more than $250,000.  These two factors make the
program available to young farmers who have few years of
experience.  A borrower is required to have earned at least 25
percent of gross income from farming or ranching in the last three
years.  These applicants create a higher credit risk than other
producers with more experience and accumulated capital.

PURPOSE

As proposed, C.S.S.B. 699 amends the application and eligibility
requirements for receiving a loan from the farm and ranch finance
fund.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 59.024, Agriculture Code, as follows:

     Sec.  59.024.  New heading: APPLICATION; ELIGIBILITY.  (a)
     Requires a person to submit an application to the Texas
     Agricultural Finance Authority (authority), in order to borrow
     money from the farm and ranch finance program fund (fund) that
     contains an acceptable agricultural business plan for the land
     proposed to be purchased that assures the authority the
     applicant intends to use the land primarily for farming or
     ranching.
     
     (b) Requires the person applying to be eligible to borrow
       money from the fund to provide evidence to the authority
       that demonstrates that the person has at least three years
       of experience relevant to the person's agricultural business
       plan for the proposed land and has a net worth of less than
       $500,000.  Deletes existing Subdivisions (1) and (2).
       
       SECTION 2.   Amends Section 59.025, Agriculture Code, as follows:

     Sec.  59.025.  New heading: MAXIMUM AMOUNT OF LOAN.  Prohibits
     a loan under this chapter from exceeding the lesser of
     $150,000 or an amount equal to 95 percent of the lesser of the
     purchase of the land or the land's appraised value under
     Section 59.028.  Deletes existing Subsections (a)-(c).
     
     SECTION 3.     (a) Makes application of this Act prospective.

     (b) Requires the authority to refund a down payment paid
     before the effective date of this Act if the sale is not
     consummated.
     
     SECTION 4.     Effective date: September 1, 1995.

SECTION 5. Emergency clause.