BILL ANALYSIS


                                                        S.B. 1260
                                                     By: Montford
                                                          Finance
                                                         04-21-95
                                       Committee Report (Amended)
BACKGROUND

The Texas Agricultural Finance Authority is permitted to issue $25
million in general obligation bonds to guarantee loans for the
startup and operation costs of agricultural businesses.

Currently, the farm and ranch finance program has $500 million in
voter-approved general obligation bonds available to provide low-interest financing for purchasing farm and ranch land.  There is a
statutory limit of $150,000 per applicant.

PURPOSE

As proposed, S.B. 1260 authorizes the Texas Agricultural Finance
Authority to issue state general obligation bonds to establish the
Texas agricultural fund and the rural microenterprises fund; and
grants rulemaking authority over the issuance of the bonds to the
board of directors of the Texas Agricultural Finance Authority.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is granted
to the board of directors of the Texas Agriculture Finance
Authority under SECTIONS 11, 12, 13, and 14 (Sections 59.022(a),
59.023(1), 59.025(b), and 59.026(b), Agriculture Code) of this
bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 58.031(c) and (e), Agriculture Code, as
follows:

     (c) Authorizes the Texas Agricultural Finance Authority
     (authority) to issue and sell state general obligation bonds
     as authorized by Section 49-i, Article III, Texas
     Constitution, to establish a Texas agricultural fund.  Deletes
     language providing that the state general obligation bonds are
     not to exceed $25 million outstanding at any one time.
     
     (e) Authorizes the authority to issue and sell state general
     obligation bonds to establish the rural microenterprise
     development fund as authorized by Section 49-i, Article III,
     Texas Constitution.  Deletes language prohibiting the state
     general obligation bonds from exceeding $5 million at any one
     time.
     
     SECTION 2.     Amends Sections 59.001(2) and (3), Agriculture Code, to
redefine "board" and "bond."

SECTION 3. Amends Section 59.002(b), Agriculture Code, to require
the board of directors of the authority (board) to administer the
farm and ranch finance program fund (fund).  Deletes language
requiring the board to make available to the authority money from
the fund for certain uses.

SECTION 4. Amends Section 59.003, Agriculture Code, to authorize
a member of the board, rather than the authority or a member of the
board, to be sued and held personally liable for damages resulting
from an official act or omission that is corrupt or malicious.

SECTION 5. Amends Section 59.011, Agriculture Code, as follows:

     Sec.  59.011.  BONDS.  (a) Authorizes the board, rather than
     the authority, to provide, by order or resolution, for the
     issuance and sale of negotiable bonds authorized by Section
     49-i, Article III, Texas Constitution, rather than Section 49-f, Article III, Texas Constitution.
     
     (b) Makes a conforming and a nonsubstantive change.
       
       SECTION 6.   Amends Section 59.012(c), Agriculture Code, to authorize
the board, rather than to require the board at the request of the
authority, to transfer directly from the proceeds of the bond sales
or from available money in the fund a reasonable amount to cover
the cost of the farm and ranch finance program (program).  Deletes
language requiring the transferred money to be credited to the farm
and ranch administrative expense fund.

SECTION 7. Amends Section 59.013, Agriculture Code, to make a
conforming change.

SECTION 8. Amends Sections 59.015(a) and (b), Agriculture Code, to
make conforming changes.

SECTION 9. Amends Section 59.016, Agriculture Code, as follows:

     Sec.  59.016.  INVESTMENTS.  Requires the board to invest
     funds as provided under Section 58.022.  Deletes existing
     Subsections (a)-(d) relating to administering the fund and
     investing money in the fund.
     
     SECTION 10.    Amends Section 59.021, Agriculture Code, by amending
Subsections (b)-(e) and (h) and by adding Subsection (i), as
follows:

     (b)-(e) and (h) Make conforming changes.
     
     (i) Authorizes the board to use money in the fund to pay the
     costs and expenses of administering the program.
SECTION 11.    Amends Sections 59.022(a) and (c), Agriculture Code,
as follows:

     (a) Makes conforming changes.
     
     (c) Requires the fees set and collected by the board to be
     deposited in the state treasury to the credit of the program. 
     Makes conforming changes
SECTION 12.    Amends Section 59.023, Agriculture Code, as follows:

     Sec.  59.023.  New heading: POWERS OF BOARD.  Sets forth the
     powers of the board necessary to accomplish the purposes and
     carry out the programs provided by this chapter.  Makes a
     conforming change.
     
     SECTION 13.    Amends Sections 59.025(b) and (c), Agriculture Code,
to make conforming changes.

SECTION 14.    Amends Section 59.026, Agriculture Code, to make
conforming changes.

SECTION 15.    Amends Section 59.027, Agriculture Code, to make
conforming changes.

SECTION 16.    Amends Section 59.028, Agriculture Code, to make
conforming changes.

SECTION 17.    Amends Section 59.029, Agriculture Code, as follows:

     Sec.  59.029.  New heading: PAYMENTS TO BOARD UNDER CERTAIN
     LEASES.  Makes conforming changes.
     
     SECTION 18.    Amends Section 59.031, Agriculture Code, to make
conforming changes.

SECTION 19.    Amends Section 59.032, Agriculture Code, to make a
conforming change.

SECTION 20.    Amends Section 44.013, Agriculture Code, to require
proceeds from bonds issued under Section 58.031(e), among other
appropriations, to be deposited to the credit of the rural
microenterprise development fund.

SECTION 21.    Effective date: January 1, 1996, if the proposed
constitutional amendment relating to the consolidation of general
obligation bonding authority for certain agricultural funds is
approved by voters.

SECTION 22.    Emergency clause.