BILL ANALYSIS Financial Institutions Committee C.S.S.J.R. 51 By: Montford (Patterson) May 5, 1995 Committee Report (Substituted) BACKGROUND In 1993 legislation was passed that set up the administration of the Farm and Ranch Finance Program in the Texas Department of Agriculture (TDA). The purpose of the program is to provide affordable financing to eligible farmers and ranchers in order to purchase land for a base of operation. The program is funded by $500 million of general obligation bonds. TDA administrators do not expect the demand for loans to reach $500 million. The TDA administers the Texas Agricultural Finance Authority (authority) that was created in 1987. The authority has $25 million in general obligation bonds and $500 million in revenue bonds, the proceeds of which are deposited in the Texas Agricultural Fund. The authority has issued the general obligation bonds and is in the process of issuing the revenue bonds. The authority has been successful in providing financial assistance for the expansion, development and diversification of production, processing, marketing and export of Texas agricultural products. The demand for assistance from the authority continues to be high. PURPOSE C.S.S.J.R. 51 expands the use of bond proceeds of the farm and ranch finance program to include diversifying the production, processing, marketing and export of Texas agricultural products and other rural economic development programs. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Section 49-f, Article III, Texas Constitution, is amended by adding Subsection (g). (g) Authorizes the use of the proceeds of $200 million of the Farm and Ranch Land bonds to be deposited in the Texas Agricultural Fund to provide financial assistance to develop, increase, improve, or expand the production, processing, marketing, or export of crops or products grown or produced primarily in this state by Texas agricultural businesses and for other rural economic development programs. SECTION 2. Sets forth that this proposed constitutional amendment shall be submitted to the voters on November 7, 1995. Sets forth the language of the proposition. COMPARISON OF ORIGINAL TO SUBSTITUTE SJR 51 as engrossed consolidates the general obligation bonding authority for the Texas agricultural fund, the farm and ranch finance program, and the rural microenterprise development fund. This means that an additional $505 million in bonds would be added to the Texas agricultural fund for the purpose of developing, increasing, improving, or expanding the production, processing, marketing, or export of crops or products. $500 million would come from the Farm and Ranch Finance program and $5 million from the microenterprise fund. This bonding authority has already been authorized by voters. The substitute authorizes only $200 million of the $500 million Farm and Ranch finance bonds to be available in the Texas agricultural fund for the use of diversifying the production, processing, marketing and export of Texas agricultural products and other rural economic development programs. SUMMARY OF COMMITTEE ACTION The committee considered SJR 51 in a formal meeting on May 8, 1995. The committee considered a complete committee substitute for the bill which was adopted without objection. The bill was reported favorably as substituted, with the recommendation that it do pass and be printed, by the following record vote: 6 Ayes, 0 Nays, 0 PNV, 3 Absent.