BILL ANALYSIS


                                                        S.J.R. 51
                                                     By: Montford
                                                          Finance
                                                         04-21-95
                                     Committee Report (Unamended)
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.J.R. 51 requires the submission to the voters of a
constitutional amendment to consolidate the general obligation
bonding authority for the Texas agricultural fund, the farm and
ranch finance program, and the rural microenterprise development
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 49-i, Article III, Texas Constitution,
as follows:

     Sec.  49-i.  (a) Authorizes the legislature, by law, to
     provide for the issuance of state general obligation bonds to
     provide money for the establishment of a farm and ranch
     finance program fund, among other funds, in the state treasury
     and to refund bonds described by Subsection (e).  Requires the
     Texas agricultural fund to be used pay the costs of its
     administration, among other uses.  Requires the farm and ranch
     finance program fund to be used to make loans and provide
     financing assistance to purchase farm and ranch land and pay
     the costs of its administration.  Requires the rural
     microenterprise development fund to be used to pay the costs
     of its administration, among other uses.  Authorizes the
     financial assistance offered by all funds established under
     this section to include loans, insurance, and other
     obligations.
     
     (b) Prohibits the principal amount of bonds outstanding at
       any one time from exceeding $530 million.  Deletes language
       placing a limit on the amount of outstanding bonds for the
       Texas agricultural fund and the rural microenterprise
       development fund.
       
       (c) Authorizes the legislature to establish an interest and
       sinking account and other accounts within the farm and ranch
       finance program fund, among other funds.  Authorizes the
       legislature to provide for the investment of bond proceeds
       and of the separate fund accounts, rather than of the bond
       proceeds and of the interest and sinking accounts. 
       Authorizes the legislature to authorize bond enhancement
       agreements with respect to principal of and interest on the
       bonds.  Authorizes, rather than requires, income from the
       investment of money in the funds that is not used to pay the
       principal of and interest on bonds to be used to enhance
       agricultural resource management research, among other uses.
       
       (d) Provides that while any amount is owed to principal of
       and interest on bonds under any bond enhancement agreements,
       amounts will be appropriated out of the first money coming
       into the treasury in each fiscal year to make certain
       payments including payments under a bond enhancement
       agreement with respect to principal of and interest on bonds
       during such fiscal year.
       
       (e) Authorizes bonds authorized under Subsection (a) to be
       used to refund bonds issued under Section 49-f of this
       article as that section existed before January 1, 1996. 
       Sets forth the status of outstanding bonds issued under that
       section.
       
       SECTION 2.   Repealer: Section 49-f, Article III, Texas Constitution
(Bonds to Fund Financial Assistance to Purchase Farm and Ranch
Land).

SECTION 3. TEMPORARY PROVISION.  (a) Provides that this temporary
provision applies to the constitutional amendment proposed by the
74th Legislature, Regular Session, 1995, that consolidates general
obligation bonding authority for agricultural funds.

     (b) Provides that the amendment to Section 49-i, Article III,
     Texas Constitution, and the repeal of Section 49-f, Article
     III, Texas Constitution, take effect January 1, 1996.
     
     (c) Provides that this provision expires January 2, 1996.
     
     SECTION 4.     Requires this proposed constitutional amendment to be
submitted to the voters at an election to be held November 7, 1995. 
Sets forth the required language for the ballot.