SRC-HRD H.B. 993 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 993
By: Patterson (Brown)
Natural Resources
4-24-97
Engrossed


DIGEST 

                                                                           
The Young Farmer Program was established in 1993 as a direct loan
endowment program for people 18 to 39 years of age with four years of
practical agricultural experience, who desire to establish their first
farming or ranching operation.  It is funded by a $5 fee on farm license
tags. In 1995 the program was revised as a loan guarantee program.
Currently, about $5 million is in the young farmer fund and six loans have
been made.  It is believed that the inactivity of the program  may be due
to restrictions on the program that have recently been addressed by the
Texas Agricultural Finance Authority (governing board within the Texas
Department of Agriculture) and that are addressed in this legislation.
This bill would increase the maximum Young Farmer Loan Guarantee amount
from $50,000 to $100,000, delete the requirement that an applicant's plan
be a five-year plan, and expand the allowed uses for the loan proceeds.

PURPOSE

As proposed, H.B. 993 increases the maximum Young Farmer Loan Guarantee
amount from $50,000 to $100,000, deletes the requirement that the plan of
an applicant to the Young Farmer Program be a five-year plan, and expands
the allowed uses for the loan proceeds.

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 235.002, Agriculture Code, to prohibit the
guarantee made by the board of directors (board) of the Texas Agricultural
Finance Authority from exceeding the lesser of $100,000, rather than
$50,000, or 90 percent of the total loan amount.  Authorizes a loan
guarantee recipient to use proceeds from the loan only for working capital
for operating a farm or ranch, rather than only for feed, seed,
fertilizer, livestock, poultry, farm or ranch equipment, farm or ranch
facilities, or leases of farmland or rangeland.  Provides that a loan
guarantee is voidable by the board under certain conditions. 

SECTION 2. Amend Sections 253.003(a) and (c), Agriculture Code, to require
an eligible applicant to present to the board, rather than the Department
of Agriculture, a plan for the applicant's proposed farm or ranch that has
been reviewed and approved by an individual who is a county extension
agentagriculture program leader of the Texas Agricultural Extension
Service in the area where the farm or ranch is located.  Makes conforming
changes. 

SECTION 3. Effective date: September 1, 1997.
  Makes application of this Act prospective.

SECTION 4. Emergency clause.