ALM H.B. 993 75(R)BILL ANALYSIS AGRICULTURE & LIVESTOCK H.B. 993 By: Pete Patterson 2-18-97 Committee Report (Unamended) BACKGROUND 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 dollars are 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. PURPOSE This legislation 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. 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. Amends Section 253.002, Agriculture Code, by increasing the maximum loan guarantee amount from $50,000 to $100,000. Expands the allowed use of the loan to include working capital for operating a farm or ranch rather than specifically listed items. SECTION 2. Amends Section 253.003, Agriculture Code, by striking department and inserting board. Deletes the requirement that the applicant's cash flow, production or management plan be a five-year plan. Specifies that the applicant must have his plan reviewed by a county extension agent in the area where the farm or ranch is located. SECTION 3. Effective date: September 1, 1997. SECTION 4. Emergency clause.