ALM H.B. 2499 75(R)BILL ANALYSIS


AGRICULTURE & LIVESTOCK
H.B. 2499
By: Pete Patterson
3-25-97
Committee Report (Unamended)



BACKGROUND 

In 1993, legislation was passed that moved the Farm and Ranch Finance
program from the Veterans Land Board to the Texas Department of
Agriculture (TDA). The purpose of the program is to provide affordable
financing (5% down payment) to eligible farmers and ranchers in order to
purchase land for a base of operation. Only one loan has been made, and
some think the inactivity of the program is due to the low net worth and
loan caps. 

Funds to operate the program will be exhausted in a few months. The
governing board (Texas Agricultural Finance Authority) does not believe it
prudent to issue debt to maintain program operation. Therefore, the board
recommends using approximately $450,000 that is dedicated to the Young
Farmer Loan Guarantee Program, but not being utilized. The $450,000 is in
state fund #474 and is the balance of the funds resulting from the
resolution of the Farm and Ranch Loan Security Fund created in 1979.  All
but $450,000 of the fund has been utilized for other Texas Department of
Agriculture programs. 

PURPOSE

This legislation raises the Farm and Ranch Finance program net worth and
loan caps and transfers funds to it. 

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 59.024, Agriculture Code, by raising the
maximum net worth from $300,000 to $400,000 that an applicant may have to
be eligible for a Farm and Ranch Finance loan. 

SECTION 2.  Amends Section 59.025, Agriculture Code, by raising the
maximum Farm and Ranch Finance loan amount from 150,000 to $250,000. 

SECTION 3.  Amends Section 252.082, Agriculture Code, by transferring the
balance and income of the Farm and Ranch Loan Security fund to the Farm
and Ranch Finance program fund. Deletes language that previously
transferred Farm and Ranch Loan Security fund money to other programs. 

SECTION 4.  Emergency clause.