SRC-TNM H.B. 3065 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 3065
By: King (Fraser)
Natural Resources
5-4-97
Engrossed


DIGEST 

Currently, the Linked Deposit Program is an "interest buy-down" program
between a borrower and a lending institution.  Under current law, a bank
that employs a Texas Agricultural Finance Authority (TAFA) appointee could
be prohibited from participating in the Linked Deposit Program.  Because
the banks that participate in the Linked Deposit Program are located in
rural areas, it is possible that a bank's lending practices could be
limited, and otherwise eligible borrowers in the region served by the bank
could be prohibited from having access to the low-interest loans offered
by the Linked Deposit Program.  H.B. 3065 would enable banks and lending
institutions to continue to participate in the Linked Deposit Program,
even if they have an officer, director, or employee who has been appointed
to serve as a board member of the TAFA. 

PURPOSE

As proposed, H.B. 3065 outlines provisions regarding the eligibility of
lending institutions to participate in the linked deposit program
established in the Department of Agriculture. 

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 44.007, Agriculture Code, by adding Subsection
(k), to provide that a lending institution is not ineligible to
participate in the linked deposit program solely because a member of the
board is also an officer, director, or employee of the lending
institution. 

SECTION 2. Emergency clause.
  Effective date: upon passage.