1-1 AN ACT
1-2 relating to loans guaranteed by the Young Farmer Loan Guarantee
1-3 Program.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 253.002, Agriculture Code, is amended to
1-6 read as follows:
1-7 Sec. 253.002. YOUNG FARMER LOAN GUARANTEE PROGRAM. (a) The
1-8 board shall administer a loan guarantee program that benefits
1-9 eligible applicants who desire to establish their first farming or
1-10 ranching operation.
1-11 (b) The board may grant to an eligible applicant a guarantee
1-12 of a loan made by a commercial lender for the purposes prescribed
1-13 by this chapter. The guarantee amount may not exceed the lesser of
1-14 $100,000 [$50,000] or 90 percent of the total loan amount.
1-15 (c) The aggregate amount guaranteed under this chapter may
1-16 not exceed twice the amount of current appropriations from the
1-17 young farmer loan guarantee account.
1-18 (d) A loan guarantee recipient may use proceeds from the
1-19 loan only for working capital for operating a farm or ranch [feed,
1-20 seed, fertilizer, livestock, poultry, farm or ranch equipment,
1-21 farm or ranch facilities, or leases of farmland or rangeland]. A
1-22 loan guarantee is voidable by the board if the recipient uses loan
1-23 proceeds for a purpose other than working capital for operating a
1-24 farm or ranch [those listed by this subsection]. The board shall
2-1 include this restriction as a condition in each loan guarantee
2-2 instrument executed under this chapter.
2-3 (e) The board may enter an agreement with a lender and a
2-4 borrower under which the board provides a payment from money in the
2-5 young farmer loan guarantee account for the purpose of providing a
2-6 reduced interest rate on a loan guaranteed to a borrower under this
2-7 chapter. The board shall adopt rules to implement this subsection.
2-8 The maximum rate reduction under this subsection shall not exceed
2-9 three percentage points.
2-10 SECTION 2. Sections 253.003(a) and (c), Agriculture Code,
2-11 are amended to read as follows:
2-12 (a) An eligible applicant must present to the board
2-13 [department] for the board's review:
2-14 (1) a [five-year] plan for the applicant's proposed
2-15 farm or ranch that has been reviewed and approved by an individual
2-16 who:
2-17 (A) teaches agricultural science and technology
2-18 in the applicant's school district; or
2-19 (B) is a county extension agent-agriculture
2-20 program leader of the Texas Agricultural Extension Service in the
2-21 area where the farm or ranch is located;
2-22 (2) a completed application for a loan from a
2-23 commercial lender on which the eligible applicant has indicated
2-24 that the loan proceeds will be used to implement the applicant's
2-25 [five-year] plan; and
2-26 (3) the signed statement of a loan officer of the
2-27 commercial lender that a loan guarantee is required for approval of
3-1 the loan application.
3-2 (c) The board [department] may charge a reasonable
3-3 application fee for processing an application filed under this
3-4 section.
3-5 SECTION 3. This Act takes effect September 1, 1997, and
3-6 applies only to a loan that is made on or after September 1, 1997.
3-7 A loan that is made before September 1, 1997, is governed by the
3-8 law as it existed immediately before the effective date of this
3-9 Act, and that law is continued in effect for that purpose.
3-10 SECTION 4. The importance of this legislation and the
3-11 crowded condition of the calendars in both houses create an
3-12 emergency and an imperative public necessity that the
3-13 constitutional rule requiring bills to be read on three several
3-14 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 993 was passed by the House on April
3, 1997, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 993 on May 21, 1997, by a non-record
vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 993 was passed by the Senate, with
amendments, on May 19, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor