1-1     By:  Patterson, Flores, Cook, et al.                   H.B. No. 993

 1-2          (Senate Sponsor - Brown)

 1-3           (In the Senate - Received from the House April 4, 1997;

 1-4     April 8, 1997, read first time and referred to Committee on Natural

 1-5     Resources; April 28, 1997, reported favorably by the following

 1-6     vote:  Yeas 9, Nays 0; April 28, 1997, sent to printer.)

 1-7                            A BILL TO BE ENTITLED

 1-8                                   AN ACT

 1-9     relating to the application for and use of the proceeds of loans

1-10     guaranteed by the Young Farmer Loan Guarantee Program.

1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-12           SECTION 1.  Section 253.002, Agriculture Code, is amended to

1-13     read as follows:

1-14           Sec. 253.002.  YOUNG FARMER LOAN GUARANTEE PROGRAM.  (a)  The

1-15     board shall administer a loan guarantee program that benefits

1-16     eligible applicants who desire to establish their first farming or

1-17     ranching operation.

1-18           (b)  The board may grant to an eligible applicant a guarantee

1-19     of a loan made by a commercial lender for the purposes prescribed

1-20     by this chapter.  The guarantee amount may not exceed the lesser of

1-21     $100,000 [$50,000] or 90 percent of the total loan amount.

1-22           (c)  The aggregate amount guaranteed under this chapter may

1-23     not exceed twice the amount of current appropriations from the

1-24     young farmer loan guarantee account.

1-25           (d)  A loan guarantee recipient may use proceeds from the

1-26     loan only for working capital for operating a farm or ranch [feed,

1-27     seed,  fertilizer, livestock, poultry, farm or ranch equipment,

1-28     farm or ranch facilities, or leases of farmland or rangeland].  A

1-29     loan guarantee is voidable by the board if the recipient uses loan

1-30     proceeds for a purpose other than working capital for operating a

1-31     farm or ranch [those listed by this subsection].  The board shall

1-32     include this  restriction as a condition in each loan guarantee

1-33     instrument executed under this chapter.

1-34           SECTION 2.  Sections 253.003(a) and (c), Agriculture Code,

1-35     are amended to read as follows:

1-36           (a)  An eligible applicant must present to the board

1-37     [department] for the board's review:

1-38                 (1)  a [five-year] plan for the applicant's proposed

1-39     farm or ranch that has been reviewed and approved by an individual

1-40     who:

1-41                       (A)  teaches agricultural science and technology

1-42     in the applicant's school district; or

1-43                       (B)  is a county extension agent-agriculture

1-44     program leader of the Texas Agricultural Extension Service in the

1-45     area where the farm or ranch is located;

1-46                 (2)  a completed application for a loan from a

1-47     commercial lender on which the eligible applicant has indicated

1-48     that the loan proceeds will be used to implement the applicant's

1-49     [five-year] plan; and

1-50                 (3)  the signed statement of a loan officer of the

1-51     commercial lender that a loan guarantee is required for approval of

1-52     the loan application.

1-53           (c)  The board [department] may charge a reasonable

1-54     application fee for processing an application filed under this

1-55     section.

1-56           SECTION 3.  This Act takes effect September 1, 1997, and

1-57     applies only to a loan that is made on or after September 1, 1997.

1-58     A loan that is made before September 1, 1997, is governed by the

1-59     law as it existed immediately before the effective date of this

1-60     Act, and that law is continued in effect for that purpose.

1-61           SECTION 4.  The importance of this legislation and the

1-62     crowded condition of the calendars in both houses create an

1-63     emergency and an imperative public necessity that the

1-64     constitutional rule requiring bills to be read on three several

 2-1     days in each house be suspended, and this rule is hereby suspended.

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