By Brown                                        S.B. No. 1342

      75R4708 SKB-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the application for and use of the proceeds of loans

 1-3     guaranteed by the Young Farmer Loan Guarantee 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           SECTION 2.  Sections 253.003(a) and (c), Agriculture Code,

 2-4     are amended to read as follows:

 2-5           (a)  An eligible applicant must present to the board

 2-6     [department] for the board's review:

 2-7                 (1)  a [five-year] plan for the applicant's proposed

 2-8     farm or ranch that has been reviewed and approved by an individual

 2-9     who:

2-10                       (A)  teaches agricultural science and technology

2-11     in the applicant's school district; or

2-12                       (B)  is a county extension agent-agriculture

2-13     program leader of the Texas Agricultural Extension Service in the

2-14     area where the farm or ranch is located;

2-15                 (2)  a completed application for a loan from a

2-16     commercial lender on which the eligible applicant has indicated

2-17     that the loan proceeds will be used to implement the applicant's

2-18     [five-year] plan; and

2-19                 (3)  the signed statement of a loan officer of the

2-20     commercial lender that a loan guarantee is required for approval of

2-21     the loan application.

2-22           (c)  The board [department] may charge a reasonable

2-23     application fee for processing an application filed under this

2-24     section.

2-25           SECTION 3.  This Act takes effect September 1, 1997, and

2-26     applies only to a loan that is made on or after September 1, 1997.

2-27     A loan that is made before September 1, 1997, is governed by the

 3-1     law as it existed immediately before the effective date of this

 3-2     Act, and that law is continued in effect for that purpose.

 3-3           SECTION 4.  The importance of this legislation and the

 3-4     crowded condition of the calendars in both houses create an

 3-5     emergency and an imperative public necessity that the

 3-6     constitutional rule requiring bills to be read on three several

 3-7     days in each house be suspended, and this rule is hereby suspended.