1-1     By:  Counts, et al. (Senate Sponsor - Duncan)         H.B. No. 3050
 1-2           (In the Senate - Received from the House April 21, 1999;
 1-3     April 22, 1999, read first time and referred to Committee on
 1-4     Natural Resources; May 13, 1999, reported favorably, as amended, by
 1-5     the following vote:  Yeas 6, Nays 0; May 13, 1999, sent to
 1-6     printer.)
 1-7     COMMITTEE AMENDMENT NO. 1                               By:  Bivins
 1-8     1.  Amend SECTION 10 OF C.S.H.B. 3050 in page 6, line 32 by adding
 1-9     the following after "board.":
1-10           "The authority may make, guarantee, participate in, insure,
1-11     co-insure, or reinsure loans to an eligible agricultural business
1-12     from the proceeds of revenue bonds issued in accordance with
1-13     Section 58.033 in an amount approved by the board."
1-14     COMMITTEE AMENDMENT NO. 2                               By:  Bivins
1-15     1.  Amend SECTION 12 of C.S.H.B. 3050 in page 6, line 57 through
1-16     page 6, line 61, by striking the proposed Sec. 58.026, Agriculture
1-17     Code, and replacing it with the following:
1-18           Sec. 58.026  LIMITATION OF LIABILITY FOR CERTAIN RECREATIONAL
1-19     ACTIVITIES.  Nothing in this chapter shall affect the applicability
1-20     of Chapter 75, Civil Practice and Remedies Code.
1-21                            A BILL TO BE ENTITLED
1-22                                   AN ACT
1-23     relating to the administration of certain loan programs by the
1-24     Texas Agricultural Finance Authority, to limiting certain liability
1-25     for activities in programs funded by the authority, and to the
1-26     promotion of the development of agriculture-related rural
1-27     businesses.
1-28           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-29           SECTION 1.  Section 44.001, Agriculture Code, is amended to
1-30     read as follows:
1-31           Sec. 44.001.  Definitions.  In this chapter:
1-32                 (1)  ["Small business incubator" means a nonprofit
1-33     development agency that provides concentrated business assistance
1-34     services to new small agricultural enterprises.]
1-35                 [(2)]  "Eligible lending institution" means a financial
1-36     institution that makes commercial loans, is a depository of state
1-37     funds, and agrees to participate in the linked deposit program and
1-38     to provide collateral equal to the amount of linked deposits placed
1-39     with it.
1-40                 (2) [(3)]  "Eligible borrower" means a person who is in
1-41     the business or entering the business of:
1-42                       (A)  processing and marketing agricultural crops
1-43     in this state;
1-44                       (B)  producing alternative agricultural crops in
1-45     this state;
1-46                       (C)  producing agricultural crops in this state
1-47     the production of which has declined [markedly] because of natural
1-48     disasters; or
1-49                       (D)  producing agricultural crops in this state
1-50     using water conservation equipment for agricultural production
1-51     purposes.
1-52                 (3) [(4)]  "Alternative agricultural crops" means crops
1-53     not customarily grown in this state but that could feasibly be
1-54     produced in this state.
1-55                 (4) [(5)]  "Linked deposit" means a time deposit
1-56     governed by a written deposit agreement between the state and an
1-57     eligible lending institution that provides:
1-58                       (A)  that the eligible lending institution pay
1-59     interest on the deposit at a rate that is not less than the greater
1-60     of:
1-61                             (i)  the current market rate of a United
 2-1     States treasury bill or note of comparable maturity minus two
 2-2     percent; or
 2-3                             (ii)  1.5 percent;
 2-4                       (B)  that the state not withdraw any part of the
 2-5     deposit before the expiration of a period set by a written advance
 2-6     notice of the intention to withdraw; and
 2-7                       (C)  that the eligible lending institution agree
 2-8     to lend the value of the deposit to an eligible borrower at a
 2-9     maximum rate that is the linked deposit [current market] rate [of a
2-10     United States treasury bill or note of comparable maturity] plus a
2-11     maximum of four percent.
2-12                 (5) [(6)]  "Microenterprise" means a small business
2-13     located in a rural area in which the owner operates [and the
2-14     owner's family provide the bulk of the management and a significant
2-15     amount of the labor required to operate] the enterprise.  Priority
2-16     under this chapter shall be given to microenterprises which
2-17     demonstrate significant potential for expansion that will provide
2-18     jobs in economically depressed rural communities or to currently
2-19     unemployed rural residents.
2-20                 (6) [(7)]  "Rural area" means an area which is
2-21     predominantly rural in character, being one which the board defines
2-22     and declares to be a rural area.
2-23                 (7) [(8)]  "Board" means the board of directors of the
2-24     Texas Agricultural Finance Authority in Chapter 58 [of this code].
2-25           SECTION 2.  Section 44.002, Agriculture Code, is amended to
2-26     read as follows:
2-27           Sec. 44.002.  CREATION OF MICROENTERPRISE PROGRAMS.
2-28     [(a)  The board shall create an agricultural diversification
2-29     program to:]
2-30                 [(1)  support commercial use of agricultural research
2-31     and innovation;]
2-32                 [(2)  increase the capabilities of community and
2-33     regional organizations to train and assist new or expanding
2-34     agricultural-based businesses;]
2-35                 [(3)  start small business incubators; and]
2-36                 [(4)  encourage private commercial loans for enhanced
2-37     production, processing, and marketing of certain agricultural
2-38     crops.]
2-39           [(b)]  The board shall create a microenterprise support
2-40     program to provide financial assistance to microenterprises in
2-41     rural areas.
2-42           SECTION 3.  Section 44.0045, Agriculture Code, is amended to
2-43     read as follows:
2-44           Sec. 44.0045.  Microenterprise Support Program Loans.
2-45     (a)  The board shall administer a loan program supporting
2-46     established and proposed microenterprises in rural areas by
2-47     providing loans to expand, modernize, or otherwise improve
2-48     established microenterprises and to begin operation of proposed
2-49     microenterprises.
2-50           (b)  An applicant applying on behalf of a [A] proposed
2-51     microenterprise [loan applicant] may receive a loan of up to
2-52     $25,000 [$15,000] to begin operation of the microenterprise.
2-53           (c)  An applicant applying on behalf of an established
2-54     microenterprise [loan applicant] may receive a loan of up to
2-55     $50,000 [$30,000] to expand, modernize, or otherwise improve an
2-56     established operation [microenterprise].
2-57           (d)  The board [of the microenterprise support program] may
2-58     reserve a portion of the total fund for use in cooperative loan
2-59     programs established with the participation of other public or
2-60     private lenders.
2-61           [(e)  Financial assistance in the form of a loan may not be
2-62     used to refinance an existing debt of a proposed or existing
2-63     microenterprise.]
2-64           SECTION 4.  Section 44.007, Agriculture Code, is amended to
2-65     read as follows:
2-66           Sec. 44.007.  Linked Deposit Program.  (a)  The board shall
2-67     establish a linked deposit program to encourage commercial lending
2-68     for the enhanced production, processing, and marketing of certain
2-69     agricultural crops and for the financing of water conservation
 3-1     projects or equipment for agricultural production purposes.
 3-2           (b)  The board shall approve or disapprove any and all
 3-3     applications under this chapter, provided that the board may
 3-4     delegate this authority to the commissioner.
 3-5           (c)  The board shall promulgate rules for the loan portion of
 3-6     the linked deposit program.  The rules must include:
 3-7                 (1)  a list of the categories of crops customarily
 3-8     grown in Texas, with consideration given to the Texas Agricultural
 3-9     Statistics Service information available and relevant to this
3-10     determination;
3-11                 (2)  a list of crops that are alternative agricultural
3-12     crops, with consideration given to the Texas Agricultural
3-13     Statistics Service information available and relevant to this
3-14     determination;
3-15                 (3)  identification of criteria for a project eligible
3-16     for [a list of crops the production of which has declined markedly
3-17     because of] natural disaster assistance [disasters]; and
3-18                 (4)  identification of projects and types of equipment
3-19     considered as water conservation projects or equipment for
3-20     agricultural production purposes.
3-21           (d) [(c)]  In order to participate in the linked deposit
3-22     program, an eligible lending institution may solicit loan
3-23     applications from eligible borrowers.
3-24           (e) [(d)]  After reviewing an application and determining
3-25     that the applicant is eligible and creditworthy, the eligible
3-26     lending institution shall send the application for a linked deposit
3-27     loan to [the board or] the administrator of the Texas Agricultural
3-28     Finance Authority.
3-29           (f) [(e)]  The eligible lending institution shall certify the
3-30     interest rate applicable to the specific eligible borrower and
3-31     attach it to the application sent to [the board or] the
3-32     administrator of the Texas Agricultural Finance Authority.
3-33           (g) [(f)]  After reviewing each linked deposit loan
3-34     application, the board or the commissioner shall recommend to the
3-35     comptroller the acceptance or rejection of the application.
3-36           (h) [(g)]  After acceptance of the application, the
3-37     comptroller shall place a linked deposit with the applicable
3-38     eligible lending institution for the period the comptroller
3-39     considers appropriate.  The comptroller may not place a deposit for
3-40     a period extending beyond the state fiscal biennium in which it is
3-41     placed.  Subject to the limitation described by Section 44.010 [of
3-42     this chapter], the comptroller may place time deposits at an
3-43     interest rate described by Section 44.001(4) [44.001(5)(A) of this
3-44     chapter].
3-45           (i) [(h)]  Before the placing of a linked deposit, the
3-46     eligible lending institution and the state, represented by the
3-47     comptroller [and the board], shall enter into a written deposit
3-48     agreement containing the conditions on which the linked deposit is
3-49     made.
3-50           (j) [(i)]  If a lending institution holding linked deposits
3-51     ceases to be a state depository, the comptroller may withdraw the
3-52     linked deposits.
3-53           (k) [(j)]  The board may adopt rules that create a procedure
3-54     for determining priorities for loans granted under this chapter.
3-55     Each rule adopted must state the policy objective of the rule.  The
3-56     policy objectives of the rules may include preferences to:
3-57                 (1)  achieve adequate geographic distribution of loans;
3-58                 (2)  assist certain industries;
3-59                 (3)  encourage certain practices including water
3-60     conservation; and
3-61                 (4)  encourage value-added processing of agricultural
3-62     products.
3-63           (l) [(k)]  A lending institution is not ineligible to
3-64     participate in the linked deposit program solely because a member
3-65     of the board is also an officer, director, or employee of the
3-66     lending institution, provided that a board member shall recuse
3-67     himself or herself from any action taken by the board on an
3-68     application involving a lending institution by which the board
3-69     member is employed or for which the board member serves as an
 4-1     officer or director.
 4-2           SECTION 5.  Section 44.010, Agriculture Code, is amended to
 4-3     read as follows:
 4-4           Sec. 44.010.  Limitations in Program.  (a)  At any one time,
 4-5     not more than $25 [$15] million, of which $10 million may only be
 4-6     used to finance water conservation projects, may be placed in
 4-7     linked deposits under this chapter.
 4-8           (b)  The maximum amount of a loan under this chapter to
 4-9     process and market Texas agricultural crops is $500,000.  The
4-10     maximum amount of a loan under this chapter to produce alternative
4-11     agricultural crops in this state is $250,000.  The maximum amount
4-12     of a loan under this chapter to finance water conservation projects
4-13     or equipment for agricultural production purposes is $250,000.  The
4-14     maximum amount of a loan under this chapter to finance production
4-15     of a crop declared eligible for natural disaster relief, as defined
4-16     by board rule, is $250,000.
4-17           (c)  A loan granted pursuant to this chapter may be used for
4-18     any agriculture-related operating expense, including the purchase
4-19     or lease of land or fixed assets acquisition or improvement, as
4-20     identified in the application [must be applied to the purchase or
4-21     lease of land, equipment, seed, fertilizer, direct marketing
4-22     facilities, or processing facilities, or to payment for
4-23     professional services].
4-24           (d)  A loan granted pursuant to this chapter[, when used to
4-25     finance eligible water conservation projects or equipment,] may be
4-26     applied to existing debt as described in Section 44.007 [resulting
4-27     from the financing of water conservation projects or equipment for
4-28     agricultural purposes as defined by board rule].
4-29           SECTION 6.  Sections 44.012 and 44.013, Agriculture Code, are
4-30     amended to read as follows:
4-31           Sec. 44.012.  MONEY FOR [GRANTS AND] LOANS.  The board may
4-32     accept gifts and grants of money from the federal government, local
4-33     governments, or private corporations or other persons for use in
4-34     making [grants and] loans under [the agricultural diversification
4-35     program and] the rural microenterprise support program.  The
4-36     legislature may appropriate money for [grants and] loans under the
4-37     program [programs].
4-38           Sec. 44.013.  Rural Microenterprise Development Fund.  The
4-39     rural microenterprise development fund is a fund in the
4-40     comptroller's office [state treasury].  Money appropriated to the
4-41     board [Agricultural Diversification Board] for use in making loans
4-42     under the rural microenterprise support program, other amounts
4-43     received by the state for loans made under the program, and other
4-44     money received by the board for the program and required by the
4-45     board to be deposited in the fund shall be deposited to the credit
4-46     of the fund.  The fund shall operate as a revolving fund, the
4-47     contents of which shall be applied and reapplied for the purposes
4-48     of the rural microenterprise support program.
4-49           SECTION 7.  Section 58.002, Agriculture Code, is amended by
4-50     amending Subdivision (1) and adding Subdivision (9) to read as
4-51     follows:
4-52                 (1)  "Agricultural business" means:
4-53                       (A)  a business that is or proposes to be engaged
4-54     in producing, processing, marketing, or exporting an agricultural
4-55     product;
4-56                       (B)  an eligible applicant as defined in
4-57     Subchapter E;
4-58                       (C)  the entity designated to carry out boll
4-59     weevil eradication in accordance with Section 74.1011;
4-60                       (D)  any agriculture-related business in rural
4-61     areas of Texas including a business that provides recreational
4-62     activities, including hiking, fishing, hunting, or any other
4-63     activity associated with the enjoyment of nature or the outdoors on
4-64     agricultural land; or
4-65                       (E)  a state agency or an institution of higher
4-66     education that is engaged in producing an agricultural product.
4-67                 (9)  "Rural area" means an area which is predominately
4-68     rural in character, being one which the board defines and declares
4-69     to be a rural area.
 5-1           SECTION 8.  Subsection (b), Section 58.016, Agriculture Code,
 5-2     is amended to read as follows:
 5-3           (b)  On or before August 1 of each year, the administrator
 5-4     shall file with the board the proposed annual budgets for the young
 5-5     farmer loan guarantee program under Subchapter E [Chapter 253], the
 5-6     farm and ranch finance program under Chapter 59, and the programs
 5-7     administered by the board under this chapter for the succeeding
 5-8     fiscal year.  If there is no administrator, the commissioner shall
 5-9     assume the duties of the administrator in connection with
5-10     preparation of the budget.  The budget must set forth the general
5-11     categories of expected expenditures out of revenues and income of
5-12     the funds administered by the authority and the amount on account
5-13     of each.  On or before September 1 of each year, the board shall
5-14     consider the proposed annual budget and may approve it or amend it.
5-15     Copies of the annual budget certified by the chairman of the board
5-16     shall be promptly filed with the governor and the legislature.  The
5-17     annual budget is not effective until it is filed.  If for any
5-18     reason the authority does not adopt an annual budget before
5-19     September 2, no expenditures may be made from the funds until the
5-20     board approves the annual budget.  The authority may adopt an
5-21     amended annual budget for the current fiscal year, but the amended
5-22     annual budget may not supersede a prior budget until it is filed
5-23     with the governor and the legislature.
5-24           SECTION 9.  Section 58.0172, Agriculture Code, is amended by
5-25     adding Subsection (e) to read as follows:
5-26           (e)  A lending institution is not ineligible to participate
5-27     in the programs administered by the board solely because a member
5-28     of the board is also an officer, director, or employee of the
5-29     lending institution, provided that a board member shall recuse
5-30     himself or herself from any action taken by the board on an
5-31     application involving a lending institution by which the board
5-32     member is employed or for which the board member serves as an
5-33     officer or director.
5-34           SECTION 10.  Section 58.021, Agriculture Code, is amended to
5-35     read as follows:
5-36           Sec. 58.021.  Purposes of Authority.  (a)  In order to
5-37     promote the expansion, development, and diversification of
5-38     production, processing, marketing, and export of Texas agricultural
5-39     products and to promote the development of agriculture-related
5-40     rural businesses, the authority shall design and implement programs
5-41     to provide financial assistance to eligible agricultural
5-42     businesses, including programs:
5-43                 (1)  to make or acquire loans to eligible agricultural
5-44     businesses;
5-45                 (2)  to make or acquire loans to lenders to enable
5-46     those lenders to make loans to eligible agricultural businesses;
5-47                 (3)  to insure, coinsure, and reinsure, in whole or in
5-48     part, loans to eligible agricultural businesses;
5-49                 (4)  to guarantee, in whole or in part, loans to
5-50     eligible agricultural businesses; and
5-51                 (5)  to administer or participate in programs
5-52     established by another person to provide financial assistance to
5-53     eligible agricultural businesses.
5-54           (b)  The authority's programs shall be designed and
5-55     implemented to provide financial assistance to enable eligible
5-56     agricultural businesses to finance or refinance costs incurred in
5-57     connection with the development, increase, improvement, or
5-58     expansion of production, processing, marketing, or export of Texas
5-59     agricultural products and for the development of rural
5-60     agriculture-related businesses, including but not limited to the
5-61     costs of:
5-62                 (1)  acquisition of and improvements to land or
5-63     interests in land;
5-64                 (2)  acquisition, construction, rehabilitation,
5-65     operation, and maintenance of buildings, improvements, and
5-66     structures;
5-67                 (3)  site preparations;
5-68                 (4)  architectural, engineering, legal, and related
5-69     services;
 6-1                 (5)  acquisition, installation, rehabilitation,
 6-2     operation, and maintenance of machinery, equipment, furnishings,
 6-3     and facilities;
 6-4                 (6)  acquisition, processing, or distribution of
 6-5     inventory;
 6-6                 (7)  research and development;
 6-7                 (8)  financing fees and charges;
 6-8                 (9)  interest during acquisition or construction;
 6-9                 (10)  necessary reserve fund;
6-10                 (11)  acquisition of licenses, permits, and approvals
6-11     from any governmental entity; [and]
6-12                 (12)  pre-export and export expenses; and
6-13                 (13)  insect eradication and suppression programs.
6-14           (c)  Except as otherwise provided by this subsection, the
6-15     maximum aggregate amount of loans made to or guaranteed, insured,
6-16     coinsured, or reinsured under this subchapter for a single eligible
6-17     agricultural business by the authority from funds provided by the
6-18     authority is $2 million.  The authority may make, guarantee,
6-19     insure, coinsure, or reinsure a loan for a single eligible
6-20     agricultural business that results in an aggregate amount exceeding
6-21     $2 million, but not exceeding $5 million, if the action is approved
6-22     by a two-thirds vote of the membership of the board.  The authority
6-23     may make, guarantee, participate in, insure, coinsure, or reinsure
6-24     loans to the entity designated to carry out boll weevil eradication
6-25     in accordance with Section 74.1011 in an amount approved by the
6-26     board to enable that entity to execute Subchapter D, Chapter 74.
6-27     The authority may issue an obligation on behalf of, or make,
6-28     guarantee, participate in, insure, coinsure, or reinsure loans to,
6-29     a state agency or an institution of higher education for the
6-30     purpose of the development, improvement, or expansion of an
6-31     agricultural product or an agriculture-related business in an
6-32     amount approved by the board.
6-33           (d) [(e)]  Notwithstanding any other provision of this
6-34     section, the authority may also design and implement programs to
6-35     further rural economic development.
6-36           SECTION 11.  Subsection (a), Section 58.023, Agriculture
6-37     Code, is amended to read as follows:
6-38           (a)  The board shall adopt rules to establish criteria for
6-39     determining which eligible agricultural businesses may participate
6-40     in programs that may be established by the board.  The board's
6-41     rules must state that the policy of the authority is to provide
6-42     programs for providing financial assistance to eligible
6-43     agricultural businesses [that otherwise would not be made and] that
6-44     the board considers to present a reasonable risk and have a
6-45     sufficient likelihood of repayment.  In establishing criteria for
6-46     participation, the board shall give priority to eligible
6-47     agricultural businesses that include producers of Texas
6-48     agricultural products in the ownership of the businesses.  The
6-49     board shall adopt collateral or security requirements to ensure the
6-50     full repayment of that financial assistance and the solvency of any
6-51     program implemented under this chapter.  The board shall approve
6-52     any and all extensions of that financial assistance under this
6-53     chapter, provided that the board may delegate this approval
6-54     authority to the administrator or the commissioner.
6-55           SECTION 12.  Subchapter C, Chapter 58, Agriculture Code, is
6-56     amended by adding Section 58.026 to read as follows:
6-57           Sec. 58.026.  LIMITATION OF LIABILTY FOR CERTAIN RECREATIONAL
6-58     ACTIVITIES.  The provisions of Chapter 75, Civil Practice and
6-59     Remedies Code, applies only to those recreational activities which
6-60     are funded under this chapter and enumerated in Section 75.001(3),
6-61     Civil Practice and Remedies Code.
6-62           SECTION 13.  Chapter 58, Agriculture Code, is amended by
6-63     adding Subchapter E to read as follows:
6-64             SUBCHAPTER E.  YOUNG FARMER LOAN GUARANTEE PROGRAM
6-65           Sec. 58.051.  DEFINITIONS.  In this subchapter:
6-66                 (1)  "Commercial lender" means a commercial lending
6-67     institution chartered by the state or federal government, including
6-68     a savings and loan association, a credit union, or a Farm Credit
6-69     System institution.
 7-1                 (2)  "Eligible applicant" means a person applying for a
 7-2     loan guarantee under this subchapter who:
 7-3                       (A)  is at least 18 years of age but younger than
 7-4     40 years of age; and
 7-5                       (B)  complies with the application procedures
 7-6     prescribed by this subchapter.
 7-7                 (3)  "Plan" means the documentation submitted to the
 7-8     lender in support of the application.
 7-9           Sec. 58.052.  YOUNG FARMER LOAN GUARANTEE PROGRAM.  (a)  The
7-10     board shall administer a loan guarantee program that benefits
7-11     eligible applicants who desire to establish or enhance a farming or
7-12     ranching operation or an agriculture-related business.
7-13           (b)  The board, either directly or through authority
7-14     delegated to the commissioner, may grant to an eligible applicant a
7-15     guarantee of a loan made by a commercial lender for the purposes
7-16     prescribed by this subchapter.  The guarantee amount may not exceed
7-17     the lesser of $250,000 or 90 percent of the loan amount.
7-18           (c)  The aggregate amount guaranteed under this subchapter
7-19     may not exceed twice the amount contained in the young farmer loan
7-20     guarantee account within the Texas agricultural fund.
7-21           (d)  A loan guarantee recipient may use proceeds from the
7-22     loan for working capital for operating a farm or ranch, including
7-23     the lease of facilities and the purchase of machinery and
7-24     equipment, or for any agriculture-related business purpose,
7-25     including the purchase of real estate, as identified in the plan.
7-26     A loan guarantee is voidable by the board if the recipient uses
7-27     loan proceeds for any purposes other than those identified in the
7-28     plan.  The board shall include this restriction as a condition in
7-29     each loan guarantee instrument executed under this subchapter.
7-30           (e)  The board shall adopt an agreement, to be used between a
7-31     commercial lender and an approved eligible applicant, under which
7-32     the program provides a payment from money in the young farmer loan
7-33     guarantee account for the purpose of providing a reduced interest
7-34     rate on a loan guaranteed to a borrower under this subchapter.  The
7-35     board shall adopt rules to implement this subsection.  The maximum
7-36     rate reduction under this subsection shall not exceed three
7-37     percentage points.
7-38           Sec. 58.053.  APPLICATION FOR LOAN GUARANTEE.  (a)  An
7-39     eligible applicant's documentation shall include the following for
7-40     the board's review:
7-41                 (1)  the plan, as submitted to the lender, for the
7-42     applicant's proposed farm or ranch operation or agriculture-related
7-43     business to be financed that includes a budget for the proposed
7-44     operation;
7-45                 (2)  a completed application for a loan from a
7-46     commercial lender on which an eligible applicant has indicated how
7-47     the loan proceeds will be used to implement the applicant's plan;
7-48     and
7-49                 (3)  the signed statement of a loan officer of the
7-50     commercial lender that a loan guarantee is required for approval of
7-51     the loan application.
7-52           (b)  The board may charge a reasonable application fee for
7-53     processing an application filed under this section.
7-54           Sec. 58.054.  BOARD CONSIDERATION OF LOAN GUARANTEE
7-55     APPLICATION.  After reviewing the material submitted under Section
7-56     58.053, the board shall consider the following factors in deciding
7-57     whether to approve an application for a loan guarantee:
7-58                 (1)  the anticipated benefits from granting a loan
7-59     guarantee to the applicant, including both potential job creation
7-60     and commercial benefits to the agricultural industry;
7-61                 (2)  the applicant's qualifications;
7-62                 (3)  the feasibility of the applicant's plan; and
7-63                 (4)  other repayment sources available to the
7-64     applicant.
7-65           Sec. 58.055.  DEFAULT.  If the recipient of a loan guarantee
7-66     defaults on a loan that is guaranteed under this subchapter and the
7-67     authority is required to honor its guarantee, the authority,
7-68     through its representative, may bring suit against the defaulting
7-69     party.  Any suit brought by the authority under this section may
 8-1     have venue in Travis County.
 8-2           Sec. 58.056.  MONEY FOR LOAN GUARANTEE PROGRAM.  The
 8-3     authority may accept gifts and grants of money from the federal
 8-4     government, local governments, private corporations, or other
 8-5     persons for use in the young farmer loan guarantee program.  The
 8-6     legislature may appropriate money for the program.
 8-7           Sec. 58.057.  YOUNG FARMER LOAN GUARANTEE ACCOUNT.  (a)  The
 8-8     young farmer loan guarantee account is an account in the Texas
 8-9     agricultural fund.  Money in the account may be used only by the
8-10     authority for the purpose of making or administering loan
8-11     guarantees under this subchapter.
8-12           (b)  The account consists of funds and transfers made to the
8-13     account, grants and donations made for the purposes of the young
8-14     farmer loan guarantee program, income earned on money in the
8-15     account, and any other money received under this subchapter.
8-16     Notwithstanding Section 404.071, Government Code, income and
8-17     interest earned on money in the account shall be deposited to the
8-18     credit of the account.  The account is exempt from the application
8-19     of Section 403.095, Government Code.
8-20           (c)  The board may spend not more than $100,000 during each
8-21     fiscal year from income earned on the account and from application
8-22     fees collected by the authority under Section 58.053 to pay the
8-23     costs of administering the program.
8-24           (d)  The board shall attempt to administer the fund in a
8-25     manner that makes private donations to the fund an eligible
8-26     itemized deduction for federal income taxation purposes.
8-27           (e)  The board has the same authority in administering the
8-28     young farmer loan guarantee program as it has in administering
8-29     other programs established by this chapter.
8-30           SECTION 14.  Subsection (b), Section 502.174, Transportation
8-31     Code, is amended to read as follows:
8-32           (b)  The county assessor-collector shall send an assessment
8-33     collected under this section to the comptroller, at the time and in
8-34     the manner prescribed by the Texas Agricultural Finance Authority,
8-35     for deposit in the Texas agricultural fund [general revenue fund]
8-36     to the credit of the young farmer loan guarantee account.
8-37           SECTION 15.  Sections 44.004, 44.005, 44.006, and 44.011 and
8-38     Chapter 253, Agriculture Code, are repealed.
8-39           SECTION 16.  The importance of this legislation and the
8-40     crowded condition of the calendars in both houses create an
8-41     emergency and an imperative public necessity that the
8-42     constitutional rule requiring bills to be read on three several
8-43     days in each house be suspended, and this rule is hereby suspended,
8-44     and that this Act take effect and be in force from and after its
8-45     passage, and it is so enacted.
8-46                                  * * * * *