77R7912 LJR-F
By Counts H.B. No. 1596
Substitute the following for H.B. No. 1596:
By Brown of Brazos C.S.H.B. No. 1596
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to programs to promote agriculture and economic
1-3 development in rural areas of this state.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subdivisions (1) and (2), Section 44.001,
1-6 Agriculture Code, are amended to read as follows:
1-7 (1) "Eligible lending institution" means a financial
1-8 institution that makes commercial loans, is either a depository of
1-9 state funds or an institution of the Farm Credit System
1-10 headquartered in this state, and agrees to participate in the
1-11 linked deposit program and to provide collateral equal to the
1-12 amount of linked deposits placed with it.
1-13 (2) "Eligible borrower" means a person who is in the
1-14 business or entering the business of:
1-15 (A) processing and marketing agricultural crops
1-16 in this state;
1-17 (B) producing alternative agricultural crops in
1-18 this state;
1-19 (C) producing agricultural crops in this state
1-20 the production of which has declined because of natural disasters;
1-21 [or]
1-22 (D) producing agricultural crops in this state
1-23 using water conservation equipment for agricultural production
1-24 purposes; or
2-1 (E) providing nonagricultural goods or services
2-2 that provide an economic benefit to a municipality or county in a
2-3 rural area.
2-4 SECTION 2. Subsections (a) and (j), Section 44.007,
2-5 Agricultural Code, are amended to read as follows:
2-6 (a) The board shall establish a linked deposit program to:
2-7 (1) encourage commercial lending for the enhanced
2-8 production, processing, and marketing of certain agricultural
2-9 crops;
2-10 (2) encourage the development or expansion of
2-11 businesses in rural areas of this state; and
2-12 (3) finance [for the financing of] water conservation
2-13 projects or equipment for agricultural production purposes.
2-14 (j) If a lending institution holding linked deposits ceases
2-15 to be either a state depository or a Farm Credit System institution
2-16 headquartered in this state, the comptroller may withdraw the
2-17 linked deposits.
2-18 SECTION 3. Subsections (a) and (b), Section 44.010,
2-19 Agriculture Code, are amended to read as follows:
2-20 (a) At any one time, not more than $30 [$25] million, [of
2-21 which] $10 million of which may [only] be used only to finance
2-22 water conservation projects and $5 million of which may be used
2-23 only to finance the economic development of businesses in rural
2-24 areas, may be placed in linked deposits under this chapter.
2-25 (b) The maximum amount of a loan under this chapter to
2-26 process and market Texas agricultural crops is $500,000. The
2-27 maximum amount of a loan under this chapter to produce alternative
3-1 agricultural crops in this state is $250,000. The maximum amount
3-2 of a loan under this chapter to finance water conservation projects
3-3 or equipment for agricultural production purposes is $250,000. The
3-4 maximum amount of a loan under this chapter to finance production
3-5 of a crop declared eligible for natural disaster relief, as defined
3-6 by board rule, is $250,000. The maximum amount of a loan under
3-7 this chapter to finance a business in a rural area is $250,000.
3-8 SECTION 4. Subdivision (1), Section 58.002, Agriculture
3-9 Code, is amended to read as follows:
3-10 (1) "Agricultural business" means:
3-11 (A) a business that is or proposes to be engaged
3-12 in producing, processing, marketing, or exporting an agricultural
3-13 product;
3-14 (B) an eligible applicant as defined in
3-15 Subchapter E;
3-16 (C) the entity designated to carry out boll
3-17 weevil eradication in accordance with Section 74.1011;
3-18 (D) any agriculture-related business in rural
3-19 areas of Texas including a business that provides recreational
3-20 activities, including hiking, fishing, hunting, or any other
3-21 activity associated with the enjoyment of nature or the outdoors on
3-22 agricultural land; [or]
3-23 (E) a state agency or an institution of higher
3-24 education that is engaged in producing an agricultural product; or
3-25 (F) any other business in a rural area of this
3-26 state.
3-27 SECTION 5. Subchapter A, Chapter 58, Agriculture Code, is
4-1 amended by adding Section 58.003 to read as follows:
4-2 Sec. 58.003. VENUE. A suit filed by or on behalf of the
4-3 authority under this chapter may be brought in Travis County.
4-4 SECTION 6. Subsection (b), Section 58.014, Agriculture Code,
4-5 is amended to read as follows:
4-6 (b) A majority of the voting membership of the board
4-7 constitutes a quorum. The board shall act by adopting resolutions.
4-8 Except as otherwise provided by Sections 58.021(c) and 58.0211(a),
4-9 the [The] affirmative vote of a majority of the [at least three]
4-10 directors present is necessary to adopt a resolution.
4-11 SECTION 7. Subsections (a), (c), and (d), Section 58.021,
4-12 Agriculture Code, are amended to read as follows:
4-13 (a) In order to promote the expansion, development, and
4-14 diversification of production, processing, marketing, and export of
4-15 Texas agricultural products and to promote the development of
4-16 [agriculture-related] rural businesses, the authority shall design
4-17 and implement programs to provide financial assistance to eligible
4-18 agricultural businesses, including programs:
4-19 (1) to make or acquire loans to eligible agricultural
4-20 businesses;
4-21 (2) to make or acquire loans to lenders to enable
4-22 those lenders to make loans to eligible agricultural businesses;
4-23 (3) to insure, coinsure, and reinsure, in whole or in
4-24 part, loans to eligible agricultural businesses;
4-25 (4) to guarantee, in whole or in part, loans to
4-26 eligible agricultural businesses; and
4-27 (5) to administer or participate in programs
5-1 established by another person to provide financial assistance to
5-2 eligible agricultural businesses.
5-3 (c) Except as otherwise provided by this subsection, the
5-4 maximum aggregate amount of loans made to or guaranteed, insured,
5-5 coinsured, or reinsured under this subchapter for a single eligible
5-6 agricultural business by the authority from funds provided by the
5-7 authority is $2 million. The authority may make, guarantee,
5-8 insure, coinsure, or reinsure a loan for a single eligible
5-9 agricultural business that results in an aggregate amount exceeding
5-10 $2 million, but not exceeding $5 million, if the action is approved
5-11 by a two-thirds vote of the [membership of the] board members
5-12 present. The authority may make, guarantee, participate in,
5-13 insure, coinsure, or reinsure loans to the entity designated to
5-14 carry out boll weevil eradication in accordance with Section
5-15 74.1011 in an amount approved by the board to enable that entity to
5-16 execute Subchapter D, Chapter 74. The authority may issue an
5-17 obligation on behalf of, or make, guarantee, participate in,
5-18 insure, coinsure, or reinsure loans to, a state agency or an
5-19 institution of higher education for the purpose of the development,
5-20 improvement, or expansion of an agricultural product or an
5-21 agriculture-related business in an amount approved by the board.
5-22 The authority may make, guarantee, participate in, insure,
5-23 coinsure, or reinsure loans to an eligible agricultural business
5-24 from the proceeds of revenue bonds issued in accordance with
5-25 Section 58.033 in an amount approved by the board.
5-26 (d) Notwithstanding any other provision of this section, the
5-27 authority may also design and implement programs to:
6-1 (1) further rural economic development; and
6-2 (2) reduce the amount of interest paid on loans
6-3 approved by the authority.
6-4 SECTION 8. Section 58.023, Agriculture Code, is amended by
6-5 adding Subsection (d) to read as follows:
6-6 (d) The board by rule shall adopt an agreement to be used
6-7 between a lender and an approved applicant under which the
6-8 authority makes a payment from the Texas agricultural fund for the
6-9 purpose of providing a reduced interest rate on a loan guaranteed
6-10 to a borrower under this subchapter. The board shall adopt rules
6-11 to implement this subsection.
6-12 SECTION 9. Subsection (a), Section 58.033, Agriculture Code,
6-13 is amended to read as follows:
6-14 (a) In addition to the authority to issue general obligation
6-15 bonds, the authority may issue not more than $500 million of
6-16 revenue bonds for the purpose of providing money to carry out any
6-17 purpose of the authority under this chapter. The authority shall
6-18 establish and maintain funds and accounts, in accordance with
6-19 Subsection (d) of this section, that the board considers necessary
6-20 to ensure payment of the bonds and to provide for the use of the
6-21 bond proceeds and the implementation of the program financed.
6-22 Proceeds of revenue bonds shall be applied in accordance with the
6-23 resolution authorizing those bonds:
6-24 (1) to provide financial assistance:
6-25 (A) to eligible agricultural businesses; and
6-26 (B) for programs designed to further rural
6-27 economic development;
7-1 (2) to pay costs of issuance of those bonds and the
7-2 administration of any financial assistance program established by
7-3 the authority; and
7-4 (3) together with any other available funds, to pay
7-5 the principal of or interest on or to discharge or redeem, in whole
7-6 or in part, any outstanding bonds issued by the authority.
7-7 SECTION 10. Subsections (a) and (b), Section 58.057,
7-8 Agriculture Code, are amended to read as follows:
7-9 (a) The young farmer loan guarantee account is an account in
7-10 the Texas agricultural fund. Money in this [the] account may be
7-11 used [only by the authority] for purposes authorized by [the
7-12 purpose of making or administering loan guarantees under] this
7-13 subchapter.
7-14 (b) The account consists of funds and transfers made to the
7-15 account, grants and donations made for the purposes of the young
7-16 farmer loan guarantee program, income earned on money in the
7-17 account, and any other money received under this subchapter.
7-18 Notwithstanding Section 404.071, Government Code, income and
7-19 interest earned on money in the account shall be deposited to the
7-20 credit of the account. At the end of each state fiscal year the
7-21 authority shall transfer to the general credit of the Texas
7-22 agricultural fund any interest earned on the account that remains
7-23 after payment of any administrative expenses of the program. The
7-24 account is exempt from the application of Section 403.095,
7-25 Government Code.
7-26 SECTION 11. Section 59.022, Agriculture Code, is amended by
7-27 adding Subsection (d) to read as follows:
8-1 (d) The board shall adopt rules governing loan guarantees
8-2 provided to lenders by the board in an amount necessary for the
8-3 lender to have a performing loan.
8-4 SECTION 12. Section 59.023, Agriculture Code, is amended to
8-5 read as follows:
8-6 Sec. 59.023. POWERS OF BOARD. The board has the power
8-7 necessary to accomplish the purposes and carry out the programs
8-8 provided by this chapter, including the power:
8-9 (1) to adopt and enforce bylaws, rules, and procedures
8-10 necessary to carry out this chapter;
8-11 (2) to establish, charge, and collect a fee, charge,
8-12 or penalty in connection with a program, service, or activity
8-13 provided by the board under this chapter;
8-14 (3) to issue bonds, provide for and secure the payment
8-15 of the bonds, and provide for the rights of the owners of the
8-16 bonds, in the manner and to the extent permitted by this chapter;
8-17 (4) to purchase, hold, cancel, or resell or otherwise
8-18 dispose of its bonds, subject to any restrictions and any
8-19 resolution authorizing the issuance of its bonds;
8-20 (5) to own, rent, lease, or otherwise acquire, accept,
8-21 or hold any interest in real, personal, or mixed property, by
8-22 purchase, exchange, gift, assignment, transfer, foreclosure,
8-23 mortgage, sale, lease, or otherwise;
8-24 (6) to hold, manage, operate, or improve real,
8-25 personal, or mixed property;
8-26 (7) to sell, lease, encumber, mortgage, exchange,
8-27 donate, convey, or otherwise dispose of any of its property or any
9-1 interest in its property, deed of trust, or mortgage lien owned by
9-2 it, under its control or custody, or in its possession and to
9-3 release or relinquish any right, title, claim, lien, interest,
9-4 easement, or demand, including any equity or right of redemption in
9-5 property foreclosed by it, by public or private sale, with or
9-6 without public bidding;
9-7 (8) to lease or rent any improvement, land, or
9-8 facility from any person;
9-9 (9) to make a secured or unsecured loan to provide
9-10 financial assistance as provided by this chapter, including the
9-11 refunding of an outstanding obligation, mortgage, or advance used
9-12 for those purposes, and to charge and collect interest on those
9-13 loans for loan payments and on terms and conditions the board
9-14 considers advisable that are not in conflict with this chapter;
9-15 (10) to purchase or acquire, sell, discount, assign,
9-16 negotiate, or otherwise dispose of notes or other evidence of
9-17 indebtedness of eligible applicants as the board determines or
9-18 portions or portfolios of or participations in those evidences of
9-19 indebtedness; [and]
9-20 (11) to sell and guarantee securities, whether taxable
9-21 or tax exempt under federal law, in primary and secondary markets;
9-22 and
9-23 (12) to provide to a lender a loan guarantee for the
9-24 purchase of real property by an eligible applicant under Section
9-25 59.024.
9-26 SECTION 13. Section 59.025, Agriculture Code, is amended to
9-27 read as follows:
10-1 Sec. 59.025. MAXIMUM AMOUNT OF LOAN OR GUARANTEE. (a) A
10-2 loan under this chapter may not exceed the lesser of:
10-3 (1) $250,000; or
10-4 (2) an amount equal to 95 percent of the lesser of the
10-5 purchase price of the land or the land's appraised value under
10-6 Section 59.028.
10-7 (b) The board may [shall] provide a guarantee of not more
10-8 than 90 percent of a loan approved under this section [by rule for
10-9 the period during which and the manner in which the down payment
10-10 provided for under Subsection (a) of this section shall be paid to
10-11 the board].
10-12 [(c) If the sale is not consummated, the board shall refund
10-13 the down payment to the borrower.]
10-14 SECTION 14. This Act takes effect immediately if it receives
10-15 a vote of two-thirds of all the members elected to each house, as
10-16 provided by Section 39, Article III, Texas Constitution. If this
10-17 Act does not receive the vote necessary for immediate effect, this
10-18 Act takes effect September 1, 2001.