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A BILL TO BE ENTITLED
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AN ACT
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relating to the creation of a fuel ethanol and biodiesel producer |
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loan guarantee program. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 58, Agriculture Code, is amended by |
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adding Subchapter F to read as follows: |
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SUBCHAPTER F. FUEL ETHANOL AND BIODIESEL PRODUCER LOAN GUARANTEE |
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PROGRAM |
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Sec. 58.071. DEFINITIONS. In this subchapter: |
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(1) "Biodiesel" has the meaning assigned by Section |
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16.001. |
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(2) "Commercial lender" means a commercial lending |
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institution chartered by the state or federal government, including |
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a savings and loan association, a credit union, or a Farm Credit |
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System institution. |
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(3) "Eligible applicant" means a person applying for a |
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loan guarantee under this subchapter who: |
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(A) meets the eligibility requirements |
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established by department rule; and |
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(B) complies with the application procedures |
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prescribed by this subchapter. |
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(4) "Fuel ethanol" has the meaning assigned by Section |
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16.001. |
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(5) "Plan" means the documentation submitted to the |
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lender in support of the application. |
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Sec. 58.072. FUEL ETHANOL AND BIODIESEL PRODUCER LOAN |
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GUARANTEE PROGRAM. (a) The board shall administer a loan guarantee |
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program that benefits eligible applicants who produce fuel ethanol |
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or biodiesel. |
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(b) The board, either directly or through authority |
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delegated to the commissioner, may grant to an eligible applicant a |
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guarantee of a loan made by a commercial lender for the purposes |
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prescribed by this subchapter. The guarantee amount may not exceed |
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the lesser of $250,000 or 90 percent of the loan amount. |
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(c) The aggregate amount guaranteed under this subchapter |
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may not exceed twice the amount contained in the fuel ethanol and |
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biodiesel producer loan guarantee account in the Texas agricultural |
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fund. |
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(d) A loan guarantee recipient may use proceeds from the |
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loan for working capital for an operation related to the production |
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of fuel ethanol or biodiesel, including the lease of facilities and |
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the purchase of machinery and equipment, or for any other business |
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purpose, including the purchase of real estate, as identified in |
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the plan. A loan guarantee is voidable by the board if the |
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recipient uses loan proceeds for any purpose other than those |
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identified in the plan. The board shall include this restriction as |
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a condition in each loan guarantee instrument executed under this |
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subchapter. |
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(e) The board shall adopt an agreement, to be used between a |
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commercial lender and an approved eligible applicant, under which |
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the program provides a payment from money in the fuel ethanol and |
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biodiesel producer loan guarantee account for the purpose of |
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providing a reduced interest rate on a loan guaranteed to a borrower |
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under this subchapter. The board shall adopt rules to implement |
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this subsection. The maximum rate reduction under this subsection |
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may not exceed three percentage points. |
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Sec. 58.073. APPLICATION FOR LOAN GUARANTEE. (a) An |
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eligible applicant's documentation must include the following for |
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the board's review: |
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(1) the plan, as submitted to the lender, for the |
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applicant's proposed fuel ethanol or biodiesel production |
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operation to be financed that includes a budget for the proposed |
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operation; |
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(2) a completed application for a loan from a |
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commercial lender on which an eligible applicant has indicated how |
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the loan proceeds will be used to implement the applicant's plan; |
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and |
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(3) the signed statement of a loan officer of the |
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commercial lender that a loan guarantee is required for approval of |
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the loan application. |
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(b) The board may charge a reasonable fee for processing an |
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application filed under this section. |
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Sec. 58.074. BOARD CONSIDERATION OF LOAN GUARANTEE |
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APPLICATION. After reviewing the material submitted under Section |
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58.073, the board shall consider the following factors in deciding |
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whether to approve an application for a loan guarantee: |
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(1) the anticipated benefits from granting a loan |
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guarantee to the applicant, including both potential job creation |
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and commercial benefits to the fuel ethanol and biodiesel |
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industries; |
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(2) the applicant's qualifications; |
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(3) the feasibility of the applicant's plan; and |
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(4) other repayment sources available to the |
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applicant. |
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Sec. 58.075. DEFAULT. If the recipient of a loan guarantee |
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defaults on a loan that is guaranteed under this subchapter and the |
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authority is required to honor its guarantee, the authority, |
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through its representative, may bring suit against the defaulting |
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party. A suit brought by the authority under this section may have |
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venue in Travis County. |
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Sec. 58.076. MONEY FOR LOAN GUARANTEE PROGRAM. The |
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authority may accept gifts and grants of money from the federal |
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government, local governments, private corporations, or other |
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persons for use in the fuel ethanol and biodiesel producer loan |
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guarantee program. The legislature may appropriate money for the |
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program. |
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Sec. 58.077. FUEL ETHANOL AND BIODIESEL PRODUCER LOAN |
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GUARANTEE ACCOUNT. (a) The fuel ethanol and biodiesel producer |
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loan guarantee account is an account in the Texas agricultural |
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fund. Money in the account may be used for purposes authorized by |
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this subchapter. |
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(b) The account consists of funds and transfers made to the |
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account, grants and donations made for the purposes of the fuel |
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ethanol and biodiesel producer loan guarantee program, income |
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earned on money in the account, and any other money received under |
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this subchapter. Notwithstanding Section 404.071, Government |
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Code, income and interest earned on money in the account shall be |
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deposited to the credit of the account. At the end of each state |
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fiscal year the authority shall transfer to the general credit of |
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the Texas agricultural fund any interest earned on the account that |
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remains after payment of any administrative expenses of the |
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program. The account is exempt from the application of Section |
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403.095, Government Code. |
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(c) The board may spend not more than $100,000 during each |
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state fiscal year from income earned on the account and from fees |
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collected by the authority under Section 58.073 to pay the costs of |
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administering the program. |
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(d) The board shall attempt to administer the fund in a |
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manner that makes private donations to the fund an eligible |
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itemized deduction for federal income taxation purposes. |
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(e) The board has the same authority in administering the |
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fuel ethanol and biodiesel producer loan guarantee program as it |
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has in administering other programs established by this chapter. |
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SECTION 2. This Act takes effect September 1, 2009. |