89R19779 TYPED

By: Kitzman H.B. No. 43

A BILL TO BE ENTITLED

AN ACT

relating to the Texas Agricultural Finance Authority and to a study and report on plant diseases and pest outbreaks.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 58.012, Agriculture Code, is amended by amending Subsections (a) and (b) to read as follows:

(a) The authority is governed by a board of directors composed of the commissioner of agriculture[, the director of the Institute for International Agribusiness Studies at Prairie View A&M University,] and six [nine] members appointed by the commissioner. Members of the board must be appointed in the numbers specified and from the following categories:

(1) one person who is an elected or appointed official of a municipality or county;

(2) two [four] persons who are knowledgeable about agricultural lending practices;

(3) one person who is a representative of agricultural businesses;

(4) one person who is a representative of agriculture related entities, including rural chambers of commerce, foundations, trade associations, institutions of higher education, or other entities involved in agricultural matters; and

(5) one person [two persons] who represents [represent] young farmers and the interests of young farmers.

(b) The appointed members of the board serve staggered terms of two years, with the terms of three [four] members expiring on January 1 of each even-numbered year and the terms of three [five] members expiring on January 1 of each odd-numbered year.

SECTION 2. Section 58.016(d), Agriculture Code, is amended to read as follows:

(d) On or before January 1 of each year, the authority shall prepare a report of its activities, including revenues and expenditures relating to each program administered by the board, for the preceding fiscal year. The report must set forth a complete operating and financial statement. The report must be submitted to the Legislative Budget Board.

SECTION 3. Section 58.021, Agriculture Code, is amended by amending Subsections (a) through (c) to read as follows:

(a) In order to promote the expansion, development, and diversification of production, processing, marketing, and export of Texas agricultural products and to promote the development of rural businesses, the authority shall design and implement programs to provide financial assistance to eligible agricultural businesses, including programs:

(1) to make or acquire loans to eligible agricultural businesses;

(2) to make or acquire loans to lenders to enable those lenders to make loans to eligible agricultural businesses;

(3) to insure, coinsure, and reinsure, in whole or in part, loans to eligible agricultural businesses;

(4) to guarantee, in whole or in part, loans to eligible agricultural businesses; [and]

(5) to administer or participate in programs established by another person to provide financial assistance to eligible agricultural businesses; and

(6) to administer or participate in programs with other state entities that study issues impacting agricultural producers, such as plant diseases and pest outbreaks.

(b) The authority's programs shall be designed and implemented to provide financial assistance to enable eligible agricultural businesses or state agencies to finance or refinance costs incurred in connection with the development, increase, improvement, or expansion of production, processing, marketing, or export of Texas agricultural products and for the development of rural agriculture-related businesses, including but not limited to the costs of:

(1) acquisition of and improvements to land or interests in land;

(2) acquisition, construction, rehabilitation, operation, and maintenance of buildings, improvements, and structures;

(3) site preparations;

(4) architectural, engineering, legal, and related services;

(5) acquisition, installation, rehabilitation, operation, and maintenance of machinery, equipment, furnishings, and facilities;

(6) acquisition, processing, or distribution of inventory;

(7) research and development;

(8) financing fees and charges;

(9) interest during acquisition or construction;

(10) necessary reserve fund;

(11) acquisition of licenses, permits, and approvals from any governmental entity;

(12) pre-export and export expenses; and

(13) insect eradication and suppression programs.

(c) [Except as otherwise provided by this subsection, the maximum aggregate amount of loans made to or guaranteed, insured, coinsured, or reinsured under this subchapter for a single eligible agricultural business by the authority from funds provided by the authority is $2 million. The authority may make, guarantee, insure, coinsure, or reinsure a loan for a single eligible agricultural business that results in an aggregate amount exceeding $2 million, but not exceeding $5 million, if the action is approved by a two-thirds vote of the board members present.] The authority may make, guarantee, participate in, insure, coinsure, or reinsure loans to the entity designated to carry out boll weevil eradication in accordance with Section 74.1011 in an amount approved by the board to enable that entity to execute Subchapter D, Chapter 74. The authority may issue an obligation on behalf of, or make, guarantee, participate in, insure, coinsure, or reinsure loans to, a state agency or an institution of higher education for the purpose of the development, improvement, or expansion of an agricultural product or an agriculture-related business in an amount approved by the board. The authority may make, guarantee, participate in, insure, coinsure, or reinsure loans to an eligible agricultural business from the proceeds of revenue bonds issued in accordance with Section 58.033 in an amount approved by the board.

SECTION 4. The heading to Subchapter F, Chapter 58, Agriculture Code, is amended to read as follows:

SUBCHAPTER F. [YOUNG] FARMER INTEREST RATE REDUCTION PROGRAM

SECTION 5. Section 58.071, Agriculture Code, is amended to read as follows:

Sec. 58.071. DEFINITIONS. In this subchapter:

(1) "Eligible lending institution" means a financial institution that makes commercial loans, is either a depository of state funds or an institution of the Farm Credit System [headquartered in this state,] and agrees to participate in the [young] farmer interest rate reduction program and to provide collateral equal to the amount of linked deposits placed with it.

(2) "Linked deposit" means a time deposit governed by a written deposit agreement between the state and an eligible lending institution that provides:

(A) that the eligible lending institution pay interest on the deposit at a rate that is not less than the greater of:

(i) the current market rate of a United States treasury bill or note of comparable maturity minus three percent; or

(ii) 0.5 percent;

(B) that the state not withdraw any part of the deposit before the expiration of a period set by a written advance notice of the intention to withdraw; and

(C) that the eligible lending institution agree to lend the value of the deposit to an eligible borrower at a maximum rate that is the linked deposit rate plus a maximum of one [four] percent.

SECTION 6. The heading to Section 58.072, Agriculture Code, is amended to read as follows:

Sec. 58.072. [YOUNG] FARMER INTEREST RATE REDUCTION PROGRAM.

SECTION 7. Section 58.072, Agriculture Code, is amended by amending Subsections (a), (b), (d), (e), (k), (m), and (n) to read as follows:

(a) The board shall establish a [young] farmer interest rate reduction program to promote the creation and expansion of agricultural businesses by [young] people in this state.

(b) The board shall accept applications on a biennial basis [To be eligible to participate in the young farmer interest rate reduction program, an applicant must be at least 18 years of age but younger than 46 years of age].

(d) The board shall adopt rules for the loan portion of the [young] farmer interest rate reduction program.

(e) In order to participate in the [young] farmer interest rate reduction program, an eligible lending institution may solicit loan applications from eligible applicants.

(k) If a lending institution holding linked deposits ceases to be either a state depository or a Farm Credit System institution [headquartered in this state,] the comptroller may withdraw the linked deposits.

(m) A lending institution is not ineligible to participate in the [young] farmer interest rate reduction program solely because a member of the board is also an officer, director, or employee of the lending institution, provided that a board member shall recuse himself or herself from any action taken by the board on an application involving a lending institution by which the board member is employed or for which the board member serves as an officer or director.

(n) Linked deposits under the [young] farmer interest rate reduction program shall be funded from the Texas agricultural fund.

SECTION 8. Section 58.075(a), Agriculture Code, is amended to read as follows:

(a) The maximum amount of a loan under this subchapter is $1 million [$500,000].

SECTION 9. The heading to Subchapter G, Chapter 58, Agriculture Code, is amended to read as follows:

SUBCHAPTER G. AGRICULTURE [YOUNG FARMER] GRANT PROGRAM

SECTION 10. Section 58.091(a), Agriculture Code, is amended to read as follows:

(a) The authority shall administer an agriculture [a young farmer] grant program. A grant must be for the purpose of maintaining agricultural businesses, supply chain resiliency, or fostering the creation and expansion of agricultural businesses by people in this state.

SECTION 11. Section 58.092, Agriculture Code, is amended to read as follows:

Sec. 58.092. ELIGIBILITY. To be eligible to receive a grant under this subchapter, a person must:

(1) be an agricultural business or producer [who is at least 18 years of age but younger than 46 years of age]; and

(2) provide matching funds in the amount of not less than ten percent [one dollar for each dollar] of the grant money received.

SECTION 12. Section 58.093, Agriculture Code, is amended to read as follows:

Sec. 58.093. AMOUNT OF GRANTS. A grant under the agriculture [young farmer] grant program may not be less than $5,000 or more than $500,000 [$20,000].

SECTION 13. Section 58.095, Agriculture Code, is amended to read as follows:

Sec. 58.095. FUNDING. The source of funds for the agriculture [young farmer] grant program is the Texas agricultural fund.

SECTION 14. Chapter 58, Agriculture Code, is amended by adding Subchapter H to read as follows:

SUBCHAPTER H. MISCELLANEOUS PROVISIONS

Sec. 58.100. DEFINITIONS. In this subchapter:

(1) "Agency" means the Texas Department of Agriculture.

(2) "Commission" means the Texas Animal Health Commission.

(3) "Extension" means the Texas A&M AgriLife Extension Service.

Sec. 58.101. REPORT ON DISEASES AND PESTS. (a) The agency shall partner with the extension or the commission, as appropriate, to annually conduct a study of each existing or emerging, plant disease and pest outbreaks in this state.

(b) In conducting the study under Subsection (a), the extension or the commission shall determine for each outbreak of a plant disease or pest:

(1) the duration of the outbreak;

(2) how the outbreak was resolved, if applicable; and

(3) any other information the extension service determines is relevant.

(c) Not later than January 1 of each year, the extension shall prepare and publish on the extension's Internet website a report of the previous year's study conducted under this section.

(d) Not later than January 1, 2028, the extension shall prepare and publish on the extension's Internet website a report summarizing each annual report published under Subsection (c) and providing policy recommendations to address outbreaks of plant diseases and pests. The extension shall provide the report to the Legislative Budget Board.

(e) This section expires January 31, 2028.

SECTION 15. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2025.