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A BILL TO BE ENTITLED
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AN ACT
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relating to the creation of the Texas Small Farm Recovery Microloan |
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Progam. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 12, Texas Agriculture Code, is amended |
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by adding new sections 12.101 to read as follows: |
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Sec. 12.101. DEFINITIONS. (a)In this section: |
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(1) "Small Farm" means an agricultural operation |
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located in Texas with annual farm revenue not exceeding $500,000. |
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(2) "Economic Hardship" means financial distress due |
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to an economic downturn, natural disaster, or other qualifying |
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circumstances as determined by the department. |
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(b) The Texas Small Farm Recovery Microloan Program |
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(TSFRMP) is established to provide low-interest microloans to |
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eligible small farms. The department shall oversee the |
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implementation and administration of this program. |
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(c) To qualify for a loan under this section, an applicant |
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must: |
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(1) Be the owner or principal operator of a small farm |
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in Texas; |
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(2) Demonstrate financial hardship; |
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(3) Engage in agricultural activities, including but |
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not limited to crop production and livestock farming; and |
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(4) Submit a viable business plan detailing the |
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intended use of funds. |
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(d) Loan amounts shall range from $5,000 to $50,000. The |
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interest rate shall not exceed 2 percent fixed annually. The |
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repayment period shall not exceed five years, with an optional |
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grace period of six to 12 months. Collateral requirements shall be |
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flexible and based on available farm assets. Individual loans may |
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be canceled if the borrower demonstrates an inability to repay due |
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to unforeseen financial hardship, subject to an approval process. |
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(e) Loan proceeds may be used for: |
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(1) The purchase of seeds, fertilizers, and livestock |
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feed; |
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(2) Equipment repairs or upgrades; |
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(3) Covering labor costs and farm operations; |
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(4) Recovery efforts following natural disasters or |
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economic emergency; or |
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(5) Marketing and distribution expansion. |
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(f) Applicants must submit an application with supporting |
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documentation, including financial statements and proof of |
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hardship. The department shall review applications within 30 to 60 |
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days. Approved applicants shall receive funds in a timely manner. |
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(g) The department shall manage the program in coordination |
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with financial institutions and nonprofit agricultural |
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organizations. The program shall offer technical support and |
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financial literacy training for participants. |
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SECTION 2. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2025. |