HB43 - Relating to the Texas Agricultural Finance Authority and certain programs administered by the authority.

      H.B. No. 43         AN ACT   relating to the Texas Agricultural Finance Authority and certain   programs administered by the authority.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 58.002(1), Agriculture Code, is amended   to read as follows:                (1)  "Agricultural business" means:                      (A)  a business that is or proposes to be engaged   in producing, processing, marketing, or exporting an agricultural   product;                      (B)  an eligible applicant as defined in   Subchapter E;                      (C)  the entity designated to carry out boll   weevil eradication in accordance with Section 74.1011;                      (D)  any agriculture-related business in rural   areas of Texas [ including a business that provides recreational   activities, including hiking, fishing, hunting, or any other   activity associated with the enjoyment of nature or the outdoors on   agricultural land ];                      (E)  a state agency or an institution of higher   education that is engaged in producing an agricultural product; or                      (F)   a nonprofit organization whose primary   purpose is to maintain the agricultural use of land [ a business that   holds a permit under Subchapter L, Chapter 43, Parks and Wildlife   Code; or                      [ (G)     any other business in a rural area of this   state ].          SECTION 2.  Sections 58.012(a), (b), (c), and (g),   Agriculture Code, are amended to read as follows:          (a)  The authority is governed by a board of directors   composed of the following nine members:                 (1)   the commissioner of agriculture ;                 (2)     two members appointed by the commissioner who are   knowledgeable about agricultural lending practices; and                 (3)  six [ , the director of the Institute for   International Agribusiness Studies at Prairie View A&M University,   and nine ] members appointed by the governor [ commissioner.   Members of the board must be appointed in the numbers specified and ]   from the following categories:                       (A)  two persons who are representatives [ (1) one   person who is an elected or appointed official of a municipality or   county;                [ (2)     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 ]                       (B)  [ (5) ]  two persons who represent young   farmers or ranchers and the interests of young farmers or ranchers;   and                       (C)     two persons who each operate a family farm or   ranch in this state .          (b)  The appointed members of the board serve staggered terms   of two years, with the terms of four members expiring on January 1   of each even-numbered year and the terms of four [ five ] members   expiring on January 1 of each odd-numbered year.          (c)  Any vacancy occurring in an appointed position on the   board shall be filled [ by the commissioner ] for the unexpired term   in the same manner as provided for the appointment of the position .          (g)  Notwithstanding Subsection (f), age may be considered   by the commissioner in making appointments under Subsection   (a)(3)(B) [ (a)(5) ].          SECTION 3.  Sections 58.016(b) and (d), Agriculture Code,   are amended to read as follows:          (b)  On or before August 1 of each year, the administrator   shall file with the board the proposed annual budgets for the   agricultural [ young farmer ] loan guarantee program under   Subchapter E, the farm and ranch finance program under Chapter 59,   and the programs administered by the board under this chapter for   the succeeding fiscal year. If there is no administrator, the   commissioner shall assume the duties of the administrator in   connection with preparation of the budget. The budget must set   forth the general categories of expected expenditures out of   revenues and income of the funds administered by the authority and   the amount on account of each. On or before September 1 of each   year, the board shall consider the proposed annual budget and may   approve it or amend it. If for any reason the authority does not   adopt an annual budget before September 2, no expenditures may be   made from the funds until the board approves the annual budget. The   authority may adopt an amended annual budget for the current fiscal   year.          (d)  On or before January 1 of each year, the authority shall   prepare and submit to the Legislative Budget Board a report of its   activities for the preceding fiscal year. The report must set forth   a complete operating and financial statement , including the   revenues and expenditures of the authority for each program   administered by the board .          SECTION 4.  Section 58.021, Agriculture Code, is amended by   amending Subsections (c) and (d) and adding Subsection (e) to read   as follows:          (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.          (d)  Notwithstanding any other provision of this section,   the authority may also design and implement programs to:                (1)  further agriculture-related rural economic   development; and                (2)  reduce the amount of interest paid on loans   approved by the authority.           (e)     The authority may provide financial assistance to the   Texas Animal Health Commission, Texas A&M AgriLife Extension   Service, or Texas A&M AgriLife Research to design and implement   programs to control agriculture-related diseases, pests, or   depredating animals under Subchapter H.          SECTION 5.  Section 58.023, Agriculture Code, is amended by   adding Subsection (e) to read as follows:           (e)     The board shall adopt rules to allow a recipient of a   loan or grant under a program administered by the board:                 (1)     to use a portion of the loan or the grant to apply   for other forms of financial assistance, including matching federal   funds; and                 (2)     to use the loan or grant in conjunction with   financial assistance provided through another state or federal   program.          SECTION 6.  The heading to Subchapter F, Chapter 58,   Agriculture Code, is amended to read as follows:   SUBCHAPTER F. [ YOUNG ] FARMER INTEREST RATE REDUCTION PROGRAM          SECTION 7.  Sections 58.071(1) and (2), Agriculture Code,   are amended to read as follows:                (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 8.  The heading to Section 58.072, Agriculture Code,   is amended to read as follows:          Sec. 58.072.  [ YOUNG ] FARMER INTEREST RATE REDUCTION   PROGRAM.          SECTION 9.  Sections 58.072(a), (b), (d), (e), (k), (m), and   (n), Agriculture Code, are amended 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 may disperse a loan under the [ To be eligible   to participate in the young ] farmer interest rate reduction program   quarterly, annually, or biennially, or on another disbursement   schedule, as determined by the board after considering the needs of   the recipient [ , an applicant must be at least 18 years of age but   y [Text truncated for display. 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