Relating to the Texas Agricultural Finance Authority and certain programs administered by the authority.
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
predators under Subchapter H.
SECTION 5. The heading to Subchapter F, Chapter 58,
Agriculture Code, is amended to read as follows:
SUBCHAPTER F. [YOUNG] FARMER INTEREST RATE REDUCTION PROGRAM
SECTION 6. 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 7. The heading to Section 58.072, Agriculture Code,
is amended to read as follows:
Sec. 58.072. [YOUNG] FARMER INTEREST RATE REDUCTION
PROGRAM.
SECTION 8. 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
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 9. 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 10. The heading to Subchapter G, Chapter 58,
Agriculture Code, is amended to read as follows:
SUBCHAPTER G. AGRICULTURE [YOUNG FARMER] GRANT PROGRAM
SECTION 11. 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, maintaining agricultural uses
of land, or fostering supply chain resiliency or the creation and
expansion of agricultural businesses by [young] people in this
state.
SECTION 12. 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, an applicant [a person] must:
(1) be an agricultural producer or business [who is at
least 18 years of age but younger than 46 years of age]; and
(2) provide matching funds in an [the] amount [of] not
less than 10 percent [one dollar for each dollar] of the grant money
received.
SECTION 13. 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 14. 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 15. Chapter 58, Agriculture Code, is amended by
adding Subchapter H to read as follows:
SUBCHAPTER H. PEST AND DISEASE CONTROL AND DEPREDATION PROGRAM
Sec. 58.101. PEST AND DISEASE CONTROL AND DEPREDATION
PROGRAM. (a) The authority shall provide financial assistance to
the Texas Animal Health Commission, Texas A&M AgriLife Extension
Service, or Texas A&M AgriLife Research to implement programs to
control agriculture-related pests, diseases, or predators.
(b) A program implemented under this section must be
designed to mitigate agricultural losses by an agricultural
business through the control of agriculture-related pests,
diseases, or predators.
Sec. 58.102. APPLICATIONS. The Texas Animal Health
Commission, Texas A&M AgriLife Extension Service, or Texas A&M
AgriLife Research shall submit an application to receive financial
assistance under this subchapter on a form approved by the board or
the board’s designee.
Sec. 58.103. FUNDING. The source of funds for the financial
assistance program under this subchapter is the Texas agricultural
fund.
Sec. 58.104. RULES. The board shall adopt rules to
implement this subchapter, including rules governing the operation
of the program.
SECTION 16. The changes in law made by this Act in the
qualifications of members of the board of directors of the Texas
Agricultural Finance Authority do not affect the entitlement of a
member serving on the board immediately before the effective date
of this Act to continue to carry out the board’s functions for the
remainder of the member’s term. The changes in law apply only to a
member appointed on or after the effective date of this Act. This
Act does not prohibit a person who is a member of the board on the
effective date of this Act from being reappointed to the board if
the person has the qualifications required for a member under
Section 58.012, Agriculture Code, as amended by this Act.
SECTION 17. As soon as is practicable after the effective
date of this Act, the commissioner of agriculture shall adopt rules
to implement Chapter 58, Agriculture Code, as amended by this Act,
including rules to implement the pest and disease control and
depredation program established under Subchapter H, Chapter 58,
Agriculture Code, as added by this Act.
SECTION 18. 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.
