bill creating the Texas Small Farm Recovery Microloan Program

The text as introduced · 412 words

By: Gutierrez
S.B. No. 2875

A BILL TO BE ENTITLED

AN ACT

relating to the creation of the Texas Small Farm Recovery Microloan

Progam.

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

SECTION 1. Chapter 12, Texas Agriculture Code, is amended

by adding new sections 12.101 to read as follows:

Sec. 12.101. DEFINITIONS. (a)In this section:

(1) "Small Farm" means an agricultural operation

located in Texas with annual farm revenue not exceeding $500,000.

(2) "Economic Hardship" means financial distress due

to an economic downturn, natural disaster, or other qualifying

circumstances as determined by the department.

(b) The Texas Small Farm Recovery Microloan Program

(TSFRMP) is established to provide low-interest microloans to

eligible small farms. The department shall oversee the

implementation and administration of this program.

(c) To qualify for a loan under this section, an applicant

must:

(1) Be the owner or principal operator of a small farm

in Texas;

(2) Demonstrate financial hardship;

(3) Engage in agricultural activities, including but

not limited to crop production and livestock farming; and

(4) Submit a viable business plan detailing the

intended use of funds.

(d) Loan amounts shall range from $5,000 to $50,000. The

interest rate shall not exceed 2 percent fixed annually. The

repayment period shall not exceed five years, with an optional

grace period of six to 12 months. Collateral requirements shall be

flexible and based on available farm assets. Individual loans may

be canceled if the borrower demonstrates an inability to repay due

to unforeseen financial hardship, subject to an approval process.

(e) Loan proceeds may be used for:

(1) The purchase of seeds, fertilizers, and livestock

feed;

(2) Equipment repairs or upgrades;

(3) Covering labor costs and farm operations;

(4) Recovery efforts following natural disasters or

economic emergency; or

(5) Marketing and distribution expansion.

(f) Applicants must submit an application with supporting

documentation, including financial statements and proof of

hardship. The department shall review applications within 30 to 60

days. Approved applicants shall receive funds in a timely manner.

(g) The department shall manage the program in coordination

with financial institutions and nonprofit agricultural

organizations. The program shall offer technical support and

financial literacy training for participants.

SECTION 2. 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.