Bill Raises Farm Grant Ceiling From $20,000 To $500,000

The text as introduced · 1,954 words

89R19779 TYPED

By: Sparks
S.B. No. 2985

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.