Relating to the Rural Economic Development and Investment Program and the Texas economic development fund, the official text

H.B. No. 2765

AN ACT

relating to the Rural Economic Development and Investment Program

and the Texas economic development fund.

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

SECTION 1. Sections 12.0271(a) and (b), Agriculture Code,

are amended to read as follows:

(a) From funds appropriated for that purpose, the

commissioner shall establish and administer a financial assistance

program to encourage private economic development in rural areas.

Financial assistance under the program may be provided only to:

(1) a county with a population of not more than 200,000

[75,000];

(2) a municipality with a population of not more than

50,000; [or]

(3) a public utility owned by a municipality described

by Subdivision (2);

(4) a political subdivision not described by

Subdivision (1) or (2), including a special district, that is

wholly or partly located in a county described by Subdivision (1);

or

(5) an economic development corporation, [or]

community development financial institution, or other lender that

primarily represents a county or municipality described by this

subsection.

(b) Financial assistance under Subsection (a) may be used

only for a project relating to:

(1) the acquisition or development of land, easements,

or rights-of-way;

(2) attracting new private enterprises to the county

or municipality, including:

(A) manufacturing facilities;

(B) freight storage facilities;

(C) distribution warehouse centers; [and]

(D) mineral extraction activities, as defined by

Section 2270.0051, Government Code; and

(E) other nonretail private enterprises;

(3) the construction, extension, or other improvement

of:

(A) water or waste disposal facilities; or

(B) transportation infrastructure; or

(4) any other activity relating to private economic

development that the commissioner determines will encourage

economic and infrastructure development in a rural area.

SECTION 2. Section 12.0272(b), Agriculture Code, is amended

to read as follows:

(b) Money in the Texas economic development fund is

dedicated to and may be appropriated only to the department for the

purposes of administering, continuing, implementing, or

maintaining:

(1) an economic development program originally

established as part of the department's implementation of the State

Small Business Credit Initiative; or [and]

(2) one or more of the department's economic

development programs:

(A) established to encourage the export of Texas

agricultural products or products manufactured in rural Texas; or

(B) established through an agreement with a

federal agency, foreign governmental entity, local governmental

entity, nonprofit organization, private entity, public university,

or state governmental entity to encourage rural economic

development in this state.

SECTION 3. Section 12.0273, Agriculture Code, is amended by

amending Subsections (c), (d), and (e) and adding Subsections (e-1)

and (h) to read as follows:

(c) The term of a loan made using money from the fund may not

exceed 20 years. [A loan must require monthly payments of principal

and interest beginning not later than the 90th day after the date

the loan is made.]

(d) The department shall administer the fund as a perpetual

source of financing for loans and grants under this section. The

department shall use payments of principal and interest to make

additional loans and grants. Subject to Subsection (f), the

department may use any money in the fund to make additional loans

and grants.

(e) The cumulative amount of [loans and] grants to any

person using money from the fund may not exceed $1 million.

(e-1) The maximum aggregate amount of outstanding loans to

any one person at any time using money from the fund may not exceed

$1 million.

(h) The department may adopt rules for the repayment of a

loan or grant made under this section.

SECTION 4. Section 12.0273, Agriculture Code, as amended by

this Act, applies only to a loan or grant made on or after the

effective date of this Act.

SECTION 5. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 2765 was passed by the House on April

25, 2025, by the following vote: Yeas 104, Nays 27, 3 present, not

voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 2765 was passed by the Senate on May

22, 2025, by the following vote: Yeas 25, Nays 6.

______________________________

Secretary of the Senate

APPROVED: _____________________

Date

_____________________

Governor