Relating to the Texas Agricultural Finance Authority and certain programs administered by the authority, the official text

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

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 10. 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 11. The heading to Subchapter G, Chapter 58,

Agriculture Code, is amended to read as follows:

SUBCHAPTER G. AGRICULTURE [YOUNG FARMER] GRANT PROGRAM

SECTION 12. 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 13. 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 14. 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 15. 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 16. 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 depredating

animals.

(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 depredating animals.

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 17. 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 18. 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 19. 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.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 43 was passed by the House on April

23, 2025, by the following vote: Yeas 132, Nays 16, 1 present, not

voting; and that the House concurred in Senate amendments to H.B.

No. 43 on May 28, 2025, by the following vote: Yeas 102, Nays 35, 1

present, not voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 43 was passed by the Senate, with

amendments, on May 25, 2025, by the following vote: Yeas 30, Nays

1.

______________________________

Secretary of the Senate

APPROVED: __________________

Date

__________________

Governor