Texas 2011 - 82nd Regular

Texas House Bill HB2996 Compare Versions

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1	1	By: Miles (Senate Sponsor - Estes) H.B. No. 2996
2	2	(In the Senate - Received from the House May 12, 2011;
3	3	May 12, 2011, read first time and referred to Committee on
4	4	Agriculture and Rural Affairs; May 23, 2011, reported favorably by
5	5	the following vote: Yeas 4, Nays 1; May 23, 2011, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to the creation of the Texas Urban Agricultural Innovation
11	11	Authority.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Title 4, Agriculture Code, is amended by adding
14	14	Chapter 60A to read as follows:
15	15	CHAPTER 60A. TEXAS URBAN AGRICULTURAL INNOVATION AUTHORITY
16	16	SUBCHAPTER A. ADMINISTRATION AND POWERS
17	17	Sec. 60A.001. CREATION OF AUTHORITY; PUBLIC PURPOSE.
18	18	(a) The Texas Urban Agricultural Innovation Authority is created
19	19	within the Department of Agriculture as a public authority.
20	20	(b) The authority is created to promote the creation and
21	21	expansion of urban agricultural projects in this state.
22	22	Sec. 60A.002. DEFINITION. In this chapter, "authority"
23	23	means the Texas Urban Agricultural Innovation Authority.
24	24	Sec. 60A.003. BOARD OF DIRECTORS. (a) The authority is
25	25	governed by a board of directors composed of the commissioner and
26	26	eight members appointed by the commissioner. Members of the board
27	27	must be appointed in the numbers specified and from the following
28	28	categories:
29	29	(1) two persons who are elected or appointed officials
30	30	of a municipality with a population of at least 500,000;
31	31	(2) three persons who are knowledgeable about
32	32	agricultural lending practices;
33	33	(3) one person who is a representative of an
34	34	agricultural business, as defined by Section 58.002; and
35	35	(4) two persons who represent urban farmers and the
36	36	interests of urban farmers.
37	37	(b) The appointed members of the board serve staggered terms
38	38	of two years, with the terms of four members expiring on January 1
39	39	of each even-numbered year and the terms of four members expiring on
40	40	January 1 of each odd-numbered year.
41	41	(c) Any vacancy occurring in an appointed position on the
42	42	board shall be filled by the commissioner for the unexpired term.
43	43	(d) A board member is not entitled to compensation or
44	44	reimbursement for serving as a director.
45	45	(e) Appointments to the board shall be made without regard
46	46	to the race, color, disability, sex, religion, age, or national
47	47	origin of the appointees.
48	48	Sec. 60A.004. OFFICERS. (a) The commissioner shall
49	49	designate a member of the board as the chairman of the board to
50	50	serve in that capacity at the pleasure of the commissioner. The
51	51	board shall elect other officers it considers necessary.
52	52	(b) The chairman of the board shall preside at meetings of
53	53	the board and perform other duties prescribed by the board.
54	54	Sec. 60A.005. ADMINISTRATION. (a) The commissioner with
55	55	the assistance of the board shall administer the authority. The
56	56	commissioner may appoint, employ, contract with, and provide for
57	57	employees, consultants, agents, and experts as the business of the
58	58	authority may require.
59	59	(b) The board shall hold regular and special meetings at
60	60	times specified by the chairman.
61	61	(c) The board is subject to Chapter 551, Government Code,
62	62	and Chapter 2001, Government Code.
63	63	Sec. 60A.006. FISCAL ACCOUNTING OF ADMINISTRATION.
64	64	(a) All funds acquired under this chapter may be used for
65	65	administration of this chapter.
66	66	(b) On or before January 1 of each year, the authority shall
67	67	prepare a report of its activities for the preceding fiscal year.
68	68	The report must set forth a complete operating and financial
69	69	statement. The authority shall file copies of the report with the
70	70	governor and the legislature as soon as practicable.
71	71	(c) The board members, administrator, and staff of the
72	72	authority may not be personally liable for loans issued or
73	73	contracts executed by the authority and shall be exculpated and
74	74	fully indemnified in the documents relating to any loans except in
75	75	the case of fraudulent or wilful misconduct on the part of the
76	76	individual seeking exculpation or indemnification.
77	77	Sec. 60A.007. REMOVAL OF BOARD MEMBER. (a) It is a ground
78	78	for removal from the board if a member:
79	79	(1) does not have at the time of appointment the
80	80	qualifications required by Section 60A.003;
81	81	(2) does not maintain during service on the board the
82	82	qualifications required by Section 60A.003; or
83	83	(3) cannot because of illness or disability discharge
84	84	the member's duties for a substantial part of the term for which the
85	85	member is appointed.
86	86	(b) The validity of an action of the board is not affected by
87	87	the fact that it is taken when a ground for removal of a board member
88	88	exists.
89	89	[Sections 60A.008-60A.050 reserved for expansion]
90	90	SUBCHAPTER B. PURPOSES AND POWERS
91	91	Sec. 60A.051. PURPOSES OF AUTHORITY. In order to promote
92	92	the creation and expansion of urban agricultural projects in this
93	93	state, the authority shall implement programs under Subchapters C
94	94	and D to:
95	95	(1) make or acquire loans to eligible persons;
96	96	(2) make or acquire loans to lenders to enable those
97	97	lenders to make loans to eligible persons;
98	98	(3) insure, coinsure, and reinsure, wholly or partly,
99	99	loans to eligible persons;
100	100	(4) guarantee, wholly or partly, loans to eligible
101	101	persons; and
102	102	(5) make grants to eligible persons.
103	103	Sec. 60A.052. POWERS OF AUTHORITY. (a) The authority has
104	104	all powers necessary to accomplish the purposes and programs of the
105	105	authority, including the power:
106	106	(1) to adopt and enforce bylaws, rules, and procedures
107	107	and perform all functions necessary for the board to carry out this
108	108	chapter;
109	109	(2) to sue and be sued, complain, and defend, in its
110	110	own name;
111	111	(3) to acquire, hold, invest, use, pledge, and dispose
112	112	of its revenues, income, receipts, funds, and money from every
113	113	source and to select one or more depositories, inside or outside the
114	114	state, subject to this chapter, any resolution, bylaws, or in any
115	115	indenture pursuant to which the funds are held;
116	116	(4) to establish, charge, and collect fees, charges,
117	117	and penalties in connection with the programs, services, and
118	118	activities provided by the authority in accordance with this
119	119	chapter;
120	120	(5) to procure insurance and pay premiums on insurance
121	121	of any type, in amounts, and from insurers as the board considers
122	122	necessary and advisable to accomplish any of the authority's
123	123	purposes;
124	124	(6) to make, enter into, and enforce contracts,
125	125	agreements, including management agreements, for the management of
126	126	any of the authority's property, leases, indentures, mortgages,
127	127	deeds of trust, security agreements, pledge agreements, credit
128	128	agreements, and other instruments with any person, including any
129	129	lender and any federal, state, or local governmental agency, and to
130	130	take other actions as may accomplish any of its purposes;
131	131	(7) to own, rent, lease, or otherwise acquire, accept,
132	132	or hold real, personal, or mixed property, or any interest in
133	133	property in performing its duties and exercising its powers under
134	134	this chapter, by purchase, exchange, gift, assignment, transfer,
135	135	foreclosure, mortgage, sale, lease, or otherwise and to hold,
136	136	manage, operate, or improve real, personal, or mixed property,
137	137	wherever situated;
138	138	(8) to sell, lease, encumber, mortgage, exchange,
139	139	donate, convey, or otherwise dispose of any or all of its properties
140	140	or any interest in its properties, deed of trust or mortgage lien
141	141	interest owned by it or under its control, custody, or in its
142	142	possession, and release or relinquish any right, title, claim,
143	143	lien, interest, easement, or demand however acquired, including any
144	144	equity or right of redemption in property foreclosed by it, and to
145	145	do any of the foregoing by public or private sale, with or without
146	146	public bidding, notwithstanding any other law; and to lease or rent
147	147	any improvements, lands, or facilities from any person to effect
148	148	the purposes of this chapter; and
149	149	(9) to request, accept, and use gifts, loans,
150	150	donations, aid, guaranties, allocations, subsidies, grants, or
151	151	contributions of any item of value for the furtherance of any of its
152	152	purposes.
153	153	(b) Money acquired under Subsection (a)(9) may be used only
154	154	for a purpose of the authority. Money from a gift or grant made for
155	155	a purpose of the authority is subject only to limitations contained
156	156	in the gift or grant.
157	157	Sec. 60A.053. PROGRAMS RULES. (a) The board shall adopt
158	158	rules to establish criteria for determining which eligible persons
159	159	may participate in programs under this chapter. The board's rules
160	160	must state that the policy of the authority is to provide programs
161	161	for providing financial assistance to eligible persons that the
162	162	board considers to present a reasonable risk and have a sufficient
163	163	likelihood of repayment. The board shall adopt collateral or
164	164	security requirements to ensure the full repayment of that
165	165	financial assistance and the solvency of any program implemented
166	166	under this chapter. The board shall approve any and all extensions
167	167	of that financial assistance under this chapter, provided that the
168	168	board may delegate this approval authority to the commissioner.
169	169	(b) The board shall also adopt rules to establish criteria
170	170	for lenders that may participate in programs under this chapter.
171	171	(c) Eligible persons or lenders participating in the
172	172	authority's programs shall pay the costs of applying for,
173	173	participating in, and administering and servicing the program, in
174	174	amounts the board considers reasonable and necessary. The board
175	175	shall charge an administrative fee for guaranteeing a loan that may
176	176	not be less than one percent of the amount of the guaranteed loan.
177	177	Any costs not paid by the eligible persons or lenders shall be paid
178	178	from the funds of the authority.
179	179	(d) The board by rule shall adopt an agreement to be used
180	180	between a lender and an approved applicant under Subchapter C under
181	181	which the authority makes a payment for the purpose of providing a
182	182	reduced interest rate on a loan guaranteed to a borrower. The
183	183	agreement must require the borrower to use the proceeds of the loan
184	184	for the purposes of the program under which the payment is made.
185	185	The board shall adopt rules to implement this subsection.
186	186	Sec. 60A.054. AUTHORITY EXEMPTION FROM TAXATION. The
187	187	property of the authority, its income, and its operations are
188	188	exempt from all taxes and assessments imposed by the state and all
189	189	public agencies and political subdivisions on property acquired or
190	190	used by the authority under this chapter.
191	191	Sec. 60A.055. FUNDING. State money may not be used for
192	192	purposes of the authority.
193	193	[Sections 60A.056-60A.100 reserved for expansion]
194	194	SUBCHAPTER C. URBAN FARMER INTEREST RATE REDUCTION PROGRAM
195	195	Sec. 60A.101. DEFINITIONS. In this subchapter:
196	196	(1) "Eligible lending institution" means a financial
197	197	institution that makes commercial loans, is either a depository of
198	198	state funds or an institution of the Farm Credit System
199	199	headquartered in this state, and agrees to participate in the urban
200	200	farmer interest rate reduction program and to provide collateral
201	201	equal to the amount of linked deposits placed with it.
202	202	(2) "Linked deposit" means a time deposit governed by
203	203	a written deposit agreement between the state and an eligible
204	204	lending institution that provides:
205	205	(A) that the eligible lending institution pay
206	206	interest on the deposit at a rate that is not less than the greater
207	207	of:
208	208	(i) the current market rate of a United
209	209	States treasury bill or note of comparable maturity minus three
210	210	percent; or
211	211	(ii) 0.5 percent;
212	212	(B) that the state not withdraw any part of the
213	213	deposit before the expiration of a period set by a written advance
214	214	notice of the intention to withdraw; and
215	215	(C) that the eligible lending institution agree
216	216	to lend the value of the deposit to an eligible borrower at a
217	217	maximum rate that is the linked deposit rate plus a maximum of four
218	218	percent.
219	219	Sec. 60A.102. URBAN FARMER INTEREST RATE REDUCTION PROGRAM.
220	220	(a) The board shall establish an urban farmer interest rate
221	221	reduction program to promote the creation and expansion of urban
222	222	agriculture in this state.
223	223	(b) To be eligible to participate in the urban farmer
224	224	interest rate reduction program, an applicant must own or lease
225	225	real property for agricultural purposes in a municipality with a
226	226	population of at least 500,000.
227	227	(c) The board shall approve or disapprove any and all
228	228	applications under this subchapter, provided that the board may
229	229	delegate this authority to the commissioner.
230	230	(d) The board shall adopt rules for the loan portion of the
231	231	urban farmer interest rate reduction program.
232	232	(e) In order to participate in the urban farmer interest
233	233	rate reduction program, an eligible lending institution may solicit
234	234	loan applications from eligible applicants.
235	235	(f) After reviewing an application and determining that the
236	236	applicant is eligible and creditworthy, the eligible lending
237	237	institution shall send the application for a linked deposit loan to
238	238	the authority.
239	239	(g) The eligible lending institution shall certify the
240	240	interest rate applicable to the specific eligible applicant and
241	241	attach it to the application sent to the authority.
242	242	(h) After reviewing each loan application under this
243	243	subchapter, the board or the commissioner shall recommend to the
244	244	comptroller the acceptance or rejection of the application.
245	245	(i) After acceptance of the application, the comptroller
246	246	shall place a linked deposit with the applicable eligible lending
247	247	institution for the period the comptroller considers appropriate.
248	248	The comptroller may not place a deposit for a period extending
249	249	beyond the state fiscal biennium in which it is placed. Subject to
250	250	the limitations described by Section 60A.105, the comptroller may
251	251	place time deposits at an interest rate described by Section
252	252	60A.101(2).
253	253	(j) Before the placing of a linked deposit, the eligible
254	254	lending institution and the state, represented by the comptroller,
255	255	shall enter into a written deposit agreement containing the
256	256	conditions on which the linked deposit is made.
257	257	(k) If a lending institution holding linked deposits ceases
258	258	to be either a state depository or a Farm Credit System institution
259	259	headquartered in this state, the comptroller may withdraw the
260	260	linked deposits.
261	261	(l) The board may adopt rules that create a procedure for
262	262	determining priorities for loans granted under this subchapter.
263	263	Each rule adopted must state the policy objective of the rule.
264	264	(m) A lending institution is not ineligible to participate
265	265	in the urban farmer interest rate reduction program solely because
266	266	a member of the board is also an officer, director, or employee of
267	267	the lending institution, provided that a board member shall recuse
268	268	himself or herself from any action taken by the board on an
269	269	application involving a lending institution by which the board
270	270	member is employed or for which the board member serves as an
271	271	officer or director.
272	272	Sec. 60A.103. COMPLIANCE. (a) On accepting a linked
273	273	deposit, an eligible lending institution must loan money to
274	274	eligible applicants in accordance with the deposit agreement and
275	275	this subchapter. The eligible lending institution shall forward a
276	276	compliance report to the board.
277	277	(b) The board shall monitor compliance with this subchapter
278	278	and inform the comptroller of noncompliance on the part of an
279	279	eligible lending institution.
280	280	Sec. 60A.104. STATE LIABILITY PROHIBITED. The state is not
281	281	liable to an eligible lending institution for payment of the
282	282	principal, interest, or any late charges on a loan made under this
283	283	subchapter. A delay in payment or default on a loan by a borrower
284	284	does not affect the validity of the deposit agreement. Linked
285	285	deposits are not an extension of the state's credit within the
286	286	meaning of any state constitutional prohibition.
287	287	Sec. 60A.105. LIMITATIONS IN PROGRAM. (a) The maximum
288	288	amount of a loan under this subchapter is $500,000.
289	289	(b) A loan granted under this subchapter may be used for any
290	290	agriculture-related operating expense, including the purchase or
291	291	lease of land or fixed assets acquisition or improvement, as
292	292	identified in the application.
293	293	[Sections 60A.106-60A.150 reserved for expansion]
294	294	SUBCHAPTER D. URBAN FARMER GRANT PROGRAM
295	295	Sec. 60A.151. GRANT PROGRAM. (a) The authority shall
296	296	administer an urban farmer grant program. A grant must be for the
297	297	purpose of fostering the creation and expansion of urban
298	298	agricultural projects in this state.
299	299	(b) The board shall adopt rules governing the operation of
300	300	the program and selection criteria for grant recipients.
301	301	(c) The board shall select grant recipients.
302	302	Sec. 60A.152. ELIGIBILITY. To be eligible to receive a
303	303	grant under this subchapter, a person must:
304	304	(1) be an agricultural producer;
305	305	(2) own or lease real property for agricultural
306	306	purposes in a municipality with a population of at least 500,000;
307	307	and
308	308	(3) provide matching funds in the amount of not less
309	309	than one dollar for each dollar of grant money received.
310	310	Sec. 60A.153. AMOUNT OF GRANTS. A grant under the urban
311	311	farmer grant program may not be less than $5,000 or more than
312	312	$20,000.
313	313	SECTION 2. As soon as practicable after the effective date
314	314	of this Act, the commissioner of agriculture shall appoint the
315	315	members of the Texas Urban Agricultural Innovation Authority
316	316	created by Section 60A.001, Agriculture Code, as added by this Act.
317	317	SECTION 3. This Act takes effect September 1, 2011.
318	318	* * * * *