Texas 2017 - 85th Regular

Texas Senate Bill SB1983 Compare Versions

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1	1	By: Miles S.B. No. 1983
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the creation of the Texas Urban Agricultural Innovation
7	7	Authority.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Title 4, Agriculture Code, is amended by adding
10	10	Chapter 60A to read as follows:
11	11	CHAPTER 60A. TEXAS URBAN AGRICULTURAL INNOVATION AUTHORITY
12	12	SUBCHAPTER A. ADMINISTRATION AND POWERS
13	13	Sec. 60A.001. CREATION OF AUTHORITY; PUBLIC PURPOSE. (a)
14	14	The Texas Urban Agricultural Innovation Authority is created within
15	15	the Department of Agriculture as a public authority.
16	16	(b) The authority is created to promote the creation and
17	17	expansion of urban agricultural projects in this state.
18	18	Sec. 60A.002. DEFINITION. In this chapter, "authority"
19	19	means the Texas Urban Agricultural Innovation Authority.
20	20	Sec. 60A.003. BOARD OF DIRECTORS. (a) The authority is
21	21	governed by a board of directors composed of the commissioner and
22	22	eight members appointed by the commissioner. Members of the board
23	23	must be appointed in the numbers specified and from the following
24	24	categories:
25	25	(1) two persons who are elected or appointed officials
26	26	of a municipality with a population of at least 500,000;
27	27	(2) three persons who are knowledgeable about
28	28	agricultural lending practices;
29	29	(3) one person who is a representative of an
30	30	agricultural business, as defined by Section 58.002; and
31	31	(4) two persons who represent urban farmers and the
32	32	interests of urban farmers.
33	33	(b) The appointed members of the board serve staggered terms
34	34	of two years, with the terms of four members expiring on January 1
35	35	of each even-numbered year and the terms of four members expiring on
36	36	January 1 of each odd-numbered year.
37	37	(c) Any vacancy occurring in an appointed position on the
38	38	board shall be filled by the commissioner for the unexpired term.
39	39	(d) A board member is not entitled to compensation or
40	40	reimbursement for serving as a director.
41	41	(e) Appointments to the board shall be made without regard
42	42	to the race, color, disability, sex, religion, age, or national
43	43	origin of the appointees.
44	44	Sec. 60A.004. OFFICERS. (a) The commissioner shall
45	45	designate a member of the board as the chairman of the board to
46	46	serve in that capacity at the pleasure of the commissioner. The
47	47	board shall elect other officers it considers necessary.
48	48	(b) The chairman of the board shall preside at meetings of
49	49	the board and perform other duties prescribed by the board.
50	50	Sec 60A.005. ADMINISTRATION. (a) The commissioner with
51	51	the assistance of the board shall administer the authority. The
52	52	commissioner may appoint, employ, contract with, and provide for
53	53	employees, consultants, agents, and experts as the business of the
54	54	authority may require.
55	55	(b) The board shall hold regular and special meetings at
56	56	times specified by the chairman.
57	57	(c) The board is subject to Chapter 551, Government Code,
58	58	and Chapter 2001, Government Code.
59	59	Sec. 60A.006. FISCAL ACCOUNTING OF ADMINISTRATION. (a) All
60	60	funds acquired under this chapter may be used for administration of
61	61	this chapter.
62	62	(b) On or before January 1 of each year, the authority shall
63	63	prepare a report of its activities for the preceding fiscal year.
64	64	The report must set forth a complete operating and financial
65	65	statement. The authority shall file copies of the report with the
66	66	governor and the legislature as soon as practicable.
67	67	(c) The board members, administrator, and staff of the
68	68	authority may not be personally liable for loans issued or
69	69	contracts executed by the authority and shall be exculpated and
70	70	fully indemnified in the documents relating to any loans except in
71	71	the case of fraudulent or wilful misconduct on the part of the
72	72	individual seeking exculpation or indemnification.
73	73	Sec. 60A.007. REMOVAL OF BOARD MEMBER. (a) It is a ground
74	74	for removal from the board if a member:
75	75	(1) does not have at the time of appointment the
76	76	qualifications required by Section 60A.003;
77	77	(2) does not maintain during service on the board the
78	78	qualifications required by Section 60A.003; or
79	79	(3) cannot because of illness or disability discharge
80	80	the member's duties for a substantial part of the term for which the
81	81	member is appointed.
82	82	(b) The validity of an action of the board is not affected by
83	83	the fact that it is taken when a ground for removal of a board member
84	84	exists.
85	85	[Sections 60A.008-60A.050 reserved for expansion]
86	86	SUBCHAPTER B. PURPOSES AND POWERS
87	87	Sec. 60A.051. PURPOSES OF AUTHORITY. In order to promote
88	88	the creation and expansion of urban agricultural projects in this
89	89	state, the authority shall implement programs under Subchapters C
90	90	and D to:
91	91	(1) make or acquire loans to eligible persons;
92	92	(2) make or acquire loans to lenders to enable those
93	93	lenders to make loans to eligible persons;
94	94	(3) insure, coinsure, and reinsure, wholly or partly,
95	95	loans to eligible persons;
96	96	(4) guarantee, wholly or partly, loans to eligible
97	97	persons; and
98	98	(5) make grants to eligible persons.
99	99	Sec. 60A.052. POWERS OF AUTHORITY. (a) The authority has
100	100	all powers necessary to accomplish the purposes and programs of the
101	101	authority, including the power:
102	102	(1) to adopt and enforce bylaws, rules, and procedures
103	103	and perform all functions necessary for the board to carry out this
104	104	chapter;
105	105	(2) to sue and be sued, complain, and defend, in its
106	106	own name;
107	107	(3) to acquire, hold, invest, use, pledge, and dispose
108	108	of its revenues, income, receipts, funds, and money from every
109	109	source and to select one or more depositories, inside or outside the
110	110	state, subject to this chapter, any resolution, bylaws, or in any
111	111	indenture pursuant to which the funds are held;
112	112	(4) to establish, charge, and collect fees, charges,
113	113	and penalties in connection with the programs, services, and
114	114	activities provided by the authority in accordance with this
115	115	chapter;
116	116	(5) to procure insurance and pay premiums on insurance
117	117	of any type, in amounts, and from insurers as the board considers
118	118	necessary and advisable to accomplish any of the authority's
119	119	purposes;
120	120	(6) to make, enter into, and enforce contracts,
121	121	agreements, including management agreements, for the management of
122	122	any the authority's property, leases, indentures, mortgages, deeds
123	123	of trust, security agreements, pledge agreements, credit
124	124	agreements, and other instruments with any person, including any
125	125	lender and any federal, state, or local governmental agency, and to
126	126	take other actions as may accomplish any of its purposes;
127	127	(7) to own, rent, lease, or otherwise acquire, accept,
128	128	or hold real, personal, or mixed property, or any interest in
129	129	property in performing its duties and exercising its powers under
130	130	this chapter, by purchase, exchange, gift, assignment, transfer,
131	131	foreclosure, mortgage, sale, lease, or otherwise and to hold,
132	132	manage, operate, or improve real, personal, or mixed property,
133	133	wherever situated;
134	134	(8) to sell, lease, encumber, mortgage, exchange,
135	135	donate, convey, or otherwise dispose of any or all of its properties
136	136	or any interest in its properties, deed of trust or mortgage lien
137	137	interest owned by it or under its control, custody, or in its
138	138	possession, and release or relinquish any right, title, claim,
139	139	lien, interest, easement, or demand however acquired, including any
140	140	equity or right of redemption in property foreclosed by it, and to
141	141	do any of the foregoing by public or private sale, with or without
142	142	public bidding, notwithstanding any other law; and to lease or rent
143	143	any improvements, lands, or facilities from any person to effect
144	144	the purposes of this chapter; and
145	145	(9) to request, accept, and use gifts, loans,
146	146	donations, aid, guaranties, allocations, subsidies, grants, or
147	147	contributions of any item of value for the furtherance of any of its
148	148	purposes.
149	149	(b) Money acquired under Subsection (a)(9) may be used only
150	150	for a purpose of the authority. Money from a gift or grant made for
151	151	a purpose of the authority is subject only to limitations contained
152	152	in the gift or grant.
153	153	Sec. 60A.053. PROGRAMS RULES. (a) The board shall adopt
154	154	rules to establish criteria for determining which eligible persons
155	155	may participate in programs under this chapter. The board's rules
156	156	must state that the policy of the authority is to provide programs
157	157	for providing financial assistance to eligible persons that the
158	158	board considers to present a reasonable risk and have a sufficient
159	159	likelihood of repayment. The board shall adopt collateral or
160	160	security requirements to ensure the full repayment of that
161	161	financial assistance and the solvency of any program implemented
162	162	under this chapter. The board shall approve any and all extensions
163	163	of that financial assistance under this chapter, provided that the
164	164	board may delegate this approval authority to the commissioner.
165	165	(b) The board shall also adopt rules to establish criteria
166	166	for lenders that may participate in programs under this chapter.
167	167	(c) Eligible persons or lenders participating in the
168	168	authority's programs shall pay the costs of applying for,
169	169	participating in, and administering and servicing the program, in
170	170	amounts the board considers reasonable and necessary. The board
171	171	shall charge an administrative fee for guaranteeing a loan that may
172	172	not be less than one percent of the amount of the guaranteed loan.
173	173	Any costs not paid by the eligible persons or lenders shall be paid
174	174	from the funds of the authority.
175	175	(d) The board by rule shall adopt an agreement to be used
176	176	between a lender and an approved applicant under Subchapter C under
177	177	which the authority makes a payment for the purpose of providing a
178	178	reduced interest rate on a loan guaranteed to a borrower. The
179	179	agreement must require the borrower to use the proceeds of the loan
180	180	for the purposes of the program under which the payment is made.
181	181	The board shall adopt rules to implement this subsection.
182	182	Sec. 60A.054. AUTHORITY EXEMPTION FROM TAXATION. The
183	183	property of the authority, its income, and its operations are
184	184	exempt from all taxes and assessments imposed by the state and all
185	185	public agencies and political subdivisions on property acquired or
186	186	used by the authority under this chapter.
187	187	Sec. 60A.055. FUNDING. State money may not be used for
188	188	purposes of the authority.
189	189	[Sections 60A.056-60A.100 reserved for expansion]
190	190	SUBCHAPTER C. URBAN FARMER INTEREST RATE REDUCTION PROGRAM
191	191	Sec. 60A.101. DEFINITIONS. In this subchapter:
192	192	(1) "Eligible lending institution" means a financial
193	193	institution that makes commercial loans, is either a depository of
194	194	state funds or an institution of the Farm Credit System
195	195	headquartered in this state, and agrees to participate in the urban
196	196	farmer interest rate reduction program and to provide collateral
197	197	equal to the amount of linked deposits placed with it.
198	198	(2) "Linked deposit" means a time deposit governed by
199	199	a written deposit agreement between the state and an eligible
200	200	lending institution that provides:
201	201	(A) that the eligible lending institution pay
202	202	interest on the deposit at a rate that is not less than the greater
203	203	of:
204	204	(i) the current market rate of a United
205	205	States treasury bill or note of comparable maturity minus three
206	206	percent; or
207	207	(ii) 0.5 percent;
208	208	(B) that the state not withdraw any part of the
209	209	deposit before the expiration of a period set by a written advance
210	210	notice of the intention to withdraw; and
211	211	(C) that the eligible lending institution agree
212	212	to lend the value of the deposit to an eligible borrower at a
213	213	maximum rate that is the linked deposit rate plus a maximum of four
214	214	percent.
215	215	Sec. 60A.102. URBAN FARMER INTEREST RATE REDUCTION
216	216	PROGRAM. (a) The board shall establish an urban farmer interest
217	217	rate reduction program to promote the creation and expansion of
218	218	urban agriculture in this state.
219	219	(b) to be eligible to participate in the urban farmer
220	220	interest rate reduction program, an applicant must own or lease
221	221	real property for agricultural purposes in a municipality with a
222	222	population of at least 500,000.
223	223	(c) The board shall approve or disapprove any and all
224	224	applications under this subchapter, provided that the board may
225	225	delegate this authority to the commissioner.
226	226	(d) The board shall adopt rules for the loan portion of the
227	227	urban farmer interest rate reduction program.
228	228	(e) In order to participate in the urban farmer interest
229	229	rate reduction program, an eligible lending institution may solicit
230	230	loan applications from eligible applicants.
231	231	(f) After reviewing an application and determining that the
232	232	applicant is eligible and creditworthy, the eligible lending
233	233	institution shall send the application for a linked deposit loan to
234	234	the authority.
235	235	(g) The eligible lending institution shall certify the
236	236	interest rate applicable to the specific eligible applicant and
237	237	attach it to the application sent to the authority.
238	238	(h) After reviewing each loan application under this
239	239	subchapter, the board or the commissioner shall recommend to the
240	240	comptroller the acceptance or rejection of the application.
241	241	(i) After acceptance of the application, the comptroller
242	242	shall place a linked deposit with the applicable eligible lending
243	243	institution for the period the comptroller considers appropriate.
244	244	The comptroller may not place a deposit for a period extending
245	245	beyond the state fiscal biennium in which it is placed. Subject to
246	246	the limitations described by Section 60A.105, the comptroller may
247	247	place time deposits at an interest rate described by Section
248	248	60A.101(2).
249	249	(j) Before the placing of a linked deposit, the eligible
250	250	lending institution and the state, represented by the comptroller,
251	251	shall enter into a written deposit agreement containing the
252	252	conditions on which the linked deposit is made.
253	253	(k) If a lending institution holding linked deposits ceases
254	254	to be either a state depository or a Farm Credit System institution
255	255	headquartered in this state, the comptroller may withdraw the
256	256	linked deposits.
257	257	(l) The board may adopt rules that create a procedure for
258	258	determining priorities for loans granted under this subchapter.
259	259	Each rule adopted must state the policy objective of the rule.
260	260	(m) A lending institution is not ineligible to participate
261	261	in the urban farmer interest rate reduction program solely because
262	262	a member of the board is also an officer, director, or employee of
263	263	the lending institution, provided that a board member shall recuse
264	264	himself or herself from any action taken by the board on an
265	265	application involving a lending institution by which the board
266	266	member is employed or for which the board member serves as an
267	267	officer or director.
268	268	Sec. 60A.103. COMPLIANCE. (a) On accepting a linked
269	269	deposit, an eligible lending institution must loan money to
270	270	eligible applicants in accordance with the deposit agreement and
271	271	this subchapter. The eligible lending institution shall forward a
272	272	compliance report to the board.
273	273	(b) The board shall monitor compliance with this subchapter
274	274	and inform the comptroller of noncompliance on the part of an
275	275	eligible lending institution.
276	276	Sec. 60A.104. STATE LIABILITY PROHIBITED. The state is not
277	277	liable to an eligible lending institution for payment of the
278	278	principal, interest, or any late charges on a loan made under this
279	279	subchapter. A delay in payment or default on a loan by a borrower
280	280	does not affect the validity of the deposit agreement. Linked
281	281	deposits are not an extension of the state's credit within the
282	282	meaning of any state constitutional prohibition.
283	283	Sec. 60A.105. LIMITATIONS IN PROGRAM. (a) The maximum
284	284	amount of a loan under this subchapter is $500,000.
285	285	(b) A loan granted under this subchapter may be used for any
286	286	agriculture-related operating expense, including the purchase or
287	287	lease of land or fixed assets acquisition or improvement, as
288	288	identified in the application.
289	289	[Sections 60A.106-60A.150 reserved for expansion]
290	290	SUBCHAPTER D. URBAN FARMER GRANT PROGRAM
291	291	Sec. 60A.151. GRANT PROGRAM. (a) The authority shall
292	292	administer an urban farmer grant program. A grant must be for the
293	293	purpose of fostering the creation and expansion of urban
294	294	agricultural projects in this state.
295	295	(b) The board shall adopt rules governing the operation of
296	296	the program and selection criteria for grant recipients.
297	297	(c) The board shall select grant recipients.
298	298	Sec. 60A.152. ELIGIBILITY. To be eligible to receive a
299	299	grant under this subchapter, a person must:
300	300	(1) be an agricultural producer;
301	301	(2) own or lease real property for agricultural
302	302	purposes in a municipality with a population of at least 500,000;
303	303	and
304	304	(3) provide matching funds in the amount of not less
305	305	than one dollar for each dollar of grant money received.
306	306	Sec. 60A.153. AMOUNTS OF GRANTS. A grant under the urban
307	307	farmer grant program may not be less than $5,000 or more than
308	308	$20,000.
309	309	SECTION 2. As soon as practicable after the effective date
310	310	of this Act, the commissioner of agriculture shall appoint the
311	311	members of the Texas Urban Agricultural Innovation Authority
312	312	created by Section 60A.001, Agriculture Code, as added by this Act.
313	313	SECTION 3. The Act takes effect September 1, 2017.