| 1 | 1 | | By: Gutierrez S.B. No. 2875 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | A BILL TO BE ENTITLED |
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| 7 | 7 | | AN ACT |
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| 8 | 8 | | relating to the creation of the Texas Small Farm Recovery Microloan |
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| 9 | 9 | | Progam. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Chapter 12, Texas Agriculture Code, is amended |
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| 12 | 12 | | by adding new sections 12.101 to read as follows: |
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| 13 | 13 | | Sec. 12.101. DEFINITIONS. (a)In this section: |
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| 14 | 14 | | (1) "Small Farm" means an agricultural operation |
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| 15 | 15 | | located in Texas with annual farm revenue not exceeding $500,000. |
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| 16 | 16 | | (2) "Economic Hardship" means financial distress due |
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| 17 | 17 | | to an economic downturn, natural disaster, or other qualifying |
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| 18 | 18 | | circumstances as determined by the department. |
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| 19 | 19 | | (b) The Texas Small Farm Recovery Microloan Program |
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| 20 | 20 | | (TSFRMP) is established to provide low-interest microloans to |
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| 21 | 21 | | eligible small farms. The department shall oversee the |
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| 22 | 22 | | implementation and administration of this program. |
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| 23 | 23 | | (c) To qualify for a loan under this section, an applicant |
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| 24 | 24 | | must: |
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| 25 | 25 | | (1) Be the owner or principal operator of a small farm |
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| 26 | 26 | | in Texas; |
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| 27 | 27 | | (2) Demonstrate financial hardship; |
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| 28 | 28 | | (3) Engage in agricultural activities, including but |
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| 29 | 29 | | not limited to crop production and livestock farming; and |
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| 30 | 30 | | (4) Submit a viable business plan detailing the |
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| 31 | 31 | | intended use of funds. |
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| 32 | 32 | | (d) Loan amounts shall range from $5,000 to $50,000. The |
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| 33 | 33 | | interest rate shall not exceed 2 percent fixed annually. The |
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| 34 | 34 | | repayment period shall not exceed five years, with an optional |
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| 35 | 35 | | grace period of six to 12 months. Collateral requirements shall be |
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| 36 | 36 | | flexible and based on available farm assets. Individual loans may |
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| 37 | 37 | | be canceled if the borrower demonstrates an inability to repay due |
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| 38 | 38 | | to unforeseen financial hardship, subject to an approval process. |
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| 39 | 39 | | (e) Loan proceeds may be used for: |
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| 40 | 40 | | (1) The purchase of seeds, fertilizers, and livestock |
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| 41 | 41 | | feed; |
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| 42 | 42 | | (2) Equipment repairs or upgrades; |
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| 43 | 43 | | (3) Covering labor costs and farm operations; |
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| 44 | 44 | | (4) Recovery efforts following natural disasters or |
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| 45 | 45 | | economic emergency; or |
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| 46 | 46 | | (5) Marketing and distribution expansion. |
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| 47 | 47 | | (f) Applicants must submit an application with supporting |
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| 48 | 48 | | documentation, including financial statements and proof of |
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| 49 | 49 | | hardship. The department shall review applications within 30 to 60 |
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| 50 | 50 | | days. Approved applicants shall receive funds in a timely manner. |
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| 51 | 51 | | (g) The department shall manage the program in coordination |
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| 52 | 52 | | with financial institutions and nonprofit agricultural |
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| 53 | 53 | | organizations. The program shall offer technical support and |
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| 54 | 54 | | financial literacy training for participants. |
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| 55 | 55 | | SECTION 2. This Act takes effect immediately if it receives |
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| 56 | 56 | | a vote of two-thirds of all the members elected to each house, as |
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| 57 | 57 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 58 | 58 | | Act does not receive the vote necessary for immediate effect, this |
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| 59 | 59 | | Act takes effect September 1, 2025. |
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