Bill Text: TX HB2996 | 2011-2012 | 82nd Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Relating to the creation of the Texas Urban Agricultural Innovation Authority.

Spectrum: Bipartisan Bill

Status: (Vetoed) 2011-06-17 - Vetoed by the Governor [HB2996 Detail]

Download: Texas-2011-HB2996-Introduced.html

---

82R8854 JXC-F
By: Miles H.B. No. 2996

A BILL TO BE ENTITLED
AN ACT
relating to the creation of the Texas Urban Agricultural Innovation
Authority.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 4, Agriculture Code, is amended by adding
Chapter 60A to read as follows:
CHAPTER 60A. TEXAS URBAN AGRICULTURAL INNOVATION AUTHORITY
SUBCHAPTER A. ADMINISTRATION AND POWERS
Sec. 60A.001. CREATION OF AUTHORITY; PUBLIC PURPOSE. (a)
The Texas Urban Agricultural Innovation Authority is created within
the Department of Agriculture as a public authority.
(b) The authority is created to promote the creation and
expansion of urban agricultural projects in this state.
Sec. 60A.002. DEFINITION. In this chapter, "authority"
means the Texas Urban Agricultural Innovation Authority.
Sec. 60A.003. BOARD OF DIRECTORS. (a) The authority is
governed by a board of directors composed of the commissioner and
eight members appointed by the commissioner. Members of the board
must be appointed in the numbers specified and from the following
categories:
(1) two persons who are elected or appointed officials
of a municipality with a population of at least 1.5 million;
(2) three persons who are knowledgeable about
agricultural lending practices;
(3) one person who is a representative of an
agricultural business, as defined by Section 58.002; and
(4) two persons who represent urban farmers and the
interests of urban farmers.
(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 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.
(d) A board member is not entitled to compensation for
serving as a director but is entitled to reimbursement for actual
and necessary expenses incurred in performing the official duties
of office.
(e) Appointments to the board shall be made without regard
to the race, color, disability, sex, religion, age, or national
origin of the appointees.
Sec. 60A.004. OFFICERS. (a) The commissioner shall
designate a member of the board as the chairman of the board to
serve in that capacity at the pleasure of the commissioner. The
board shall elect other officers it considers necessary.
(b) The chairman of the board shall preside at meetings of
the board and perform other duties prescribed by the board.
Sec. 60A.005. ADMINISTRATION. (a) The commissioner with
the assistance of the board shall administer the authority. The
commissioner may appoint, employ, contract with, and provide for
employees, consultants, agents, and experts as the business of the
authority may require.
(b) The board shall hold regular and special meetings at
times specified by the chairman.
(c) The board is subject to Chapter 551, Government Code,
and Chapter 2001, Government Code.
Sec. 60A.006. FISCAL ACCOUNTING OF ADMINISTRATION. (a)
All funds acquired under this chapter may be used for
administration of this chapter.
(b) On or before January 1 of each year, the authority shall
prepare a report of its activities for the preceding fiscal year.
The report must set forth a complete operating and financial
statement. The authority shall file copies of the report with the
governor and the legislature as soon as practicable.
(c) The board members, administrator, and staff of the
authority may not be personally liable for loans issued or
contracts executed by the authority and shall be exculpated and
fully indemnified in the documents relating to any loans except in
the case of fraudulent or wilful misconduct on the part of the
individual seeking exculpation or indemnification.
Sec. 60A.007. REMOVAL OF BOARD MEMBER. (a) It is a ground
for removal from the board if a member:
(1) does not have at the time of appointment the
qualifications required by Section 60A.003;
(2) does not maintain during service on the board the
qualifications required by Section 60A.003; or
(3) cannot because of illness or disability discharge
the member's duties for a substantial part of the term for which the
member is appointed.
(b) The validity of an action of the board is not affected by
the fact that it is taken when a ground for removal of a board member
exists.
[Sections 60A.008-60A.050 reserved for expansion]
SUBCHAPTER B. PURPOSES AND POWERS
Sec. 60A.051. PURPOSES OF AUTHORITY. In order to promote
the creation and expansion of urban agricultural projects in this
state, the authority shall implement programs under Subchapters C
and D to:
(1) make or acquire loans to eligible persons;
(2) make or acquire loans to lenders to enable those
lenders to make loans to eligible persons;
(3) insure, coinsure, and reinsure, wholly or partly,
loans to eligible persons;
(4) guarantee, wholly or partly, loans to eligible
persons; and
(5) make grants to eligible persons.
Sec. 60A.052. POWERS OF AUTHORITY. (a) The authority has
all powers necessary to accomplish the purposes and programs of the
authority, including the power:
(1) to adopt and enforce bylaws, rules, and procedures
and perform all functions necessary for the board to carry out this
chapter;
(2) to sue and be sued, complain, and defend, in its
own name;
(3) to acquire, hold, invest, use, pledge, and dispose
of its revenues, income, receipts, funds, and money from every
source and to select one or more depositories, inside or outside the
state, subject to this chapter, any resolution, bylaws, or in any
indenture pursuant to which the funds are held;
(4) to establish, charge, and collect fees, charges,
and penalties in connection with the programs, services, and
activities provided by the authority in accordance with this
chapter;
(5) to procure insurance and pay premiums on insurance
of any type, in amounts, and from insurers as the board considers
necessary and advisable to accomplish any of the authority's
purposes;
(6) to make, enter into, and enforce contracts,
agreements, including management agreements, for the management of
any of the authority's property, leases, indentures, mortgages,
deeds of trust, security agreements, pledge agreements, credit
agreements, and other instruments with any person, including any
lender and any federal, state, or local governmental agency, and to
take other actions as may accomplish any of its purposes;
(7) to own, rent, lease, or otherwise acquire, accept,
or hold real, personal, or mixed property, or any interest in
property in performing its duties and exercising its powers under
this chapter, by purchase, exchange, gift, assignment, transfer,
foreclosure, mortgage, sale, lease, or otherwise and to hold,
manage, operate, or improve real, personal, or mixed property,
wherever situated;
(8) to sell, lease, encumber, mortgage, exchange,
donate, convey, or otherwise dispose of any or all of its properties
or any interest in its properties, deed of trust or mortgage lien
interest owned by it or under its control, custody, or in its
possession, and release or relinquish any right, title, claim,
lien, interest, easement, or demand however acquired, including any
equity or right of redemption in property foreclosed by it, and to
do any of the foregoing by public or private sale, with or without
public bidding, notwithstanding any other law; and to lease or rent
any improvements, lands, or facilities from any person to effect
the purposes of this chapter; and
(9) to request, accept, and use gifts, loans,
donations, aid, appropriations, guaranties, allocations,
subsidies, grants, or contributions of any item of value for the
furtherance of any of its purposes.
(b) The use of a gift or grant for the furtherance of a
purpose of the authority is subject, after its appropriation, only
to limitations contained in the gift or grant.
Sec. 60A.053. PROGRAMS RULES. (a) The board shall adopt
rules to establish criteria for determining which eligible persons
may participate in programs under this chapter. The board's rules
must state that the policy of the authority is to provide programs
for providing financial assistance to eligible persons that the
board considers to present a reasonable risk and have a sufficient
likelihood of repayment. The board shall adopt collateral or
security requirements to ensure the full repayment of that
financial assistance and the solvency of any program implemented
under this chapter. The board shall approve any and all extensions
of that financial assistance under this chapter, provided that the
board may delegate this approval authority to the commissioner.
(b) The board shall also adopt rules to establish criteria
for lenders that may participate in programs under this chapter.
(c) Eligible persons or lenders participating in the
authority's programs shall pay the costs of applying for,
participating in, and administering and servicing the program, in
amounts the board considers reasonable and necessary. The board
shall charge an administrative fee for guaranteeing a loan that may
not be less than one percent of the amount of the guaranteed loan.
Any costs not paid by the eligible persons or lenders shall be paid
from the funds of the authority.
(d) The board by rule shall adopt an agreement to be used
between a lender and an approved applicant under Subchapter C under
which the authority makes a payment for the purpose of providing a
reduced interest rate on a loan guaranteed to a borrower. The
agreement must require the borrower to use the proceeds of the loan
for the purposes of the program under which the payment is made.
The board shall adopt rules to implement this subsection.
Sec. 60A.054. AUTHORITY EXEMPTION FROM TAXATION. The
property of the authority, its income, and its operations are
exempt from all taxes and assessments imposed by the state and all
public agencies and political subdivisions on property acquired or
used by the authority under this chapter.
[Sections 60A.055-60A.100 reserved for expansion]
SUBCHAPTER C. URBAN FARMER INTEREST RATE REDUCTION PROGRAM
Sec. 60A.101. DEFINITIONS. In this subchapter:
(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 urban
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 four
percent.
Sec. 60A.102. URBAN FARMER INTEREST RATE REDUCTION PROGRAM.
(a) The board shall establish an urban farmer interest rate
reduction program to promote the creation and expansion of urban
agriculture in this state.
(b) To be eligible to participate in the urban farmer
interest rate reduction program, an applicant must own or lease
real property for agricultural purposes in a municipality with a
population of at least 1.5 million.
(c) The board shall approve or disapprove any and all
applications under this subchapter, provided that the board may
delegate this authority to the commissioner.
(d) The board shall adopt rules for the loan portion of the
urban farmer interest rate reduction program.
(e) In order to participate in the urban farmer interest
rate reduction program, an eligible lending institution may solicit
loan applications from eligible applicants.
(f) After reviewing an application and determining that the
applicant is eligible and creditworthy, the eligible lending
institution shall send the application for a linked deposit loan to
the authority.
(g) The eligible lending institution shall certify the
interest rate applicable to the specific eligible applicant and
attach it to the application sent to the authority.
(h) After reviewing each loan application under this
subchapter, the board or the commissioner shall recommend to the
comptroller the acceptance or rejection of the application.
(i) After acceptance of the application, the comptroller
shall place a linked deposit with the applicable eligible lending
institution for the period the comptroller considers appropriate.
The comptroller may not place a deposit for a period extending
beyond the state fiscal biennium in which it is placed. Subject to
the limitations described by Section 60A.105, the comptroller may
place time deposits at an interest rate described by Section
60A.101(2).
(j) Before the placing of a linked deposit, the eligible
lending institution and the state, represented by the comptroller,
shall enter into a written deposit agreement containing the
conditions on which the linked deposit is made.
(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.
(l) The board may adopt rules that create a procedure for
determining priorities for loans granted under this subchapter.
Each rule adopted must state the policy objective of the rule.
(m) A lending institution is not ineligible to participate
in the urban 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.
Sec. 60A.103. COMPLIANCE. (a) On accepting a linked
deposit, an eligible lending institution must loan money to
eligible applicants in accordance with the deposit agreement and
this subchapter. The eligible lending institution shall forward a
compliance report to the board.
(b) The board shall monitor compliance with this subchapter
and inform the comptroller of noncompliance on the part of an
eligible lending institution.
Sec. 60A.104. STATE LIABILITY PROHIBITED. The state is not
liable to an eligible lending institution for payment of the
principal, interest, or any late charges on a loan made under this
subchapter. A delay in payment or default on a loan by a borrower
does not affect the validity of the deposit agreement. Linked
deposits are not an extension of the state's credit within the
meaning of any state constitutional prohibition.
Sec. 60A.105. LIMITATIONS IN PROGRAM. (a) The maximum
amount of a loan under this subchapter is $500,000.
(b) A loan granted under this subchapter may be used for any
agriculture-related operating expense, including the purchase or
lease of land or fixed assets acquisition or improvement, as
identified in the application.
[Sections 60A.106-60A.150 reserved for expansion]
SUBCHAPTER D. URBAN FARMER GRANT PROGRAM
Sec. 60A.151. GRANT PROGRAM. (a) The authority shall
administer an urban farmer grant program. A grant must be for the
purpose of fostering the creation and expansion of urban
agricultural projects in this state.
(b) The board shall adopt rules governing the operation of
the program and selection criteria for grant recipients.
(c) The board shall select grant recipients.
Sec. 60A.152. ELIGIBILITY. To be eligible to receive a
grant under this subchapter, a person must:
(1) be an agricultural producer;
(2) own or lease real property for agricultural
purposes in a municipality with a population of at least 1.5
million; and
(3) provide matching funds in the amount of not less
than one dollar for each dollar of grant money received.
Sec. 60A.153. AMOUNT OF GRANTS. A grant under the urban
farmer grant program may not be less than $5,000 or more than
$20,000.
SECTION 2. As soon as practicable after the effective date
of this Act, the commissioner of agriculture shall appoint the
members of the Texas Urban Agricultural Innovation Authority
established by Section 60A.001, Agriculture Code, as added by this
Act.
SECTION 3. This Act takes effect September 1, 2011.