Text of section effective on September 01, 2009
- (a) The board shall administer a loan guarantee program that benefits eligible applicants who desire to establish or enhance a farming or ranching operation or an agriculture-related business.
- (b) The board, either directly or through authority delegated to the commissioner, may grant to an eligible applicant a guarantee of a loan made by a commercial lender for the purposes prescribed by this subchapter. The guarantee amount may not exceed the lesser of $250,000 or 90 percent of the loan amount.
- (c) The aggregate amount guaranteed under this subchapter may not exceed twice the amount contained in the young farmer loan guarantee account within the Texas agricultural fund.
- (d) A loan guarantee recipient may use proceeds from the loan for working capital for operating a farm or ranch, including the lease of facilities and the purchase of machinery and equipment, or for any agriculture-related business purpose, including the purchase of real estate, as identified in the plan. A loan guarantee is voidable by the board if the recipient uses loan proceeds for any purposes other than those identified in the plan. The board shall include this restriction as a condition in each loan guarantee instrument executed under this subchapter.
- (e) The board shall adopt an agreement, to be used between a commercial lender and an approved eligible applicant, under which the program provides a payment from money in the young farmer loan guarantee account for the purpose of providing a reduced interest rate on a loan guaranteed to a borrower under this subchapter. The board shall adopt rules to implement this subsection. The maximum rate reduction under this subsection shall not exceed three percentage points.
Added by Acts 1999, 76th Leg., ch. 1459, Sec. 14, eff. June 19, 1999.