The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

1. (1) Act--The Texas Agriculture Code, §§44.001-44.010.
2. (2) Alternative agricultural crops or livestock--Crops or livestock not customarily grown in this state but that could feasibly be produced in the state.
3. (3) Applicant--A person who completes and submits the borrower's section of the linked deposit application.
4. (4) Application--The forms and documents required to be submitted for review and approval by the Authority and the Comptroller for participation in the program, including: the linked deposit application, the borrower's financial statements and business plans if available, a copy of the lender's loan application, and the proposed loan and security documents.
5. (5) Authority--The Texas Agricultural Finance Authority.
6. (6) Board--The board of directors of the Authority.
7. (7) Compliance report--A copy of the final loan documents.
8. (8) Comptroller--The Comptroller of Public Accounts.
9. (9) Commissioner--The Commissioner of the Texas Department of Agriculture.
10. (10) Crop--A product or derivative of any product that is produced or bred on a farm or ranch including: agricultural, arboricultural, floricultural, horticultural, or viticultural products or derivatives.
11. (11) Current market rate--The rate of interest on a United States treasury bill or note, the maturity date of which most closely matches the maturity date of the loan, or the end of the current biennium of the State, whichever is sooner, as determined by reference to the United States treasury bill or note section of the Wall Street Journal published on the day the loan is priced.
12. (12) Customarily grown--Crops or livestock produced in this state that utilize conventional management systems, and have cash receipts equal to or exceeding $5 million as listed in the most recent version of Texas Agricultural Cash Receipts by Commodity, compiled by the Texas Agricultural Statistics Service, except for experimental varieties of these crops or livestock.
13. (13) Default--The failure to perform an obligation established by the loan agreement, these rules or agreement.
14. (14) Department--The Texas Department of Agriculture and the Texas Agriculture Commissioner.

15. (15) Eligible borrower--A person who is in the business or entering the business of:

    1. (A) processing and marketing agricultural crops or livestock in this state;
    2. (B) producing alternative agricultural crops or livestock in this state;
    3. (C) producing agricultural crops or livestock in this state, the production of which has declined because of natural disasters;
    4. (D) producing agricultural crops or livestock in this state using water conservation equipment for agricultural production purposes;
    5. (E) financing of water conservation projects; or
    6. (F) providing nonagricultural goods or services that provide an economic benefit to a municipality or county in a rural area.
16. (16) Lender--A financial institution that makes commercial loans, agrees to participate in the linked deposit program and is certified as a state depository by the Comptroller.

17. (17) Linked deposit--A time deposit governed by a written deposit agreement between the state and the lender that provides that:

    1. (A) the lender pay interest on the deposit at a rate that is not less than the greater of:

       1. (i) the current market rate minus 2%; or
       2. (ii) 1.5%;
    2. (B) 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
    3. (C) 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 4.0%.
18. (18) Livestock--A product or a derivative of any product that is produced or bred on a farm or ranch, or harvested in the wild including: apicultural, aquacultural, equine, livestock, maricultural, poultry, wild game, wild sea food, or other animal products or derivatives.
19. (19) Loan--The note or other evidence of indebtedness entered into between the eligible borrower and the lender under the program.
20. (20) Nonagricultural business--Goods and services, produced or provided by a person or business enterprise in a rural area, that are not agricultural crops or livestock as defined in this subchapter.
21. (21) Person--An individual, corporation, co-operative, organization, government or a governmental subdivision or agency, business trust, trust, partnership, association, or any other legal entity.
22. (22) Program--The Linked Deposit Program authorized by the Act, §44.007.
23. (23) Rural area--an area which is predominately rural in character, meeting the criteria as identified in the policy approved by the Board for the program.
24. (24) Staff--The staff of the department designated by the commissioner of agriculture as performing duties for the Authority.

Source Note:The provisions of this §26.1 adopted to be effective October 4, 1995, 20 TexReg 7595; amended to be effective September 16, 1997, 22 TexReg 9243; amended to be effective September 28, 1999, 24 TexReg 8149; amended to be effective September 18, 2001, 26 TexReg 7120; amended to be effective July 22, 2002, 27 TexReg 6502.