In addition to the limitations already set forth in these rules, the following limitations apply.

1. (1) Not more than $30 million, of which $10 million may only be used to finance water conservation projects, and of which $5 million may be used only to finance the economic development of businesses in rural areas, may be placed concurrently in linked deposits under the Act.
2. (2) The maximum amount of a loan to produce alternative crops or livestock is $250,000.
3. (3) The maximum amount of a loan to finance production of a crop or livestock declared eligible for natural disaster relief is $250,000.
4. (4) The maximum amount of a loan to finance water conservation projects or equipment for agricultural production purposes is $250,000.
5. (5) The maximum amount of a loan to finance an eligible borrower in a rural area is $250,000.
6. (6) The maximum amount of a loan to process and market agricultural crops or livestock is $500,000.
7. (7) All linked deposits placed under this program shall expire upon expiration of the biennium; however, subject to legislative authorization and approval by the Authority and the comptroller, linked deposits that expired as a result of the expiration of the biennium may be renewed.
8. (8) The state shall not be liable for any failure to comply with the terms and conditions of the loan, or any failure to make any payments or any other losses or expenses that occur directly or indirectly from the program.
9. (9) An applicant may have more than one application and linked deposit loan with the program provided that the total applications and total linked deposits approved do not exceed the limitations of the program maximums as defined in paragraphs (2) - (6) of this section, and that any previous outstanding linked deposit loans with a lender be of a satisfactory status. The total of all linked deposit loans to an applicant cannot exceed a maximum of $500,000.
10. (10) A person shall not receive approval of an application if a previous loan under the program is in default.
11. (11) An applicant who proposes operations to produce crops or livestock that are customarily grown in this state is not eligible for participation in the production financing for alternative crops portion of the program.
12. (12) Customarily grown crops or livestock are not eligible for participation in the production financing for alternative crops or livestock portion of the program. The Department shall maintain a list of crops or livestock that it has determined to be customarily grown in the state. The list will include, at a minimum, all crops and livestock with cash receipts of $5,000,000 or more as listed in the most recent version of the Agricultural Cash Receipts by Commodity, compiled by the Texas Agricultural Statistics Service.
13. (13) Alternative agricultural crops or livestock (including crops or livestock that are not customarily grown in the State of Texas) are eligible for participation in the production financing portion of the program. The Department shall maintain a list of alternative agricultural crops or livestock, which shall consist of all crops and livestock with cash receipts of less than $5,000,000 as listed in the most recent version of the Agricultural Cash Receipts by Commodity, compiled by the Texas Agricultural Statistics Service. The Authority may, on a case by case basis, approve for program participation crops or livestock which are not listed in the Agricultural Cash Receipts by Commodity, compiled by the Texas Agricultural Statistics Service.

14. (14) A project is eligible for natural disaster relief in this state if:

    1. (A) the project resides in a county that has been declared in a state of natural disaster by the United States Department of Agriculture or the President of the United States;
    2. (B) the declared disaster is still in effect on the date the application is submitted to the Authority;

    3. (C) the applicant submits either:

       1. (i) an insurance proof of loss (required for applicants with crop insurance), IRS Schedule F, or documentation establishing the applicant's eligibility for the Livestock Indemnity Program (if available), the Livestock Assistance Program (if available) or similar federal or state natural disaster relief program, from a relevant period of time, to establish that the applicant was personally harmed by the disaster; or
       2. (ii) if the applicant is entering the business of producing agricultural crops or livestock, documentation from USDA or a Texas Cooperative Extension Agent to establish that production of the crop or livestock to be produced by the applicant has declined during the disaster period in the county or counties where the project will reside;
    4. (D) the decline in the production or harm suffered by the applicant was caused by the natural disaster; and
    5. (E) the term of the natural disaster linked deposit commitment does not exceed the lesser of the normal operating cycle of the business or 15 months.
15. (15) The following types of equipment considered as water conservation equipment for agricultural production purposes are eligible for financing in the production financing portion of the program: underground pipe; in-line valves; pipe increasers/reducers; gate valves; fittings and bushings; flow meters and accessories; complete circular watering systems; drip irrigation systems complete with installation; and any other equipment which can be identified and verified as water conservation equipment for use within the state.
16. (16) The following types of water conservation projects would be eligible for financing under the program: brush control projects, stock tank renovation or construction; dam renovation or construction; or any other project that can be identified as a water conservation project.
17. (17) A nonagricultural business meeting the criteria for being located in a rural area is eligible if the business provides an economic development benefit to a municipality or county in a rural area. Because the program is intended to "encourage the development or expansion of businesses in rural areas of this state," preference will be given to applicants who create or retain employment in a rural area.

Source Note:The provisions of this §28.70 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; transferred effective October 1, 2007, as published in the Texas Register September 28, 2007, 32 TexReg 6793.