SB2875 - Relating to the creation of the Texas Small Farm Recovery Microloan Progam.

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