TITLE agriculture

Part I. Texas Department of Agriculture

Chapter 28. Texas Agricultural Finance Authority Financial Assistance Program Rules

4 TAC §§28.2-28.4, 28.6-28.16

The Board of Directors (the board) of the Texas Agricultural Finance Authority (the Authority) of the Texas Department of Agriculture proposes amendments to §§28.2-28.4, 28.6-28.14 and new §28.15 and §28.16, concerning the Authority's financial assistance programs.

The amendments are proposed in order to provide an expansion of the financial assistance program available through the Authority. Changes are proposed throughout the existing rules to make them consistent with the new financial assistance expansion. In addition, the following changes are proposed. The proposed amendment to §28.2 expands the financial assistance programs to other agricultural-related rural economic development programs and eliminates the reference to a loan guaranty program. The proposed amendments to §28.3 expand the definition for an agricultural business by adding a business that is or proposes to be engaged in an agricultural-related rural economic development project; add a definition for a direct loan amount; add provisions for a direct loan and participation purchase to the interest rate; change the term "savings and loan association" to "savings bank" and eliminate any non-profit certified development company from the definition of a lender; add a definition for a participation purchase amount; change the definition of "programs" to include a direct loan program, a participation purchase program, and a loan guaranty program; expand the definition of "project" to include other agricultural-related rural economic development projects; and clarify that the qualified application can be submitted by the lender and/or the applicant for a project. Existing definitions have also been renumbered to accommodate new definitions. The proposed amendment to §28.6 changes the term "state treasury" to "office of the state comptroller" to update this section to reflect current practice. The proposed amendment to §28.7(a)(1) adds language to include other agricultural-related economic development projects. The proposed amendment to §28.7(a)(7) clarifies that the lender is to submit a preliminary letter of commitment under the loan guaranty program. The proposed amendment to §28.7(a)(8) requires the lender and borrower to submit a letter of commitment for the lender to service the loan when applying for a direct loan by the Authority. The proposed amendment to §28.7(9) is a renumbering of that subparagraph. The proposed amendment to §28.7(b) clarifies cost that are eligible under the financial assistance programs of the Authority and adds costs in connection with agricultural-related rural economic development projects. The proposed amendment to §28.7(c) clarifies the ineligible cost under the loan guaranty program. The proposed amendment to §28.8(a) proposes that the applicant or the lender may use the application form of the Authority in applying to the programs. The proposed amendment to §28.8(b) clarifies that the applicant to the direct loan program and the loan guaranty program must have lender participation before submitting the qualified application and staff will assist the lender in determining project eligibility before submission. The proposed amendment to §28.8(d) clarifies the handling of applications by staff and board for the programs. The proposed amendment to §28.8(e) clarifies the notification procedures for the programs of the Authority and changes the initial number of days to close a loan from 180 to 90 days. The proposed amendment to 28.8(i) clarifies that the Authority will make a good faith effort to provide financial assistance to businesses owned by minorities and women. The proposed amendment to §28.9(a) requires additional information from applicants to the programs. The proposed amendments to the title of §28.10 and subsection (a) replace the word commitment with assistance to clarify the programs and to be consistent with amendments made to other sections. The proposed amendment to §28.10(b) provides the minimum amount of financial assistance under the programs. The proposed amendment to §28.10(c) provides the maximum amount of financial assistance of each of the programs and provides a guideline for the board use in approving loan guaranty applications. The proposed amendment to §28.10(d) identifies the extent of participation purchased by the loan guaranty program in a commitment. The proposed amendment to §28.10(e) clarifies the interest rate to be allowed by the programs. The proposed amendment to §28.10(f) clarifies the maturity for commitments under the direct loan program, the participation purchase program and the loan guaranty program. The proposed amendment to §28.10(h) clarifies the fees charged to the applicant under the programs covered under Chapter 28 and deletes fees for Young Farmer Loan Guaranty and Farm and Ranch Finance Programs. The proposed amendment to §28.10(i) clarifies the closing procedures to the programs. The proposed amendment to §28.10(j) identifies the reporting requirements by lenders and borrowers participating in the programs. The proposed amendment to §28.11 clarifies the criteria for the approval of financial assistance under the programs. The proposed amendment to §28.12 clarifies the administrative responsibilities of lenders for approved financial assistance under the programs. The proposed amendment to §28.13 clarifies the requirements for a lender to qualify as an eligible lender for the financial assistance programs. The proposed amendment to §28.14 renames the section to collateral administration, clarifying that the section applies to the financial assistance programs. New §28.15 identifies the criteria and requirements to allow the Authority to purchase a portion of a loan made by a lender to an eligible borrower under the participation purchase program. New §28.16 identifies the criteria and requirements to allow the Authority to provide direct financial assistance to an eligible borrower with an eligible lender servicing the loan for a servicing fee provided by the program.

Robert Kennedy, Deputy Assistant Commissioner for Finance, has determined that for the first five year period that the proposed amendments and new sections are in effect there will be no anticipated fiscal implications to state or local government as a result of enforcing or administering the proposals.

Mr. Kennedy has also determined that for each year of the first five years the amendments and new sections are in effect, the public benefit anticipated as a result of enforcing the amendments and new sections will be the provision of financial assistance to more agricultural-related businesses in the state and to provide more efficient financial assistance programs. There is no anticipated effect on small businesses, except that eligible small businesses that are granted financial assistance under the Authority's programs will benefit from that assistance. There will be no anticipated economic costs to persons required to comply with the proposals other than regular costs associated with the application process for those seeking financial assistance from the Authority.

Comments on the proposal may be submitted to Robert Kennedy, Deputy Assistant Commissioner for Finance, Texas Department of Agriculture, P.O. Box 12847, Austin, Texas, 78711. Comments must be received no later than 30 days from the date of publication of the proposal in the Texas Register .

The amendments are proposed under the Texas Agriculture Code, §58.022, which provides the Authority with authority to adopt rules and procedures necessary for the administration of its programs including the setting and collection of fees in connection with the program; and §58.023, which provides the Authority to adopt rules to establish criteria for eligibility of applicant and lenders under the financial assistance programs.

The Texas Agriculture Code, Chapter 58 is affected by the proposed amendments and new rules.

§28.2.Purpose.

The purpose of the Texas Agricultural Finance Authority [ Loan Guaranty Program ] is to provide financial assistance to eligible agricultural businesses and to other agricultural-related rural economic development projects that otherwise would not be provided and that the board of the Texas Agricultural Finance Authority (the Authority) considers to present a reasonable risk and have a sufficient likelihood of repayment. The Authority is mandated to support the expansion, development, and diversification of production, processing, marketing, and exporting of Texas agricultural products and to support other agricultural-related rural economic development projects . These rules establish standards of eligibility and the application procedures for the Authority's financial assistance programs [ loan guaranty program ].

§28.3.Definitions.

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

(1)

(No change.)

(2)

Agricultural business--A business that is or proposes to be engaged in innovative, diversified, or value-added production, processing, marketing, or exporting of an agricultural product or a business that is or proposes to be engaged in an agricultural-related rural economic development project .

(3)

(No change.)

(4)

Applicant--Any person, corporation, partnership, cooperative, joint venture, or sole proprietorship filing an application with the Authority for financial assistance [ a loan guaranty ]. A lender may submit an application for any of the above-mentioned parties.

(5)

Application--An application, including supporting documentation and schedules as required by the Authority, for participation in the programs [ this program ].

(6)-(9)

(No change.)

(10)

Direct Loan Amount--With respect to loans made to an eligible applicant, a sum measured in terms of United States dollars that the Authority provides to the eligible applicant as identified in the application and the loan documents.

(11)

[ 10 ] Equity--The applicant's contribution to a project in the form of cash, land, or other depreciable property.

(12)

[ 11 ] Fund--The Texas agricultural fund.

(13)

[ 12 ] Interest rate--The interest rate charged on a guarantied loan or a direct loan shall be no less than the prime lending rate as published in the money rates section of the Wall Street Journal (Southwest Edition) plus 2.0%, floating, unless approved by the Board [ and the lender ]. The interest rate established on a participation purchased by the Authority from an approved lender will be the rate approved by the lender on the loan.

(14)

[ 13 ] Lender--A lending institution, including a bank, banking association, savings bank [ and loan association ], trust company, mortgage company, investment banker, credit union, underwriter, life insurance company, or any affiliate of those entities, and also including any other financial institution or governmental agency that customarily provides financing of agricultural loans or mortgages, or any affiliate of such an institution or agency, [ any nonprofit certified development company, ] or any institution that the board determines is an experienced and sophisticated lender.

(15)

[ 14 ] Loan guaranty amount--With respect to loans made by a lender and guaranteed by the Authority , a sum measured in terms of United States dollars that the Authority pays to the lender to acquire an undivided interest in any loan or, in the case of default by the borrower, the Authority agrees to pay to the lender, not to exceed the percentage as stated in the guaranty agreement.

(16)

Participation purchase amount--A sum measured in terms of United States dollars that the Authority agrees to provide to an eligible lender for the purchase of an undivided interest of a loan provided to an eligible borrower by a lender.

(17)

[ 15 ] Programs [ Program ]-- Any financial assistance program approved by the [ The Texas Agricultural Finance ] Authority board and defined by these rules including the Direct Loan Program, the Participation Purchase Program and the Loan Guaranty Program.

(18)

[ 16 ] Project--An enterprise which would further the expansion or development of [ innovative, diversified or value added ] production, processing, marketing or exporting of Texas agricultural products or other agricultural-related rural economic development project .

(19)

[ 17 ] Qualified application--A completed application, including all documents and information required by the Authority and submitted by the lender or applicant [ on behalf of an applicant ], for a project.

(20)

[ 18 ] Staff--The staff of the Authority or staff of the department performing work for the Authority.

(21)

[ 19 ] State--The State of Texas

§28.4.Examination of Records.

Any party requesting the examination of records pursuant to the Open Records Act, Texas Government Code, Chapter 552 [ Civil Statutes, Article 6252-17a ], shall indicate in writing the specific nature of the document to be viewed, and if copies are desired.

§28.6.Texas Agricultural Fund.

The fund, established in the office of the state comptroller [ state treasury ], may consist of general obligation bond or commercial paper note proceeds, appropriations or transfers made to the fund, guaranty fees, monies received from the operation of the program, interest paid on money in the fund from the operation of the program, interest paid on money in the fund and any other monies received from other sources for the fund. The board may provide for the establishment and maintenance of separate accounts within the fund, including loan guaranty program accounts as prescribed by the board.

§28.7.Project Eligibility Requirements.

(a)

Projects. An applicant is eligible for assistance from the Authority if the proposed project meets the following criteria:

(1)

the project provides significant benefits for the expansion or development of diversified, innovative, or value-added production, processing, marketing, or exporting of Texas agricultural products or provides significant benefits for other agricultural-related economic development projects ; provided that the board shall give priority to agricultural businesses that include producers of Texas agricultural products; provided, also, that the board will give preference to applicants, the majority ownership of which is held by citizens of the United States; and if the applicant is a corporation, the board will give preference to a corporation organized under the laws of the State of Texas with majority ownership by Texas residents; provided further, that the board will give preference to applicants who are Texas residents doing business in the state and to applicants who can demonstrate that the financed activities will take place predominantly in the state; provided that the board will also give preference to those agricultural businesses that demonstrate a significant new technology or market opportunity for Texas producers; provided, finally, that the board may decline to assist those businesses whose primary purpose is to establish or expand conventional agricultural production;

(2)-(6)

(No change.)

(7)

for the Loan Guaranty Program, the lender submits a preliminary letter of commitment to make the loan based on a partial guaranty from the Authority; [ and ]

(8)

for the Direct Loan Program, the lender and borrower submit a preliminary letter of commitment that the lender will service the loan based upon the approval of a direct loan by the Authority; and

(9)

[ 8 ] the applicant provides evidence satisfactory to the board that financial assistance is not otherwise available.

(b)

Project costs. The proceeds of the financial assistance provided by the Authority [ guaranteed loan ] may be used to finance costs incurred in connection with the [ innovative, diversified, or value-added ] production, processing, marketing, or export of Texas agricultural products or in connection with the development of other agricultural-related rural projects , including, but not limited to, the costs of:

(1)-(12)

(No change.)

(c)

Ineligible project costs. Under the loan guaranty program, costs [ Costs ] which are not eligible include, but are not limited to, refinancing of existing debt, where the refinancing will improve the lender's position in the loan, whether classified or not, by allowing for the refinancing of those projects through the program.

§28.8.Filing Requirements and Consideration of Applications.

(a)

Application forms. An applicant or lender seeking a loan guaranty from the Authority may [ must ] use the application forms provided by the Authority.

(b)

Submission of a qualified application. Applicants [ All applicants ] are required to obtain a commitment from a lender to participate in the direct loan program or the loan guaranty program before qualified applications will be accepted by the Authority. Staff will be available prior to submission of the qualified application to assist lenders or applicants in determining project eligibility.

(c)

(No change.)

(d)

Board review. Staff will submit a report on each qualified application to the board, provided that the board has directed staff to present only those applications which meet those minimum underwriting standards established in the Credit Policy and Procedures, which shall include a recommendation for approval or denial. If staff determines that an application does not meet the minimum underwriting standards established in the Credit Policy and Procedures, then staff shall notify the applicant and the lender in writing to this effect, and shall advise them of which minimum underwriting standards are not met. If staff determines during the underwriting process, that the minimum standards not met are mitigated by other factors in the application, then staff can present the application to the board identifying the waivers to the Credit Policy and Procedures and the mitigating factors. If staff cannot determine mitigating factors for the waivers, then staff will notify the [ The ] applicant and /or the lender that they may appeal the determination of the staff to the board [ Board ], but shall have the burden of convincing the board [ Board ] that the minimum standards not met should be waived. The board may, in its discretion, recommend the imposition of conditions and requirements in connection with approval of a qualified application. Approval of a qualified application will be by a majority of a quorum of the board, except for the approval requirements identified in §28.10 (c) of this title (relating to General Terms and Conditions of the Authority's Financial Assistance [ Commitment ]). Applications submitted to the Authority for the participation program will not be considered if the eligible project does not meet the minimum underwriting standards established in the Credit Policy and Procedures established by the Authority.

(e)

Notification of approval. Upon conditional approval of the qualified application by the board, the Authority will notify the lender and the applicant in writing identifying the terms and conditions of the financial assistance provided [ loan guaranty ]. The board may set certain time limits regarding the acceptance of loan commitments by the applicant and lender and time limits regarding the closing of loans by the applicant and lender; however, in no event shall the time period exceed 30 days to accept the commitment and 90 [ 180 ] days to close the loan, provided that the board may approve one additional extension of the commitment for a period of no more than 60 days. Under the loan guaranty program, the [ The ] lender will prepare the written agreements and documents necessary to close the loan guaranty in accordance with the terms and conditions set forth in the notice of conditional approval. The Authority will send the lender and the applicant final notice of guaranty approval after review of the closing documents by the Authority's legal counsel. Under the direct loan program, the Authority will prepare the closing documents in cooperation with the Authority's legal counsel and notify lender and/or borrower of the closing date established. The lender will disburse the loan according to the terms of the note and/or loan agreement.

(f)-(h)

(No change.)

(i)

The Authority shall make a good faith effort to provide financial assistance [ loan guaranties ] to businesses owned by minorities and women.

§28.9.Contents of Qualified Application.

(a)

Required information. The qualified application must set forth the information necessary for the determination of eligibility and will include the following, if applicable:

(1)

applicant's name , [ and ] address and telephone numbers ;

(2)

(No change.)

(3)

articles of incorporation and bylaws , a certificate of good standing with the secretary of state, or other instruments that establish or describe the legal operation or structure of the business;

(4)

a business plan which includes the following:

(A)

information describing the products or services to be offered; and

(B)

how such [ innovative, diversified or value-added ] products or services will help to expand, develop , or diversify Texas agriculture or the rural economy of the state ;

(C)

an estimate of the number of jobs created or retained by the project; and

(D)

a statement of what percentage of Texas products and suppliers will be used by the project:

(5)-(16)

(No change.)

(b)

(No change.)

§28.10.General Terms and Conditions of the Authority's Financial Assistance [ Commitment ].

(a)

Permissible use of financial assistance [ commitment ]. The Authority's financial assistance [ commitment ] is to be used to finance the project identified on the qualified application.

(b)

Minimum amount of financial assistance [ loan guaranty ]. The Authority shall not provide financial assistance to an applicant where the guarantied amount of the loan is less than $30,000.

(c)

Maximum amount of financial assistance [ loan guaranty ]. The Authority shall not provide a loan guaranty or a participation purchased to an applicant, including its affiliates, that at any one time exceeds $2 million except that by a two-thirds vote of the board , the total aggregate participation purchase or loan guaranty may exceed $2 million but may not exceed $5 million. The assistance in the form of a loan guaranty shall not exceed 90% of the total loan. The Authority board will apply the following as a guideline when approving loan guaranty applications: a guaranty may not exceed 75% on guaranties of $2 million and over; a guaranty may not exceed 80% for guaranties between $1 million and $1,999,999; a guaranty may not exceed 85% for guaranties between $500,000 and $999,999; and a guaranty may not exceed 90% for guaranties between $30,000 and $499,999. The financial assistance in the form of a guaranty shall never exceed 90% of the total loan or $5 million, whichever is less. Furthermore, the Authority may make, guaranty, insure, coinsure, or reinsure a loan up to the limits described above for a single eligible business which already has an active loan and will consider the guaranty percentage under which the active loan was guarantied, if the action is approved by a two-thirds vote of the members present. The maximum direct loan is $250,000 as established in §28.16(a) of this title (relating to Criteria for a Direct Loan).

(d)

Extent of participation in a guaranteed loan . The Authority shall participate in each and every guaranteed loan in an amount not to exceed 80% of the Loan Guaranty Amount, not to exceed the limits in subsection (c) of this section.

(e)

Interest. The interest rate on the guaranteed loan (not including guaranty fees) shall be the rate charged by the lender and approved by the Authority , subject to the definition established in §28.3 of this title (relating to Definitions) .

(f)

Maturity. The maturity of the direct loan, participation purchased, or loan guaranty approved by the Authority must not exceed the useful life of the collateral and may be negotiated between the Authority , [ and ] the lender , and/or the borrower .

(g)

(No change.)

(h)

Fees. The board has adopted the following fee schedule which will be used to calculate the [ loan guaranty ] fees [ fee ] payable by the applicant to the Authority within ten days of the initial funding of the loan. A nonrefundable application fee will be required with the qualified application. If the qualified application is approved, the application fee will be credited [ considered ] as part of the total [ loan guaranty ] fees [ fee ] charged . Any and all legal fees incurred by the board in issuing a direct loan or loan guaranty [ and participating in any loan ] will be an obligation of the applicant.

Figure: 4 TAC §28.10(h)

(i)

Closing the financial assistance provided [ loan guaranty ]. The lender, the applicant, and the commissioner of agriculture or his designee may attend the verification and signing of the closing documents as prepared by staff and/or [ and ] the lender.

(j)

Reporting requirements for loan guaranties and participations purchased .

(1)

(No change.)

(2)

The applicant shall provide annual financial statements including a balance sheet, income statement and cash flow statement [ statements ] ; payment receipts of personal property taxes; and a statement of the annual employment of the applicant's business to the lender. Annual financial [ Such ] statements should be audited but, if not, they must be signed by the owner of the project. Annual employment shall be expressed in terms of annual full-time equivalent positions. The lender shall submit these reports to the Authority. If necessary , the Authority may request other reports or documentation reasonably necessary for [ to ] an assessment of the applicant's compliance with the program.

§28.11.Criteria for Approval of [ a ] Financial Assistance [ Loan Guaranty ].

(a)

(No change.)

(b)

Reasonable risks. There must be reasonable assurance, in the judgment of the Authority, that the financial assistance provided [ loan ] can and will be paid back according to its terms. In making this judgment the Authority may consider the following:

(1)-(2)

(No Change.)

(3)

firm commitments from other independent and responsible financial sources for all other funds in excess of the financial assistance provided [ loan guaranty ];

(4)

collateral and other sources of guaranties or insurance securing the financial assistance provided [ loan ];

(5)-(7)

(No Change.)

(c)

Eligibility of lender. The lender originating an application to the financial assistance programs [ a loan ] must have a continuing ability to evaluate, perform and service the loan; make the necessary reports as identified in the rules of the program; and collect the loan, if requested by the Authority, upon default. The lender must agree to exercise due diligence in the servicing, maintenance, review, and evaluation of performance without regard to the existence of participation by the Authority or any other limitation of risk. The Authority reserves the right to refuse to enter into [ loan guaranty ] an agreement [ agreements ] with lenders which, in the judgment of the Authority, do not have the capacity or interest to appropriately make and service the loan.

(d)

The Authority has adopted a Credit Policy and Procedures document which contains additional criteria and guidelines used by the Authority in the loan guaranty review and approval process. The Credit Policy and Procedure document is adopted by reference herein. Copies may be obtained from the Finance and Agribusiness Development Division [ Program ], Texas Department of Agriculture, P.O. Box 12847, Austin, Texas 78711, (512) 475-1619.

§28.12.Loan Administration.

The lender shall service the loan and receive all payments of principal and interest, including assessment of any late charges, if applicable, in accordance with its loan servicing agreement, loan guaranty agreement and/or participation agreement, whichever is applicable with the Authority, which agreement may [ shall ], among other things, obligate the lender to service the loan even after an event of default.

§28.13.Eligible Private Lenders.

(a)

Letter of request. Each lender is required to qualify itself for participation in the program by submitting a letter of request, accompanied by its most recent audited financial statements, if available, a copy of the latest statement of condition and income filed with the financial institution's regulator, if any, and the designation of the individual(s) within the lender who will be responsible for working with the Authority.

(b)

(No change.)

(c)

Lender interest. As a condition to receiving a loan guaranty [ participation ], the lender must retain an interest of at least 10% in the principal amount of the guarantied loan and agree to administer the loan in accordance with the guaranty agreement, the participation agreement and this chapter and in such manner as if there were no limitations of risk.

(d)

Commitment letter. A lender interested in making a loan guaranteed under this chapter or servicing a direct loan under this chapter [ the program ] must submit a qualified application along with a commitment letter to the Authority outlining the terms and conditions of the proposed loan. The letter will show the name of the business, purpose of the loan, amount and use of the funds, proposed closing date, and collateral for the financial assistance [ loan guaranty amount ] that the applicant [ lender ] is seeking from the Authority.

Collateral [ Loan Guaranty ] Administration.

(a)

Except as otherwise provided by state law, by these rules, or by resolution of the board, the staff, with the approval of the commissioner of agriculture, the deputy commissioner of agriculture or the official of the department designated by the commissioner of agriculture as being responsible for the department's agricultural finance programs shall have the authority to act on behalf of the Authority, without specific board approval, in regard to the collection, settlement, and enforcement of each and every commitment [ loan guaranteed by the Authority ] under the programs [ program ]. Such authority shall include, without limitation, the actions required to be taken by the Authority under any loan agreement, any participation agreement [ any loan guaranty agreement, ] and any other agreement entered into by the Authority concerning financial assistance provided [ a loan guarantied ] by the Authority [ under the program ].

(b)

(No change.)

§28.15.Criteria for Approval of a Participation Purchased.

(a)

Eligibility requirements. The Authority may purchase an undivided interest in a loan made by a lender provided that:

(1)

the project meets the eligibility criteria as defined in §28.7 of this title (relating to Project Eligibility Requirements);

(2)

the project meets the guidelines of the Authority's Credit Policy and Procedures document incorporated by reference herein as stated in §28.11(d) of this title (relating to Criteria for Approval of Financial Assistance);

(3)

the undivided interest purchased by the Authority does not exceed the maximum amount as stated in §28.10(c) of this title (relating to General Terms and Conditions of the Authority's Financial Assistance); and

(4)

the lender meets the eligibility criteria as defined in §28.13 of this title (relating to Eligible Private Lenders) and shall service the loan as defined in §28.12 of this title (relating to Loan Administration).

(b)

Interest rate. The participation purchased by the Authority shall be at the same interest rate as the original loan made by the lender, unless a different rate is approved by the board or its designee.

(c)

Written agreement. The participation purchased by the Authority shall be evidenced by a Participation Agreement supplied by the Authority and executed by both the lender and the Authority.

(d)

Required documentation. The lender must submit a complete credit package, including the lender's credit analysis, borrower's financial information and other documents necessary for the Authority to evaluate the borrower's financial condition. If the lender has already made the loan, a copy of all collateral and security documents should be submitted with the application.

(e)

Staff review. Staff will review the credit package for completeness and will notify the lender of any additional information required. When all required information has been received, staff will conduct a credit review, evaluate the technical and market feasibility of the project, and examine the benefits of the project for Texas agriculture and economic growth in the state.

(f)

Board review. Staff will submit a report on each participation to be purchased to the board, which shall include a recommendation for approval or denial. If staff determines that a participation does not meet the minimum underwriting standards established in the Credit Policy and Procedures, then staff shall notify the lender in writing to this effect, and shall advise the lender of which minimum underwriting standards are not met. The lender may resubmit the participation application for further consideration at such time as the minimum standards are met. Approval of a participation will be by a majority of a quorum of the board, except for the approval requirements identified in Section 28.10(c) of this title.

§28.16Criteria for a Direct Loan.

(a)

Determination of need. The Authority has identified a potential need for an opportunity to provide a direct loan to eligible applicants in cooperation with the eligible applicant's local lending institution. The Authority will consider a direct loan to an eligible applicant only when an applicant and lender provide the Authority evidence that a direct loan is in the best interest of the eligible applicant, the lender and the Authority.

(b)

Eligibility requirements. The Authority may make direct loans to eligible applicants not to exceed $250,000 provided that:

(1)

the lender and the applicant submit the information necessary for a qualified application as defined in §28.9 of this title (relating to Contents of Qualified Application);

(2)

the project meets the eligibility criteria as defined in §28.7 of this title (relating to Project Eligibility Requirements) with the exception of §28.7(a)(7) and §28.7(c);

(3)

the project meets the guidelines of the Authority's Credit Policy and Procedures document incorporated by reference herein as stated in §28.11(d) of this title (relating to Criteria for Approval of Financial Assistance);

(4)

the lender agrees, in writing, that the direct loan from the Authority is necessary for the furtherance of the project; and

(5)

the lender agrees to service the loan based upon the payment of a servicing fee by the Authority as agreed between lender and Authority.

(c)

Notification of approval. Upon conditional approval of the qualified application by the board, the Authority will notify the applicant and the participating lender in writing, identifying the terms and conditions of the loan. The board may set certain time limits regarding the acceptance of the loan by the applicant and time limits regarding the closing of the loan by the applicant and the Authority, however, in no event shall the time period exceed 30 days to accept the commitment and 90 days to close the loan. The Authority will prepare the written agreements and documents necessary to close the loan in accordance with the terms and conditions set forth in the notice of approval. The Authority and the lender will disburse the loan according to the terms of the note and/or the loan agreements.

(d)

Notification of denial. If the board denies the qualified application, the Authority will notify the applicant in writing identifying the reasons for denial. Applicants who have been denied may re-apply to the program.

(e)

Other requirements. A qualified application for a direct loan from the Authority will be subject to the filings and considerations established in §28.8 of this title (relating to Filing Requirements and Consideration of Applications) with the exception that any reference to "lender" would be deemed as "not applicable".

(f)

Fees. The Authority may charge fees, including origination fees, as it deems appropriate. Fees for direct loans will be adopted by the board and included on the fee schedule found at §28.10(h) of this title (relating to General Terms and Conditions of the Authority's Financial Assistance). Fees may be included in the amount of the loan provided by the Authority.

(g)

Interest rate. The interest rate on the direct loan (not including origination fees) shall be the rate defined in §28.3(13) of this title (relating to Definitions) unless a different rate is approved by the Authority.

(h)

Maturity. The maturity of the direct loan approved by the Authority must not exceed the useful life of the collateral and may be negotiated between the Authority and the borrower.

(i)

Security. Loans must be secured by collateral of a type, amount, and value which, when considered with other criteria, affords reasonable assurance of repayment.

(j)

Closing the loan. The staff of the Authority, the borrower, the commissioner of agriculture or her designee may attend the verification and signing of the closing documents as prepared by staff and its legal counsel. The closing will take place at a time and location to allow for the highest degree of convenience for the Authority, borrower and any other parties necessary to close the loan.

(k)

Closing Costs. All closing costs, including legal fees, shall be paid by the borrower.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on May 17, 1999.

TRD-9902835

Dolores Alvarado Hibbs

Deputy General Counsel

Texas Department of Agriculture

Earliest possible date of adoption: June 27, 1999

For further information, please call: (512) 463-4075


Part II. Texas Animal Health Commission

Chapter 35. Brucellosis

Subchapter B. Eradication of Brucellosis in Swine

4 TAC §35.41, §35.42

The Texas Animal Health Commission proposes amendments to §35.41 and §35.42, concerning Eradication of Brucellosis in Swine. Section 35.41 is being amended to more clearly communicate that swine herds which contain exposed swine are subject to existing restrictions and subsequent testing requirements as contained in the regulations. Section 35.42 is being amended to reflect changes in the current testing methodology for brucellosis in swine. The Automated Complement Fixation (ACF) test is no longer available and therefore is being deleted from the current rules which leaves the Particle Concentration Fluorescence Immunoassay (PCFIA) as the primary confirmatory test. The rule is also being modified in regards to the rivanol test to clearly establish the same standard as found in the Uniform Methods and Rules (UM&R) adopted by the United States Animal Health Association and approved by the Animal and Plant Health Inspection Service, Veterinary Services for swine brucellosis by requiring that the results be evaluated by a designated brucellosis epidemiologist. Language was added to clearly provide, that under the current rules, swine testing positive for brucellosis would be considered exposed and the herd of origin could be subject to testing requirements.

Suzy Whittenton, Assistant Executive Director of Administration, Texas Animal Health Commission, has determined for the five-year period the rules are in effect, because this is a change to provide greater clarity of existing requirements there will be no new fiscal implications for state or local government as a result of enforcing or administering the rules because the proposed changes are for the purpose of providing greater clarity to existing rules.

Ms. Whittenton also has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the rules will be clear and concise regulations. There is no anticipated economic cost to persons who are required to comply with the rules as proposed.

Comments regarding the proposed amendments may be submitted to Edith Smith, Texas Animal Health Commission, 2105 Kramer Lane, Austin, Texas 78758.

The amendments are proposed under the Texas Agriculture Code, Chapter 161, §161.041(a) and (b), §161.046 which authorizes the Commission to promulgate rules in accordance with the Texas Agriculture Code.

No other statutes, articles, or codes are affected by the proposed amendments.

§35.41.Definitions.

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

(1)

Adjacent herd--A herd of swine that occupies a premise that borders a herd known to be affected. (This includes herds separated by roads or fordable streams.)

(2)

Boar--An uncastrated male swine that has reached a stage of maturity that allows him to be used as a breeding animal. The term also includes those uncastrated male swine that because of age or infirmity are no longer capable of being used for breeding.

(3)

Brucellosis exposed swine--Swine that are part of a known infected herd or that have been in contact with brucellosis reactors in marketing channels for periods of 24 hours or longer, or for a period of less than 24 hours if the reactor has recently aborted, farrowed, or has a vaginal or uterine discharge. These animals are considered exposed regardless of the blood test results. Brucellosis suspect swine are also considered to be exposed. Brucellosis exposed swine must be placed under hold order or quarantine and restricted pending slaughter or pending release by the Texas Animal Health Commission (TAHC).

(4)

Herd--

(A)

all swine under common ownership or supervision that are grouped on one or more parts of any single premises (lot, farm, or ranch);

(B)

all swine under common ownership or supervision on two or more premises that are geographically separated, but on which swine have been interchanged or where there has been contact among them on the different premises. Contact between swine on the different premises will be assumed unless the owner establishes otherwise and the results of the epidemiologic investigation are consistent with the lack of contact between premises; or

(C)

all swine on common premises, such as community pastures, grazing association units, or waste food feeding complexes but owned by different persons. Other groups of swine owned by the persons involved which are located on other premises are considered to be part of this herd unless the epidemiological investigation established that swine from the affected herd have not had the opportunity for direct or indirect contacts with swine from that specific premises.

(5)

Herd of origin of swine--Any herd or premises on which swine are farrowed and raised or premises on which those swine were maintained for a period of 60 days or more immediately before being shipped.

(6)

Herd test--The herd test shall include all sexually intact swine six months of age and older. All swine tested shall be identified with an eartag, tattoo, or other permanent identification. (All swine held for feeding purposes are exempt from herd test provided they are maintained separate and apart from the breeding herd.)

(7)

High risk herd--A herd that is epidemiologically judged by a state/federal veterinarian to have a high probability of having or developing brucellosis. A high risk herd need not be located on the same premise as an infected or adjacent herd.

(8)

Identification of reactor--Reactor swine are to be identified by placing a red serially numbered reactor tag in the left ear.

(9)

Infected herd--A herd of swine in which one or more reactors has been disclosed.

(10)

Infected herd retest--A retest of an infected herd shall include all sexually intact swine of weaning age or older.

(11)

Market swine test (MST)--Tests on sows and boars moving in trade through livestock markets, stockyards, buying stations, or to slaughter establishments and those sows and boars assembled at farms or ranches that are being readied for immediate movement to markets, stockyards, or a slaughter establishment or to other sales.

(12)

Sow--A female swine that has given birth to one or more pigs or that is parturient.

(13)

Swine classification--

(A)

Negative--An animal that is considered and judged to be free of swine brucellosis by a state/federal veterinarian according to the guidelines found in §35.42 of this title (relating to Classification of Swine by Blood and Semen Tests).

(B)

Suspect--An animal which tests indicate may be infected with brucellosis and classified as such by a state/federal veterinarian according to the guidelines found in §35.42 of this title (relating to Classification of Swine by Blood and Semen Tests). Animals classified as suspects will be identified as brucellosis exposed swine.

(C)

Reactor--An animal considered and determined to be infected with swine brucellosis by a state/federal veterinarian based on testing and guidelines in §35.42 of this title (relating to Classification of Swine by Blood and Semen Tests).

(14)

Swine Commuter Herd--A swine entity with operations in two or more states and whose normal management practices involve movement of swine interstate between operations which it controls, without change of ownership. A swine Commuter Herd Agreement must be signed by a representative of the swine entity and the State Chief Animal Health Officials where swine entity is located. This Agreement will continue until canceled by the swine entity or one of the signatory states.

(15)

Waste food feeding complex--A premise where more than one owner raises swine and where at least one of the owners feeds waste food to swine.

(16)

Waste food feeding operation (garbage feeder)--A swine operation that feeds material defined as garbage in §55.3 of this title (relating to Feeding of Garbage).

§35.42.Classification of Swine by Blood and Semen Tests.

(a)

Tests on blood serum.

(1)

Standard card test (SCT). Card test results are used to classify swine as positive or negative. All swine positive to the SCT should be subjected to confirmatory testing.

(2)

Confirmatory test procedures. The Particle Concentration Fluorescence Immunoassay (PCFIA) will serve as the confirmatory test. [ The confirmatory test procedures authorized for use are as follows. ]

[ (A)

Particle Concentration Fluorescence Immunoassay (PCFIA). ] Interpretation of the PCFIA result is made in accordance with the following.

Figure: 4 TAC 35.42(a)(2)

[ (B)

Automated Complement Fixation (ACF). ]

[ Figure: 4 TAC 35.42 (a)(2)(B) ]

(3)

Rivanol test. The results of the rivanol test are to be evaluated by the designated brucellosis epidemiologist.

Figure: 4 TAC 35.42(a)(3)

(b)

Semen plasma test. This test is approved for use as a supplemental test of boars used for artificial insemination but must be employed with other serological tests. Final classification will be based on the most reactive test procedure.

(c)

Animals not testing negative on any blood test performed will be considered as brucellosis exposed swine and an initial test of the herd of origin will be conducted within a specified time set by a state-federal veterinarian upon consultation with the herd owner unless waived by the designated brucellosis epidemiologist.

(d)

[ (c) ] Reclassification. Animals may be reclassified by the designated epidemiologist when consideration and evaluation of relevant bacteriologic, serologic, or epidemiologic evidence justifies the reclassification.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on May 17, 1999.

TRD-9902837

Gene Snelson

General Counsel

Texas Animal Health Commission

Earliest possible date of adoption: June 27, 1999

For further information, please call: (512) 719-0714


Chapter 40. Chronic Wasting Disease

4 TAC §§40.1-40.4

The Texas Animal Health Commission proposes a new Chapter 40, concerning Chronic Wasting Disease in cervidae. This proposal creates new §§40.1-40.4. Section 40.1 provides definitions for terms contained in the new sections. Section 40.2 is general requirements and provides for testing procedures and the designation of an official test. Section 40.3 is for complete monitored herds and established the procedures and standards in order to participate in this category. Section 40.4 established entry requirements for out of state cervidae herds.

Chronic Wasting Disease (CWD) is a transmissible spongiform encephalopathy of deer and elk. CWD was initially described as a clinical syndrome in native mule deer and black-tailed deer held in a wildlife research facility in Colorado, in 1967. The disease was later reported in additional research facilities in Colorado and Wyoming. By the early 1990's, the disease had been documented in free-ranging mule deer and elk in north-central Colorado and southeastern Wyoming. In December 1997, the disease was confirmed in two commercial elk operations in South Dakota. CWD has since been diagnosed in two additional commercial elk herds in South Dakota, one elk herd in Nebraska, and one elk herd in Oklahoma. Quarantines were placed on the affected commercial herds by the state animal health authorities.

Chronic Wasting Disease is known to affect mule deer, black-tailed deer, elk and white-tailed deer. The susceptibility of other species native and exotic cervidae is unknown. Clinical signs include chronic weight loss, emaciation, excessive thirst, excessive frequency of urination, excessive salivation, and behavioral changes. The disease is progressive and always fatal. Based on the epidemiology of the disease, transmission is thought to be lateral and possibly maternal. Although not fully characterized, the causative agent is thought to be an infectious proteinaceous particle commonly referred to as a prion which is known to be extremely resistant to conventional heat and chemical disinfection procedures.

Suzy Whittenton, Assistant Executive Director of Administration, Texas Animal Health Commission, has determined for the first five-year period the rules are in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the rules.

Ms. Whittenton also has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the rules will be clear and concise regulations as well as orderly commerce and improved marketability of Texas-origin cervidae which are certified as free of chronic wasting disease. There will be no effect on small businesses. The additional cost for such operations would only apply to those that voluntarily elect to be certified for Complete Monitored Herd status. Their expense would be limited to paying a private veterinarian for collection and submission of blood samples to the state/federal lab.

Comments regarding the proposed new rules may be submitted to Edith Smith, Texas Animal Health Commission, 2105 Kramer Lane, Austin, Texas 78758.

The new rules are proposed under the Texas Agriculture Code, Chapter 161, §161.041(a) and (b), and §161.046 which authorizes the Commission to promulgate rules in accordance with the Texas Agriculture Code. Also the Commission relies upon §161.081 to address issues related to importation of these animals.

No other statutes, articles, or codes are affected by the proposed new rules.

§40.1.Definitions.

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

(1)

Chronic Wasting Disease (CWD) - A transmissible spongiform encephalopathy (TSE) of deer and elk.

(2)

CWD Profile - A deer or elk 16 months of age or older that is emaciated and exhibits some combination of clinical signs including abnormal behavior, increased salivation, tremors, stumbling, incoordination, difficulty in swallowing , excessive thirst, and excessive urination.

(3)

Commission - The Texas Animal Health Commission.

(4)

Herd - A group of deer or elk maintained on common ground, or two or more groups of deer or elk under common ownership or supervision that are geographically separated but can have an interchange or movement without regard to health status.

(5)

High Risk Animal - A deer or elk which has had direct contact with an animal which has been confirmed to be affected with CWD. In herds with evidence of transmission, as determined by an epidemiological investigation, high risk animals include all animals that have had contact with the affected animal(s) at any time during a 12 month period preceding the initial observation of clinical signs. In herds without evidence of transmission, as determined by an epidemiological investigation, high risk animals include all animals that have had contact with the affected animal at any time during a 12 month period preceding death of the affected animal.

(6)

Official Eartag - An identification eartag that provides unique identification for each individual animal by conforming to the alphanumeric National Uniform Eartagging System.

(7)

Official Laboratory - The National Veterinary Services Laboratory, United States Department of Agriculture, Ames, Iowa, is the reference laboratory for CWD diagnostic procedures.

(8)

Positive Herd - A herd in which a diagnosis of CWD has been confirmed by the National Veterinary Services Laboratory.

(9)

Suspicious Animal - A deer or elk which has clinical signs which resemble the CWD profile.

(10)

Suspicious Herd - A herd in which one or more animals are observed with clinical signs which resemble the CWD profile.

(11)

Trace Herd - The term includes both traceback and traceforward herds. A traceback herd is any herd where an affected animal has resided during a 36 month period prior to death. A trace-forward herd is any herd which has received animals from a positive herd during a 30 month period prior to death of the affected animal.

§40.2.General Requirements.

(a)

Procedures for issuing hold orders and quarantines.

(1)

All herds suspicious of CWD, in which one or more animals are observed with signs which resemble the CWD profile, shall be reported to a representative of the Commission. The herd shall be restricted by hold order until the investigation and diagnosis have been completed.

(2)

Trace herds shall be restricted by hold order until an epidemiologic investigation has been completed and the herd has met all requirements specified in a herd plan.

(3)

CWD positive herds hall be restricted by quarantine until the herd has met all requirements specified in a herd plan.

(4)

All suspicious, trace, and positive herds not complying with the requirements of an investigation or herd plan shall be restricted by quarantine.

(b)

Procedures in suspicious, trace and positive herds.

(1)

CWD suspicious animals shall be presented to a representative of the Commission for the purpose of collection and submission of appropriate samples to an official laboratory for diagnosis.

(2)

Disposition of a positive herd without evidence of transmission within the herd as determined by TAHC or USDA epidemiologist following completion of the investigation. A herd plan will be developed by TAHC or USDA epidemiologist in consultation with the herd owner, and their veterinarian (if requested by the owner). The herd plan shall include the following requirements for a period of five years:

(A)

Routine visual inspection of all animals in the herd by a TAHC or USDA veterinarian for the purpose of early detection of CWD suspicious animals.

(B)

Annual verification of herd inventory by a TAHC or USDA veterinarian.

(C)

Mandatory reporting of all CWD suspicious animals and all death losses. Mortality in animals 16 months of age or older shall be shall be immediately reported to a TAHC or USDA veterinarian for the purpose of collection of appropriate samples for submission to an official laboratory for CWD surveillance.

(D)

High risk animals must be removed from the herd and:

(i)

Humanely destroyed, tested for CWD, and disposed of as specified in subsection (c) of this section, or

(ii)

Maintained under hold order for 48 months from the last case of CWD.

(3)

Disposition of a positive herd with evidence of transmission within the herd as determined by a TAHC or USDA epidemiologist following completion of the investigation. A herd plan will be developed by a TAHC or USDA epidemiologist in consultation with the owner, and their veterinarian (if requested by the owner). The herd plan shall include the following requirements for a period of five years:

(A)

Routine visual inspection of all animals in the herd by a TAHC or USDA veterinarian for the purpose of early detection of CWD suspicious animals.

(B)

Annual verification of herd inventory by a TAHC or USDA veterinarian.

(C)

Mandatory reporting of all CWD suspicious animals and all death losses. Mortality in animals 16 months of age or older shall be immediately reported to a TAHC or USDA veterinarian for the purpose of collection of appropriate samples for submission to an official laboratory for CWD surveillance.

(D)

High risk animals must be removed from the herd and:

(i)

Humanely destroyed, tested for CWD, and disposed of as specified in subsection (c) of this section, or

(ii)

Maintained under hold order for 48 months from the last case of CWD.

(E)

The herd shall remain under quarantine for 36 months from the case of CWD.

(4)

Disposition of trace herds. A herd plan will be developed by a TAHC or USDA epidemiologist in consultation with the owner, and their veterinarian (if requested by the owner). The herd plan shall include the following requirements for a period of three years:

(A)

Routine visual inspection of all animals in the herd by a TAHC or USDA veterinarian for the purpose of early detection of CWD suspicious animals.

(B)

Annual verification of herd inventory by a TAHC or USDA veterinarian.

(C)

Mandatory reporting of all CWD suspicious animals and all death losses. Mortality in animals 16 months of age or older shall be immediately reported to a TAHC or USDA veterinarian for the purpose of collection of appropriate samples for submission to an official laboratory for CWD surveillance.

(D)

High risk animals must be removed from the herd and:

(i)

Humanely destroyed, tested for CWD, and disposed of as specified in subsection (c) of this section, or

(ii)

Maintained under hold order for 48 months from the last potential exposure.

(c)

Destruction of suspicious and high risk animals. Animals destroyed due to a presumptive diagnosis of CWD, including high risk animals in positive and trace herds, shall be humanely euthanized, appropriate samples collected to confirm the diagnosis, and disposed of by deep burial or incineration, including all animal products, by-products, and contaminated materials:

(1)

on the premises where disclosed, or

(2)

at a facility approved by the executive director.

§40.3.Herd Status Plans for Cervidae.

Complete Monitored Herd.

(1)

Participating herds must have adequate perimeter fencing to prevent ingress and egress of cervids.

(2)

Surveillance in participating herds is accomplished by collection and submission of appropriate samples form all cases of mortality in animals over 16 months of age. Exemptions are provided for animals consigned to commercial slaughter operations with state or federal meat inspection.

(3)

An annual inventory in participating herds shall be verified by a TAHC, USDA or Accredited veterinarian. All animals over one year of age shall be identified with an official eartag or other approved identification device. All animals less than one year of age shall be officially identified on a change of ownership.

(4)

Herd status designation shall be assigned on the basis of the number of years of participation provided that CWD is not confirmed in the herd:

(A)

Level A - One full year of participation.

(B)

Level B - Two to three years of participation.

(C)

Level C - Four to five years of participation.

(D)

Level D - Six years or more of participation.

(5)

Additions to Complete Monitored Herd

(A)

Additions may originate from herds of equal or higher status with no change in the status of the receiving herd.

(B)

Additions may originate from herds of lower status with the receiving herd acquiring the lower status of the herd(s) involved.

§40.4.Entry Requirements.

(a)

Cervids that originate form herds not known to be affected with or exposed to CWD may enter without restrictions, provided that:

(1)

the state of origin requires all suspicious or confirmed cases of CWD be reported to the state veterinarian, and

(2)

the state of origin has the authority to restrict movement of suspicious, trace and positive herds.

(b)

In addition to the requirements specified in subsection (a) of this section, cervids that originate from positive or trace herds may be approved for entry if an epidemiological investigation indicates the consignment is at low risk of exposure to CWD, the herd of origin is not restricted by quarantine or hold order, and the consignee agrees to comply with requirements specified in §40.2(b) of this title (relating to General Requirements).

(c)

In addition to the requirements specified in subsections (a) and (b) of this section, cervids that originate from herds located in areas where CWD is known to be endemic in wildlife, the herd of origin must have a CWD monitored status recognized in the state of origin with at least one year of participation.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on May 17, 1999.

TRD-9902839

Gene Snelson

General Counsel

Texas Animal Health Commission

Earliest possible date of adoption: June 27, 1999

For further information, please call: (512) 719-0714


Chapter 43. Tuberculosis

Subchapter C. Eradication of Tuberculosis in Cervidae

4 TAC §43.22

The Texas Animal Health Commission proposes amendments to §43.22, concerning Herd Status Plans for Cervidae. The section is being amended to maintain consistency with federal requirements.

The Texas Animal Health Commission adopted regulations in 1995 to implement the standards and guidelines specified in the Tuberculosis Eradication in Cervidae, Uniform Methods and Rules. These regulations were subsequently revised in 1996 and 1997 to reflect amendments to the Uniform Methods and Rules adopted by the United States Animal Health Association and approved by the Animal and Plant Health inspection Service, Veterinary Services. The revised Uniform Methods and Rules were published in the December 31, 1998 Federal Register and became effective on February 1, 1999. Several minor changes in the TAHC regulations are proposed in order to maintain consistency with the requirements published in the Federal Register .

Suzy Whittenton, Assistant Executive Director of Administration, Texas Animal Health Commission, has determined for the five-year period the rule is in effect, because this is a change to maintain consistency with federal requirements, there will be no additional fiscal implications for state or local government as a result of enforcing or administering the rule.

Ms. Whittenton also has determined that for each year of the first five years the rule is in effect, the public benefit anticipated as a result of enforcing the rule will be regulations which are consistent with federal requirements. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the rule as proposed.

Comments regarding the proposed amendment may be submitted to Edith Smith, Texas Animal Health Commission, 2105 Kramer Lane, Austin, Texas 78758.

The amendment is proposed under the Texas Agriculture Code, Chapter 161, §161.041(a) and (b), and §161.046 which authorizes the Commission to promulgate rules in accordance with the Texas Agriculture Code. Also, the Commission relies upon §161.081 to address issues related to importation of these animals.

No other statutes, articles, or codes are affected by the proposed amendment.

§43.22.Herd Status Plans for Cervidae.

(a)

Accredited Herd Plan.

(1) - (3)

(No change.)

(4)

Reaccreditation. To qualify for reaccreditation, the herd must pass a test within a period of 21-27 [ 22-26 ] months of the anniversary date. The accreditation period will be 24 months (730 days) from the anniversary date (not 24 months from the date of the reaccreditation test).

(b)

(No change.)

(c)

Qualified Herd Plan for Cervidae.

(1) - (2)

(No change.)

(3)

Additions. Herd additions must originate directly from one of the following:

(A) - (B)

(No change.)

(C)

a herd not meeting the requirements of subparagraph (A) or (B) of this paragraph. Individual animals for addition must be isolated from other members of the herd of origin and must have negative results to two official tests for tuberculosis, conducted at least 90 days apart, provided that the second test was conducted within 90 days prior to movement to the premises of the qualified herd. The additions must be kept in isolation from all members of the qualified herd until they are negative to an official tuberculosis test conducted at least 90 days following the date of entry.

(4)

(No change.)

(d) - (e)

(No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on May 17, 1999.

TRD-9902838

Gene Snelson

General Counsel

Texas Animal Health Commission

Earliest possible date of adoption: June 27, 1999

For further information, please call: (512) 719-0714