Texas Register
(24 TexReg 3955).
The amendments and new sections are adopted in order to provide an expansion
of the financial assistance program available through the Authority. Changes
are adopted throughout the existing rules to make them consistent with the
new financial assistance expansion. In addition, the following changes are
adopted. The 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 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 amendment to §28.6 changes the term "state treasury"
to "office of the state comptroller" to update this section to reflect current
practice. The amendment to §28.7(a)(1) adds language to include other
agricultural-related economic development projects. The amendment to §28.7(a)(7)
clarifies that the lender is to submit a preliminary letter of commitment
under the loan guaranty program. The 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
amendment to §28.7(9) is a renumbering of that subparagraph. The 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 amendment to §28.7(c) clarifies
the ineligible cost under the loan guaranty program. The amendment to §28.8(a)
provides that the applicant or the lender may use the application form of
the Authority in applying to the programs. The 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 amendment to §28.8(d) clarifies the handling of applications
by staff and board for the programs. The 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 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 amendment to §28.9(a) requires additional information from applicants
to the programs. The 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 amendment to
§28.10(b) provides the minimum amount of financial assistance under
the programs. The 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 amendment
to §28.10(d) identifies the extent of participation purchased by the
loan guaranty program in a commitment. The amendment to §28.10(e) clarifies
the interest rate to be allowed by the programs. The 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 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 amendment to §28.10(i)
clarifies the closing procedures to the programs. The amendment to §28.10(j)
identifies the reporting requirements by lenders and borrowers participating
in the programs. The amendment to §28.11 clarifies the criteria for
the approval of financial assistance under the programs. The amendment to
§28.12 clarifies the administrative responsibilities of lenders for
approved financial assistance under the programs. The amendment to §28.13
clarifies the requirements for a lender to qualify as an eligible lender
for the financial assistance programs. The 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.
No comments were received on the proposal.
The amendments and new sections are adopted 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.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August
4, 1999.
TRD-9904814
Dolores Alvarado Hibbs
Deputy General Counsel
Texas Department of Agriculture
Effective date: August 24, 1999
Proposal publication date: May 28, 1999
For further information, please call: (512) 463-4075