SB 2875

relating to the creation of the Texas Small Farm Recovery Microloan
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
(1)  Be the owner or principal operator of a small farm
(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
(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
(2)  Equipment repairs or upgrades;
(3)  Covering labor costs and farm operations;
(4)  Recovery efforts following natural disasters 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.