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No significant fiscal implication to the State is anticipated.
The bill would amend the Agriculture code relating to the operation and functions of the Texas Grain Producer Indemnity Board.
The bill would create a trust fund outside the state treasury to be administered by the board for certain claims against a grain buyer, with other conditions as described, including minimum balances and assessment rebates. The bill would authorize the board to purchase reinsurance to mitigate financial risks. Both the Texas Department of Agriculture and the Comptroller of Public Accounts indicate bill provisions could reasonably be absorbed within each agency's current resources.
During the 2011 legislative session, the Texas Legislature created the Texas Grain Producer Indemnity Board and provided for the establishment of a fund which would handle the responsibilities of the board. SB 1099, if passed, would modify the agriculture code and create such a fund.
Specifically, this fund would be defined as “a trust fund outside the state treasury to be held by the comptroller and administered by the board, without appropriation, for the payment of claims against a grain buyer”. The bill further adds a number of relevant definitions, and both defines and specifies the powers and duties of the board. One notable section which would be added to the code (41.216) would establish an administrative review process to review and resolve claims arising from potential board action.
The existence of a Texas Grain Producer Indemnity Board managed by the Department of Agriculture raises some concerns but SB 1099 is concerned only with putting a funding mechanism is place. This is less problematic and concerns are mitigated by some of the measures taken in the bill, such as the administrative review process. Also helpful is the modification of code so that a grain producer may only be awarded up to 85% (as opposed to 90%) of the grain value in question.
Most notable though is that this fund will be revenue neutral as both the Texas Department of Agriculture, and the Office of the Comptroller have declared that the provisions of the bill could be handled with current resources. (See the fiscal note.) Ultimately, although the board may be problematic institution, the funding method that would be put in place if SB 1099 were to pass is prudent and well constructed. There are no serious grounds under our liberty principles to either support or oppose this bill and, thus, we remain neutral.