Texas § AG.56.006 - LIMIT OF INDEBTEDNESS
Full text of Texas The Texas Constitution § AG.56.006 — LIMIT OF INDEBTEDNESS, with citation guidance and answers to common questions.
§ AG.56.006. LIMIT OF INDEBTEDNESS
LIMIT OF INDEBTEDNESS. (a) For the purposes of this section, the existing obligations of an agricultural finance corporation include the primary, secondary, fixed, and contingent obligations of the corporation but do not include an obligation for which a liable person has furnished to the corporation funds to pay the obligation at maturity. (b) Except as provided by Subsection (c) of this section, an agricultural finance corporation may not enter into a contract of acceptance, guaranty, endorsement, or suretyship if the total of its existing obligations plus its obligations resulting from the contract exceeds an amount equal to five times the total of its unimpaired capital and surplus at the time of the contract. (c) An agricultural finance corporation may exceed the limit set by Subsection (b) of this section if, before entering into the contract, the corporation obtains written authorization from the banking commissioner to do so. If authorization is obtained, the corporation may not exceed the limit set by the commissioner, and the limit set by the commissioner may not exceed an amount equal to 10 times the total of the corporation's unimpaired capital and surplus at the time of the contract. (d) Except as provided by Subsection (e) of this section, if a corporation enters into a contract in violation of this section, the contract is unenforceable against the corporation. (e) This section does not prevent the enforcement of a prohibited obligation by a holder who has acquired the obligation: (1) in due course; (2) for value; (3) before its maturity; and (4) without notice of its defect. Acts 1981, 67th Leg., p. 1124, ch. 388, Sec. 1, eff. Sept. 1, 1981.
Source: official Texas text · Last verified 2026-08-27
Frequently Asked Questions About Texas § AG.56.006
What does The Texas Constitution § AG.56.006 cover?
Section AG.56.006 ("LIMIT OF INDEBTEDNESS") is part of the The Texas Constitution, the codified statutory law of Texas. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Texas § AG.56.006?
A common citation format is "The Texas Constitution § AG.56.006" (Texas). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Texas law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Texas official source linked on this page or consult a licensed Texas attorney.
How does Texas § AG.56.006 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Texas can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Texas.