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HF 2159

as introduced - 87th Legislature (2011 - 2012) Posted on 02/27/2012 03:25pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 02/09/2012

Current Version - as introduced

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A bill for an act
relating to agriculture; establishing an immigrant and minority microloan
program; modifying provisions related to the Rural Finance Authority; amending
Minnesota Statutes 2010, sections 41B.036; 41B.048, subdivision 6; 41B.055,
subdivision 1; 41B.06; proposing coding for new law in Minnesota Statutes,
chapter 41B; repealing Minnesota Statutes 2010, section 41B.048, subdivision 7.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 41B.036, is amended to read:


41B.036 GENERAL POWERS OF THE AUTHORITY.

For the purpose of exercising the specific powers granted in section 41B.04 and
effectuating the other purposes of sections 41B.01 to 41B.23 the authority has the general
powers granted in this section.

(a) It may sue and be sued.

(b) It may have a seal and alter the seal.

(c) It may make, and from time to time, amend and repeal rules consistent with
sections 41B.01 to 41B.23.

(d) It may acquire, hold, and dispose of real or personal property for its corporate
purposes.

(e) It may enter into agreements, contracts, or other transactions with any federal or
state agency, any person and any domestic or foreign partnership, corporation, association,
or organization, including contracts or agreements for administration and implementation
of all or part of sections 41B.01 to 41B.23.

(f) It may acquire real property, or an interest therein, in its own name, by purchase
or foreclosure, where such acquisition is necessary or appropriate.

(g) It may provide general technical services related to rural finance.

(h) It may provide general consultative assistance services related to rural finance.

(i) It may promote research and development in matters related to rural finance.

(j) It may enter into agreements with lenders, borrowers, or the issuers of securities
for the purpose of regulating the development and management of farms financed in whole
or in part by the proceeds of qualified agricultural loans.

(k) It may enter into agreements with other appropriate federal, state, or local
governmental units to foster rural finance. It may give advance reservations of loan
financing as part of the agreements, with the understanding that the authority will only
approve the loans pursuant to normal procedures, and may adopt special procedures
designed to meet problems inherent in such programs.

(l) It may undertake and carry out studies and analyses of rural financing needs
within the state and ways of meeting such needs including: data with respect to
geographical distribution; farm size; the distribution of farm credit needs according to
debt ratios and similar factors; the amount and quality of available financing and its
distribution according to factors affecting rural financing needs and the meeting thereof;
and may make the results of such studies and analyses available to the public and may
engage in research and disseminate information on rural finance.

(m) It may survey and investigate the rural financing needs throughout the state and
make recommendations to the governor and the legislature as to legislation and other
measures necessary or advisable to alleviate any existing shortage in the state.

(n) It may establish cooperative relationships with such county and multicounty
authorities as may be established and may develop priorities for the utilization of authority
resources and assistance within a region in cooperation with county and multicounty
authorities.

(o) It may contract with, use, or employ any federal, state, regional, or local public
or private agency or organization, legal counsel, financial advisors, investment bankers or
others, upon terms it deems necessary or desirable, to assist in the exercise of any of the
powers granted in sections 41B.01 to 41B.23 and to carry out the objectives of sections
41B.01 to 41B.23 and may pay for the services from authority funds.

(p) It may establish cooperative relationships with counties to develop priorities for
the use of authority resources and assistance within counties and to consider county plans
and programs in the process of setting the priorities.

(q) It may delegate any of its powers to its officers or staff.

(r) It may enter into agreements with qualified agricultural lenders or others insuring
or guaranteeing to the state the payment of all or a portion of qualified agricultural loans.

(s) It may enter into agreements with eligible agricultural lenders providing for
advance reservations of purchases of participation interests in restructuring loans, if
the agreements provide that the authority may only purchase participation interests
in restructuring loans under the normal procedure. The authority may provide in an
agreement for special procedures or requirements designed to meet specific conditions or
requirements.

(t) It may allow farmers who are natural persons to combine programs of the federal
Agriculture Credit Act of 1987 with programs of the Rural Finance Authority.

(u) From within available funds generated by program fees, it may provide partial
or full tuition assistance for farm management programs required under section 41B.03,
subdivision 3
, clause (7).

new text begin (v) It may accept for and on behalf of the state any gift, bequest, devise, grant, or
interest in money or personal property of any kind tendered to the state for any purpose
pertaining to the activities of the authority.
new text end

Sec. 2.

Minnesota Statutes 2010, section 41B.048, subdivision 6, is amended to read:


Subd. 6.

Loans.

(a) The authority may disburse loans through a fiscal agent to
farmers and agricultural landowners who are eligible under subdivision 5. The total
accumulative loan principal must not exceed $75,000 per loan.

(b) The fiscal agent may impose a loan origination fee in the amount of one percent
of the total approved loan. This fee is to be paid by the borrower to the fiscal agent at
the time of loan closing.

(c) The loan may be disbursed over a period not to exceed 12 years.

(d) A borrower may receive loans, depending on the availability of funds, for planted
areas up to 160 acres for up to:

(1) the total amount necessary for establishment of the crop;

(2) the total amount of maintenance costs, including weed control, during the first
three years; and

(3) 70 percent of the estimated value of one year's growth of the crop for years
four through 12.

(e) Security for the loan must be the crop, a personal note executed by the borrower,
an interest in the land upon which the crop is growing, and whatever other security is
required by the fiscal agent or the authority. All recording fees must be paid by the
borrower.

(f) The authority may prescribe forms and establish an application process for
applicants to apply for a loan.

(g) The authority may impose a reasonable, nonrefundable application fee for each
application for a loan under this program. The application fee is initially $50. Application
fees received by the authority must be deposited in the deleted text begin agroforestry loan program revolving
fund established in subdivision 7
deleted text end new text begin revolving loan account established under section 41B.06new text end .

(h) Loans under the program must be made using money in the deleted text begin agroforestry loan
program revolving fund established in subdivision 7
deleted text end new text begin revolving loan account established
under section 41B.06
new text end .

new text begin (i) All repayments of financial assistance granted under this section, including
principal and interest, must be deposited into the revolving loan account established
under section 41B.06.
new text end

deleted text begin (i)deleted text end new text begin (j)new text end The interest payable on loans made by the authority for the agroforestry
loan program must, if funded by revenue bond proceeds, be at a rate not less than the
rate on the revenue bonds, and may be established at a higher rate necessary to pay
costs associated with the issuance of the revenue bonds and a proportionate share of the
cost of administering the program. The interest payable on loans for the agroforestry
loan program funded from sources other than revenue bond proceeds must be at a rate
determined by the authority.

deleted text begin (j)deleted text end new text begin (k)new text end Loan principal balance outstanding plus all assessed interest must be repaid
within 120 days of harvest, but no later than 15 years from planting.

Sec. 3.

Minnesota Statutes 2010, section 41B.055, subdivision 1, is amended to read:


Subdivision 1.

Establishment.

The authority must establish and implement a
livestock equipment deleted text begin pilotdeleted text end loan program to help finance the purchase of livestock-related
equipment and make livestock facilities improvements.

Sec. 4.

new text begin [41B.056] IMMIGRANT AND MINORITY PILOT MICROLOAN
PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The authority shall establish and implement an
immigrant and minority pilot microloan program to help finance the production of
specialty crops or eligible livestock. The authority may contract with an intermediary to
provide an efficient delivery system for this program.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) The definitions in this subdivision apply to this section.
new text end

new text begin (b) "Intermediary" means any lending institution or other organization of a for-profit
or nonprofit nature that is in good standing with the state of Minnesota that has the
appropriate business structure and trained personnel suitable to providing efficient
disbursement of loan funds and the servicing and collection of loans.
new text end

new text begin (c) "Specialty crops" means agricultural crops, such as annuals, flowers, perennials,
and other horticultural products, that are intensively cultivated.
new text end

new text begin (d) "Eligible livestock" means poultry that has been allowed access to the outside,
sheep, or goats.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin To be eligible for this program a borrower must:
new text end

new text begin (1) be a legal resident of Minnesota;
new text end

new text begin (2) either:
new text end

new text begin (i) be a member of a protected group as defined in section 43A.02, subdivision 33; or
new text end

new text begin (ii) be a qualified noncitizen as defined in section 256B.06, subdivision 4, paragraph
(b);
new text end

new text begin (3) be or plan to become a grower of specialty crops or eligible livestock;
new text end

new text begin (4) market or contract to market the specialty crops or eligible livestock; and
new text end

new text begin (5) demonstrate an ability to repay the loan.
new text end

new text begin Subd. 4. new text end

new text begin Loans. new text end

new text begin (a) The authority may disburse loans through an intermediary
to farmers who are eligible under subdivision 3. The total accumulative loan principal
must not exceed $10,000 per loan.
new text end

new text begin (b) Refinancing an existing debt is not an eligible purpose.
new text end

new text begin (c) The loan may be disbursed over a period not to exceed six years.
new text end

new text begin (d) A borrower may receive loans, depending on the availability of funds, up to 70
percent of the estimated value of the crop or livestock.
new text end

new text begin (e) Security for the loan must be a personal note executed by the borrower and any
other security required by the intermediary or the authority.
new text end

new text begin (f) The authority may prescribe forms and establish an application process for
applicants to apply for a loan.
new text end

new text begin (g) The interest payable on loans for the immigrant and minority pilot microloan
program must be at a rate determined by the authority.
new text end

new text begin (h) Loans under this program will be made using money in the revolving loan
account established under section 41B.06.
new text end

new text begin (i) Repayments of financial assistance under this section, including principal and
interest, must be deposited into the revolving loan account established under section
41B.06.
new text end

Sec. 5.

Minnesota Statutes 2010, section 41B.06, is amended to read:


41B.06 RURAL FINANCE AUTHORITY REVOLVING LOAN ACCOUNT.

There is established in the rural finance administration fund a Rural Finance
Authority revolving loan account that is eligible to receive appropriations and the transfer
of loan funds from other programs. All repayments of financial assistance granted from
this account, including principal and interest, must be deposited into this account. Interest
earned on money in the account accrues to the account, and the money in the account
is appropriated to the commissioner of agriculture for purposes of the Rural Finance
Authority livestock equipment, methane digester, disaster recovery, deleted text begin anddeleted text end value-added
agricultural productnew text begin , agroforestry, and immigrant and minoritynew text end loan programs, including
costs incurred by the authority to establish and administer the programs.

Sec. 6. new text begin BALANCE TRANSFER.
new text end

new text begin The balance in the agroforestry loan program revolving fund established under
Minnesota Statutes, section 41B.048, is transferred to the revolving loan account
established under Minnesota Statutes, section 41B.06, and the agroforestry loan program
revolving fund is abolished.
new text end

Sec. 7. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 41B.048, subdivision 7, new text end new text begin is repealed.
new text end