HF 4013

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to agriculture; establishing an agroforestry 
  1.3             loan program administered by the rural finance 
  1.4             authority; appropriating money; proposing coding for 
  1.5             new law in Minnesota Statutes, chapter 41B. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [41B.048] [AGROFORESTRY LOAN PROGRAM.] 
  1.8      Subdivision 1.  [PURPOSE.] The purpose of the agroforestry 
  1.9   loan program is to provide low interest financing during the 
  1.10  growing period to farmers converting land to agroforestry. 
  1.11     Subd. 2.  [ESTABLISHMENT.] The authority shall establish 
  1.12  and implement an agroforestry loan program to help finance the 
  1.13  production of short rotation woody crops.  The authority may 
  1.14  contract with a fiscal agent to provide an efficient delivery 
  1.15  system for this program. 
  1.16     Subd. 3.  [RULES.] The authority may adopt rules necessary 
  1.17  for administration of the program established in this section. 
  1.18     Subd. 4.  [DEFINITIONS.] (a) The definitions in this 
  1.19  subdivision apply to this section. 
  1.20     (b) "Fiscal agent" means a lending institution or other 
  1.21  organization of a for-profit or nonprofit nature that is in good 
  1.22  standing with the state of Minnesota that has the appropriate 
  1.23  business structure and trained personnel suitable to providing 
  1.24  efficient disbursement of loan funds and the servicing and 
  1.25  collection of loans over an extended period of time. 
  2.1      (c) "Growing cycle" means the number of years from planting 
  2.2   to harvest. 
  2.3      (d) "Harvest" means the day that the crop arrives at the 
  2.4   scale of the buyer of the crop. 
  2.5      (e) "Short rotation woody crops" or "crop" means hybrid 
  2.6   poplar and other woody plants that are harvested for their fiber 
  2.7   within 15 years of planting. 
  2.8      Subd. 5.  [ELIGIBILITY.] (a) To be eligible for this 
  2.9   program a borrower must: 
  2.10     (1) be a resident of Minnesota or any entity eligible to 
  2.11  own farm land under section 500.24; 
  2.12     (2) be a grower of short rotation woody crops on 
  2.13  agricultural land that is suitable for the profitable production 
  2.14  of those crops; 
  2.15     (3) be a member of a producer owned cooperative that will 
  2.16  contract to market the short rotation woody crop to be planted 
  2.17  by the borrower; 
  2.18     (4) demonstrate an ability to repay the loan; 
  2.19     (5) agree to work with appropriate local, state, and 
  2.20  federal agencies and the marketing cooperative to develop an 
  2.21  acceptable establishment and maintenance plan; and 
  2.22     (6) meet any other requirements the authority may impose 
  2.23  under chapter 14. 
  2.24     (b) When a borrower has received a total of $150,000 in 
  2.25  loans under this program, that borrower is not eligible for 
  2.26  further loans under the program.  
  2.27     Subd. 6.  [LOANS.] (a) The authority may disburse loans 
  2.28  through a fiscal agent to farmers and agricultural land owners 
  2.29  who are eligible under subdivision 5.  The total accumulative 
  2.30  loan principal must not exceed $75,000 per loan. 
  2.31     (b) The fiscal agent may impose a loan origination fee in 
  2.32  the amount of one percent of the total approved loan.  This fee 
  2.33  is to be paid by the borrower to the fiscal agent at the time of 
  2.34  closing the loan. 
  2.35     (c) The loan may be disbursed over a period not to exceed 
  2.36  12 years. 
  3.1      (d) Borrowers may receive loans, depending on the 
  3.2   availability of funds, for planted areas up to 160 acres for up 
  3.3   to: 
  3.4      (1) the total amount necessary for establishment of the 
  3.5   crop; 
  3.6      (2) the total amount of maintenance costs, including weed 
  3.7   control, during the first three years; and 
  3.8      (3) 70 percent of the estimated value of one year's growth 
  3.9   of the crop for years four through 12. 
  3.10     (e) Security for the loan must be the crop, a personal note 
  3.11  executed by the borrower, an interest in the land upon which the 
  3.12  crop is growing, and whatever other security is required by the 
  3.13  fiscal agent or the authority.  All recording fees must be paid 
  3.14  by the borrower. 
  3.15     (f) The authority shall prescribe forms and establish an 
  3.16  application process for applicants to apply for a loan. 
  3.17     (g) The authority may impose a reasonable nonrefundable 
  3.18  application fee for each application for a loan under this 
  3.19  program.  The application fee is initially $50.  Application 
  3.20  fees received by the authority must be deposited in the 
  3.21  agroforestry loan program revolving fund established under 
  3.22  subdivision 7. 
  3.23     (h) Loans under the program must be made using money in the 
  3.24  agroforestry loan program revolving fund established under 
  3.25  subdivision 7. 
  3.26     (i) Interest may be assessed by the authority at the rate 
  3.27  of no more than three percent at the end of each calendar year 
  3.28  based on the average outstanding principal balance for the year. 
  3.29     (j) Loan principal balance outstanding plus all assessed 
  3.30  interest must be repaid within 120 days of harvest but no later 
  3.31  than 15 years from planting. 
  3.32     Subd. 7.  [REVOLVING FUND.] There is established in the 
  3.33  state treasury an agroforestry loan program revolving fund.  All 
  3.34  repayments of financial assistance under subdivision 2, 
  3.35  including principal and interest and any appropriations to the 
  3.36  fund, must be deposited into this fund.  Interest earned on 
  4.1   money in the fund accrues to the fund, and money in the fund is 
  4.2   appropriated to the authority for purposes of the agroforestry 
  4.3   loan program, including costs incurred by the authority to 
  4.4   establish and administer the program. 
  4.5      Sec. 2.  [APPROPRIATION.] 
  4.6      $10,000,000 is appropriated from the general fund to the 
  4.7   rural finance authority to fund the agency's agroforestry loan 
  4.8   program.  This appropriation is available until June 30, 2001. 
  4.9      Sec. 3.  [EFFECTIVE DATE.] 
  4.10     This act is effective the day following final enactment.