HF 3365

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to agriculture; providing for loans for acquisition of dairy heifers and
cows; amending Minnesota Statutes 2005 Supplement, section 41B.055.

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

Section 1.

Minnesota Statutes 2005 Supplement, section 41B.055, is amended to read:

41B.055 LIVESTOCK new text begin AND LIVESTOCK new text end EQUIPMENT PILOT LOAN
PROGRAM.

Subdivision 1.

Establishment.

The authority must establish and implement a
livestock new text begin and livestock new text end equipment pilot loan program to help finance the first purchase
of new text begin dairy heifers and cows and new text end livestock-related equipment and make livestock facilities
improvements.

Subd. 2.

Eligibility.

Notwithstanding section 41B.03, to be eligible for this program
a borrower must:

(1) be a resident of Minnesota or general partnership or a family farm corporation,
authorized farm corporation, family farm partnership, or authorized farm partnership as
defined in section 500.24, subdivision 2;

(2) be the principal operator of a livestock new text begin or dairy new text end farm;

(3) have a total net worth, including assets and liabilities of the borrower's spouse
and dependents, no greater than the amount stipulated in section 41B.03, subdivision 3;

(4) demonstrate an ability to repay the loan; and

(5) hold an appropriate feedlot registration or be using the loan under this program
to meet registration requirements. In addition to the requirements in clauses (1) to (5),
preference must be given to applicants who have farmed less than ten years as evidenced
by their filing of schedule F in their federal tax returns.

Subd. 3.

Loans.

(a) The authority may participate in a livestock equipment loan
equal to 90 percent of the purchased equipment value with an eligible lender to a farmer
who is eligible under subdivision 2. Participation is limited to 45 percent of the principal
amount of the loan or $40,000, whichever is less. new text begin In the case of a loan for the purchase of
dairy cows, the authority may participate in a loan of up to $500 per cow, with a limit of
100 cows per dairy producer. new text end The interest rates and repayment terms of the authority's
participation interest may differ from the interest rates and repayment terms of the lender's
retained portion of the loan, but the authority's interest rate must not exceed three percent.
The authority may review the interest annually and make adjustments as necessary.

(b) Standards for loan amortization must be set by the Rural Finance Authority
and must not exceed seven years.

(c) Security for a livestock new text begin or livestock new text end equipment loan new text begin under this section new text end must be a
personal note executed by the borrower and whatever other security is required by the
eligible lender or the authority.

(d) Refinancing of existing debt is not an eligible purpose.

(e) The authority may impose a reasonable, nonrefundable application fee for a
livestock new text begin or livestock new text end equipment loan new text begin under this section new text end . The authority may review the
fee annually and make adjustments as necessary. The initial application fee is $50.
Application fees received by the authority must be deposited in the revolving loan account
established in section 41B.06.

(f) Loans under this program must be made using money in the revolving loan
account established in section 41B.06.

Subd. 4.

Eligible expenditures.

Money may be used for loans for the acquisition of
equipment for animal housing, confinement, animal feeding, milk production, and waste
management, including the following, if related to animal husbandry:

(1) fences;

(2) watering facilities;

(3) feed storage and handling equipment;

(4) milking parlors;

(5) milking equipment;

(6) scales;

(7) milk storage and cooling facilities;

(8) manure pumping and storage facilities; deleted text begin and
deleted text end

(9) capital investment in pasture deleted text begin . deleted text end new text begin ; and
new text end

new text begin (10) dairy heifers and cows.
new text end

new text begin Subd. 5. new text end

new text begin Dairy cow loans. new text end

new text begin The authority may not participate in loans for the
purchase of dairy cows under this section except during the last two months of a fiscal
year if funds remain available.
new text end