SF 2594

3rd Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to agriculture; creating the methane digester 
  1.3             loan program; appropriating money; proposing coding 
  1.4             for new law in Minnesota Statutes, chapter 41B. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [41B.049] [METHANE DIGESTER LOAN PROGRAM.] 
  1.7      Subdivision 1.  [ESTABLISHMENT.] The authority shall 
  1.8   establish and implement a methane digester loan program to help 
  1.9   finance the purchase of necessary equipment and the construction 
  1.10  of a system that will utilize manure to produce electricity. 
  1.11     Subd. 2.  [REVOLVING FUND.] There is established in the 
  1.12  state treasury a revolving fund, which is eligible to receive 
  1.13  appropriations and the transfer of funds from other services.  
  1.14  All repayments of financial assistance granted under subdivision 
  1.15  1, including principal and interest, must be deposited into this 
  1.16  fund.  Interest earned on money in the fund accrues to the fund, 
  1.17  and money in the fund is appropriated to the commissioner of 
  1.18  agriculture for purposes of the manure digester loan program, 
  1.19  including costs incurred by the authority to establish and 
  1.20  administer the program. 
  1.21     Subd. 3.  [ELIGIBILITY.] Notwithstanding section 41B.03, to 
  1.22  be eligible for a loan under this section a borrower must: 
  1.23     (1) locate the projects and utilize the equipment and 
  1.24  practices on land located in Minnesota; 
  1.25     (2) provide evidence of financial stability; 
  2.1      (3) demonstrate an ability to repay the loan; and 
  2.2      (4) provide evidence that the practices implemented and 
  2.3   capital assets purchased will be properly managed and maintained.
  2.4      Subd. 4.  [LOANS.] (a) The authority may make a direct loan 
  2.5   or participate in a loan with an eligible lender to a farmer who 
  2.6   is eligible under subdivision 3.  The interest rates and 
  2.7   repayment terms of the authority's participation interest may 
  2.8   differ from the interest rates and repayment terms of the 
  2.9   lender's retained portion of the loan.  The authority's interest 
  2.10  rate for a direct loan or a loan participation must not exceed 
  2.11  four percent. 
  2.12     (b) Application for a direct loan or a loan participation 
  2.13  must be made on forms prescribed by the authority. 
  2.14     (c) Standards for loan amortization shall be set by the 
  2.15  rural finance authority not to exceed ten years. 
  2.16     (d) Security for the loans must be a personal note executed 
  2.17  by the borrower and whatever other security is required by the 
  2.18  eligible lender or the authority. 
  2.19     (e) No loan proceeds may be used to refinance a debt 
  2.20  existing prior to application. 
  2.21     (f) The authority may impose a reasonable nonrefundable 
  2.22  application fee for each application for a direct loan or a loan 
  2.23  participation.  The authority may review the application fees 
  2.24  annually and make adjustments as necessary.  The application fee 
  2.25  is initially set at $100 for a loan under subdivision 1.  The 
  2.26  fees received by the authority must be deposited in the 
  2.27  revolving fund created in subdivision 2. 
  2.28     Subd. 5.  [LOAN CRITERIA.] (a) To be eligible, a borrower 
  2.29  must be a resident of Minnesota or an entity that is not 
  2.30  prohibited from owning agricultural land under section 500.24. 
  2.31     (b) State participation in a participation loan is limited 
  2.32  to 45 percent of the principal amount of the loan.  A direct 
  2.33  loan or loan participation may not exceed $250,000.  
  2.34     (c) Loans under this program may be used as a match for 
  2.35  federal loans or grants. 
  2.36     (d) A borrower who has previously received a loan under 
  3.1   subdivision 1 is prohibited from receiving another methane 
  3.2   digester loan under subdivision 1. 
  3.3      Sec. 2.  [TRANSFER OF FUNDS; DEPOSIT OF REPAYMENTS.] 
  3.4      The remaining balance in the revolving account in Minnesota 
  3.5   Statutes, section 17.115, that is dedicated to manure digester 
  3.6   loans under Minnesota Statutes, section 17.115, subdivision 5, 
  3.7   shall be transferred to the revolving fund established under 
  3.8   Minnesota Statutes, section 41B.049, subdivision 2, on the 
  3.9   effective date of this section.  Notwithstanding Minnesota 
  3.10  Statutes, section 17.115, and Laws 2002, chapter 220, article 9, 
  3.11  section 7, all future receipts from manure digester loans 
  3.12  originated under Minnesota Statutes, section 17.115 and from 
  3.13  disaster recovery loans, under Minnesota Statutes, section 
  3.14  41B.047, shall be deposited in the revolving fund established 
  3.15  under Minnesota Statutes, section 41B.049, subdivision 2. 
  3.16     Sec. 3.  [UNIVERSITY OF MINNESOTA.] 
  3.17     Notwithstanding the restrictions in Minnesota Statutes, 
  3.18  section 41B.049, subdivision 4, the commissioner may participate 
  3.19  in a zero interest loan to the University of Minnesota for up to 
  3.20  $100,000 for purchase of a methane digester under Minnesota 
  3.21  Statutes, section 41B.049, subdivision 1.