SF 3506

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

A bill for an act
relating to agriculture; creating a farm enhancement loan program; appropriating
money; proposing coding for new law in Minnesota Statutes, chapter 41B.

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

Section 1.

new text begin [41B.051] FARM ENHANCEMENT LOAN 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 a farm
enhancement loan program to help finance the acquisition, construction, or improvement
of buildings for dairy animal housing, confinement, feeding, milk production, and waste
management.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin A borrower under this section must meet the eligibility
requirements of section 41B.03, subdivision 1, and must use the loan for the acquisition,
construction, or improvement of buildings for dairy animal housing, confinement, feeding,
milk production, and waste management.
new text end

new text begin Subd. 3. new text end

new text begin Loan specifications; forgiveness. new text end

new text begin (a) The authority may make a direct
loan to a borrower under this section in an amount equal to 25 percent of the cost of
eligible expenditures under subdivision 2 or $50,000, whichever is less. Payments and
interest on the loan are deferred for ten years after disbursement, so long as the borrower
or the borrower's immediate family remains the principal operator of the farm on which
loan expenditures were made. If, after ten years, the borrower or the borrower's immediate
family remains the principal operator of the farm on which loan expenditures were made,
the loan is forgiven. If the borrower or the borrower's immediate family ceases to be the
principal operator of the farm on which the loan expenditures were made less than ten
years after the loan was disbursed, the loan is immediately payable in full, with interest at
a rate determined by the authority.
new text end

new text begin (b) A loan under this section must be secured by a mortgage on real property and
such other security as the authority may require.
new text end

new text begin (c) For purposes of this subdivision, "borrower's immediate family" means:
new text end

new text begin (1) a son or daughter of the borrower, or a descendant of either;
new text end

new text begin (2) a stepson or stepdaughter of the borrower;
new text end

new text begin (3) the father or mother of the borrower, or an ancestor of either;
new text end

new text begin (4) a stepfather or stepmother of the borrower; or
new text end

new text begin (5) a spouse of the borrower.
new text end

new text begin Subd. 4. new text end

new text begin Application and origination fees. new text end

new text begin The authority may impose a reasonable
nonrefundable application fee for each loan application and an origination fee for each
loan issued under the farm enhancement loan program. The origination fee is initially 1.5
percent and the application fee is $50. The authority may review the fees annually and
make adjustments as necessary.
new text end

new text begin Subd. 5. new text end

new text begin Revolving fund. new text end

new text begin A revolving fund is established in the state treasury,
which is eligible to receive appropriations. All repayments of loans granted under
subdivision 3, including principal and interest, and fees under subdivision 4, must be
deposited into the fund. Interest earned on money in the fund accrues to the fund. Money
in the fund is appropriated to the commissioner of agriculture for purposes of the farm
enhancement loan program under this section, including costs incurred by the authority
to establish and administer the program.
new text end

Sec. 2. new text begin APPROPRIATION.
new text end

new text begin $1,500,000 is appropriated from the general fund to the commissioner of agriculture
to administer the farm enhancement loan program under section 1. The money is available
until June 30, 2007.
new text end

Sec. 3. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 and 2 are effective the day following final enactment.
new text end