Minnesota Session Laws - 1985, Regular Session

  

                         Laws of Minnesota 1985 

                        CHAPTER 114-H.F.No. 1216
           An act relating to agriculture; clarifying the meaning 
          of lender in the Minnesota emergency farm operating 
          loans act; changing certain eligibility criteria; 
          providing for earlier payments; amending Laws 1985, 
          chapter 4, sections 3, subdivision 8; and 6. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Laws 1985, chapter 4, section 3, subdivision 8, 
is amended to read:  
    Subd. 8.  [LENDER.] "Lender" means a bank, savings and loan 
association, or credit union chartered by the state or federal 
government and a farm credit system lender.  "Lender" also means 
the Federal Deposit Insurance Corporation. 
    Sec. 2.  Laws 1985, chapter 4, section 6, is amended to 
read: 
    Sec. 6.  [INTEREST PAYMENT PROGRAM ON NEW FARM OPERATING 
LOANS.] 
    Subdivision 1.  [APPLICATION; FARMER CRITERIA.] A farmer 
may apply to a lender for a farm operating loan on which the 
state will pay part of the interest.  To be eligible for the 
state payment, the farmer must have a debt to asset ratio 
greater than 50 percent and must not have a positive cash flow 
at the commissioner's interest index rate. 
    Subd. 2.  [LOAN CRITERIA.] (a) To be eligible for the state 
interest payment, the farm operating loan must: 
    (1) be made to a farmer at an interest rate between seven 
and ten percent per year; 
    (2) be due and payable by March 1, 1986, after it is made; 
    (3) be for operating expenses of the farm business; and 
    (4) be made to a farmer that shows a positive cash flow at 
the reduced interest rate, demonstrates a reasonable chance of 
obtaining debt restructuring necessary to achieve a positive 
cash flow, or shows the ability to repay the operating loan. 
    (b) The lender may use additional criteria in determining 
whether to make a farm operating loan to a farmer. 
    (c) The lender must encourage the farmer to participate in 
the vocational adult farm business management program.  The 
lender must agree to offer to pay enrollment fees, less the 
amount of a locally available reduction in or subsidy to fees 
ordinarily paid by the enrollee, for loan recipients who wish to 
enroll and participate in a vocational adult farm business 
management program or equivalent.  A lender is not required to 
pay farm management program enrollment fees for more than one 
farmer per loan. 
    Subd. 3.  [LOAN SUBMISSION.] The lender must submit to the 
commissioner all farm operating loans made by the lender for 
which the lender requests the state to pay part of the 
interest.  The lender must certify that the approved farm 
operating loan has been submitted to the farmers home 
administration for any loan guarantee programs that are 
available.  The commissioner must review the loan within five 
days after receipt.  The commissioner may not pay interest on 
loans submitted after December 31, 1985. 
    Subd. 4.  [PAYMENT AMOUNT.] The amount of interest paid by 
the state must be two-thirds of the amount of interest foregone 
by the lender as a result of the lender making the loan at an 
interest rate less than the commissioner's interest index.  The 
interest is payable on the unpaid principal of the first $75,000 
of the loan, except as provided in section 7.  The maximum 
interest payment per farmer may not exceed $3,750.  The 
commissioner shall make payments beginning January 1, 1986, and 
pay all interest due by March 1, 1986 At the request of the 
lender, the commissioner shall pay 50 percent of the total 
amount due to the lender within ten days after the request is 
submitted to the commissioner.  The commissioner shall pay all 
interest due by March 1, 1986. 
    Sec. 3.  [EFFECTIVE DATE.] 
    This act is effective the day following final enactment. 
    Approved May 10, 1985