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Key: (1) language to be deleted (2) new language

  
    Laws of Minnesota 1993 

                        CHAPTER 298-H.F.No. 1149 
           An act relating to the agricultural finance authority; 
          authorizing direct loans and participations; 
          increasing the dollar limit; appropriating money; 
          amending Minnesota Statutes 1992, sections 41B.02, by 
          adding a subdivision; and 41B.043. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1992, section 41B.02, is 
amended by adding a subdivision to read: 
     Subd. 7a.  [DIRECT LOAN.] "Direct loan" means a loan 
originated and serviced by the authority without involvement of 
an eligible lender. 
    Sec. 2.  Minnesota Statutes 1992, section 41B.043, is 
amended to read: 
    41B.043 [AGRICULTURAL IMPROVEMENT LOAN PROGRAM.] 
    Subdivision 1.  [ESTABLISHMENT.] The authority may 
establish, adopt rules for, and implement an agricultural 
improvement loan program to finance agricultural improvements.  
Loans may be made to borrowers who meet the requirements of 
section 41B.03, subdivision 1, clauses (1) and (2), and who are 
actively engaged in farming.  In the first two years, all loans 
must be given to grade B dairy farmers for the purpose of 
enabling them to upgrade to grade A. 
    Subd. 1a.  [DIRECT LOANS.] Direct loans may be made to 
borrowers who meet the requirements of section 41B.03, 
subdivision 1, clauses (1) and (2), and who are actively engaged 
in farming. 
     Subd. 1b.  [LOAN PARTICIPATION.] The authority may 
participate in an agricultural improvement loan with an eligible 
lender to a farmer who meets the requirements of section 41B.03, 
subdivision 1, clauses (1) and (2), and who are actively engaged 
in farming.  Participation is limited to 45 percent of the 
principal amount of the loan or $50,000, whichever is less.  The 
interest rates and repayment terms of the authority's 
participation interest may be different than the interest rates 
and repayment terms of the lender's retained portion of the loan.
    Subd. 2.  [SPECIFICATIONS.] No direct loan may exceed 
$20,000 $35,000 or $50,000 for a loan participation or be made 
to refinance an existing debt.  Each direct loan and 
participation must be secured by a mortgage on real 
property comprising all or part of the farm on which the 
improvements are made, and such other security as the authority 
may require. 
    Subd. 3.  [APPLICATION AND ORIGINATION FEE.] The authority 
may impose a reasonable nonrefundable application fee for each 
application for a direct loan or participation and an 
origination fee for each direct loan issued under the 
agricultural improvement loan program.  The origination fee 
initially shall be set at 1.5 percent and the application fee at 
$50.  The authority may review the fees annually and make 
adjustments as necessary.  The fees must be deposited in the 
state treasury and credited to a special an account in the 
special revenue fund.  Money in the account is appropriated to 
the commissioner for administrative expenses for the 
agricultural improvement loan program. 
    Subd. 4.  [INTEREST RATE.] The interest rate per annum on 
the agricultural improvement direct loan or participation must 
be the rate of interest determined by the authority to be 
necessary to provide for the timely payment of principal and 
interest when due on bonds or other obligations of the authority 
issued under chapter 41B to provide financing for direct loans 
and participations made under the agricultural improvement loan 
program, and to provide for reasonable and necessary costs of 
issuing, carrying, administering, and securing the bonds or 
notes and to pay the costs incurred and to be incurred by the 
authority in the implementation of the agricultural improvement 
loan program. 
     Sec. 3.  [APPROPRIATION.] 
    $30,000 in fiscal year 1994 and $30,000 in fiscal year 1995 
is appropriated from the special revenue fund to the 
commissioner of agriculture for administrative expenses for the 
agricultural improvement loan program. 
    Sec. 4.  [APPROPRIATION; DAIRY LEADERS ROUNDTABLE.] 
    Notwithstanding any rules adopted under Minnesota Statutes, 
section 32A.071, a total of not more than $100,000 in fiscal 
year 1993 and a total of not more than $100,000 in fiscal year 
1994 are appropriated on June 30, 1993, and June 30, 1994, from 
the balance remaining in the Minnesota milk over-order premium 
account after all payments have been made at the discretion of 
the commissioner of agriculture to the Minnesota dairy leaders 
roundtable for programs and activities of the roundtable. 
    Presented to the governor May 17, 1993 
    Signed by the governor May 20, 1993, 2:17 p.m.