1.1                          A bill for an act 
  1.2             relating to agriculture; modifying interest rates and 
  1.3             priority for the agricultural shared savings loan 
  1.4             program; amending Minnesota Statutes 2002, section 
  1.5             17.115, subdivisions 2, 3. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 17.115, 
  1.8   subdivision 2, is amended to read: 
  1.9      Subd. 2.  [LOAN CRITERIA.] (a) The shared savings loan 
  1.10  program must provide loans for purchase of new or used machinery 
  1.11  and installation of equipment for projects that make 
  1.12  environmental improvements or enhance farm profitability.  
  1.13  Eligible loan uses do not include seed, fertilizer, or fuel. 
  1.14     (b) Loans may not exceed $25,000 per individual applying 
  1.15  for a loan and may not exceed $100,000 for loans to four or more 
  1.16  individuals on joint projects.  The loan repayment period may be 
  1.17  up to seven years as determined by project cost and energy 
  1.18  savings.  The interest rate on the loans ~~is~~ must not exceed six 
  1.19  percent.  For loans made from May 1, 2004, to June 30, 2007, the 
  1.20  interest rate must not exceed three percent. 
  1.21     (c) Loans may only be made to residents of this state 
  1.22  engaged in farming.  
  1.23     Sec. 2.  Minnesota Statutes 2002, section 17.115, 
  1.24  subdivision 3, is amended to read: 
  1.25     Subd. 3.  [AWARDING OF LOANS.] (a) Applications for loans 
  2.1   must be made to the commissioner on forms prescribed by the 
  2.2   commissioner. 
  2.3      (b) The applications must be reviewed, ranked, and 
  2.4   recommended by a loan review panel appointed by the 
  2.5   commissioner.  The loan review panel shall consist of two 
  2.6   lenders with agricultural experience, two resident farmers of 
  2.7   the state using sustainable agriculture methods, two resident 
  2.8   farmers of the state using organic agriculture methods, a farm 
  2.9   management specialist, a representative from a postsecondary 
  2.10  education institution, and a chair from the department.  
  2.11     (c) The loan review panel shall rank applications according 
  2.12  to the following criteria: 
  2.13     (1) realize savings to the cost of agricultural production; 
  2.14     (2) reduce or make more efficient use of energy or inputs; 
  2.15     (3) increase overall farm profitability; and 
  2.16     (4) result in environmental benefits.  
  2.17     (d) A loan application must show that the loan can be 
  2.18  repaid by the applicant.  
  2.19     (e) The commissioner must consider the recommendations of 
  2.20  the loan review panel and may make loans for eligible projects.  
  2.21     (f) For loans made between May 1, 2004, and June 30, 2007, 
  2.22  the commissioner shall give priority to loans to resident 
  2.23  farmers beginning or expanding organic farming operations. 
  2.24     Sec. 3.  [EFFECTIVE DATE.] 
  2.25     Sections 1 and 2 are effective the day following final 
  2.26  enactment.