2004 Minnesota Statutes

     41B.049 Methane digester loan program. 

    Subdivision 1.    Establishment.  The authority shall 
 establish and implement a methane digester loan program to help 
 finance the purchase of necessary equipment and the construction 
 of a system that will utilize manure to produce electricity. 

    Subd. 2.    Revolving fund.  There is established in the 
 state treasury a revolving fund, which is eligible to receive 
 appropriations and the transfer of funds from other services.  
 All repayments of financial assistance granted under subdivision 
 1, including principal and interest, must be deposited into this 
 fund.  Interest earned on money in the fund accrues to the fund, 
 and money in the fund is appropriated to the commissioner of 
 agriculture for purposes of the manure digester loan program, 
 including costs incurred by the authority to establish and 
 administer the program. 

    Subd. 3.    Eligibility.  Notwithstanding section 
 41B.03, to be eligible for a loan under this section a borrower 
 must: 

    (1) locate the projects and utilize the equipment and 
 practices on land located in Minnesota; 

    (2) provide evidence of financial stability; 

    (3) demonstrate an ability to repay the loan; and 

    (4) provide evidence that the practices implemented and 
 capital assets purchased will be properly managed and maintained.

    Subd. 4.    Loans.  (a) The authority may make a direct 
 loan or participate in a loan with an eligible lender to a 
 farmer who is eligible under subdivision 3.  The interest rates 
 and repayment terms of the authority's participation interest 
 may differ from the interest rates and repayment terms of the 
 lender's retained portion of the loan.  The authority's interest 
 rate for a direct loan or a loan participation must not exceed 
 four percent.  Loans made under this section before July 1, 
 2003, must be no-interest loans.  

    (b) Application for a direct loan or a loan participation 
 must be made on forms prescribed by the authority. 

    (c) Standards for loan amortization shall be set by the 
 Rural Finance Authority not to exceed ten years. 

    (d) Security for the loans must be a personal note executed 
 by the borrower and whatever other security is required by the 
 eligible lender or the authority. 

    (e) No loan proceeds may be used to refinance a debt 
 existing prior to application. 

    (f) The authority may impose a reasonable nonrefundable 
 application fee for each application for a direct loan or a loan 
 participation.  The authority may review the application fees 
 annually and make adjustments as necessary.  The application fee 
 is initially set at $100 for a loan under subdivision 1.  The 
 fees received by the authority must be deposited in the 
 revolving fund created in subdivision 2. 

    Subd. 5.    Loan criteria.  (a) To be eligible, a 
 borrower must be a resident of Minnesota or an entity that is 
 not prohibited from owning agricultural land under section 
 500.24. 

    (b) State participation in a participation loan is limited 
 to 45 percent of the principal amount of the loan.  A direct 
 loan or loan participation may not exceed $250,000.  

    (c) Loans under this program may be used as a match for 
 federal loans or grants. 

    (d) A borrower who has previously received a loan under 
 subdivision 1 is prohibited from receiving another methane 
 digester loan under subdivision 1. 

    HIST: 2002 c 373 s 27