2007 Minnesota Statutes

41C.05 AGRICULTURAL DEVELOPMENT BOND BEGINNING FARMER AND
AGRICULTURAL BUSINESS ENTERPRISE LOAN PROGRAM.
    Subdivision 1. Development of program. The authority shall develop an agricultural
development bond beginning farmer and agricultural business enterprise loan program to facilitate
the acquisition of agricultural land and improvements and depreciable agricultural property by
beginning farmers and real and personal property by an agricultural business enterprise. The
authority shall exercise the powers granted to it in this chapter in order to fulfill the goal of
providing financial assistance to beginning farmers and agricultural business enterprises in the
acquisition of agricultural land, agricultural improvements, depreciable agricultural property, and
real and personal property for an agricultural business enterprise. The authority may participate
in and cooperate with programs of the Farmers Home Administration, Federal Land Bank, or
any other agency or instrumentality of the federal government or with any program of any other
state agency in the administration of the agricultural development bond beginning farmer and
agricultural business enterprise loan program and in the making or purchasing of mortgage or
secured loans under this chapter.
    Subd. 2. Eligibility; beginning farmers. The authority shall provide in the agricultural
development bond beginning farmer and agricultural business enterprise loan program that a
mortgage or a contract on behalf of a beginning farmer may be provided if the borrower qualifies
under authority rules and under federal tax law governing qualified small issue bonds and must:
    (1) be a resident of Minnesota;
    (2) have sufficient education, training, or experience in the type of farming for which the
loan is desired;
    (3) have a low or moderate net worth, as defined in section 41C.02, subdivision 12;
    (4) certify that the agricultural land to be purchased will be used by the borrower for
agricultural purposes;
    (5) certify that farming will be the principal occupation of an individual borrower;
    (6) agree to participate in a farm management program approved by the commissioner
of agriculture for at least the first three years of the loan, if an approved program is available
within 45 miles from the borrower's residence. The commissioner may waive this requirement
for any of the programs administered by the authority if the participant requests a waiver and
provides justification; and
    (7) agree to file an approved soil and water conservation plan with the Soil Conservation
Service office in the county where the land is located.
    Subd. 3. Eligibility; agricultural business enterprises. (a) The authority shall provide in
the agricultural development bond beginning farmer and agricultural business enterprise loan
program that a mortgage or contract on behalf of an agricultural business enterprise may be
provided if the borrower qualifies under this chapter and rules of the authority and under federal
tax law governing qualified small issue bonds.
(b) An agricultural business enterprise is eligible for a program loan in an aggregate amount
not exceeding $250,000.
(c) An agricultural business enterprise is eligible for program loans only for new or expanded
operations located in a community with a population of 5,000 or less.
    Subd. 4. Loans and contracts for beginning farmers and agricultural business
enterprises. (a) The authority may:
(1) make loans to qualified beginning farmers for the acquisition of agricultural land,
agricultural improvements, depreciable agricultural property, and real and personal property for
an agricultural business enterprise. Each loan made by the authority under this program and all
collateral securing the loan may be assigned as security for the authority's bond.
(2) enter into contracts to purchase agricultural land, agricultural improvements, depreciable
agricultural property, and real and personal property for an agricultural business enterprise. Each
contract entered into by the authority under this program and all obligations of the authority
under the contract shall be assigned to the beginning farmer or agricultural business enterprise
without recourse.
(b) Loan documents and contracts entered into by the authority shall contain such terms
and conditions of repayment as may be agreed to between the beginning farmer or agricultural
business enterprise and the individual or agricultural lender involved, and such terms and
conditions as the authority may deem necessary.
(c) Each individual or agricultural lender purchasing a bond from the authority under this
program is responsible for making their own independent credit evaluation of the beginning
farmer or the agricultural business enterprise involved, and for the creation and perfection of any
security interest which they deem necessary for the loan or contract to be made on behalf of the
beginning farmer or the agricultural business enterprise.
(d) The authority shall bear no continuing responsibility for repayment of any bond issued
under the program other than the assignment of its interests under the loan document made with
the proceeds of the bond or the contract entered into in connection with the bond.
    Subd. 5. Other terms. The authority may provide that loans and contracts made under
this program may not be assumed or any interest in the agricultural land or improvements
or depreciable agricultural property or real or personal property of an agricultural business
enterprise may not be leased, sold, or otherwise conveyed without its prior written consent and
may provide a due-on-sale clause with respect to the occurrence of any of the foregoing events
without its prior written consent. The authority may provide by rule the grounds for permitted
assumptions of loans and contracts or for the leasing, sale, or other conveyance of any interest
in the agricultural land or improvements or real or personal property of an agricultural business
enterprise. However, the authority shall provide and state in its loan documents and contracts
that the interest rate of the loan or contracts shall increase to the then prevailing market rate if
the loan or contract is assumed by anyone other than a qualified beginning farmer or agricultural
business enterprise. This subdivision controls with respect to a loan or contract made under this
program, notwithstanding other law.
History: 1991 c 332 s 10; 1993 c 342 s 13; 2007 c 45 art 1 s 55