Current through Register Vol. 49, No. 8, August 19, 2024
Section 41B.057 - FARM OPPORTUNITY LOAN PROGRAMSubdivision 1.Establishment.The authority shall establish a farm opportunity loan program to provide loans that enable farmers to:
(1) add value to crops or livestock produced in Minnesota;(2) adopt best management practices that emphasize sufficiency and self-sufficiency;(3) reduce or improve management of agricultural inputs resulting in environmental improvements; or(4) increase production of on-farm energy.Subd. 2.Loan criteria.(a) The farm opportunity loan program shall provide loans for purchase of new or used equipment and installation of equipment for projects that make environmental improvements and enhance farm profitability. The loan program shall also be used to add value to crops or livestock produced in Minnesota by, but not limited to, initiating or expanding livestock product processing; purchasing equipment to initiate, upgrade, or modernize value-added agricultural businesses; or increasing farmers' processing and aggregating capacity facilitating entry into farm-to-institution and other markets. Eligible loan uses do not include expenses related to seeds, fertilizer, fuel, or other operating expenses.(b) The authority may impose a reasonable, nonrefundable application fee for a farm opportunity loan. The authority may review the fee annually and make adjustments as necessary. The initial application fee is $50. Application fees received by the authority must be deposited in the Rural Finance Authority administrative account established in section 41B.03.(c) Loans may only be made to Minnesota residents engaged in farming. Standards for loan amortization must be set by the Rural Finance Authority and must not exceed ten years.(d) The borrower must show the ability to repay the loan.(e) Refinancing of existing debt is not an eligible expense.(f) Loans under this program must be made using money in the revolving loan account established in section 41B.06.Subd. 3.Loan participation.The authority may participate in a farm opportunity loan with an eligible lender, as defined in section 41B.02, subdivision 8, to a farmer or a group of farmers on joint projects who are eligible under subdivision 2, paragraph (c), and who are actively engaged in farming. Participation is limited to 45 percent of the principal amount of the loan or $100,000 per individual, whichever is less. For loans to a group made up of four or more individuals, participation is limited to 45 percent of the principal amount of the loan or $250,000, whichever is less. The interest rate on the loans must not exceed six percent.
Amended by 2019 Minn. Laws, ch. 38,s 27, eff. 8/1/2019.Added by 2015SP1 Minn. Laws, ch. 4,s 2-76, eff. 6/14/2015.