AB684: Bill Text

AB684,36,18 (e) "Participating lender" means a bank, credit union, savings bank, savings and loan association, or other person, who makes loans for working capital or to finance physical plant needs, equipment, or machinery and who has entered into an agreement with the authority under s. 238.58 (2) (a).

AB684,36,20 (f) "Percentage of guarantee" means the percentage established by the authority under sub. (3).

AB684,36,24 (g) "Raw agricultural commodity" means any agricultural, aquacultural, horticultural, viticultural, vegetable, poultry, or livestock product produced in this state, including milk and milk products, bees and honey products, timbers and wood products, or any class, variety, or utilization of the products, in their natural state.

AB684,37,2 (h) "Security interest" means an interest in property or other assets which secures payment or other performance of a guaranteed loan.

AB684,37,6 (2) Eligible loans. If the authority implements the program under this section, a loan made by a participating lender is eligible for guarantee of collection from the Wisconsin agricultural reserve fund under s. 238.58 if all of the following apply:

AB684,37,9 (a) The loan is made for working capital or to finance any of the following items, if the working capital or item is necessary to, or used to, process or market a product from a raw agricultural commodity produced in this state.

AB684,37,10 1. Physical plant.

AB684,37,11 2. Machinery or equipment.

AB684,37,12 3. Marketing expenses.

AB684,37,15 (b) The rate of interest on the loan, including any origination fees or other charges, is fixed at a rate determined by the participating lender and approved by the authority.

AB684,37,17 (c) The total principal amount of all loans to the borrower that are guaranteed under this section will not exceed $750,000.

AB684,37,20 (d) The borrower's principal place of operations for processing or marketing a product from a raw agricultural commodity is located in a city, village, or town in this state with a population of less than 50,000.

AB684,37,22 (e) The participating lender obtains a security interest in physical plant, equipment, machinery, or other assets.

AB684,37,24 (f) The loan term does not extend beyond 15 years after the date that the participating lender disburses the loan unless the loan is extended by the authority.

AB684,38,2 (g) The proceeds of the loan are not applied to the outstanding balance of any other loan.

AB684,38,4 (h) The loan results in new or more viable methods for the processing or marketing of a product from a raw agricultural commodity.

AB684,38,7 (i) The borrower does not meet the participating lender's minimum standards of creditworthiness to receive a loan for the purposes described in par. (a) in the normal course of the participating lender's business.

AB684,38,10 (j) The participating lender considers the borrower's assets, cash flow, and managerial ability sufficient to preclude voluntary or involuntary liquidation for the loan term granted by the participating lender.

AB684,38,12 (k) The participating lender agrees to the percentage of guarantee established for the loan by the authority.

AB684,38,19 (3) Guarantee of collection. The authority may guarantee collection of a percentage, not exceeding 90%, of the principal of any loan eligible for a guarantee under sub. (2). The authority shall establish the percentage of the unpaid principal of an eligible loan that will be guaranteed, using the procedures described in the guarantee agreement under s. 238.58 (2) (a). The authority may establish a single percentage for all guaranteed loans or establish different percentages for eligible loans on an individual basis.

AB684,38,21 238.54 Farm Assets Reinvestment Management Loan Guarantee Program. (1) Definitions. In this section:

AB684,38,23 (a) "Agricultural assets" means machinery, equipment, facilities, land, or livestock.

AB684,38,25 (b) "Farm credit service" includes a production credit association, federal land credit association, and agricultural credit association.

AB684,39,1 (c) "Farmer" has the meaning given in s. 102.04 (3).

AB684,39,2 (d) "Farm premises" has the meaning given in s. 102.04 (3).

AB684,39,7 (e) "Participating lender" means a bank, farm credit service, credit union, savings bank, savings and loan association, or other person who makes loans for the acquisition or improvement of agricultural assets and who has entered into an agreement with the authority under s. 238.58 (2) (a). The term does not include a seller under a land contract.

AB684,39,11 (2) Eligible loans. If the authority implements the program under this section, a loan made by a participating lender is eligible for guarantee of collection from the Wisconsin agricultural reserve fund under s. 238.58 if all of the following apply:

AB684,39,12 (a) The borrower is a farmer who is eligible for a guarantee under sub. (3).

AB684,39,14 (b) The loan is made to finance the acquisition, for agricultural purposes, of agricultural assets or the cost of improvements to facilities or land.

AB684,39,18 (c) The total outstanding guaranteed principal amount of all loans made to the borrower that are guaranteed under this section will not exceed $300,000, or $150,000 if any of the loans is affected by any other state or federal credit assistance program.

AB684,39,20 (d) The rate of interest and the loan terms, including any associated fees or charges, are approved by the authority.

AB684,39,22 (e) The participating lender obtains a security interest in assets of the borrower sufficient to secure repayment of the loan.

AB684,39,24 (f) The proceeds of the loan are not applied to the outstanding balance of any other loan or forbearance.

AB684,40,3 (3) Eligible farmers. If the authority implements the program under this section, a farmer is eligible for a guarantee of a loan under this section if all of the following apply at the time the loan is made:

AB684,40,4 (a) The farmer is currently operating farm premises.

AB684,40,7 (b) The amount of the farmer's debts, including the loan, does not exceed 85% of the farmer's assets, including the value of the agricultural assets to be acquired, or the improvements to be made, with the proceeds of the loan.

AB684,40,10 (c) The participating lender considers the farmer's assets, cash flow, and managerial ability sufficient to preclude voluntary or involuntary liquidation during the term of the loan.

AB684,40,16 (4) Origination fees. The authority shall charge a guarantee origination fee on every loan guaranteed under this section. The amount of the fee shall be 1% of a loan's guaranteed principal. The participating lender shall collect the fee and remit it to the authority. The authority shall deposit all fees received under this subsection in the Wisconsin agricultural reserve fund to be used to guarantee loans under this section.

AB684,40,21 (5) Guarantee of collection. (a) The authority may guarantee collection of a percentage of the principal of a loan eligible for a guarantee under sub. (2). The principal amount of an eligible loan that the authority may guarantee may not exceed the borrower's net worth or 25% of the total loan amount, whichever is less, calculated at the time the loan is made.

AB684,40,25 (b) The term of a loan guarantee for a loan made to finance the acquisition of machinery, equipment, or livestock, or the cost of improvements to facilities or land, may not exceed 5 years. The term of a loan guarantee for a loan made to finance the acquisition of facilities or land may not exceed 10 years.

AB684,41,5 238.56 Nutrient Environmental Technology Loan Guarantee Program. (1) Definition. In this section, "nutrient management or odor mitigation technology" includes anaerobic digesters and electricity production systems, separators, lagoon covers, and aeration systems, and reception pits, pipes, and pumps required in animal waste processing.

AB684,41,9 (2) Eligible loans. If the authority implements the program under this section, a loan made by a participating lender is eligible for guarantee of collection from the Wisconsin agricultural reserve fund under s. 238.58 if all of the following apply:

AB684,41,11 (a) The loan is made to finance nutrient management or odor mitigation technology on a farm.

AB684,41,14 (b) The rate of interest on the loan, including any origination fees or other charges, is fixed at a rate determined by the participating lender and approved by the authority.

AB684,41,16 (c) The participating lender obtains a security interest in assets of the borrower sufficient to secure repayment of the loan.

AB684,41,18 (d) The proceeds of the loan are not applied to the outstanding balance of any other loan.

AB684,41,21 (e) The participating lender considers the borrower's assets, cash flow, and managerial ability sufficient to preclude voluntary or involuntary liquidation for the loan term granted by the participating lender.

AB684,41,23 (f) The participating lender agrees to the percentage of guarantee established for the loan by the authority.

AB684,41,25 (g) The term of the loan is not longer than the maximum term established by the authority.

AB684,42,3 (h) The borrower satisfies requirements concerning the maximum amount of outstanding guaranteed principal of all loans guaranteed under this section and any other requirements specified by the authority for the program under this section.

AB684,42,5 (3) Guarantee. The authority may guarantee repayment of no more than 90 percent of the principal of any loan that is eligible for guarantee under sub. (2).

AB684,42,9 238.58 Wisconsin agricultural reserve fund. (1) Establishment of fund. There is established under the jurisdiction and control of the authority, for the purpose of providing funds for guaranteeing loans, a Wisconsin agricultural reserve fund, consisting of all of the following:

AB684,42,11 (a) Moneys appropriated to the authority or received by the authority for the Wisconsin agricultural reserve fund from any other source.

AB684,42,13 (b) Any income from investment of money in the Wisconsin agricultural reserve fund by the authority.

AB684,42,15 (c) To be used for guaranteeing loans under s. 238.54, fees collected under s. 238.54 (4).

AB684,42,21 (2) Program administration. (a) The authority may enter into a guarantee agreement with any bank, production credit association, credit union, savings bank, savings and loan association or other person who wishes to participate in a loan program guaranteed by the Wisconsin agricultural reserve fund. The authority may determine all of the following, consistent with the terms of the specific loan guarantee program:

AB684,42,22 1. The form of the agreement.

AB684,42,24 2. Any conditions upon which the authority may refuse to enter into such an agreement.

AB684,43,2 3. Any procedures required to carry out the agreement, including default procedures and procedures for determining the guaranteed percentage of each loan.

AB684,43,5 (c) The authority may not use any moneys other than those in the Wisconsin agricultural reserve fund for programs guaranteed by the Wisconsin agricultural reserve fund.

AB684,43,9 (d) The authority may establish an eligibility criteria review panel, consisting of experts in finance and in the subject area of the loan guarantee program, to advise the authority about lending requirements and issues related to a loan guarantee program.

AB684,43,13 (3) Loan guarantees; increases or decreases. (a) Except as provided in par. (b), the total principal amount or total outstanding guaranteed principal amount of all loans that the authority may guarantee under the programs guaranteed by funds from the Wisconsin agricultural reserve fund may not exceed $25,000,000.

AB684,43,25 (b) The authority may request the joint committee on finance to take action under s. 13.10 to permit the authority to increase or decrease the total principal amount or total outstanding guaranteed principal amount of loans that it may guarantee under the programs guaranteed by the Wisconsin agricultural reserve fund and the joint committee on finance may take that action. Included with its request, the authority shall provide a projection, for the next June 30, that compares the amounts required on that date to pay outstanding claims and to fund guarantees under the aggregate of the programs guaranteed by funds from the Wisconsin agricultural reserve fund, and the balance remaining in the Wisconsin agricultural reserve fund on that date after deducting those amounts, if the increase or decrease is approved, with those amounts and the balance remaining, if the increase or decrease is not approved.

AB684,44,9 (3m) Extension of loan guarantee program. When the authority prepares a fiscal estimate under s. 13.093 (2) (a) with respect to any bill that extends a program that is guaranteed by funds from the Wisconsin agricultural reserve fund, the authority shall include in its fiscal estimate a projection, for the next June 30, that compares the amounts required on that date to pay outstanding claims and to fund guarantees under all of the programs guaranteed by funds from the Wisconsin agricultural reserve fund, and the balance remaining in the Wisconsin agricultural reserve fund on that date after deducting those amounts, if the program is extended, with those amounts and the balance remaining if the program is not extended.

AB684,44,13 (4) Balance transfer. (a) Annually on June 30, until no balance remains, the authority shall transfer to the general fund any balance remaining in the Wisconsin agricultural reserve fund on that date, after deducting an amount sufficient for all of the following:

AB684,44,15 1. To pay all outstanding claims under the programs guaranteed by funds from the Wisconsin agricultural reserve fund.

AB684,44,19 2. To fund guarantees under all of the programs guaranteed by funds from the Wisconsin agricultural reserve fund at a ratio of $1 of reserve funding to $4.50 of total outstanding principal and outstanding guaranteed principal that the authority may guarantee under all of those programs.

AB684,44,22 (b) Annually on August 31, the executive director of the authority shall provide to the secretary of administration and to the joint committee on finance a signed statement that includes all of the following information:

AB684,44,25 1. The amounts required to pay outstanding claims and to fund guarantees under each of the programs guaranteed by funds from the Wisconsin agricultural reserve fund on that date.

AB684,45,1 2. An explanation of how each amount under subd. 1. was determined.

AB684,45,4 3. The amount of the balance, if any, that remains in the Wisconsin agricultural reserve fund after deducting the amounts under subd. 1. and that will be transferred to the general fund under par. (a).

AB684,45,6 4. A projection of what the amounts under subds. 1. and 3. will be on June 30 in each of the next 2 years.

AB684,45,10 (4m) Limitation on loan guarantees. The authority shall regularly monitor the cash balance in the Wisconsin agricultural reserve fund. The authority shall ensure that the cash balance in the fund is sufficient for the purposes specified in sub. (4) (a) 1. and 2.

AB684,45,17 (5) Annual report. On or before November 1 annually, the authority shall submit to the chief clerk of each house of the legislature for distribution under s. 13.172 (2) and to the joint committee on finance a report on the number and total dollar amount of guaranteed loans under each of the programs guaranteed by the Wisconsin agricultural reserve fund, the default rate on the loans, and any other information on a program guaranteed by the Wisconsin agricultural reserve fund that the authority determines is significant.

AB684,45,21 (6) Moral obligation. Recognizing its moral obligation, the legislature expresses its expectation that, if called upon to do so, it will make an appropriation to meet all demands for funds guaranteed by the Wisconsin agricultural reserve fund.

AB684,45,25 238.65 Agricultural business development; additional powers. (1) The authority, in consultation with the department of commerce, may implement any of the following programs for the purpose of promoting the development of agricultural business in this state:

AB684,46,2 (a) A revolving loan fund program pursuant to which the authority makes loans to finance agricultural businesses.

AB684,46,6 (b) An equity financing program pursuant to which the authority acts as an intermediary to facilitate equity investments in agricultural businesses. This paragraph does not permit the authority to invest its own moneys in any agricultural business.

AB684,46,9 (c) A conservation trading program pursuant to which the authority acts as an intermediary in the aggregation and trading of environmental credits related to agricultural production.

AB684,46,12 (2) By July 1 annually, the authority shall file a report with the department of commerce describing the financial condition of and level of participation in any program under sub. (1).

AB684, s. 39 Section 39. 281.75 (4) (b) 3. of the statutes is amended to read:

AB684,46,14 281.75 (4) (b) 3. An authority created under ch. 231, 233, 234, or 237, or 238.

AB684, s. 40 Section 40. 285.59 (1) (b) of the statutes is amended to read:

AB684,46,23 285.59 (1) (b) "State agency" means any office, department, agency, institution of higher education, association, society or other body in state government created or authorized to be created by the constitution or any law which is entitled to expend moneys appropriated by law, including the legislature and the courts, the Wisconsin Housing and Economic Development Authority, the Bradley Center Sports and Entertainment Corporation, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Rural Finance Authority, and the Wisconsin Health and Educational Facilities Authority.

AB684, s. 41 Section 41. 560.032 (1) of the statutes is amended to read:

AB684,47,7 560.032 (1) Allocation. The department, by rule, shall establish under 26 USC 146 and administer a system for the allocation of the volume cap on the issuance of private activity bonds, as defined under 26 USC 141 (a), among all municipalities, as defined in s. 67.01 (5), and any corporation formed on behalf of those municipalities, and among this state, the Wisconsin Health and Educational Facilities Authority, the Wisconsin Rural Finance Authority, and the Wisconsin Housing and Economic Development Authority.

AB684, s. 42 Section 42. 600.01 (1) (b) 7m. of the statutes is created to read:

AB684,47,10 600.01 (1) (b) 7m. Guarantees of the Wisconsin Rural Finance Authority under ss. 238.50, 238.52, and 238.54.

AB684, s. 43 Section 43. 706.11 (1) (c) 2. of the statutes is amended to read: