AB684: Bill Text

AB684,29,3 (2) The authority may not finance more than 45% or $125,000, subject to adjustment under s. 238.30 (5) (c), whichever is less, of the principal of a loan under this section.

AB684,29,7 238.36 Agricultural cooperative stock loans. (1) Subject to sub. (2) (a), the authority may participate as provided in s. 238.30 (3) in a loan made by a participating lender to an eligible borrower for the purchase of capital stock or other equity interest in a cooperative organized under ch. 185, if all of the following apply:

AB684,29,10 (a) The cooperative owns and operates, or proposes to build or purchase and operate, a facility in this state for processing an agricultural commodity or a byproduct of an agricultural commodity.

AB684,29,13 (b) The eligible borrower produces the agricultural commodity that will be processed at the facility or produces the agricultural commodity the byproduct of which will be processed at the facility.

AB684,29,15 (c) The loan finances no more than 95% of the purchase price of the stock or equity interest to be acquired by the eligible borrower.

AB684,29,18 (2) (a) The authority may not finance more than 45% or $24,000, subject to adjustment under s. 238.30 (5) (c), whichever is less, of the principal of a loan under this section.

AB684,29,21 (b) The interest rate charged by the authority on its portion of a loan under this section may not be more than 50% of the interest rate charged by the participating lender.

AB684,29,24 (c) A loan under this section must be secured by the stock or equity interest acquired with the loan, a personal note executed by the eligible borrower, and any other security required by the authority or participating lender.

AB684,30,6 238.38 Livestock operation modernization loans. (1) Subject to sub. (2), the authority may participate as provided in s. 238.30 (3) in a loan made by a participating lender to an eligible borrower for the purchase and construction or installation of improvements to land or buildings or other permanent structures that are useful for, and intended to be used for, the purpose of raising livestock if all of the following apply:

AB684,30,7 (a) The eligible borrower is engaged in the raising of livestock.

AB684,30,8 (b) The collateral for the loan includes a first mortgage on farm real estate.

AB684,30,10 (c) The loan does not exceed 80% of the appraised value of the collateral for the loan.

AB684,30,11 (d) The term of the loan does not exceed 10 years.

AB684,30,14 (2) The authority may not finance more than 45% or $250,000, subject to adjustment under s. 238.30 (5) (c), whichever is less, of the principal of a loan under this section.

AB684,30,17 238.40 Beginning Farmer Program. (1) In this section, "beginning farmer" means a person who engages in farming or wishes to engage in farming and who qualifies as a first-time farmer under 26 USC 147 (c) (2).

AB684,30,21 (2) The authority may establish and administer a Beginning Farmer Program to assist beginning farmers to purchase agricultural land, agricultural improvements, and depreciable agricultural property, as defined in 26 USC 144 (a) (11) (B).

AB684,30,23 (3) (a) The authority may issue its bonds to finance the Beginning Farmer Program, including funding loans to beginning farmers.

AB684,30,24 (b) The limit in s. 238.18 does not apply to bonds issued under this section.

AB684,31,3 (c) The authority may not issue more than $17,500,000 in aggregate principal amount of bonds and notes under this section, excluding bonds and notes issued to refund outstanding bonds and notes issued under this section.

AB684,31,12 (4) Bonds issued under this section are special, limited obligations of the authority payable solely out of the revenue derived from the loan agreement, debt obligation, or sales contract, collateral, or other property received in connection with the Beginning Farmer Program. All assets and liabilities created through the issuance of bonds under this section shall be separate from all other assets and liabilities of the authority. The authority has no moral or legal obligation or liability to any person under this section, except as expressly provided by written contract. The authority may not comingle funds of the Beginning Farmer Program with any other funds of the authority.

AB684,31,15 (5) The authority may charge fees for assistance provided under this section to cover the administrative costs of the Beginning Farmer Program, including legal fees.

AB684,31,17 238.50 Agricultural production loan guarantees. (1) Definitions. In this section:

AB684,31,18 (a) "Agricultural commodity" has the meaning given in s. 94.67 (2).

AB684,31,22 (ad) "Agricultural production loan" means a loan to a farmer to finance the purchase of fertilizer, seed, fuel, pesticides, tillage services, crop insurance, animal feed, or any other service or consumable good necessary to produce an agricultural commodity.

AB684,31,23 (ag) "Dairy plant" has the meaning given in s. 97.20 (1) (a).

AB684,31,24 (b) "Farmer" has the meaning given in s. 102.04 (3).

AB684,32,2 (c) "Guaranteed loan" means an agricultural production loan that is guaranteed by the authority.

AB684,32,3 (cp) "Milk" has the meaning given in s. 97.22 (1) (e).

AB684,32,7 (d) "Participating lender" means a bank, production credit association, credit union, savings bank, savings and loan association, or other person that makes agricultural production loans and that has entered into an agreement with the authority under s. 238.58 (2) (a).

AB684,32,11 (2) Eligible loans. Except as provided in sub. (3j), if the authority implements the program under this section, an agricultural production 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:

AB684,32,12 (a) The loan is to finance production of an agricultural commodity.

AB684,32,15 (b) The total outstanding principal amount of all loans to the borrower that are guaranteed under this section will not exceed an amount set annually by the authority that may not exceed $100,000.

AB684,32,19 (bm) If the loan is one for which the borrower is eligible under sub. (3g), the amount of that loan does not exceed the amount of the payment, excluding interest or penalties if any, owed to the borrower by the insolvent or bankrupt dairy plant, subject to par. (b).

AB684,32,22 (c) The rate of interest on the loan, including any origination fees or other charges relating to the loan, does not exceed a rate determined by the authority after considering the conditions of the financial market.

AB684,33,2 (d) If the authority will make a payment under sub. (5) with respect to the loan, the rate of interest on the loan for which the borrower is obligated, including any origination fees or other charges relating to the loan, does not exceed the rate determined under par. (c), minus up to 2%.

AB684,33,6 (e) The participating lender will pay directly any supplier of fertilizer, seed, fuel, pesticides, tillage services, crop insurance, animal feed, or other service or consumable good necessary to produce an agricultural commodity, if the borrower obtains the loan to pay that supplier.

AB684,33,8 (f) The participating lender obtains a security interest for repayment of the loan in the agricultural commodity resulting from use of the loan proceeds.

AB684,33,12 (g) Unless waived by the authority, the borrower procures an insurance policy that protects the agricultural commodity to be financed with the proceeds of the loan against risk of loss, and the proceeds of that policy are payable to the participating lender.

AB684,33,14 (h) The term of the loan does not extend after March 31 of the calendar year following the calendar year in which the participating lender granted the loan.

AB684,33,17 (i) The proceeds of the loan are not applied to the outstanding balance of any other loan, except that the proceeds may be used to refinance a loan under this section, subject to sub. (3n).

AB684,33,21 (j) If the loan is one for which the borrower is eligible under sub. (3g), the terms of the loan require the borrower to pay to the authorized lender, in repayment of the loan, money received from or on behalf of the bankrupt or insolvent dairy plant, immediately upon receipt of the money.

AB684,33,24 (3) Eligible farmers. Except as provided in subs. (3g) and (3j), if the authority implements the program under this section, a farmer is eligible for a guaranteed loan if all of the following apply:

AB684,34,3 (a) The farmer does not meet the participating lender's minimum standards of creditworthiness to receive an agricultural production loan in the normal course of the participating lender's business.

AB684,34,5 (b) The amount of the farmer's debts totals at least 40% of the amount of the farmer's assets.

AB684,34,10 (c) In the judgment of the participating lender, it is reasonably likely that if the farmer receives a guaranteed loan the farmer's assets, cash flow, and managerial ability are sufficient to preclude voluntary or involuntary liquidation before April 1 of the calendar year following the calendar year in which the participating lender granted the loan.

AB684,34,15 (d) The farmer's name does not appear on the statewide support lien docket under s. 49.854 (2) (b) or, if the farmer's name appears on that docket, the farmer provides to the authority a payment agreement that has been approved by the county child support agency under s. 59.53 (5) and that is consistent with rules promulgated under s. 49.858 (2) (a).

AB684,34,18 (3g) Eligible dairy farmer. Except as provided in sub. (3j), if the authority implements the program under this section, a farmer is eligible for a guaranteed loan under this subsection if all of the following apply:

AB684,34,20 (a) The farmer has not been paid for milk provided to a dairy plant because of the bankruptcy or insolvency of the dairy plant.

AB684,34,25 (b) In the judgment of the participating lender, it is reasonably likely that if the farmer receives a guaranteed loan the farmer's assets, cash flow, and managerial ability are sufficient to preclude voluntary or involuntary liquidation before April 1 of the calendar year following the calendar year in which the participating lender granted the loan.

AB684,35,5 (c) The farmer's name does not appear on the statewide support lien docket under s. 49.854 (2) (b) or, if the farmer's name appears on that docket, the farmer provides to the authority a payment agreement that has been approved by the county child support agency under s. 59.53 (5) and that is consistent with rules promulgated under s. 49.858 (2) (a).

AB684,35,8 (3j) Emergency eligibility criteria. The authority may guarantee a loan to a farmer using eligibility criteria determined by the authority that differ from the criteria under subs. (2) to (3g) if all of the following apply:

AB684,35,11 (a) The governor has determined that an emergency situation exists and that the criteria under subs. (2) to (3g) prevent the authority from making an adequate response to the emergency situation.

AB684,35,15 (b) The authority has submitted to the joint committee on finance for review under s. 13.10 the emergency eligibility criteria that it proposes to use, and the joint committee on finance has approved the use of the criteria for the emergency situation.

AB684,35,18 (3m) Extension. A participating lender may extend the term of a loan until no later than June 30 of the calendar year following the calendar year in which the participating lender granted the loan.

AB684,35,20 (3n) Refinancing. (a) Except as provided in par. (b), proceeds of a guaranteed loan may be used to refinance a guaranteed loan no more than one time.

AB684,35,23 (b) The proceeds of a guaranteed loan may be used to refinance a guaranteed loan that has been refinanced one time if at least 60% of the principal amount of the refinanced guaranteed loan has been repaid.

AB684,35,25 (3p) Installment payment of certain loans. An authorized lender may require a borrower to repay a loan described in sub. (3g) in installments.

AB684,36,3 (4) Guarantee. The authority may guarantee repayment of no more than 90% of the principal of any agricultural production loan eligible for guarantee under sub. (2) made to a farmer eligible for a guaranteed loan under sub. (3) or (3g).

AB684,36,10 (5) Interest reduction. If the authority implements the program under this section and if at the time of origination or extension the interest rate on a guaranteed loan and the prime lending rate as reported by the federal reserve board in federal reserve statistical release H. 15 each equals or exceeds 10%, the authority may pay, from the moneys in the Wisconsin agricultural reserve fund, to the participating lender making the loan, an amount equal to up to 2% of the principal amount of the loan.

AB684,36,12 238.52 Agricultural Development Loan Guarantee Program. (1) Definitions. In this section:

AB684,36,14 (d) "Guaranteed loan" means a loan on which the authority guarantees collection under sub. (3).

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).