2D SSHB 203: "An Act relating to loans from the agricultural revolving loan fund; and providing for an effective date."
002d SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 203 01 "An Act relating to loans from the agricultural revolving loan fund; and 02 providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 03.10.030(a) is amended to read: 05 (a) The farm development, chattel, or irrigation loan made under this chapter 06 (1) may not exceed a term of 30 years, except that a chattel loan may 07 not exceed a term of seven years; 08 (2) may not, when added to the outstanding balance of other loans 09 made under this chapter, exceed a total outstanding balance of $1,000,000; 10 (3) shall be secured by a real estate or chattel mortgage of any priority, 11 except that the portion of a loan that exceeds $500,000, when added to prior 12 indebtedness that is secured by the same property, must be secured by a first mortgage; 13 (4) shall bear interest at a rate that may not be less than five [EIGHT] 14 percent or more than the commercial rate, unless the commercial rate is five [EIGHT]
01 percent or less; in this paragraph , "commercial rate" means the prevailing rate of 02 interest at private lending institutions in the state for loans similar to those referred to 03 in this subsection. 04 * Sec. 2. AS 03.10.030(f) is amended to read: 05 (f) A farm product processing loan may not exceed $250,000. A mortgage 06 that secures a farm product processing loan may be of any priority if the total 07 indebtedness on the real estate, including the secured farm product processing loan, 08 does not exceed $250,000. A farm product processing loan that, if made, would raise 09 the existing indebtedness on the real estate securing the loan above $250,000, or a 10 farm product processing loan on real estate that has a prior indebtedness of $250,000 11 or more, may be made only if all prior mortgagees agree to subordinate their 12 mortgages to that of the state for the amount of the farm product processing loan that 13 exceeds the $250,000 indebtedness limit on the real estate. A farm product processing 14 loan may not exceed a term of 30 years or bear interest that is less than five [EIGHT] 15 percent a year and shall be secured by a real estate or chattel mortgage or both. 16 * Sec. 3. AS 03.10.030(g) is amended to read: 17 (g) A loan for clearing land may not 18 (1) exceed $250,000; 19 (2) bear interest that is less than five [EIGHT] percent; 20 (3) have a term in excess of 20 years; or 21 (4) be made for clearing land other than land that has been classified 22 by the United States Department of Agriculture, Soil Conservation Service , under the 23 Land Capability Classification System as having agricultural potential for the 24 production of annual crops or [,] hay, or for pasture. 25 * Sec. 4. AS 03.10.033(a) is amended to read: 26 (a) To increase the return to the state, the Agricultural Revolving Loan Fund 27 Board may restructure loans (1) in existence on January 1, 1987, made by the board 28 or by the Alaska Agricultural Action Council based upon guidelines approved by the 29 board ; or (2) of a borrower in an area that has been declared a farm disaster area 30 under AS 03.10.058 during three of the five years preceding the restructuring . 31 The restructuring may only include reduction of interest [TO RATES BELOW THOSE
01 SPECIFIED BY AS 03.10.030], an extension of the term of the loan, and an 02 improvement to the security interest of the state. It may not reduce the amount of 03 principal and interest owed before the loan is restructured. 04 * Sec. 5. AS 03.10.050(a) is amended to read: 05 (a) The commissioner shall administer the agricultural revolving loan fund 06 in conjunction with the Agricultural Revolving Loan Fund Board. A [NO] loan [IN 07 EXCESS OF $25,000] may not be made by the commissioner without the approval of 08 a majority of the board , except that emergency loans not to exceed $50,000 may be 09 made upon the approval, by majority vote, of a committee composed of the 10 director of agriculture, an employee of the board who is a loan officer selected by 11 the board to serve on the committee, and the chair of the board or the chair's 12 designee . 13 * Sec. 6. This Act takes effect July 1, 1999.