CS 2D SSHB 203(FIN): "An Act relating to loans from the agricultural revolving loan fund; and providing for an effective date."
00CS FOR 2d SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 203(FIN) 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 fixed rate comparable to that charged by 14 other agricultural [THAT MAY NOT BE LESS THAN EIGHT PERCENT OR
01 MORE THAN THE COMMERCIAL RATE, UNLESS THE COMMERCIAL RATE 02 IS EIGHT PERCENT OR LESS; IN THIS PARAGRAPH, "COMMERCIAL RATE" 03 MEANS THE PREVAILING RATE OF INTEREST AT PRIVATE] lending 04 institutions in the state for loans similar to those referred to in this subsection. 05 * Sec. 2. AS 03.10.030(c) is amended to read: 06 (c) A short term loan, to be amortized within one year, not to exceed $350,000 07 to any one borrower , may be made for operating purposes, except that a loan made 08 under this subsection may not exceed $200,000 unless the loan is made to a borrower 09 in a farm disaster area declared under AS 03.10.058. The loan shall bear interest at 10 a fixed rate comparable to that charged by other agricultural lending institutions 11 in the state for loans similar to those referred to in this subsection. An applicant 12 for a short term loan may be required to purchase insurance through the Federal Crop 13 Insurance Act (7 U.S.C. 1501 - 1520) as a condition of the loan. The term of a loan 14 made under this subsection may be extended for up to three years by the agricultural 15 revolving loan fund board, in the discretion of the board, upon application by the 16 borrower. 17 * Sec. 3. AS 03.10.030(f) is amended to read: 18 (f) A farm product processing loan may not exceed $250,000. A mortgage 19 that secures a farm product processing loan may be of any priority if the total 20 indebtedness on the real estate, including the secured farm product processing loan, 21 does not exceed $250,000. A farm product processing loan that, if made, would raise 22 the existing indebtedness on the real estate securing the loan above $250,000, or a 23 farm product processing loan on real estate that has a prior indebtedness of $250,000 24 or more, may be made only if all prior mortgagees agree to subordinate their 25 mortgages to that of the state for the amount of the farm product processing loan that 26 exceeds the $250,000 indebtedness limit on the real estate. A farm product processing 27 loan may not exceed a term of 30 years or bear interest at a rate that is less than a 28 fixed rate comparable to that charged by other agricultural lending institutions 29 in the state for similar loans [EIGHT PERCENT A YEAR] and shall be secured by 30 a real estate or chattel mortgage or both. 31 * Sec. 4. AS 03.10.030(g) is amended to read:
01 (g) A loan for clearing land may not 02 (1) exceed $250,000; 03 (2) bear interest at a rate that is less than a fixed rate comparable to 04 that charged by other agricultural lending institutions in the state for similar 05 loans [EIGHT PERCENT]; 06 (3) have a term in excess of 20 years; or 07 (4) be made for clearing land other than land that has been classified 08 by the United States Department of Agriculture, Soil Conservation Service , under the 09 Land Capability Classification System as having agricultural potential for the 10 production of annual crops or [,] hay, or for pasture. 11 * Sec. 5. AS 03.10.033(a) is amended to read: 12 (a) To increase the return to the state, the Agricultural Revolving Loan Fund 13 Board may restructure loans (1) in existence on January 1, 1987, made by the board 14 or by the Alaska Agricultural Action Council based upon guidelines approved by the 15 board ; (2) of a borrower in an area that has been declared a farm disaster area 16 under AS 03.10.058; or (3) of a borrower who has experienced an agricultural 17 disaster based upon regulations adopted by the department . Notwithstanding any 18 other provision of law that relates to loan terms, the [THE] restructuring may only 19 include reduction of interest to a fixed rate not less than five percent a year [TO 20 RATES BELOW THOSE SPECIFIED BY AS 03.10.030], an extension of the term 21 of the loan, and an improvement to the security interest of the state. It may not reduce 22 the amount of principal and interest owed before the loan is restructured. 23 * Sec. 6. AS 03.10.050(a) is amended to read: 24 (a) The commissioner shall administer the agricultural revolving loan fund 25 in conjunction with the Agricultural Revolving Loan Fund Board. A [NO] loan [IN 26 EXCESS OF $25,000] may not be made by the commissioner without the approval of 27 a majority of the board , except that emergency loans based upon regulations 28 adopted by the department and not to exceed $50,000 may be made upon the 29 approval, by majority vote, of a committee composed of the director of 30 agriculture, a board member selected by the board to serve on the committee, 31 and the chair of the board or the chair's designee .
01 * Sec. 7. This Act takes effect immediately under AS 01.10.070(c).