SB 161: "An Act relating to loans from the agricultural revolving loan fund and to contracts for the sale of state agriculture land; and providing for an effective date."
00SENATE BILL NO. 161 01 "An Act relating to loans from the agricultural revolving loan fund and to 02 contracts for the sale of state agriculture land; and providing for an effective 03 date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 03.10.030(a) is amended to read: 06 (a) The farm development, chattel, or irrigation loan made under this chapter 07 (1) may not exceed a term of 30 years, except that a chattel loan may 08 not exceed a term of seven years; 09 (2) may not, when added to the outstanding balance of other loans 10 made under this chapter, exceed a total outstanding balance of $1,000,000; 11 (3) shall be secured by a real estate or chattel mortgage of any priority, 12 except that the portion of a loan that exceeds $500,000, when added to prior 13 indebtedness that is secured by the same property, must be secured by a first mortgage; 14 (4) shall bear interest at a rate that may not be less than five [EIGHT]
01 percent or more than the commercial rate, unless the commercial rate is five [EIGHT] 02 percent or less; in this paragraph , "commercial rate" means the prevailing rate of 03 interest at private lending institutions in the state for loans similar to those referred to 04 in this subsection. 05 * Sec. 2. AS 03.10.030(f) is amended to read: 06 (f) A farm product processing loan may not exceed $250,000. A mortgage 07 that secures a farm product processing loan may be of any priority if the total 08 indebtedness on the real estate, including the secured farm product processing loan, 09 does not exceed $250,000. A farm product processing loan that, if made, would raise 10 the existing indebtedness on the real estate securing the loan above $250,000, or a 11 farm product processing loan on real estate that has a prior indebtedness of $250,000 12 or more, may be made only if all prior mortgagees agree to subordinate their 13 mortgages to that of the state for the amount of the farm product processing loan that 14 exceeds the $250,000 indebtedness limit on the real estate. A farm product processing 15 loan may not exceed a term of 30 years or bear interest that is less than five [EIGHT] 16 percent a year and shall be secured by a real estate or chattel mortgage or both. 17 * Sec. 3. AS 03.10.030(g) is amended to read: 18 (g) A loan for clearing land may not 19 (1) exceed $250,000; 20 (2) bear interest that is less than five [EIGHT] percent; 21 (3) have a term in excess of 20 years; or 22 (4) be made for clearing land other than land that has been classified 23 by the United States Department of Agriculture, Soil Conservation Service , under the 24 Land Capability Classification System as having agricultural potential for the 25 production of annual crops or [,] hay, or for pasture. 26 * Sec. 4. AS 03.10.033(a) is amended to read: 27 (a) To increase the return to the state, the Agricultural Revolving Loan Fund 28 Board may restructure loans (1) in existence on January 1, 1987, made by the board 29 or by the Alaska Agricultural Action Council based upon guidelines approved by the 30 board ; or (2) of a borrower who has experienced three years of agricultural 31 disaster during the last five years as defined by regulations adopted by the board .
01 The restructuring may only include reduction of interest [TO RATES BELOW THOSE 02 SPECIFIED BY AS 03.10.030], an extension of the term of the loan, and an 03 improvement to the security interest of the state. It may not reduce the amount of 04 principal and interest owed before the loan is restructured. 05 * Sec. 5. AS 03.10.050(a) is amended to read: 06 (a) The commissioner shall administer the agricultural revolving loan fund 07 in conjunction with the Agricultural Revolving Loan Fund Board. A [NO] loan [IN 08 EXCESS OF $25,000] may not be made by the commissioner without the approval of 09 a majority of the board , except that emergency loans not to exceed $50,000 may be 10 made upon the approval, by majority vote, of a committee composed of the chair 11 of the board, the director of agriculture, and an employee of the board who is a 12 loan officer selected by the board to serve on the committee . 13 * Sec. 6. AS 38.05.065(h) is amended to read: 14 (h) The commissioner 15 (1) shall provide that, notwithstanding (a) and (b) of this section, in a 16 contract for the sale of land classified under AS 38.05.020(b)(6) for agricultural uses, 17 the interest rate to be charged on installment payments may not exceed 5 [9.5] percent; 18 and 19 (2) may declare a moratorium of up to five years on payments on land 20 sold under this section for land classified under AS 38.05.020(b)(6) for agricultural 21 uses if 22 (A) the commissioner determines that the moratorium is in the 23 best interest of the state; 24 (B) the commissioner certifies and the contract purchaser agrees 25 to perform farm development, crop production, and harvesting, not including 26 land clearing or related activity, requiring the expenditure of amounts 27 equivalent to the payments that would otherwise be made during the 28 moratorium; 29 (C) the sale of the agricultural land takes place after July 1, 30 1979; and 31 (D) the contract purchaser is in compliance with the
01 development plan specified in the purchase contract at the time the purchaser 02 applies for a moratorium under this subsection and remains in compliance with 03 the development plan during the moratorium; for the payments subject to the 04 moratorium declared under this paragraph, interest payments are subject to the 05 moratorium but interest continues to accrue during the moratorium. 06 * Sec. 7. This Act takes effect July 1, 1999.