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Statutes > Wisconsin > 234 > 234.905

234.905

234.905 Agricultural production drought assistance loan guarantees.

234.905(1)

(1) Definitions. In this section:

234.905(1)(a)

(a) "Agricultural commodity" has the meaning given under s. 94.67 (2).

234.905(1)(b)

(b) "Agricultural production drought assistance loan" means a loan to a farmer to finance extraordinary drought-related costs, including the cost of any of the following:

234.905(1)(b)1.

1. Fertilizer, seed, fuel, pesticides, tillage services, crop insurance, or any other service or consumable good necessary to produce an agricultural commodity to replace or supplement an agricultural commodity adversely affected by drought conditions.

234.905(1)(b)2.

2. Water delivery in connection with agricultural commodities adversely affected by drought conditions.

234.905(1)(b)3.

3. Feed and associated expenses for animals to supplement feed supplies adversely affected by drought conditions.

234.905(1)(d)

(d) "Farmer" has the meaning given under s. 102.04 (3).

234.905(1)(e)

(e) "Guaranteed loan" means an agricultural production drought assistance loan on which the authority guarantees collection.

234.905(1)(f)

(f) "Participating lender" means a bank, production credit association, credit union, savings bank, savings and loan association or other person who makes agricultural production drought assistance loans and who has entered into an agreement with the authority under s. 234.93 (2) (a).

234.905(2)

(2) Eligible loans. An agricultural production drought assistance loan made by a participating lender is eligible for guarantee of collection from the Wisconsin development reserve fund under s. 234.93 if all of the following apply:

234.905(2)(a)

(a) The total of the principal amounts of all guaranteed loans extended to the borrower under this section will not exceed $15,000.

234.905(2)(b)

(b) The rate of interest on the agricultural production drought assistance loan, including any origination fees or other charges relating to the agricultural production drought assistance loan, does not exceed a rate determined by the authority after considering the conditions of the financial market.

234.905(2)(c)

(c) The participating lender shall pay directly any supplier of fertilizer, seed, fuel, pesticides, tillage services, crop insurance, animal feed, water or other service or consumable good necessary to produce an agricultural commodity, if the borrower obtains the agricultural production drought assistance loan to pay that supplier.

234.905(2)(d)

(d) The participating lender obtains security for repayment of the agricultural production drought assistance loan or follows other procedures required by the authority to secure repayment of the agricultural production drought assistance loan.

234.905(2)(e)

(e) The term of the agricultural production drought assistance loan is not longer than 3 years.

234.905(2)(f)

(f) The proceeds of the agricultural production drought assistance loan may not be applied to the outstanding balance of any other loan.

234.905(2)(g)

(g) The proceeds of the agricultural production drought assistance loan may not be used to refinance a loan made under this section.

234.905(3)

(3) Eligible farmers. A farmer is eligible for a guaranteed loan if all of the following apply:

234.905(3)(a)

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

234.905(3)(b)

(b) The participating lender projects the amount of the farmer's debts to be approximately 40% or more of the amount of the farmer's assets.

234.905(3)(c)

(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 the end of the loan term.

234.905(3)(d)

(d) The farmer's name does not appear on the statewide support lien docket under s. 49.854 (2) (b). The condition under this paragraph is met for a farmer whose name does appear if 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).

234.905(3)(e)

(e) The participating lender projects that the farmer will lose approximately 40% or more of the farmer's crops because of drought conditions.

234.905(3m)

(3m) Extension. A participating lender may extend the term of a loan until no later than 5 years after the lender granted the loan.

234.905(4)

(4) Guarantee of collection.

234.905(4)(a)

(a) Except as provided in par. (b), on or before June 30, 1989, the authority shall guarantee collection of 90% of the principal of any agricultural production drought assistance loan eligible for guarantee under sub. (2) made to a farmer eligible for a guaranteed loan under sub. (3).

234.905(4)(b)

(b) Except as provided in s. 234.93 (3), the total principal amounts of all agricultural production drought assistance loans which the authority may guarantee under par. (a) may not exceed $30,000,000.

234.905(5)

(5) Interest reduction. The authority shall pay, from the moneys in the Wisconsin development reserve fund, to each participating lender an amount equal to 3.5% of the principal amount of any guaranteed loan to reduce interest payments on the guaranteed loan paid by a farmer, except that the authority shall make interest reduction payments for no more than 3 years of the repayment term of any guaranteed loan.

234.905 - ANNOT.

History: 1987 a. 421; 1989 a. 2, 10, 31, 336; 1991 a. 4, 39, 221; 1995 a. 404; 1999 a. 9.