§219-8  Participation in loans by the
department.



(1)  The department of agriculture may provide funds
for a share, not to exceed ninety per cent, of the principal amount of a loan
made to a qualified aquaculturist by a private lender who is unable otherwise
to lend the applicant sufficient funds at reasonable rates where the qualified
farmer is unable to obtain sufficient funds for the same purpose from the
United States Department of Agriculture;



(2)  Participation loans under this section shall be
limited by the provisions of section 219-6 and the department of agriculture's
share shall not exceed the maximum amounts specified therefor;



(3)  Interest charged on the private lender's share of
the loan shall not be more than the sum of two per cent above the lowest rate
of interest charged by all state or national banks authorized to accept or hold
deposits in the State on secured short term loans made to borrowers who have
the highest credit rating with those banks;



(4)  The private lender's share of the loan may be
insured by the department up to ninety per cent of the principal balance of the
loan, under section 219-7;



(5)  When a participation loan has been approved by
the department, its share shall be paid to the participating private lender for
disbursement to the borrower.  The private lender shall collect all payments
from the borrower and otherwise service the loan;



(6)  Out of interest collected, the private lender may
be paid a service fee to be determined by the department which fee shall not
exceed one per cent of the unpaid principal balance of the loan; provided that
this fee shall not be added to any amount which the borrower is obligated to
pay;



(7)  The participating private lender may take over a
larger percentage or the full principal balance of the loan at any time that it
has determined, to the satisfaction of the department, that the borrower is
able to pay any increased interest charges resulting; and



(8)  Security for participation loans shall be limited
by section 219-5(a)(6).  All collateral documents shall be held by the private
lender.  Division of interest in collateral received shall be in proportion to
participation by the department and the private lender. [L 1977, c 212, pt of
§2; am L 1989, c 261, §11; am L 1993, c 350, §10; am L 1997, c 258, §13; am L
2001, c 55, §8(3)]