Michigan Laws 286.433 – Qualified agricultural loan origination program; establishment; requirements; use of work project funds appropriated
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Terms Used In Michigan Laws 286.433
- Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Facility: means a plant designed for receiving or storing farm produce, a plant designed for value-added agricultural processing, or a retail sales establishment of a business engaged in making retail sales directly to farmers with 75% or more of its gross retail sales volume exempted from sales tax under section 4a(1)(e), (f), (g), and (h) of the general sales tax act, 1933 PA 167, MCL 205. See Michigan Laws 286.432
- Financial institution: means a state or national bank, a state or federally chartered savings and loan association, a state or federally chartered savings bank, a state or federally chartered credit union, or other regulated lending institution that maintains a principal office or branch office in this state under the laws of this state or the United States, including, but not limited to, an entity of the federally chartered farm credit system. See Michigan Laws 286.432
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Person: means an individual, partnership, corporation, association, governmental entity, or other legal entity. See Michigan Laws 286.432
- Program: means the qualified agricultural loan origination program established under this act. See Michigan Laws 286.432
- Qualified agricultural loan: means a loan that is issued under the program and that meets all of the following conditions:
(i) The loan is made to 1 of the following:
(A) A person that is engaged in and intending to remain engaged in this state as an owner or operator of a farm in the production of agricultural goods that suffered a qualified loss of 25% or more in major enterprises or a qualified loss of 50% or more in production of any 1 crop on a farm located within this state. See Michigan Laws 286.432Qualified financial institution: means a financial institution that has a physical location in this state or whose principal office is located in this state, or both. See Michigan Laws 286.432 Qualified loss: means a reduction of gross revenue from any agricultural commodity after receipt of any insurance proceeds and other reimbursements as a result of the same crop loss. See Michigan Laws 286.432 state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o United States: shall be construed to include the district and territories. See Michigan Laws 8.3o
(1) The state treasurer may establish a qualified agricultural loan origination program as provided in this act.
(2) The program shall meet all of the following:
(a) A person receiving a qualified agricultural loan shall pay an interest rate authorized under this act and established by the qualified financial institution.
(b) This state shall pay loan origination fees for administrative costs incurred by the qualified financial institution equal to 5% of the original principal amount of the loan. Loan origination fees may be paid by this state in equal installments over the term of the work project appropriation or in a lump-sum payment for the entire term of the work project appropriation.
(3) A qualified agricultural loan shall comply with both of the following:
(a) Interest shall be set by the qualified financial institution at the rate of the 5-year United States treasury note plus 2.0%, unless otherwise provided in an appropriation act.
(b) The term of the loan shall not be more than 7 years, unless otherwise provided in an appropriation act.
(4) A qualified agricultural loan described in section 2(h)(i)(A) shall be equal to not more than the value of the crop loss as certified by the producer in an affidavit demonstrating an accurate and valid qualified loss of production. The qualified agricultural loan shall not exceed the lesser of $400,000.00 or the value of the qualified loss. If crop insurance was available for a particular crop and the producer did not purchase the crop insurance for that crop, the amount of the loan shall be reduced by 30% or reduced by $100,000.00, whichever is less.
(5) A qualified agricultural loan described in section 2(h)(i)(B) or (C) shall not exceed the lesser of the following:
(a) Eight hundred thousand dollars per facility.
(b) One million dollars per person applying for the loan.
(6) From the work project funds appropriated by 2019 PA 45, a qualified financial institution shall make qualified agricultural loans after March 1, 2020 and before June 1, 2020. For any additional work project funds subsequently appropriated for this program, a qualified financial institution shall not make qualified agricultural loans before March 1 of the immediately succeeding calendar year or as otherwise provided in an appropriation act.