6-09.8 Beginning Farmer Loan Guarantee Program
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<![CDATA[CHAPTER 6-09.8BEGINNING FARMER LOAN GUARANTEE PROGRAM6-09.8-01. Definitions. As used in this chapter, unless the context or subject matterrequires otherwise:1."Beginning farmer" means an individual who qualifies as a beginning farmer who:a.Is a resident of this state;b.Receives more than half of that person's gross annual income from farming,<br>unless the person initially commences farming during the year of the<br>application under this chapter;c.Intends to use any farmland to be purchased or rented for agricultural<br>purposes;d.Is adequately trained by education in the type of farming operation which the<br>person wishes to begin on the purchased or rented land referred to in<br>subdivision c through satisfactory participation in the adult farm management<br>education program of the state board for career and technical education or an<br>equivalent program approved by the agriculture commissioner; ande.Has, including the net worth of any dependents and spouse, a net worth of less<br>than one hundred thousand dollars, not including the value of their equity in<br>their principal residence, the value of one personal or family motor vehicle, and<br>the value of their household goods, including furniture, appliances, musical<br>instruments, clothing, and other personal belongings.2."Lender" means any lending institution which is regulated or funded under the laws<br>of this state or the United States and which has provided financing to a beginning<br>farmer for the purchase of qualified agricultural property.3."Loan guarantee" means an agreement that in the event of default by a beginning<br>farmer under a contract for deed, a note and mortgage, or other loan or financing<br>agreement, the Bank shall pay the seller or lender ninety percent of the amount of<br>principal due the seller or lender on a real estate transaction and up to fifty percent<br>of the amount of principal due the seller or lender on a personal property loan at the<br>time the claim is approved from the loan guarantee fund.4."Qualified agricultural property" means real estate or depreciable personal property<br>used in the production of agricultural products.Depreciable personal propertymeans personal property that may be depreciated under generally accepted<br>accounting principles and is designed for use in more than one production year.5."Seller" means any person, association, partnership, corporation, or limited liability<br>company which has provided financing to a beginning farmer for the purchase of<br>qualified agricultural property or which has entered into a contract for deed with a<br>beginning farmer for the sale and purchase of agricultural real estate.6-09.8-02. Beginning farmer loan guarantee program - Administration by the Bankof North Dakota.The Bank of North Dakota shall administer the beginning farmer loanguarantee program established by this chapter.6-09.8-03. Loan guarantee fund - Administrative charges. There is hereby created abeginning farmer loan guarantee fund which must be used by the Bank to carry out the<br>provisions of this chapter. The fund must include the moneys appropriated by section 54-17-31<br>as it existed on June 30, 1983, and all earnings, less any administrative charges, from thePage No. 1investment of those moneys, and such moneys are hereby appropriated to the beginning farmer<br>loan guarantee fund.Any and all administrative charges of the Bank necessary for theadministration of the program established by this chapter may be charged to earnings of the<br>fund.6-09.8-04. Application for guarantee. Any lender or seller may apply to the Bank for aloan guarantee. A loan guarantee may not be approved if the purchase price of the qualified<br>agricultural property exceeds its appraisal value for real estate, or its fair market value for all<br>other property. Guarantees for depreciable personal property loans may only be given for loans<br>made under chapter 4-36.6-09.8-05. Term - Annual fee. The term of a loan guarantee may not exceed five years.The Bank may charge a seller or lender an annual fee during the term of a loan guarantee.6-09.8-06. Termination. A loan guarantee may be terminated by the Bank upon thesale, exchange, assignment, or transfer of the beginning farmer's interest in the qualified<br>agricultural property and must be terminated if the Bank determines that the loan guarantee was<br>obtained by fraud or material misrepresentation of which the lender or seller has actual<br>knowledge.6-09.8-07. Rules. The Bank shall adopt rules to implement this chapter, which mayinclude a formula for determining the ratio of reserves in the loan guarantee fund to the amount<br>of guaranteed loans, the maximum dollar amount of a guarantee, and the maximum allowable<br>annual interest rate on a loan eligible for a guarantee.Page No. 2Document Outlinechapter 6-09.8 beginning farmer loan guarantee program]]>