HOUSE BILL NO.      

Farm loans.

Sponsored by:  Joint Agriculture, Public Lands and Water Resources Interim Committee

A BILL

for

AN ACT relating to farm loans by the state loan and investment board; increasing the maximum loan amount; providing for a reduced interest rate under certain circumstances; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1.  W.S. 11-34-114, 11-34-115 and 11-34-117 are amended to read:

11-34-114.  Limitation on loans; percentages of appraised value.

No loan secured by a first mortgage shall exceed seventy percent (70%) of the appraised value of the land with the necessary existing improvements, as ascertained and fixed by the board except as provided by W.S. 11-34-117.  If a loan is secured by a second mortgage, the sum of the first and second mortgages shall not exceed eighty percent (80%) of the appraised value of the land and improvements and the balance due on the loans secured by the first or second mortgage shall not exceed four hundred thousand dollars ($400,000.00) six hundred thousand dollars ($600,000.00).  The appraisal shall be made by the state loan and investment board, with the advice of two (2) residents of the immediate locality in which the loan is being considered.

11-34-115.  Minimum and maximum amount of loans.

The amount of loans to any one (1) borrower shall not be less than one thousand dollars ($1,000.00) nor more than four hundred thousand dollars ($400,000.00) six hundred thousand dollars ($600,000.00) if all loans to the borrower are made for the purposes of purchasing farm lands or other purposes as defined by W.S. 11-34-109.

11-34-117.  Rates of interest.

     (a) The board may set rates of interest on all farm loans according to current interest rates but not less than four percent (4%) nor more than ten percent (10%) whether the money is loaned upon the amortization plan or otherwise.

     (b)  Notwithstanding subsection (a) of this section, a farm loan to a beginning agriculture producer shall be the lowest of one and one-half per cent (1 1/2%) below the rate established by the board under subsection (a) of this section or a rate one and one-half per cent (1 1/2%) less than the average prime interest rate.  This loan rate shall be fixed for a period of five (5) years.  At the end of the five (5) year period the interest rate shall be the current rate for loans as established under subsection (a) of this section.  To determine the average prime interest rate, the state treasurer shall average the prime interest rate for at least seventy-five percent (75%) of the thirty (30) largest banks in the United States.  The board shall determine the qualifications for a "beginning agriculture producer" provided that the definition shall not include any person who produces agricultural products as a hobby.

     (c)  No loan secured by a first mortgage pursuant to subsection (b) shall exceed eighty percent (80%) of the appraised value of the land with the necessary existing improvements, as ascertained and fixed by the board provided that there are no other mortgages on the land or improvements.

     (d)  The total value of loans outstanding pursuant to subsection (b) shall not exceed thirty million dollars ($30,000,000.00).

     Section 2.  This act is effective July 1, 2002.

(END)