Chapter 234

234.90(3n) (3n) Refinancing.

234.90(3n)(a) (a) Except as provided in par. (b), proceeds of a guaranteed loan may be used to refinance a guaranteed loan no more than one time.

234.90(3n)(b) (b) The proceeds of a guaranteed loan may be used to refinance a guaranteed loan that has been refinanced one time if at least 60 percent of the principal amount of the refinanced guaranteed loan has been repaid and the total guarantee amount to the borrower under this section after the refinancing is no more than the amount permitted under sub. (2) (b).

234.90(3p) (3p) Installment payment of certain loans. An authorized lender may require a borrower to repay a loan described in sub. (3g) in installments.

234.90(4) (4) Guarantee.

234.90(4)(a) (a) The authority may guarantee collection of a percentage, not exceeding 90 percent, of the principal of any agricultural production loan eligible for guarantee under sub. (2) made to a farmer eligible for a guaranteed loan under sub. (3) or (3g).

234.90(4)(b) (b) The authority may extend a guarantee under this section beyond the original term of the guaranteed loan if the guaranteed loan is part of a loan workout agreement.

234.90(5) (5) Interest reduction. If at the time of origination or extension the interest rate on a guaranteed loan and the prime lending rate as reported by the federal reserve board in federal reserve statistical release H. 15 each equals or exceeds 10 percent, the authority may pay, from the moneys in the Wisconsin development reserve fund, to the participating lender making the loan, an amount that is no more than 2 percent of the principal amount of the loan.

234.90(6) (6) Review. The authority shall annually review the program under this section for the purpose of maximizing the benefits of the program.

234.90 History History: 1985 a. 9, 29, 153, 332, 334; 1987 a. 7, 27, 178, 421; 1989 a. 1, 10, 31, 336; 1991 a. 4, 39, 221; 1993 a. 1; 1995 a. 5, 150, 404; 1999 a. 9; 2001 a. 16; 2003 a. 236; 2011 a. 80; 2015 a. 242, 316.

234.905 234.905 Agricultural production disaster 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 disaster assistance loan” means a loan to a farmer to finance extraordinary disaster-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 disaster conditions.

234.905(1)(b)2. 2. Water delivery in connection with agricultural commodities adversely affected by disaster conditions.

234.905(1)(b)3. 3. Feed and associated expenses for animals to supplement feed supplies adversely affected by disaster conditions.

234.905(1)(cm) (cm) “Disaster” means an act of nature for which the governor issues an executive order declaring a state of emergency for the state or any portion of the state under s. 323.10.

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 disaster 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 disaster 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 disaster 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 guarantee amount of all loans to the borrower that are guaranteed under this section will not exceed $25,000.

234.905(2)(b) (b) The rate of interest on the agricultural production disaster assistance loan, including any origination fees or other charges relating to the agricultural production disaster 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 disaster assistance loan to pay that supplier.

234.905(2)(d) (d) The participating lender obtains security for repayment of the agricultural production disaster assistance loan or follows other procedures required by the authority to secure repayment of the agricultural production disaster assistance loan.

234.905(2)(f) (f) The proceeds of the agricultural production disaster 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 disaster 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 disaster 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 related to the agricultural production that is the subject of the loan totals at least 40 percent of the amount of the farmer’s assets related to the agricultural production that is the subject of the loan.

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 percent or more of the farmer’s agricultural commodities because of a disaster.

234.905(4) (4) Guarantee of collection.

234.905(4)(a) (a) The authority may guarantee collection of up to 90 percent of the principal of any agricultural production disaster assistance loan eligible for guarantee under sub. (2) made to a farmer eligible for a guaranteed loan under sub. (3).

234.905(4)(bn) (bn) The term of the authority’s loan guarantee under this section may not exceed 3 years, unless the guaranteed loan is included in a loan workout agreement.

234.905(5) (5) Interest reduction. The authority may pay, from the moneys in the Wisconsin development reserve fund, to each participating lender an amount that is no more than 3.5 percent of the principal amount of any guaranteed loan to reduce interest payments on the guaranteed loan paid by a farmer.

234.905 History History: 1987 a. 421; 1989 a. 2, 10, 31, 336; 1991 a. 4, 39, 221; 1995 a. 404; 1999 a. 9; 2015 a. 316.

234.907 234.907 Agricultural development loan guarantee program.

234.907(1) (1) Definitions. In this section:

234.907(1)(d) (d) “Guaranteed loan” means a loan on which the authority guarantees collection under sub. (3) or (4).

234.907(1)(e) (e) “Participating lender” means a bank, credit union, savings bank, savings and loan association or other person, who makes loans for working capital or to finance physical plant needs, equipment or machinery and who has entered into an agreement with the authority under s. 234.93 (2) (a).

234.907(1)(f) (f) “Percentage of guarantee” means the percentage established by the authority under sub. (3) or (4).

234.907(1)(g) (g) “Raw agricultural commodity” means any agricultural, aquacultural, horticultural, viticultural, vegetable, poultry, and livestock products produced in this state, including milk and milk products, bees and honey products, timber and wood products, or any class, variety or utilization of the products, in their natural state.

234.907(1)(h) (h) “Security interest” means an interest in property or other assets which secures payment or other performance of a guaranteed loan.

234.907(2) (2) Eligible loans. A 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:

234.907(2)(a) (a) The loan is made for working capital or to finance any of the following items, if the working capital or item is necessary to, or used to, process or market a product from a raw agricultural commodity produced in this state or to commercially harvest whitefish from Lake Superior:

234.907(2)(a)1. 1. Physical plant.

234.907(2)(a)2. 2. Machinery or equipment.

234.907(2)(a)3. 3. Marketing expenses.

234.907(2)(b) (b) The rate of interest on the loan, including any origination fees or other charges, is fixed at a rate determined by the participating lender and approved by the authority.

234.907(2)(c) (c) Subject to par. (cm), the total guarantee amount of all loans to the borrower that are guaranteed under this section will not exceed $750,000.

234.907(2)(cm) (cm) The total guarantee amount of all loans to the borrower that are guaranteed under this section and that are made for working capital or an item necessary to, or used to, commercially harvest whitefish from Lake Superior will not exceed $100,000. This paragraph does not apply to a loan guaranteed under sub. (4).

234.907(2)(d) (d) The borrower’s principal place of operations for processing or marketing a product from a raw agricultural commodity is located in a town, village or city in this state with a population of less than 50,000. This paragraph does not apply to a borrower that harvests whitefish from Lake Superior.

234.907(2)(e) (e) The participating lender obtains a security interest in physical plant, equipment, machinery or other assets.

234.907(2)(f) (f) The term of the authority’s guarantee under this section is not longer than 10 years for land and buildings, 5 years for inventory, equipment, and machinery, and 2 years for working capital and marketing expenses. This paragraph does not apply to a loan that is part of a loan workout agreement.

234.907(2)(g) (g) The proceeds of the loan are not applied to the outstanding balance of any other loan.

234.907(2)(h) (h) The loan results in new or more viable methods for the processing or marketing of a product from a raw agricultural commodity or enables the borrower to comply with the rules promulgated by the department of natural resources for the commercial fishing of whitefish in Lake Superior.

234.907(2)(i) (i) The borrower does not meet the participating lender’s minimum standards of creditworthiness to receive a loan for the purposes described in par. (a) in the normal course of the participating lender’s business.

234.907(2)(j) (j) The participating lender considers the borrower’s assets, cash flow and managerial ability sufficient to preclude voluntary or involuntary liquidation for the loan term granted by the participating lender.

234.907(2)(k) (k) The participating lender agrees to the percentage of guarantee established for the loan by the authority.

234.907(2m) (2m) Origination fees. The authority may charge a guarantee origination fee on every loan guaranteed under this section. The amount of the fee may not exceed 1.5 percent of a loan’s guaranteed principal. The participating lender shall collect the fee and remit it to the authority. The authority shall deposit all fees received under this subsection in the Wisconsin development reserve fund.

234.907(3) (3) Guarantee of collection. The authority may guarantee collection of up to 90 percent of the disbursed principal of any loan eligible for a guarantee under sub. (2). The authority shall establish the percentage of the unpaid principal of an eligible loan that will be guaranteed, using the procedures described in the guarantee agreement under s. 234.93 (2) (a). The authority may establish a single percentage for all guaranteed loans or establish different percentages for eligible loans on an individual basis.

234.907(4) (4) Alternative guarantee of collection pilot program.

234.907(4)(a) (a) Notwithstanding sub. (3), the authority shall implement a pilot program under which it may guarantee collection of 25 percent of the disbursed principal of any loan eligible for a guarantee under sub. (2) or $750,000, whichever is less.

234.907(4)(b) (b) In the event of default, the amount guaranteed under par. (a) shall be payable in full to the authorized lender regardless of the amount due after all available collateral securing the loan has been liquidated and applied to the loan, except that if that amount due is less than the amount guaranteed under par. (a), the amount due shall be payable to the authorized lender.

234.907(4)(c) (c) The authority shall allocate at least $3,000,000 for loan guarantees under par. (a).

234.907(4)(d) (d) The authority may not guarantee a loan under par. (a) after June 30, 2024.

234.907 History History: 1989 a. 31, 336; 1991 a. 39, 221; 1993 a. 394; 2001 a. 16; 2015 a. 316; 2019 a. 62; 2021 a. 239.

234.91 234.91 Farm assets reinvestment management loan guarantee program.

234.91(1) (1) Definitions. In this section:

234.91(1)(a) (a) “Agricultural assets” means machinery, equipment, facilities, land or livestock used in agriculture or aquaculture.

234.91(1)(b) (b) “Farm credit service” includes a production credit association, federal land credit association and agricultural credit association.

234.91(1)(c) (c) “Farmer” means a person engaged in, or who intends to engage in, farming, as defined in s. 102.04 (3).

234.91(1)(d) (d) “Farm premises” has the meaning given in s. 102.04 (3).

234.91(1)(e) (e) “Participating lender” means a bank, farm credit service, credit union, savings bank, savings and loan association or other person who makes loans for the acquisition or improvement of agricultural assets and who has entered into an agreement with the authority under s. 234.93 (2) (a). The term does not include a seller under a land contract.

234.91(2) (2) Eligible loans. A 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:

234.91(2)(a) (a) The borrower is a farmer who is eligible for a guarantee under sub. (3).

234.91(2)(b) (b) The loan is made to finance the acquisition of agricultural assets or the cost of improvements to facilities or land. The agricultural assets must be acquired, and the improvements must be made, for agricultural or aquacultural purposes.

234.91(2)(c) (c) The total guarantee amount of all loans made to the borrower that are guaranteed under this section will not exceed $200,000, or $100,000 if any of the loans is affected by any other state or federal credit assistance program.

234.91(2)(d) (d) The rate of interest and the loan terms, including any associated fees or charges, are approved by the authority.

234.91(2)(e) (e) The participating lender obtains a security interest in assets of the borrower sufficient to secure repayment of the loan.

234.91(2)(g) (g) Loan proceeds are not used to refinance existing debt, for entertainment expenses, or for expenses related to a community-based residential facility, except that loan proceeds may be used to refinance existing debt if the borrower also expands an existing business.

234.91(3) (3) Eligible farmers. A farmer is eligible for a guarantee of a loan under this section if all of the following apply at the time the loan is made:

234.91(3)(a) (a) The farmer is any of the following:

234.91(3)(a)1. 1. A person who currently operates farm premises.

234.91(3)(a)2. 2. A person who intends to operate farm premises and who has not less than 3 years of farming experience including managing the day to day operations of a farm.

234.91(3)(a)3. 3. A person who intends to operate farm premises and maintain the family farmstead on the farm premises and who has previous experience with the operation of the specific farm premises.