Brief⁽¹⁾

House Sub. for S.B. 157 establishes the Kansas Agricultural Production Loan Deposit Program, a three-year program of low interest loans made to eligible agricultural borrowers.

The bill:

• authorizes the State Treasurer to administer the Program, adopt rules and regulations necessary to implement the Program, report annually to the Governor and the Legislature outlining the status of the Program, disseminate information, and provide loan packages to the lending institutions (banks) participating in the Program;

• authorizes the State Treasurer to invest up to $50.0 million from state moneys eligible for investments with lending institutions willing to provide low interest loans to eligible agricultural borrowers;



• defines "eligible agricultural borrower" as an individual, partnership, or family farm corporation with a debt to asset ratio of 40 percent or greater;



• limits the size of any loan to $250,000 to any one borrower and permits only one outstanding loan at any one time to that borrower;

• places final approval authority for the agricultural loan deposit with the State Treasurer who, upon acceptance of the application, certifies to the Director of Investments of the Pooled Money Investment Board the amount required for the agricultural loan deposit and the Director will place the agricultural production loan deposit with the eligible lending institution at an interest rate which is 2 percent below market rate;



• requires the bank to lend the amount deposited at an interest rate not more than 2 percent above market rate for an amortization period of not more than eight years; and



• establishes July 1, 2002 as the expiration date of the Kansas Agricultural Production Loan Deposit Program.

Background

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html