| 17 | 17 | | |
|---|
| 18 | 18 | | Referred to Committee on ENVIRONMENT |
|---|
| 19 | 19 | | |
|---|
| 20 | 20 | | Introduced by: |
|---|
| 21 | 21 | | |
|---|
| 22 | 22 | | (ENV) |
|---|
| 23 | 23 | | |
|---|
| 24 | 24 | | AN ACT ESTABLISHING A FARMLAND PURCHASE PROGRAM FOR BEGINNING FARMERS. |
|---|
| 25 | 25 | | |
|---|
| 26 | 26 | | Be it enacted by the Senate and House of Representatives in General Assembly convened: |
|---|
| 27 | 27 | | |
|---|
| 28 | 28 | | Section 1. (NEW) (Effective October 1, 2017) (a) There is established a farmland purchase and preservation loan program to be administered by the Department of Agriculture. The purpose of such program shall be to facilitate the purchase of farmland by beginning farmers while furthering the permanent protection of farmland in the state. |
|---|
| 29 | 29 | | |
|---|
| 30 | 30 | | (b) To receive a loan from the farmland purchase and preservation program, an applicant shall meet the following eligibility criteria: |
|---|
| 31 | 31 | | |
|---|
| 32 | 32 | | (1) Such applicant shall be not less than eighteen years of age at the time that a loan application is submitted to the department; |
|---|
| 33 | 33 | | |
|---|
| 34 | 34 | | (2) At the time of the loan application, such applicant shall have not less than three years of farming or agriculture-related experience, as determined by the department; |
|---|
| 35 | 35 | | |
|---|
| 36 | 36 | | (3) At the time of the loan application, such applicant shall have a net worth of not more than one hundred thousand dollars, exclusive of such applicant's primary residence; |
|---|
| 37 | 37 | | |
|---|
| 38 | 38 | | (4) The farmland sought to be purchased with the proceeds of such loan shall contain not less than five tillable acres;
|
|---|
| 39 | 39 | | |
|---|
| 40 | 40 | | (5) The applicant, prior to the receipt of such loan proceeds shall own or have an ownership interest in not more than twice the tillable acres of farmland than the amount of tillable acres to be purchased with the proceeds of such loan; |
|---|
| 41 | 41 | | |
|---|
| 42 | 42 | | (6) The farmland to be purchased with the proceeds of such loan shall be located in the state; |
|---|
| 43 | 43 | | |
|---|
| 44 | 44 | | (7) Each loan applicant shall be a resident of the state; |
|---|
| 45 | 45 | | |
|---|
| 46 | 46 | | (8) The farmland subject to purchase with such loan proceeds may be comprised of a combination of tillable acres, forestlands or wetlands, provided the farmland property is zoned for agricultural use; |
|---|
| 47 | 47 | | |
|---|
| 48 | 48 | | (9) The farmlands subject to purchase with such loan proceeds shall not be subject to an existing preservation easement, conservation easement or similar limitation that restricts residential or commercial development; and
|
|---|
| 49 | 49 | | |
|---|
| 50 | 50 | | (10) Each loan applicant, upon receipt of any such loan, shall contractually commit to actively engage in the agricultural use of the farmland purchased with such loan proceeds during the term of such loan. |
|---|
| 51 | 51 | | |
|---|
| 52 | 52 | | (c) The Commissioner of Agriculture shall prescribe the loan application form that shall request information of the loan applicant including, but not limited to, the applicant's fulfillment of the loan criteria described in subsection (b) of this section. The approval of any loan pursuant to such program shall be at the sole discretion of the commissioner provided the Secretary of the Office of Policy and Management may rescind any approval of a loan by the commissioner not later than thirty days after issuance of such approval by the commissioner if the secretary determines that such approval is not in the best interests of the state. |
|---|
| 53 | 53 | | |
|---|
| 54 | 54 | | (d) Any loan issued pursuant to the farmland purchase and preservation loan program shall: (1) Not exceed a total value of five hundred thousand dollars to any one applicant; (2) not exceed seventy per cent of the appraised preservation easement value of the farmland property that is to be purchased with such loan proceeds;
(3) require, as a condition of such loan, that the farmland to be purchased with such loan proceeds be subjected, at the time of the closing on such farmland, to a permanent agricultural preservation easement in the form determined by the commissioner, provided such easement shall meet the requirements contained in subsection (f) of this section and have priority status and not be subject to subordination; (4) be secured by notes and mortgages that provide for the conditions contained in subsection (e) of this section; (5) be limited to the purchase of farmland and farmland improvements only; and (6) provide that any portion of the subject property subject to be purchased that is used or proposed for use for residential purposes shall not be eligible for such loan but shall be subject to such permanent agricultural preservation easement. |
|---|
| 55 | 55 | | |
|---|
| 56 | 56 | | (e) Any note or mortgage used to secure a loan provided pursuant to this section shall: (1) Be subordinated to other loans provided for the purchase, in whole or in part, of the farmland to be purchased with such loan proceeds, except that the perpetual preservation easement placed on such farmland, at the time of the closing, shall not be subordinated; (2) bear no interest; (3) have a payback term that may be structured for full and final payback over a period of not more than thirty years from the date of issuance of such note or mortgage; (4) require initial payments to begin after the primary commercial or other financing for the purchase of such farmland is satisfied or released; and (5) require payment in full of the balance of the loan upon the sale or transfer of such farmland, provided the commissioner may allow for assumption of the loan by a transferee under such terms and conditions deemed acceptable to the commissioner, if such transferee meets the loan eligibility requirements established in subsection (b) of this section.
|
|---|
| 57 | 57 | | |
|---|
| 58 | 58 | | (f) The preservation easement required pursuant to subsection (d) of this section shall include, but not be limited to, the following conditions: (1) Such easement shall bind and run with the farmland in perpetuity; (2) the farming and related uses, as specified under programs established pursuant to chapter 422a of the general statutes, shall be allowed; (3) except as otherwise provided in this section, such farmland shall have the same benefits, controls and restrictions as preservation easements acquired by the commissioner pursuant to the provisions of chapter 422a of the general statutes; (4) the commissioner may enforce any such easement in accordance with the provisions of chapters 422 and 422a of the general statutes; and (5) any such easement shall not be affected by the payment status of any loan issued pursuant to this section. |
|---|
| 59 | 59 | | |
|---|
| 60 | 60 | | (g) There is established a Preservation Loan Fund to be maintained, operated, supervised and administered by the Commissioner of Agriculture. Such fund shall be used by the commissioner for the purpose of issuing loans pursuant to this section and any related transaction costs and expenses for such loans. Such fund shall contain all revenues of the farmland purchase and preservation loan program and may consist of any appropriation provided by the General Assembly for such program, any federal, county or municipal grant and any gift or bequest. Such fund shall be operated as a revolving fund and any payment received in connection with any loan issued pursuant to this section shall be deposited in such fund for the purpose of making additional loans in accordance with the provisions of this section. |
|---|
| 61 | 61 | | |
|---|
| 62 | 62 | | (h) In administering the provisions of this section, the commissioner may: (1) Prescribe an application form and any other form required for processing applications, loans and closing loan transactions; (2) establish a prequalification system for potential loan applicants; (3) establish schedules and timelines for processing applications and making loan decisions; (4) require the submission by applicants of a farm plan that includes a proposed loan repayment plan; (5) provide assurances to commercial or other lenders regarding willingness to subordinate such loans to commercial or other loans needed to acquire the subject farmland; (6) structure and restructure the payment provisions of loans, provided payments due the commissioner under any loan issued pursuant to this section shall not be forgiven in whole or in part; (7) have appraisals performed under an appraisal methodology approved by the commissioner to determine the fair market value and preservation easement value of loan eligible farmland properties; (8) develop priority criteria for the approval of loans by applicants who otherwise meet the requirements of this section, including, but not limited to, priority for applicants who request a loan with the lowest percentage value of the appraised preservation easement value of the subject farmland; (9) subordinate any such loan to commercial financing provided to support farming operations conducted on the subject farmland; (10)
cooperate with commercial lenders and others providing financing for the purchase of the subject farmlands to facilitate the successful completion of purchase transactions;
(11) establish a system for annual reporting by loan recipients to assure that the loan recipients are actively engaged in agricultural use of the acquired farmlands; (12) assist applicants in the identification of farmlands that meet the requirements for purchase pursuant to the provisions of this section; (13) undertake any action necessary to fulfill the requirements and responsibilities of this section; (14) advertise and promote such loan program, and create public awareness of the agricultural land preservation, open space and environmental benefits that such program provides; and (15) adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, to implement the provisions of this section. |
|---|
| 63 | 63 | | |
|---|
| 64 | 64 | | |
|---|
| 65 | 65 | | |
|---|
| 66 | 66 | | |
|---|
| 67 | 67 | | This act shall take effect as follows and shall amend the following sections: |
|---|
| 68 | 68 | | Section 1 October 1, 2017 New section |
|---|
| 69 | 69 | | |
|---|
| 70 | 70 | | This act shall take effect as follows and shall amend the following sections: |
|---|
| 71 | 71 | | |
|---|
| 72 | 72 | | Section 1 |
|---|
| 73 | 73 | | |
|---|
| 74 | 74 | | October 1, 2017 |
|---|
| 75 | 75 | | |
|---|
| 76 | 76 | | New section |
|---|
| 77 | 77 | | |
|---|