senate Bill S780

2011-2012 Legislative Session

Establishes the AgJobs NY program to provide low interest loans to finance certain costs of agribusinesses; appropriates $50,000,000

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 04, 2012 referred to finance
Jan 05, 2011 referred to finance

S780 - Bill Details

Current Committee:
Senate Finance
Law Section:
Appropriations
Laws Affected:
Add §298, Ag & Mkts L; add §99-u, St Fin L
Versions Introduced in 2009-2010 Legislative Session:
S2423

S780 - Bill Texts

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Establishes the AgJobs NY program to provide low interest loans to finance certain costs of agribusinesses; appropriates $50,000,000.

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BILL NUMBER:S780

TITLE OF BILL:

An act
to amend the agriculture and markets law and the state finance law, in
relation to establishing the AgJobs NY program;
and making an appropriation therefor

PURPOSE:

To establish the AgJobs program to promote the creation and retention
of jobs in New York via low interest loan financing for:

* the purchase of land, building, machinery and equipment which is
directly related to business operations, and/or

* the purchase of services or consumable goods necessary to produce an
agricultural commodity.

SUMMARY OF PROVISIONS:

Agriculture and Markets Law and the State Finance Law is amended to
create a low-interest revolving loan program of $50 million for
agribusinesses and agricultural producers to:

* upgrade and/or acquire new or used machinery and equipment directly
related to business operations, including associated engineering and
installation expenses;

* renovate and/or acquire a facility directly related to business
operations;

* diversify farm operations through crop diversification, such as: -~
transitioning from Concord or other native grapes to vinifera and
other hybrid grapes; -- adding cellulosic feedstock for ethanol
production, (i.e. willow and grasses) into crop rotation.

* convert or expand farm operations from "traditional" to more
profitable niche markets;

* purchase other services or consumable goods needed to produce an
agricultural commodity including, but not limited to, land rent,
equipment rental, wages for labor, plant material,
pesticides/herbicides, etc.

All applicants and its principals must be current in payment of all
applicable state and local taxes unless they have entered into a
agreement satisfactory to the respective taxing authority and are
fully in compliance with the terms of that agreement.

LOAN AMOUNT

The maximum loan amount for land, buildings, machinery and equipment
is $300,000 or 50% of the total eligible project cost, whichever is
less.


For capital purposes, an application may not receive more than
$300,000 in new financing in any 12 month period.

For purchase of services or consumable goods necessary to produce an
agricultural commodity, an application may not receive more than
$50,000 in any 12 month period.

PRIVATE INVESTMENT REQUIREMENT

For capital purposes, loans must be made with another source or
sources of financing for the eligible costs incurred, such as another
lender or equity from the owners or investors.

Funds from other sources must equal at least SO% of eligible project
costs and must have either equivalent or longer terms than the
awarded loan.

Land and building and machinery and equipment purchases made within a
12 month period prior to the filing of an application may be eligible
as a private match towards a loan project.

ELIGIBLE USE OF FUNDS

Machinery and equipment costs may include, but are not limited to,
costs of acquisition, delivery, and installation. Such costs are
eligible if associated with acquisition of machinery and equipment
that the applicant has newly purchased, even if such machinery had
previously been in service with another user. Costs of mobile
equipment are eligible if, and only if, such equipment is not titled
or registered for highway use.
Land and building/construction costs directly associated with:

* the purchase, renovation, or installation of equipment/machinery or

* building/construction directly related to business operations may
include, but are not limited to, acquisition, site preparation and
testing, utilities, site mapping, rehabilitation, architectural,
landscaping, legal, and other related costs, costs associated with
crop transition or diversification. Also, costs associated with
transitioning from a traditional to organic operation, land rent,
equipment rental, wages for labor, plant material, pesticides/
herbicides and other services or consumable goods needed to produce
an agricultural commodity.

REPAYMENT TERMS

Loans
used for real estate may have a repayment period of up to 15 years.
Loans
used for machinery and equipment may have a repayment period of up
to 10 years,
depending upon the useful life of the machinery being financed.
Loans used for purchase of services and consumable goods may have
a repayment period of up to one year with the exception of transition
expenses which will reflect the term needed for crop maturation in
order to have a marketable commodity, such as:


* for transition from Concord or other native grapes to vinifera or
hybrid grapes, the repayment period may be up to six years.

* for transition to cellulois feedstock for ethanol production, such
as willow and grasses, the repayment period may be up to three years.

* for transition from a traditional to organic operation the repayment
period may be up to three years. Loans may be prepaid anytime without
financial penalty.

INTEREST RATES

For capital purposes, interest rates shall be at a fixed rate of 3%.
For purchase of services or consumable goods necessary to produce am
agricultural commodity, interest rates shall be at a fixed rate of
5%. The commissioner may reduce the annual interest rate if the area
where the project is located has been included within a natural
disaster declaration.

JUSTIFICATION:

AgJobs NY is a progressive, self-sustaining, low interest revolving
loan program which is exclusive to the agriculture community. This
$50 million program is uniquely suited to help producers and
agribusinesses gain access to the capital needed to begin, continue
or expand their business. AgJobs NY also answers the critical need
for accessible, low cost financing which the agriculture community
lacks in the traditional finance industry. Farming is the pillar of
New York's rural communities, generating hundreds of thousands of
jobs both on and off farms, and productively employing millions of
acres of farmland. Any investment in New York agriculture is
multiplied through its impact on the many businesses in our rural
communities that support the farm industry. For this reason, New
York's 36,000 farms, which occupy seven million acres of farmland,
generate over one million farm and farm-related jobs in New York
State (NASS 2002).

LEGISLATIVE HISTORY:

2009-2010: S.2423 Referred to Agriculture
2007-2008: S.5956 Referred to Finance

FISCAL IMPLICATIONS:

Undetermined at this time.

EFFECTIVE DATE:

Effective immediately.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   780

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sen.  YOUNG  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Finance

AN ACT to amend the agriculture and markets law and  the  state  finance
  law,  in relation to establishing the AgJobs NY program; and making an
  appropriation therefor

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. The agriculture and markets law is amended by adding a new
section 298 to read as follows:
  S 298. AGJOBS NY PROGRAM. 1.  THERE  IS  HEREBY  ESTABLISHED,  IN  THE
DEPARTMENT,  THE AGJOBS NY PROGRAM WHICH SHALL BE AN AGRICULTURE REVOLV-
ING LOAN PROGRAM. THE PURPOSE OF THE PROGRAM SHALL BE TO  STIMULATE  THE
EXPANSION  AND  ASSIST  IN THE RETENTION OF AGRIBUSINESS IN THE STATE IN
ORDER TO CREATE NEW JOBS AND RETAIN EXISTING JOBS THROUGH THE  PROVISION
OF  LOW  INTEREST FINANCING COSTS DIRECTLY RELATED TO AGRIBUSINESS OPER-
ATIONS. THE PROGRAM SHALL PROVIDE LOW INTEREST LOANS FROM THE MONIES  IN
THE AGJOBS NY REVOLVING LOAN FUND, ESTABLISHED PURSUANT TO SECTION NINE-
TY-NINE-U  OF THE STATE FINANCE LAW, TO AGRICULTURAL PRODUCERS AND AGRI-
CULTURAL ENTERPRISES:
  A. TO ACQUIRE AND INSTALL NEW OR  USED  MACHINERY  AND  EQUIPMENT,  OR
UPGRADE  EXISTING  MACHINERY  AND EQUIPMENT, AND PAY RELATED ENGINEERING
AND INSTALLATION COSTS DIRECTLY RELATED TO BUSINESS OPERATIONS;
  B. TO ACQUIRE A NEW OR EXISTING FACILITY DIRECTLY RELATED TO  BUSINESS
OPERATIONS; OR
  C.  FOR  OPERATIONAL COSTS, INCLUDING, BUT NOT LIMITED TO, SERVICES OR
CONSUMABLE GOODS, NECESSARY TO PRODUCE AN AGRICULTURAL COMMODITY.
  2. FOR THE PURPOSES OF THIS SECTION:
  A. "AGRICULTURAL COMMODITY" SHALL HAVE THE SAME MEANING AS IS ASCRIBED
TO SUCH TERM PURSUANT TO SUBDIVISION ONE OF SECTION TWO HUNDRED  NINETY-
THREE OF THIS CHAPTER.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03434-01-1

S. 780                              2

  B. "AGRICULTURAL ENTERPRISE" MEANS A BUSINESS ENTITY ENGAGED IN:
  (I)  THE  MANUFACTURE,  DEVELOPMENT  OR PREPARATION FOR SALE OF ONE OR
MORE AGRICULTURAL COMMODITIES, WHICH ADDS VALUE TO SUCH COMMODITIES; OR
  (II) THE CONVERSION OF AN AGRICULTURAL  COMMODITY  INTO  A  MARKETABLE
FORM, INCLUDING BUT NOT LIMITED TO LIVESTOCK BY SLAUGHTERING, AND FRUITS
AND VEGETABLES BY PACKAGING, FREEZING AND/OR ANY OTHER PROCESSING.
  C.  "AGRICULTURAL  PRODUCER"  MEANS  A  BUSINESS ENTITY ENGAGED IN THE
MANAGEMENT AND USE OF A NORMAL AGRICULTURAL OPERATION FOR THE PRODUCTION
OF AN AGRICULTURAL COMMODITY. AN AGRICULTURAL PRODUCER MAY  BE  INVOLVED
IN THE PRODUCTION, HARVESTING OR PREPARATION OF AGRICULTURAL COMMODITIES
FOR MARKET. EVERY AGRICULTURAL PRODUCER SHALL:
  (I) OPERATE ITS BUSINESS ON TEN OR MORE CONTIGUOUS ACRES OF LAND; OR
  (II)  HAVE  AN  ANTICIPATED  ANNUAL  GROSS INCOME OF NOT LESS THAN TEN
THOUSAND DOLLARS.
  D. "PROGRAM" MEANS THE AGJOBS NY PROGRAM ESTABLISHED IN THIS SECTION.
  3. ANY MONIES OF THE FUND SHALL BE DIVIDED AS FOLLOWS:
  A. FIFTY PERCENT OF SUCH MONIES SHALL BE GRANTED TO LOANS FOR  CAPITAL
PURPOSES; AND
  B.  FIFTY  PERCENT OF SUCH MONIES SHALL BE GRANTED TO LOANS FOR OPERA-
TIONAL PURPOSES.
  4. NO AGRICULTURAL ENTERPRISE OR AGRICULTURAL PRODUCER SHALL BE ELIGI-
BLE FOR A LOW INTEREST LOAN PURSUANT TO THIS SECTION UNLESS SUCH  ENTER-
PRISE  OR  PRODUCER  PROVIDES  EVIDENCE SATISFACTORY TO THE COMMISSIONER
THAT IT AND ITS PRINCIPALS ARE NOT IN ARREARS  IN  THE  PAYMENT  OF  ALL
FEDERAL,  STATE  AND  LOCAL  TAXES;  PROVIDED, HOWEVER, THAT, IF SUCH AN
ARREARS EXISTS, AN  AGRICULTURAL  ENTERPRISE  OR  AGRICULTURAL  PRODUCER
SHALL  BE ELIGIBLE FOR A LOAN PURSUANT TO THIS SECTION IF IT HAS ENTERED
INTO AND IS IN FULL COMPLIANCE WITH AN AGREEMENT  WITH  THE  APPROPRIATE
TAXING AUTHORITY PROVIDING FOR THE PAYMENT OF SUCH ARREARS.
  5. AN AGRICULTURAL ENTERPRISE OR AGRICULTURAL PRODUCER MAY APPLY FOR A
LOAN  PURSUANT  TO THE PROGRAM BY FILING AN APPLICATION WITH THE DEPART-
MENT, IN SUCH MANNER AND FORM AS SHALL BE DETERMINED BY THE  COMMISSION-
ER.
  6.  NO LOAN FOR CAPITAL PURPOSES GRANTED BY THE DEPARTMENT PURSUANT TO
THIS SECTION SHALL EXCEED THREE HUNDRED THOUSAND DOLLARS OR ONE-HALF  OF
THE  TOTAL  ELIGIBLE  PROJECT  COST,  WHICHEVER SHALL BE LESS. PROVIDED,
FURTHER, NO APPLICANT SHALL RECEIVE MORE  THAN  THREE  HUNDRED  THOUSAND
DOLLARS  IN  FINANCING  PURSUANT  TO  THIS  SECTION DURING ANY PERIOD OF
TWELVE MONTHS FOR THE AGGREGATE OF ALL ELIGIBLE PROJECTS  UNDERTAKEN  BY
SUCH APPLICANT.
  A.  NO  LOAN  FOR CAPITAL PURPOSES SHALL BE GRANTED UNLESS ONE-HALF OR
MORE OF THE COSTS OF THE ELIGIBLE PROJECT ARE PAID BY A  PRIVATE  SOURCE
AND/OR PRIVATE FINANCING; PROVIDED THAT ALL SUCH PRIVATE FINANCING SHALL
HAVE  A  TERM EQUAL TO OR GREATER THAN THE TERM OF THE FINANCING GRANTED
PURSUANT TO THE PROGRAM.
  B. ELIGIBLE  MACHINERY  AND  EQUIPMENT  PROJECT  CAPITAL  COSTS  SHALL
INCLUDE,  BUT  NOT BE LIMITED TO, THE COSTS OF ACQUISITION, DELIVERY AND
INSTALLATION THEREOF. PROVIDED, THAT, WITH REGARD TO THE ACQUISITION  OF
MACHINERY  AND EQUIPMENT, SUCH COSTS SHALL BE DEEMED TO BE ELIGIBLE EVEN
IF THE MACHINERY OR EQUIPMENT IS USED. THE  COSTS  OF  MOBILE  EQUIPMENT
SHALL  BE  ELIGIBLE  ONLY  IF IT IS NOT TITLED OR REGISTERED FOR HIGHWAY
USE.
  C. ELIGIBLE LAND AND BUILDING PROJECT COSTS SHALL BE DIRECTLY  RELATED
TO:
  (I)  THE  PURCHASE OR RENOVATION OF REAL PROPERTY, OR THE INSTALLATION
OF MACHINERY AND/OR EQUIPMENT UPON REAL PROPERTY; OR

S. 780                              3

  (II) ANY BUILDING OR CONSTRUCTION RELATED TO THE  BUSINESS  OPERATIONS
OF THE APPLICANT INCLUDING, BUT NOT LIMITED TO, ACQUISITION, SITE PREPA-
RATION  AND  TESTING, UTILITIES, SITE MAPPING, REHABILITATION, ARCHITEC-
TURAL, LANDSCAPING, LEGAL AND OTHER RELATED COSTS.
  D.  EVERY  LOAN  FOR CAPITAL PURPOSES GRANTED PURSUANT TO THIS SECTION
SHALL BE SECURED BY A FIRST LIEN, HAVING PRIORITY OVER ALL OTHER  LIENS,
AGAINST  THE REAL PROPERTY, STRUCTURES, BUILDINGS, MACHINERY, EQUIPMENT,
ACCOUNTS RECEIVABLE AND/OR INVENTORY OF THE RECIPIENT OF SUCH LOAN.
  E. (I) LOANS FOR REAL PROPERTY HAVE A TERM OF FIFTEEN YEARS.
  (II) LOANS FOR MACHINERY AND EQUIPMENT SHALL HAVE A TERM OF  NOT  MORE
THAN  TEN YEARS, BUT NOT LONGER THAN THE USEFUL LIFE OF THE MACHINERY OR
EQUIPMENT FINANCED.
  F. EVERY LOAN GRANTED PURSUANT TO THIS SECTION SHALL  BE  AT  A  FIXED
RATE  OF  INTEREST OF THREE PERCENT; PROVIDED, THAT THE COMMISSIONER MAY
PROVIDE FOR A REDUCED RATE OF  INTEREST  FOR  ELIGIBLE  PROJECTS  WITHIN
AREAS  THAT  HAVE BEEN INCLUDED IN A NATURAL DISASTER DECLARATION ISSUED
NOT MORE THAN TWO YEARS PRIOR TO THE APPLICATION FOR SUCH LOAN.
  7. NO LOAN FOR OPERATIONAL PURPOSES GRANTED BY  THE  DEPARTMENT  SHALL
EXCEED FIFTY THOUSAND DOLLARS.
  A. ELIGIBLE APPLICANTS FOR LOANS FOR OPERATIONAL PURPOSES SHALL HAVE A
DEBT TO ASSET RATIO OF FORTY PERCENT OR GREATER.
  B.  LOANS  FOR  AGRICULTURAL COMMODITIES MUST BE PLANTED AND HARVESTED
WITHIN THE TERM OF THE LOAN.
  C. LIVESTOCK IS ELIGIBLE IF PURCHASED WITHIN THE TERM OF THE LOAN.
  D. EVERY LOAN FOR OPERATIONAL COSTS PURSUANT TO THIS SECTION SHALL  BE
AT  A  FIXED  RATE  OF  FIVE PERCENT; PROVIDED THAT THE COMMISSIONER MAY
PROVIDE FOR A REDUCED RATE OF  INTEREST  FOR  ELIGIBLE  PROJECTS  WITHIN
AREAS  THAT  HAVE BEEN INCLUDED IN A NATURAL DISASTER DECLARATION ISSUED
NOT MORE THAN TWO YEARS PRIOR TO THE APPLICATION FOR SUCH LOAN.
  S 2. The state finance law is amended by adding a new section 99-u  to
read as follows:
  S  99-U. AGJOBS NY REVOLVING LOAN FUND. 1. THERE IS HEREBY ESTABLISHED
IN THE CUSTODY OF THE STATE COMPTROLLER A SPECIAL FUND TO  BE  KNOWN  AS
THE "AGJOBS NY REVOLVING LOAN FUND".
  2.  THE FUND SHALL CONSIST OF ALL MONEYS APPROPRIATED FOR ITS PURPOSE,
ALL MONEYS TRANSFERRED TO SUCH FUND PURSUANT  TO  LAW,  AND  ALL  MONEYS
REQUIRED  BY  SECTION  TWO  HUNDRED  NINETY-EIGHT OF THE AGRICULTURE AND
MARKETS LAW TO BE REPAID ON ANY AGJOBS NY REVOLVING LOAN, INCLUDING  ALL
MONEYS RECEIVED BY THE FUND OR DONATED TO IT.
  3.  MONEYS OF THE FUND, WHEN ALLOCATED, SHALL BE MADE AVAILABLE TO THE
DEPARTMENT OF AGRICULTURE AND MARKETS TO  IMPLEMENT  THE  PROVISIONS  OF
SECTION TWO HUNDRED NINETY-EIGHT OF THE AGRICULTURE AND MARKETS LAW.  UP
TO  FIFTY  THOUSAND  DOLLARS  MAY BE USED TO PAY THE EXPENSES, INCLUDING
PERSONAL SERVICES, AND MAINTENANCE AND OPERATION, IN CONNECTION WITH THE
ADMINISTRATION OF LOANS PURSUANT TO SUCH SECTION.
  S 3. The sum of fifty million dollars ($50,000,000), or so much there-
of as may be necessary, is hereby appropriated to the AgJobs NY  revolv-
ing  loan  fund established by section 99-u of the state finance law, as
added by section two of this act, out of any moneys in the state  treas-
ury in the general fund to the credit of the state purposes account, not
otherwise  appropriated,  and  made  immediately  available. Such moneys
shall be payable on the audit and warrant of the comptroller on vouchers
or approved by the commissioner of agriculture and markets in the manner
prescribed by law.
  S 4. This act shall take effect immediately.

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