[§155-5.6]  Loan guaranty; important agricultural lands; agricultural and aquacultural loans.  (a)  From July 1, 2009, the chairperson of the board of agriculture may guarantee loans made by commercial lenders authorized to do business in this State, to agricultural producers for the purpose of developing and implementing agricultural projects; provided that the chairperson of the board of agriculture shall determine that:

     (1)  The agricultural projects are located on lands designated as important agricultural lands pursuant to part III of chapter 205; and

     (2)  The commercial lender has completed its due diligence in approving the loan, including ensuring adequate collateral.

The chairperson of the board of agriculture may impose other conditions that the chairperson deems reasonable to implement the loan guaranty.

     (b)  In addition to the conditions that the chairperson of the board of agriculture may impose under subsection (a), any loan guaranty made pursuant to this section shall meet the following conditions:

     (1)  For any loan that finances operating costs, the maximum term of the loan shall be ten years;

     (2)  For any loan that finances capital improvement costs, the maximum term of the loan shall be twenty years;

     (3)  The interest rate charged on any loan shall be one per cent below the commercial lender's prime rate for as long as the loan guaranty is in effect;

     (4)  The loan guaranty may be up to eighty-five per cent of the outstanding principal amount of any single loan, but shall not include any fees or accrued interest associated with the loan or its collection; and

     (5)  The total principal amount of the guaranteed portion of all loans outstanding at any time shall not exceed $2,500,000.

     (c)  The department of agriculture may adopt rules pursuant to chapter 91 to effectuate this section.

     (d)  As used in this section:

     "Agricultural producer" means a farmer, cooperative association, or landowner who derives at least fifty per cent of its gross income from agricultural or aquacultural activities.

     "Agricultural project" means a project relating to agricultural or aquacultural operations or capital improvements. [L 2008, c 233, §8]