A3057

An Act concerning loans to certain farming operations and supplementing P.L.1974, c.80 (C.34:1B-1 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

"Authority" shall have the same meaning as provided in section 3 of P.L.1974, c.80 (C.34:1B-3).

“Department” means the Department of Agriculture established pursuant to R.S.4:1-1.

“Farm equipment” means equipment used directly related to a farming operation.

“Farming operation” means, within this State, the commercial growing, harvesting, processing, producing, or raising of agricultural products including crops, dairy animals, livestock, fur-bearing animals, poultry, bees, aquacultural products, horticultural products, crops used in fermented alcoholic beverages, and trees and forest products.

"Eligible farming operation" means two or more business entities that are a farming operation that, at the time of application for participation in the loan program established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), are independently owned and operated, operate within this State, participate in an agricultural commodity or product marketing and development program operated by the Department of Agriculture, and satisfy other criteria that may be established by the authority.

2. a. The New Jersey Economic Development Authority, in consultation with the Department of Agriculture, shall maintain and administer a loan program for the purpose of providing loans to an eligible farming operation for the purchase of farm equipment.

b. Loans made by the authority to an eligible farming operation may be applied to any aspect of the eligible farming operation that supports its farm equipment purchases as determined by the authority. Farm equipment purchased from loan funds made pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) shall be used by two or more eligible farming operations.

c. (1) Two or more farming operations seeking to participate in the loan program established pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) shall submit a joint application in a form as the authority shall require and shall include information as the authority determines is necessary in consideration of a loan authorized pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).

(2) In order to receive a loan from the authority pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill), each farming operation, at the time of application, shall provide proof that it and another farming operation that will use the farm equipment are an eligible farming operation in a manner as determined by the authority.

(3) The authority shall review completed applications and shall approve applications from farming operations determined by the authority to be an eligible farming operation for the purposes of the loan program established pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).

d. Loans to an eligible farming operation authorized under P.L. , c. (C. ) (pending before the Legislature as this bill) shall be made pursuant to a loan agreement with the authority, shall bear interest at rates and terms deemed appropriate by the authority, and shall contain other terms and conditions considered appropriate by the authority that are consistent with the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill) and with rules and regulations promulgated by the authority to implement P.L. , c. (C. ) (pending before the Legislature as this bill). The provisions of the loan agreement shall include, but not be limited to, a statement of an eligible farming operation’s proportional shares of ownership, its farm equipment usage and maintenance responsibilities, and its loan repayment responsibilities for any loan proceeds received under the loan program.

e. The authority may, in its discretion, require an eligible farming operation that receives a loan authorized pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) to submit a joint annual audited financial statement to the authority in order to ensure the continued viability of all eligible farming operations using the farm equipment.

f. The authority may, either through the adoption of rules and regulations, or through the terms of the loan agreement made pursuant to subsection d. of this section, establish terms governing the incidence of default by an eligible farming operation that receives a loan under the program administered pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).

3. The authority, in consultation with the department, shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as may be necessary to effectuate the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill).

4. This act shall take effect immediately.

STATEMENT

This bill requires the New Jersey Economic Development Authority (EDA), in consultation with the Department of Agriculture, to maintain and administer a loan program for the purpose of providing loans to two or more eligible farming operations to be applied to any aspect of the eligible farming operations that supports their farm equipment purchases. Farm equipment purchased from loan funds made pursuant to the bill is to be used by two or more eligible farming operations acting jointly.

The bill specifies that the business of farming includes the commercial growing, harvesting, processing, producing, or raising of agricultural products including crops, dairy animals, livestock, fur-bearing animals, poultry, bees, aquacultural products, horticultural products, crops used in fermented alcoholic beverages, and trees and forest products. Under the bill, an “eligible farming operation” is one or more farming operations that, at the time of application for participation in the loan program, are independently owned and operated, operate within this State, participate in an agricultural commodity or product marketing and development program operated by the Department of Agriculture, and which satisfy other criteria that may be established by the EDA.

The bill requires that EDA-approved loans to eligible farming operations are to be made pursuant to a loan agreement, bear interest at rates and terms deemed appropriate by the EDA, and contain other terms and conditions considered appropriate by the EDA that are consistent with the purposes of the bill and with rules and regulations promulgated by the EDA to implement the bill. The EDA may, in its discretion, require eligible farming operations that receives a loan under the program to submit a joint annual audited financial statement to the EDA in order to ensure the eligible farming operations’ continued viability and may, either through the adoption of rules and regulations, or through the terms of the loan agreement, establish terms governing the incidence of default by eligible farming operations that receive a loan under the program.

This loan program is necessary due to the fact that the “Pinelands Protection Act,” the “Highlands Water Protection and Planning Act,” the Freshwater Wetlands Protection Act,” "The Endangered and Nongame Species Conservation Act," certain Department of Environmental Protection actions, and other land-use restrictions have had the effect of devaluing land values in certain parts of the State. This has made it difficult for farmers to acquire capital for their agricultural operations.