N.Y. Soil & Water Conservation Districts Law § 4-a: Farm drain tile revolving loan program

§ 4-a. Farm drain tile revolving loan program. (1) Definitions. (a)

"Farm drain tile project." A specific work or improvement that is

undertaken by an agricultural producer for the construction or

improvement of drain tile for the purpose of enhancing farm fields.

(b) "Local loan administrator." A farm credit bureau or member of the

farm credit system or a banking institution or non-governmental

organization with a demonstrated ability to provide financial assistance

and service to agricultural rural areas, that have entered into a master

servicing agreement prescribed pursuant to subdivision two of this

section.

(2) Master servicing agreement. (a) The state soil and water

conservation committee ("committee") is hereby authorized to use the

monies held in the farm drain tile revolving loan fund to make advances

to a local loan administrator that has entered into a written master

servicing agreement prescribed by the committee pursuant to paragraph

(b) of this subdivision.

(b) The committee, in consultation with the comptroller, shall

prescribe a master servicing agreement to be executed by the committee

and local loan administrators. Such agreement shall provide that: (i)

any advances made to a local loan administrator shall be used solely for

the purpose of providing loans to agricultural producers for undertaking

farm drain tile projects; (ii) the total amount of loans made to any

single agricultural producer shall not exceed fifty thousand dollars per

annum; (iii) the term of any loan shall not exceed ten years and equal

payments of principal payable no less frequently than annually shall be

required to be made on such loan during the term such loan is

outstanding which payments will liquidate the entire principal balance

of the loan over its term; (iv) the local loan administrator is required

to pay to the committee for deposit into the farm drain tile revolving

loan fund all repayments including interest, if any, received from any

agricultural producers on account of such loan, except for that portion

permitted to be retained by the local loan administrator as a fee

pursuant to the master servicing agreement. The master servicing

agreement shall also set forth: (i) the form of any note and security

agreement to be executed by the agricultural producer in connection with

any loan; (ii) the rate of interest, if any, to be charged on any loan;

(iii) the amount of any fee to be retained by the local loan

administrator for servicing any loan; (iv) the form of application

required to be completed by an agricultural producer for any loan; (v)

the form of requisition and certification to be required from a local

loan administrator to obtain an advance of funds from the committee;

(vi) any other conditions to be imposed upon an agricultural producer as

a condition of receiving a loan; (vii) the responsibilities to be

performed by the local loan administrator in connection with reviewing,

approving and servicing the loan and the circumstances under which the

committee may terminate a master servicing agreement; (viii) conditions

necessary to insure prompt closing on loans for which funds are

advanced, including payment of interest of funds from the time advanced

until utilized; and (ix) such other requirements as the committee may

from time to time establish by rules and regulations consistent with the

purposes of this section.

(3) (a) The committee shall, subject to the availability of funds as

appropriated by the legislature, advance from the farm drain tile

revolving loan fund to a local loan administrator the amount of funds

requested in any requisition within fifteen business days after receipt

of all of the following: a completed requisition for an advance of

funds; copies of any applications and any supporting documentation to

which such requisition pertains; and a certification from the local loan

administrator with respect to such requisition in addition to any other

representation and statement required by the committee. The

certification from the local loan administrator shall state that: (i)

the loan administrator has performed its responsibilities in connection

with review and approval of applications to which such requisition

pertains, (ii) to the best of the local loan administrator's knowledge

the loans, to which the advances pertain, comply with the master

servicing agreement and the provisions of this section, and (iii) the

borrowers have demonstrated their ability to make the repayments

required under the loan. In the event that funds are not available or

the committee determines that the requisition, application or

certification is defective, it shall so notify the local loan

administrator within fifteen business days after receipt of the

requisition.

(b) The committee shall establish criteria for prioritizing loan

applications in the event that the requisitions submitted to the

committee by one or more local loan administrators exceed the amount

then available for the purposes of this section. In determining

priority, the committee shall take into account: (i) whether the farm

drain tile project to which the application pertains is the most cost

effective approach to enable the agricultural producer to construct or

improve farm drain tile on the farm; (ii) whether the agricultural

producer making application lacks the financial resources to undertake

the farm drain tile project without obtaining a loan pursuant to this

section; and (iii) such other factors as the committee deems relevant.

In applying the criteria to be utilized for prioritizing loans, the

committee shall be entitled to rely on the information contained in the

copies of the applications submitted with the requisition.

(4) Examination by comptroller. The comptroller, or his or her legally

authorized representative, is hereby authorized and empowered from time

to time to examine the books and accounts of the committee relating to

the farm drain tile fund, and from time to time, to examine the books

and accounts of any local loan administrator which has received advances

from such fund pursuant to this section, but only insofar as those books

and accounts relate to such advances and to the local loan

administrator's compliance with the master servicing agreement entered

into pursuant to this section.

(5) Establishment of fund. (a) There is hereby created and established

in the committee a revolving loan fund to be known as the "farm drain

tile revolving loan fund."

(b) There shall be paid into such farm drain tile revolving loan fund

(i) any moneys appropriated and made available by the state for the

purposes of such fund, (ii) notwithstanding the provisions of the state

finance law or any other provision of law, any moneys which the

committee shall receive in repayment of advances made from such fund,

and (iii) any other moneys which may be made available to the committee

for the purpose of such fund from any other source or sources.

(c) All moneys paid into the fund from repayments of loans authorized

by subdivision three of this section shall continue to be made available

for the purpose of providing loans pursuant to such subdivision.

(d) Any moneys held in such farm drain tile revolving loan fund not

required for immediate disbursement may be invested, at the discretion

of the committee, in obligations of the state or the United States

government or obligations the principal and interest of which are

guaranteed by the state or the United States government. Any income or

interest earned by, or increment to, such farm drain tile revolving loan

fund shall be added to the moneys held in such fund for the purposes

herein provided.

(6) Rules and regulations. The committee is empowered to promulgate

such rules and regulations and to prescribe such forms as it shall deem

necessary to effectuate the purposes of this section.