DAR File No. 38747

Agriculture and Food, Conservation Commission

Rule R64-1

Agriculture Resource and Development Loans (ARDL)

Notice of Proposed Rule

(Amendment)

DAR File No.: 38747
Filed: 08/07/2014 11:18:36 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The amendment is to incorporate the new changes made to the Utah Code during the 2014 General Legislative Session under S.B. 73, Agriculture Environmental Amendments.

Summary of the rule or change:

Subsection 4-18-105(1)(e)(vi) adds as function of the Conservation Commission to approve and make loans for agricultural purposes from the Agricultural Resource Development Fund for programs or improvements for agriculture product storage, protections of crops, or animal resource.

State statutory or constitutional authorization for this rule:

• Subsection 4-18-105(1)(e)(vi)

Anticipated cost or savings to:

the state budget:

There are no extra costs or saving to the state's budget. All procedures will be the same as prior practices and will not affect personnel or approval times of the loans.

local governments:

There will only be costs if the local government requires a building permit and inspection during the construction process.

small businesses:

Only if a small architectural business is hired to draw construction plans for the storage facilities. It would create new business opportunities.

persons other than small businesses, businesses, or local governmental entities:

Others would not be affected, the Division used technical planners and advisors already in place to monitor the project planning and new projects.

Compliance costs for affected persons:

There will be minimal compliance costs for the affected persons. Loans will be processed with acceptable resource improvement and management plans that each person must provide; the same as with all prior practices. Storage improvements have not been a practice approved prior to this rule change, therefore, these plans must be purchased or engineered with technical assistance.

Comments by the department head on the fiscal impact the rule may have on businesses:

Most farming operations are cyclical in nature and most have high debt levels. Our program was created to help the farming community with financing because of of these reasons. Banking institutions find most farming operations and individuals are leveraged above acceptable lending limits and cannot be helped through their institution.

LuAnn Adams, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Agriculture and Food
Conservation Commission
350 N REDWOOD RD
SALT LAKE CITY, UT 84116-3034

Direct questions regarding this rule to:

• Kathleen Mathews at the above address, by phone at 801-538-7103, by FAX at 801-538-7126, or by Internet E-mail at [email protected]
• Scott Ericson at the above address, by phone at 801-538-7102, by FAX at 801-538-7126, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/01/2014

This rule may become effective on:

10/08/2014

Authorized by:

LuAnn Adams, Commissioner

R64. Agriculture and Food, Conservation Commission.

R64-1. Agriculture Resource Development Loans (ARDL).

R64-1-1. Authority and Purpose.

Pursuant to Section 4-18-105, this rule establishes general operating practices by which the Agriculture Resource Development Loan (ARDL) program shall function.

 

R64-1-2. Definitions.

(1) "Commission"[:] means the Utah Conservation Commission created by Section 4-18-4, which directs and implements the Agriculture Resource Development Loan program throughout the State of Utah, chaired by the Commissioner of the Utah Department of Agriculture and Food.

(2) "ZEC[Committee]"[:] means a [Zone]zone [Executive]executive [Committee]committee [for each of the seven zones in the state]representing several conservation districts in a geographic area[,] consisting of one member from each of the [soil ]conservation districts in that zone to coordinate [the ]ARDL [program at the zone level]activities.

(3) "C[.]D[.] Board" means a [Conservation]conservation district [B]board[, a] consisting of five[member group ] elected supervisors within each [of 39 soil ]conservation district[s] [in the state ]created by Section 4-18-105, to coordinate [the ]ARDL [program]activities at the district level.

(4) "ARDL Program Coordinator or Loan Administrator" means the staff administrator of [Agriculture Resource Development Loan]the ARDL program employed by the Department of Agriculture and Food.

(5) "Technical [assistance]Assistance" or "[technical]Technical [assistance]Assistance [agency]Agency" means such individuals or group of individuals, including administrative services, who may be requested by an applicant client to provide specialized input for proposed projects.

(6) "Executive Committee" means a [group composed of a chairman, the President of the Utah Association of Conservation Districts (UACD), ]committee, made up of the commission chair and at least two other members selected from and approved by the commission, who approve[and a commission member at large, which review ]applications for presentation to the [Conservation C]commission.

(7) "Application" means a project proposal which is prepared by an individual seeking ARDL [loan ]funds through the process established by the commission and in accordance with Section 4-18-105.

(8) "Resource Improvement and Management Plan[s]" means a plan [plans and specifications]providing a schedule of operations, implementation and cost estimates, and other pertinent information prepared by a technical assistant, or technical assistance agency, which [technical assistants and agencies are pre-]has been approved by the commission.

 

R64-1-3. Administration of Agriculture Resource Development Fund.

(1) The objectives of the ARDL program are to conserve [soil and water]agricultural resources of the state, increase agriculture yields and efficiency for croplands, orchards, pastures, range and livestock, maintain and improve water quality, conserve and improve wildlife habitat, prevent flooding, conserve or develop on-farm energy resources, [and ]mitigate damages to agriculture as a result of flooding, drought, or other natural disasters, and provide and maintain protection of a crop or animal resource. The commission shall annually allocate funds appropriated for projects that further these objectives.

(2) Applicant clients shall submit finalized project proposals to the [ARDL Program Coordinator or L]loan [Administrator]administrator through the conservation districts for review. Applications shall be reviewed for funding by the executive committee if they exceed loan limits established by policy. Applicant clients shall comply with district, zone and commission application procedures, which are available [from]at the district level.[and zone offices.] Applicant clients shall be investigated for credit and security as may be required by the commission[;] including repayment capability, past and current financial holdings, fiscal[-] obligations, and debt history. When requests are expected to exceed available funds, projects shall be rated and prioritized according to levels of quality of improvement(s) sought. Rating and approval information from ZEC committees and [S]CD boards shall be duly considered.

(3) [Loans]Loan contracts will be awarded [in accordance with contracts;]upon receipt of executed documents, [which will ]generally consisting of promissory notes [or]and other documents that are agreed to and signed by [applicant clients]the borrower to perfect [such ]liens on [collateral]required security.

(4) When proposed projects include technical issues that are sufficiently complex, loan and technical assistance fees may be charged to clients. Some projects may require supervision by commission designated personnel.

(5) Contracts with applicant clients shall be based on [security involving]repayment ability or defined collateral. Contracts shall include schedules for loan repayment according to the agreed upon interest rates and related fiscal conditions. The [ARDL L]loan [Administrator ]administrator may acquire appraisals and estimates of collateral values, and is authorized to obtain security or collateral in order to meet the provisions of the contract until agreed upon amounts have been collected.

(6) Projects for which funds are loaned shall be inspected and certified by commission designated personnel for compliance with contractual provisions.

(7) Under direction of the commission the [ARDL Program Coordinator or L]loan [Administrator]administrator shall manage the program; interpret guidelines, administer record-keeping operations, research financial [loan ]collateral security information, process and service contracts associated with program functions, recommend loan approvals to the commission, analyze resource improvement and management plans, and administer loan servicing/collection activities.

 

KEY: loans

Date of Enactment or Last Substantive Amendment: [January 16, 1996]2014

Notice of Continuation: July 23, 2014

Authorizing, and Implemented or Interpreted Law: 4-18-105