Code of Maine Rules
01 - DEPARTMENT OF AGRICULTURE, CONSERVATION AND FORESTRY
001 - AGRICULTURE - GENERAL
Chapter 31 - RULES FOR OPERATION OF POTATO MARKETING IMPROVEMENT FUND
Section 001-31-B - Loan Programs

The New Facilities Loan Fund is designed to help finance acquisition/improvement projects, or new construction of storages and/or centralized packing facilities and acquisition of packing, sizing, washing or drying equipment. Projects above $150,000 total cost qualify for the New Facilities Loan Fund.

Proceeds may be used for equipment acquisition and facility acquisition, construction, conversion, or expansion, including, but not limited to:

* Land acquisition;

* Land improvements;

* Purchase and remodeling of existing buildings. PMIF participation is limited to cost of remodeling, up to a maximum of 45% of total project cost;

* Major repairs and upgrades of existing facilities, including structural repairs and improvements. Any facility using these funds for major repairs and upgrades will be assessed for its structural integrity and overall physical condition prior to commencement of the proposed repair or upgrade, and will be determined to be suitable or appropriate for the proposed repair or upgrade.

* Building construction or additions;

* Leasehold improvements. Additional loan covenants may be required to protect the borrower's and the Department's rights to collateral;

* Purchase and installation of machinery and equipment for use in storage and packing facilities;

* Proceeds may not be used for working capital, nor will interim financing be an eligible use of PMIF proceeds. This provision notwithstanding, applications will be accepted and processed prior to the initiation of construction, and conditional approval of the project for PMIF financing may be used to secure interim or construction financing.

* The interest rate charged shall be fixed at the federal prime interest rate on the date of the loan commitment but may not be greater than 5%.

* Loan term shall not exceed 25 years and shall reflect the useful life of the assets being financed.

* For projects with a total cost of up to $1,500,000, PMIF proceeds may be used to fund not more than 45% of total project costs, except that, in the case of cooperative projects by two or more farmers, who do not share farm equipment or land, PMIF proceeds may be used to fund not more than 50% of the total project costs.

* For projects with a total cost of more than $1,500,000, PMIF proceeds may be used to fund 25% of project costs above $1,500,000, in addition to the amounts permitted above.

* No PMIF loan may be approved unless the applicant has demonstrated a commitment of private funds of at least 10% of the total project cost, except that, in the case of cooperative projects by two or more farmers, such demonstrated commitment of private funds shall total at least 5% of the total project cost.

* One percent of the PMIF loan amount shall be paid to the Fund at closing as an administrative fee.

* The borrower is responsible for all legal expenses and any other out-of-pocket expenses of the Department related to the borrower's project.

Any individual or organization in the business of growing, processing or marketing of potatoes may apply.

Proposals for new storages must include the following technical information:

* A business plan that explains how the storage will be used to improve marketing practices and product quality as well as details on plans to store for extended or late-season shipments;

* Type of ventilation, humidification, and insulation systems to be used;

* Background of and provision for the services of an architect, engineer, or consultant who may provide advice on storage design, construction, and operation.

Proposals for new central packing facilities must include the following:

* A description of the product to be packed with emphasis on an added-value pack;

* Plans to operate over an extended shipping season, particularly during harvesting and planting;

* Sources of early and late season supplies;

* A sales plan, including dealer channels and target markets.

The Storage Retrofit Loan Program is designed primarily to upgrade existing storages with insulation, other energy efficiency improvements, and ventilation and other climate-control equipment in order to improve the quality of the stored potatoes and extend the shipping season.

Proceeds may be used for improvements to existing storages, provided the majority of the project cost is for expenditures to improve the energy efficiency and/or climate-control characteristics of the storage. This includes real estate improvements and acquisition and installation of machinery and equipment.

Proceeds may be used for major repairs and upgrades of existing facilities, including structural repairs and improvements. Any facility using these funds for major repairs and upgrades shall be assessed for its structural integrity and overall physical condition prior to commencement of the proposed repair or upgrade, and will be determined to be suitable or appropriate for the proposed repair or upgrade.

Growers and packers are eligible to use this fund to improve packing facilities.

Funds in this program cannot be used for the purchase of existing storage or for working capital.

* The interest rate charged shall be fixed at the federal prime interest rate on the date of the loan commitment but may not be greater than 5%.

* Loans shall be for ten years or less. The term of the loan shall reflect the useful life of the assets being financed.

* For projects with a total cost of up to $150,000, PMIF proceeds may be used to fund not more than 55% of project costs.

* The borrower is responsible for all legal expenses and any other out-of-pocket expenses of the Department related to the borrower's project.

Any individual or organization in the business of growing, processing or marketing of potatoes may apply.

Applications for funds must include the following information:

* A statement outlining the benefits to be gained from the improvements;

* A statement outlining the technical assistance to be furnished by the contractor or a consultant at appropriate times during the initial storage season.

The Purchase/Acquisition Fund is designed to help finance the purchase and acquisition together with any necessary upgrading of existing modern storage facilities. Modern potato storages which have previously been financed through a PMIF loan, may be financed either by providing purchase money financing or by permitting the assumption of an existing PMIF mortgage and promissory obligation. Modern storage facilities not previously financed through a PMIF loan may be financed by providing purchase money financing. The availability of loans from this fund is subject to the conditions set forth below.

Any applicant for the Purchase/Acquisition Fund must demonstrate that, without the new financing or permission to assume the seller's PMIF financing, either

Proceeds may be used for, and permission for the assumption of existing financing may be given for, the acquisition of existing modern storage facilities previously financed through a PMIF loan, including but not being limited to:

The Support Facilities Loan Fund is designed to help finance the new construction or improvement of buildings and other structures which augment the production and/or storage of potatoes and/or potato rotation crops; or to help finance new facility construction or facility improvements required to meet food safety standards in potato storages and packing facilities.

Proceeds may be used for facility acquisition, construction, conversion, or expansion, including, but not limited to:

* Land acquisition;

* Land improvements;

* Purchase and remodeling of existing buildings. PMIF participation is limited to cost of remodeling, up to a maximum of 45% of total project cost;

* Major repairs and upgrades of existing facilities, including structural repairs and improvements. Any facility using these funds for major repairs and upgrades will be assessed for its structural integrity and overall physical condition prior to commencement of the proposed repair or upgrade, and will be determined to be suitable or appropriate for the proposed repair or upgrade.

* Building construction or additions;

* Leasehold improvements. Additional loan covenants may be required to protect the borrower's and the Department's rights to collateral;

* Proceeds may not be used for working capital, nor will interim financing be an eligible use of PMIF proceeds. This provision notwithstanding, applications will be accepted and processed prior to the initiation of construction, and conditional approval of the project for PMIF financing may be used to secure interim or construction financing.

* The interest rate charged shall be fixed at the federal prime interest rate on the date of the loan commitment but may not be greater than 5%.

* Loan term shall not exceed 10 years and shall reflect the useful life of the assets being financed.

* For projects with a total cost of up to $300,000, PMIF proceeds may be used to fund not more than 45% of total project costs.

* No PMIF loan may be approved unless the applicant has demonstrated a commitment of private funds of at least 5% of the total project cost.

* One percent of the PMIF loan amount shall be paid to the Fund at closing as an administrative fee.

* The borrower is responsible for all legal expenses and any other out-of-pocket expenses of the Department related to the borrower's project.

Any individual or organization in the business of growing, processing or marketing of potatoes may apply.

Proposals for support facilities must include the following technical information:

* A business plan that explains how the support facility will be used to improve the farm operation.

* Background of and provision for the services of an architect, engineer, or consultant who may provide advice on design and construction.

The Value Added Loan Program is designed to help finance the acquisition, construction, or improvement of facilities and equipment to add value to farm production with a direct benefit to potato production.

Proceeds may be used for equipment acquisition and facility acquisition, construction, conversion, or expansion, including, but not limited to:

* Land acquisition;

* Land improvements;

* Purchase and remodeling of existing buildings. PMIF participation is limited to cost of remodeling, up to a maximum of 50% of total project cost;

* Major repairs and upgrades of existing facilities, including structural repairs and improvements. Any facility using these funds for major repairs and upgrades will be assessed for its structural integrity and overall physical condition prior to commencement of the proposed repair or upgrade, and will be determined to be suitable or appropriate for the proposed repair or upgrade.

* Building construction or additions;

* Leasehold improvements. Additional loan covenants may be required to protect the borrower's and the Department's rights to collateral;

* Purchase and installation of machinery and equipment for use in value added projects;

* Proceeds may not be used for working capital, nor will interim financing be an eligible use of PMIF proceeds. This provision notwithstanding, applications will be accepted and processed prior to the initiation of construction, and conditional approval of the project for PMIF financing may be used to secure interim or construction financing.

* The interest rate charged shall be fixed at the federal prime interest rate on the date of the loan commitment but may not be greater than 5%.

* Loan term shall not exceed 10 years and shall reflect the useful life of the assets being financed.

* For projects with a total cost of up to $300,000, PMIF proceeds may be used to fund not more than 45% of total project costs.

* No PMIF loan may be approved unless the applicant has demonstrated a commitment of private funds of at least 5% of the total project cost

* One percent of the PMIF loan amount shall be paid to the Fund at closing as an administrative fee.

* The borrower is responsible for all legal expenses and any other out-of-pocket expenses of the Department related to the borrower's project.

Any individual or organization in the business of growing, processing or marketing of potatoes may apply.

Proposals for value added projects must include the following technical information:

* A business plan that explains how the storage will be used to improve marketing practices and product quality as well as details on plans to store for extended or late-season shipments;

* Type of ventilation, humidification, and insulation systems to be used;

* Background of and provision for the services of an architect, engineer, or consultant who may provide advice on storage design, construction, and operation.