An Act To Amend the Law Regarding the Interest Rate for State Loans under the Potato Marketing Improvement Fund (AFTER DEADLINE)
Maine Legislature, Session 128, LD 1839
Committee: Agriculture, Conservation and Forestry
Sponsors: JACKSON, MARTIN, CARPENTER, DAVIS, DILL, SAVIELLO, BLACK, DUNPHY, TIMBERLAKE
Amends: 7 MRSA §974-A, 10 MRSA §1023-N

Legislative Document
No. 1839
S.P. 691
In Senate, February 13, 2018
An Act To Amend the Law Regarding the Interest Rate for State 
Loans under the Potato Marketing Improvement Fund
(AFTER DEADLINE)
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
205.
Reference to the Committee on Agriculture, Conservation and Forestry suggested and 
ordered printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator JACKSON of Aroostook.
Cosponsored by Representative MARTIN of Eagle Lake and
Senators: CARPENTER of Aroostook, DAVIS of Piscataquis, DILL of Penobscot, 
SAVIELLO of Franklin, Representatives: BLACK of Wilton, DUNPHY of Old Town, 
McCREA of Fort Fairfield, TIMBERLAKE of Turner.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  7 MRSA §974-A, sub-§1, ¶C, as enacted by PL 1987, c. 319, §4, is 
amended to read:
C.  State loans shall must be at the interest rate established pursuant to subsection 2 
2-A.
Sec. 2.  7 MRSA §974-A, sub-§2, as amended by PL 2013, c. 403, §7, is repealed.
Sec. 3.  7 MRSA §974-A, sub-§2-A is enacted to read:
2-A.  State loan interest rate.  The interest rate for state loans is the prime rate on 
the date of loan closing but may not be greater than 5%.  Loans current on the effective 
date of this subsection may be renegotiated at the borrower's request to an interest rate of 
the prime rate on the date of loan closing but not greater than 5%.
A fee for administrative costs, which must be at a rate set by rule by the board but may 
not exceed 1% of the loan, must be charged on a loan made for a project the total cost of 
which exceeds $50,000. This fee must be deposited in the fund.
Sec. 4.  10 MRSA §1023-N, first ¶, as amended by PL 2013, c. 403, §11, is 
further amended to read:
There is created a fund known as the Potato Marketing Improvement Fund, referred 
to in this section as "the fund."  The fund must be deposited with and maintained by the 
authority to be used solely for investment in the Maine potato industry.  The fund must be 
administered by the Maine Potato Board, established in Title 36, section 4603 and 
referred to in this section as "the board," and the Potato Marketing Improvement Fund 
Committee, established in Title 5, section 12004-H, subsection 10-A.  All money 
received by the authority from any source for the development and implementation of 
improved storage, packing and marketing and programs and activities that improve the 
economic viability of the potato industry must be credited to the fund.  Any money 
credited to the fund from the issuance of bonds on behalf of the State for agricultural 
development may be used only for the purposes of state loans as prescribed by Title 7, 
section 974-A to provide assistance to potato farmers for the design, construction, 
improvement, support and operation of storage, packing and marketing facilities; for 
programs and activities that improve the economic viability of the potato industry; and to 
pay the administrative costs of processing loan applications and servicing and 
administering the fund and loans and grants made therein, to the extent that the costs 
exceed the fee for administrative costs established by Title 7, section 974-A, subsection 2 
2-A.  At the discretion of the Commissioner of Agriculture, Conservation and Forestry, 
the authority shall make payments directly to the board, which shall use those payments 
to implement the requirements of this section. During any period that the commissioner 
has authorized direct payments from the authority to the board, the authority shall make 
written annual reports to the commissioner and the joint standing committee of the 
Legislature having jurisdiction over agriculture, conservation and forestry matters 
detailing the amounts of payments to the board and the dates payments were made and 
detailing the expenditure of those payments.  Repayment of the loans and interest on the 
loans must be credited to the fund to be available for making additional state loans for the 
same purposes, except that any interest earned on the cash balance of the fund may be 
used for the grants authorized by Title 7, section 975-A.  In order to provide additional 
amounts for loans, the commissioner, upon consultation with the board, may take such 
actions and enter into such agreements as may be necessary to sell or assign up to 
$2,000,000 in the aggregate principal amount of loans and undivided interests in a pool of 
loans and assign or pledge any mortgage or other security to the authority, under the 
terms and conditions the commissioner considers advisable upon consultation with the 
board.  The assignment and related transactions may not result in indebtedness of the 
State.  The proceeds of the sale or assignment must be credited to the fund and used for 
the purposes authorized in this section.
SUMMARY
This bill changes the interest rate on loans made through the Potato Marketing 
Improvement Fund from a fixed rate of 5% to the federal prime rate at the time of loan 
closing or up to a maximum of 5%.