An Act To Amend the Law Regarding the Interest Rate for State Loans under the Potato Marketing Improvement Fund
Maine Legislature, Session 130, LD 0204
Committee: Agriculture, Conservation and Forestry
Sponsors: STEWART, BERNARD, BLACK, McCREA, UNDERWOOD
Amends: 7 MRSA §974-A, 10 MRSA §1023-N

Legislative Document
No. 204
S.P. 93
In Senate, January 27, 2021
An Act To Amend the Law Regarding the Interest Rate for State 
Loans under the Potato Marketing Improvement Fund
(EMERGENCY)
Received by the Secretary of the Senate on January 25, 2021.  Referred to the Committee 
on Agriculture, Conservation and Forestry pursuant to Joint Rule 308.2 and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator STEWART of Aroostook.
Cosponsored by Representative BERNARD of Caribou and
Senator: BLACK of Franklin, Representatives: McCREA of Fort Fairfield, UNDERWOOD of 
Presque Isle.
Emergency preamble.  Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, this legislation changes the interest rate for loans under the Potato 
Marketing Improvement Fund; and
Whereas, this legislation needs to take effect before the expiration of the 90-day 
period in order to offer loans at the revised interest rate as soon as possible; and
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore,
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Sec. 2.  7 MRSA §974-A, sub-§2, as amended by PL 2013, c. 403, §7, is repealed.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 refinanced 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.
Emergency clause.  In view of the emergency cited in the preamble, this legislation 
takes effect when approved.
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 on the date of loan 
closing or up to a maximum of 5% and allows existing loans in good standing to be 
refinanced at the same rate.