AB 328

This bill makes several changes to the agricultural development loan

guarantee program administered by the Wisconsin Housing and Economic

Development Authority and establishes a pilot loan guarantee program within the

agricultural development loan guarantee program.

Under WHEDA's existing program, WHEDA may guarantee certain loans

made by private lenders for working capital or to finance a physical plant, machinery

or equipment, or marketing expenses, used to process or market a product from a raw

agricultural commodity produced in this state or to commercially harvest whitefish

from Lake Superior. WHEDA may guarantee any amount up to 90 percent of the

principal of an eligible loan and may establish a single guarantee percentage for all

guaranteed loans or establish different percentages for different eligible loans.

However, WHEDA is prohibited from guaranteeing a loan if the total guaranteed

principal of all loans to the borrower under the program would exceed $750,000, or

$100,000 if the loan is for working capital or an item used to commercially harvest

whitefish from Lake Superior. Generally, the term of a loan guarantee under the

program may not exceed 15 years.

This bill makes the following changes to WHEDA's existing agricultural

development loan guarantee program:

1. The term of a loan guarantee may not exceed ten years for land and buildings;

five years for inventory, equipment, and machinery; and two years for permanent

working capital and marketing expenses.

2. The closing fee for a loan guarantee under the program may not exceed 1.5

percent. Current law does not address closing fees.

Additionally, the bill requires WHEDA to allocate $3,000,000 to a pilot program

under which WHEDA may guarantee collection of 25 percent of the principal of an

eligible loan or $750,000, whichever is less. The fixed amount guaranteed is payable

to the lender for the entire term of the guarantee regardless of when a default occurs,

if a default occurs. In all other respects, a loan guarantee under the pilot program

is subject to the requirements of the existing program, as affected by the bill. The

pilot program sunsets as of July 1, 2024.