Bill Text: IN HB1363 | 2011 | Regular Session | Introduced
Bill Title: Rural renewable energy project financing.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2011-01-18 - First reading: referred to Committee on Utilities and Energy [HB1363 Detail]
Download: Indiana-2011-HB1363-Introduced.html
Citations Affected: IC 5-10-1.7-2; IC 5-28-31.
Synopsis: Rural renewable energy project financing. Permits the
following entities to loan money or guarantee a loan for a renewable
energy production project: (1) the state excise police, gaming agent,
gaming control officer, and conservation officers' retirement plan; (2)
the public employees' retirement fund trust fund; (3) the pension trust
of the state police department; (4) the Indiana state teachers' retirement
fund; (5) the Indiana judges' retirement fund; (6) the police officers'
and firefighters' pension and disability fund; (7) the Indiana economic
development corporation; and (8) the Indiana finance authority.
Provides that a renewable energy production project is a rural
development project undertaken to produce, sustain production of, or
increase production of electricity, fuel, steam, or biofuel from a
renewable energy resource.
Effective: July 1, 2011.
January 18, 2011, read first time and referred to Committee on Utilities and Energy.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or
A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration.
(b) In addition to any other investment power given to a board, a board may invest as much of its trust funds as are not required for current disbursements in any of the following:
(1) Mortgage-backed bonds or notes issued by the Indiana housing and community development authority under IC 5-20-1.
(2) Bonds or other obligations of the Indiana finance authority or the Indiana economic development corporation for a renewable energy production project.
(3) Guarantees of obligations or credit enhancement obligations, or both, for a renewable energy production project, including guarantees from the agricultural loan and rural development project guarantee fund.
(4) Bonds, notes, or other valid obligations of the Indiana finance authority that have been issued in conjunction with the authority's acquisition, development, or improvement of property or other interests for a renewable energy production project.
(1) Methane.
(2) Biodiesel.
(3) Ethanol.
(4) Biobutanol.
(5) Hydrogen.
(1) Energy from wind.
(2) Solar energy.
(3) Photovoltaic cells and panels.
(4) Dedicated crops grown for energy production.
(5) Organic waste biomass, including any of the following organic matter that is available on a renewable basis:
(A) Agricultural crops.
(B) Agricultural wastes and residues.
(C) Wood and wood wastes, including the following:
(i) Wood residues.
(ii) Forest thinnings.
(iii) Mill residue wood.
(iv) Waste from clean construction and demolition.
(D) Animal wastes.
(E) Aquatic plants.
(6) Hydropower from existing dams.
(7) Fuel cells.
(8) Energy from waste to energy facilities producing steam not used for the production of electricity.
(b) Except for energy described in subsection (a)(8), the term does not include energy from the incineration, burning, or heating of any of the following:
(1) Tires.
(2) General household, institutional, commercial, industrial lunchroom, office, or landscape waste.
(3) Treated or painted lumber.
(1) There exists in Indiana an inadequate supply of affordable farm credit,
(2) There exists in particular in Indiana a need for affordable farm credit, and agricultural loan financing for new and young farmers, for small farmers, for family farm operations, and for farmers for whom loans in the conventional farm credit markets are either not available or not affordable at interest rates found in conventional farm credit markets. Alleviation of the problems described in this subdivision and subdivision (1) as they apply to the agricultural enterprises described in this
(3) There also exists in particular in Indiana a need for affordable renewable energy production project financing for operators and owners for whom loans in the conventional credit markets are either not available or not affordable at interest rates found in conventional credit markets. Alleviation of the problems described in this subdivision and subdivision (1) as they apply to the renewable energy production projects is a primary purpose of this chapter.
attributable and allocated by the corporation to the corporation's
guarantee program, including guarantee premiums.
(1) No new or additional guarantee of a loan or lease under section 33, 35, or 40 of this chapter may be entered into if the guarantee would cause the outstanding aggregate guarantee obligations with respect to all loans and leases guaranteed under sections 33, 35, and 40 of this chapter to exceed eight (8) times the amount of money in the guarantee fund.
(2) This subdivision does not apply to a renewable energy production project. The amount of all guarantees by the corporation of loans or leases to or for the benefit of any single agricultural enterprise or rural development project may not exceed three hundred thousand dollars ($300,000), less the outstanding aggregate principal balance under any loans made and owed to the corporation under section 40 of this chapter to or for the benefit of the enterprise or rural development project.
(3) A guarantee of a loan secured by either real estate or a real estate lease may not exceed ninety percent (90%) of the unpaid principal balance of the loan from time to time outstanding or ninety percent (90%) of the amount of any lease payment, as applicable, and the original principal amount of the loan or the total amount of the lease payments, as applicable, may not exceed ninety percent (90%) of the appraised fair market value of the real estate.
(4) A guarantee of a loan secured by personal property or of a personal property lease may not exceed seventy-five percent (75%) of the unpaid principal balance of the loan from time to time outstanding or seventy-five percent (75%) of the amount of any lease payment, as applicable, and the original principal amount of the loan or the total amount of the lease payments, as applicable, may not exceed seventy-five percent (75%) of the appraised fair market value of the personal property.
(5) A guarantee involving both real estate and personal property may not exceed the percentage proportionate to each type of property.
(6) To be eligible for a guarantee under this section, a loan or lease must:
(A) be one that is to be made to and held by a lender or lessor
approved by the corporation as responsible and able to service
the loan or lease properly;
(B) involve a principal obligation or lease payments, as
applicable, which may include initial service charges and
appraisal, inspection, and other fees approved by the
corporation;
(C) have a maturity or term satisfactory to the corporation but
in no case later than twenty (20) years after the date of the
guarantee;
(D) contain payment terms satisfactory to the corporation
requiring periodic payments by the developer or user,
including principal and interest payments, cost of local
property taxes and assessments, land lease rentals, if any,
insurance on the property, as applicable, and the guarantee
premiums that are fixed by the corporation; and
(E) contain terms and provisions with respect to property
insurance, repairs, alterations, payment of taxes and
assessments, default reserves, delinquency charges, default
remedies, anticipation of maturity, additional and secondary
liens, and other matters that the corporation prescribes.
(b) The corporation may guarantee an unsecured loan for working capital purposes if the corporation determines, under criteria that the corporation establishes, that:
(1) the loan for working capital is for an agricultural enterprise or a rural development project; and
(2) the loan for working capital will lead directly to increased production or job creation or retention through sales of products or provision of services to federal, state, or local government or private business or individuals or through exports to foreign markets.
The working capital loan guarantee may not exceed two hundred thousand dollars ($200,000) for any single agricultural enterprise or rural development project and may be in addition to any other guarantees of the corporation under this section. The guaranteed terms must include a time limit for working capital loan guarantees that may not exceed eighteen (18) months. However, the guarantees are renewable. A working capital loan guarantee may not exceed eighty percent (80%) of the unpaid principal balance from time to time
outstanding of the loan being guaranteed. The corporation may impose
additional terms that the corporation considers appropriate for any
particular agricultural enterprise or rural development project.
(1) No new or additional loan may be made if the loan:
(A) would cause the then outstanding aggregate guarantee obligations with respect to all loans and leases guaranteed under this section and sections 33 and 35 of this chapter to exceed eight (8) times the amount of money then in the guarantee fund; or
(B) would cause the then outstanding aggregate principal balance of all loans made under this section to an agricultural enterprise or rural development project other than a renewable energy production enterprise and then owing to the corporation to exceed twenty percent (20%) of the amount of money then in the guarantee fund.
(2) This subdivision does not apply to a renewable energy production project. The principal amount of a loan under this section to or for the benefit of an enterprise or rural development project may not exceed two hundred thousand dollars ($200,000), less the then outstanding total guarantee obligations with respect to any loans or leases guaranteed under this section and sections 33 and 35 of this chapter to or for the benefit of that enterprise or rural development project.
(3) With respect to any loan made under this section, a loan agreement with the corporation must contain the following terms:
(A) A requirement that the loan proceeds be used for specified purposes consistent with and in furtherance of the purposes of the corporation under this chapter.
(B) The term of the loan, which must be not later than twenty (20) years after the date of the loan.
(C) The repayment schedule.
(D) The interest rate or rates of the loan, which may include variations in the rate, but which may not be less than the
amount necessary to cover all expenses of the corporation in
making the loan.
(E) Any other terms and provisions that the corporation
requires.
(4) Any loan agreement under this section may also contain a
requirement that the loan be insured directly or indirectly by a
loan insurer or be guaranteed by a loan guarantor and a
requirement of any other type or types of security or collateral that
the corporation considers to be reasonable or necessary.
(5) A loan made under this section may be sold by the
corporation, and the corporation may permit other lenders to
participate in any loan made under this section, at the time or
times and upon the terms and conditions that the corporation
considers reasonable or necessary. A loan sold or in which other
lenders participate may be guaranteed by the corporation upon
terms and conditions established by the corporation.
(1) Procedures for the submission of requests or invitations and proposals for making loans to lenders and the investment in and purchase, assignment, and sale of loans.
(2) The reinvestment by lenders of the proceeds or an equivalent amount, from any loan to lenders or the investment in or purchase by the corporation or the authority or the assignment or sale of loans to the corporation or the authority, in loans to provide agricultural enterprises or rural development projects.
(3) The number of agricultural projects and rural development projects, location of the projects, and other characteristics of agricultural enterprises and rural development projects, including to the extent reasonably possible assurance that the agricultural enterprises or rural development projects to be financed by an issue of bonds or series of issues will improve employment conditions and enhance the welfare of persons in the agricultural sector, as determined by the corporation, to be financed directly or indirectly by the corporation and the authority under section 26, section 29, or sections 32 through 43 of this chapter.
(4) Rates, fees, charges, and other terms and conditions of
originating or servicing loans in order to protect against
realization of an excessive financial return or benefit by the
originator or servicer.
(5) The type and amount of collateral or security to be provided
to assure repayment of loans made or guaranteed by the
corporation and the fees to be charged under sections 32 through
43 of this chapter.
(6) The type of collateral, payment bonds, performance bonds, or
other security to be provided for any loans made by a lender for
construction loans.
(7) The nature and amount of fees to be charged by the
corporation or the authority to provide for expenses and reserves
of the corporation or the authority.
(8) Standards and requirements for the allocation of available
money among lenders and the determination of the maturities,
terms, conditions, and interest rates for loans made, purchased,
sold, assigned, or committed under section 26, section 29, or
sections 32 through 43 of this chapter.
(9) Commitment requirements for agricultural financing by
lenders involving money provided directly or indirectly by the
corporation or the authority.
(10) Any other matters related to the duties or exercise of the
corporation's or the authority's powers or duties under this
chapter.
(b) In adopting rules governing its activities, the corporation shall
consider the following factors relative to eligibility of borrowers for
loans made or guaranteed under this chapter:
(1) The length of time any borrower has been engaged in the
business of agriculture or development.
(2) The net income of any borrower in the preceding year or
years.
(3) The net worth of any borrower.
(4) The availability or feasibility of alternative financing methods
for any borrower.
(c) This subsection does not apply to a renewable energy
production project. The following entities may not be borrowers:
(1) A corporation that has more than ten (10) shareholders.
(2) A corporation that has any shareholder that is a
corporation, a subsidiary of a corporation, or a subsidiary of
a subsidiary of a corporation with more than ten (10)
shareholders.
(3) A partnership, joint venture, firm, limited liability
company, or association that has any member who is a
corporation, a subsidiary of a corporation, or a subsidiary of
a subsidiary of a corporation with more than ten (10)
shareholders.
(c) (d) This subsection applies to a renewable energy production
project. The following entities may not be borrowers:
(1) A corporation that has more than ten (10) one hundred (100)
shareholders.
(2) A corporation that has any shareholder that is a corporation,
a subsidiary of a corporation, or a subsidiary of a subsidiary of a
corporation with more than ten (10) one hundred (100)
shareholders.
(3) A partnership, joint venture, firm, limited liability company,
or association that has any member who is a corporation, a
subsidiary of a corporation, or a subsidiary of a subsidiary of a
corporation with more than ten (10) one hundred (100)
shareholders.
