8 CCR 1204-11
DEPARTMENT OF AGRICULTURE RULES PERTAINING TO THE COLORADO AGRICULTURAL FUTURE LOAN PROGRAM 8 CCR 1204-11 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ Part 1. The Colorado Agricultural Future Loan Program 1.1. Section 35-1.2-103, C.R.S., established the Colorado Agricultural Future Loan Program. These rules implement that program.
1.2. The Colorado Department of Agriculture (CDA or Department) shall administer the Loan Program. See section 35-1.2-103, C.R.S.
1.3. The Loan Program is a revolving loan and grant fund to support the future of agriculture in Colorado. Except as otherwise provided in this rule, money received as loan payments on loans issued from the Loan Program, including interest payments will be credited to the Colorado Agricultural Loan Cash Fund (Fund) created in section 35-1.2-105, C.R.S., and shall be reused on a continuing basis to support the Loan Program as set forth in C.R.S. 35-1.2-101, et seq.) and the provisions of this rule.
1.4. The Department shall to the extent practicable prioritize the provision of loans to eligible farmers or ranchers who apply for loans or grants from the Loan Program and who have owned or operated a farm or ranch for less than ten years or who represent a population that is underserved or underrepresented in Colorado agriculture. Part 2. Definitions 2.1. “Agriculture” means the science and art of production of plants and animals useful to humans, including, to a variable extent, the preparation of these products for human use and their disposal by marketing or otherwise, and includes horticulture, floriculture, viticulture, forestry, dairy, livestock, poultry, bee, and any and all forms of farm products and farm production. 2.2. “Agricultural Processing” means the transforming, packaging, sorting, storage, or grading of Colorado livestock, livestock products, agricultural commodities, plants, or plant products. 2.3. “Colorado Agricultural Future Loan Program” or “Loan Program” is a loan and grant program administered by the Department as established in section 35-1.2-103, C.R.S. 2.4. “Commissioner” means the Commissioner of Agriculture. 2.5. “Department” or “CDA” means the Department of Agriculture created in section 35-1-103, C.R.S. 2.6. “Eligible Business” means a business that earns or will earn a majority of its revenue from agricultural processing or from developing or manufacturing technology designed to benefit Colorado farmers and ranchers; and in the judgment of the Department: (a) has managers and employees who possess sufficient education, training, and experience to operate the business; and (b) provides an economic benefit to Colorado farmers or ranchers. 2.7. “Eligible Farmer or Rancher” means an individual who: (a) is at least eighteen years of age; (b) is a resident of Colorado; (c) is or will be an owner or operator in fact of a farm or ranch; and (d) in the judgment of the Department: (1) possesses sufficient education, training, and experience to operate the farm or ranch; and (2) possesses or has access to sufficient working capital, farm machinery, livestock, or land to operate the farm or ranch. 2.8. “Farm-to-Market Infrastructure Grant” means a grant of money from the Fund, which money is used for Agricultural processing.
2.9. “Farm-to-Market Infrastructure Loan” means a loan from the Loan Program used for the purpose of Agricultural Processing.
2.10. “Financial Entity” means a bank, nondeposit community development financial institution, business development corporation, or other entity with agricultural lending experience and with which the Department contracts to help administer the Loan Program. 2.11. “Fund” means the Colorado Agricultural Future Loan Cash Fund created in section 35-1.2-105, 2.12. “Loan Program” means the Colorado Agricultural Future Loan program created in section 35-1.2- 103, C.R.S.
2.13. “Low-Interest Loan” means a loan from the Loan Program, the interest rate of which is generally considered to be at or below market rate.
2.14. “Operator of a farm or ranch” means a person who makes management or operational decisions related to all or a portion of a farm or ranch, or is a hired manager, renter or tenant of land used for a farm or ranch, cash tenant, share tenant, or partner. 2.15. “Owner of a farm or ranch” means a person that owns an agricultural business or land used for farming or ranching.
2.16. “Underserved” or “Underrepresented” means a farmer or rancher who is from a population, race, ethnic group, gender, or geographic location that has been socially disadvantaged due to discrimination or prejudice or that historically has participated in agricultural programs at a level that is disproportionately lower than its representation in the population of Colorado. Part 3. Loan Eligibility and Prioritization 3.1 The Department will determine an applicant’s eligibility and possible priority status prior to the Financial Entity considering the applicant for participation in the Loan Program. 3.2. Eligible Farmers or Ranchers and Eligible Businesses may submit an application to determine eligibility and possible priority status to the Department for a loan from the Loan Program at any time during the year.
3.3. Loan Eligibility and Prioritization applications are available at the Department during normal business hours at 305 Interlocken Parkway, Broomfield, Colorado, or may be obtained at any time on-line by visiting the Department’s website: www.ag.colorado.gov. Access to Loan Eligibility and Prioritization applications may also be made available by an authorized Financial Entity. 3.4. The Department will use the following criteria in considering eligibility and prioritization: 3.4.1. Whether all eligibility requirements for participating in the Loan Program are satisfied, as those terms are defined in Part 2 of this rule;
3.4.2. Whether applicants are Underserved or Underrepresented, as those terms are defined in Part 2.16 of this rule;
3.4.3. Whether applicants have owned and operated a farm or ranch for less than 10 years; 3.4.4. The likelihood of success of the proposed project or investment. 3.5. The Department may also use the following criteria in considering prioritization: 3.5.1. The anticipated economic impact from the use of the loan funds, including the number of new jobs estimated to be created in Colorado, the amount of new revenue generated, and the overall impact on the continued success of Colorado agriculture; 3.5.2. Whether the loan will be used to fill a gap or need in Colorado agriculture, including a need for new or expanded processing equipment;
3.5.3. Whether the loan will be used to advance energy conservation, improve soil health, mitigate the impacts of drought or climate change, or promote good stewardship practices on the land.
3.6. After consideration of the Loan Eligibility and Prioritization application, the Department will communicate to the applicant the determination of the applicant’s eligibility, possible prioritization of the applicant’s loan application, and next steps, if any. 3.7. After consideration of the Loan Eligibility and Prioritization application, the Department will advise the Financial Entity of qualifying applicants and the possible prioritization of the applicant’s loan. Part 4. Financial Entity Application Requirements 4.1. Eligible Farmers or Ranchers and Eligible Businesses may apply to the Financial Entity for a loan from the Department’s Loan Program at any time during the year, after completion of the Loan Eligibility and Prioritization application.
4.2. The format and location of loan applications will be determined by the Financial Entity, provided such applications are reasonably accessible to applicants. Information on how to access the applications may be obtained by visiting the Department’s website: www.ag.colorado.gov. 4.3. Each loan application must include all required information at the time of submission for consideration, including any required documentation. The Financial Entity will not consider incomplete applications.
4.4. Any Eligible Business that applies for a loan must provide a completed application and the following information, at the time of application:
4.4.1. For a Farm-to-Market Instructure Loan, a description of the type of Agricultural Processing the applicant conducts;
4.4.2. Financial documentation to support that the applicant earns or will earn a majority of its revenue from Agricultural Processing;
4.4.3. Documentation to identify the experience, training, and education related to operation of the applicant’s business;
4.4.4. A description, with financial documentation, if possible, to indicate the economic benefit the applicant’s business provides to Colorado farmers or ranchers; 4.45. Any other information the Financial Entity determines is necessary to review, evaluate, and process the application.
4.5. Any Eligible Farmer or Rancher or any Operator of a farm or ranch who applies for a loan from the Loan Program must provide a completed application and the following information, at the time of application:
4.5.1. Proof that the applicant is at least 18 years of age; 4.5.2. Proof that the applicant is a resident of Colorado; 4.5.3. Information indicating that the applicant is or will be an owner or operator of a farm or ranch;
4.5.4. Documentation to identify the experience, training, and education of the applicant to exhibit the applicant’s ability to operate the farm or ranch; 4.5.5. Financial or other documentation showing that the applicant possesses or has access to sufficient working capital, farm machinery, livestock, or land to operate the farm or ranch; and 4.5.6. The Department or a Financial Entity may request additional information at any time to supplement or complete any application.
Part 5. Terms and Conditions for Loan Program Loans 5.1. Unless otherwise provided in this rule, the provisions of this Part 5 apply to any loan awarded by the Department as part of the Loan Program.
5.2. Loans will be underwritten, originated, and serviced by one or more Financial Entities upon approval by the Department.
5.3. The maximum amount that may be loaned by the Loan Program to any applicant or group of applicants who have combined to submit an application, , is $750,000. 5.3.1. The maximum amount does not apply to or include any grant funds that may be awarded by the Department or other sources of funding or financing the applicant may obtain. 5.3.2. The Commissioner may allow loan funds to be awarded in an amount above the maximum amount for loans in exceptional circumstances.
5.4. Interest rates for loans will be set at or below the current market rate. The Department, upon request from the Financial Entity, may determine different interest rates for individual loans after considering relevant factors, including, but not limited to: 5.4.1. The dollar amount of the loan;
5.4.2. The applicant’s ability to repay the loan, including interest; and 5.4.3. The applicant’s ability to obtain alternative lending. 5.5. Loan Repayment 5.5.1. Loans issued under the Loan Program shall provide for a repayment period not to exceed twenty years unless the Commissioner determines in the Commissioner’s sole discretion that it would be in the best interest of the Department and the State of Colorado to approve a longer repayment period.
5.5.2. Loan repayments shall be monthly unless the Financial Entity originating the loan determines that a different repayment schedule is appropriate. 5.5.3. Loan repayments, including interest, may be deferred for a period of 3 months at the Financial Entity’s discretion, and up to 18 months for good cause as determined by the Commissioner or the Commissioner’s delegate.
5.6. Notwithstanding the provisions of Part 8 of this rule, the Department may enter into a contract with a Financial Entity, allowing such Financial Entity to earn as compensation a portion of the amount of loan repayment, interest, or other fees collected in connection with a loan originated and serviced by the Financial Entity.
Part 9. Statement of Basis, Specific Statutory Authority and Purpose 9.1. Adopted December 8, 2021 – Effective January 30, 2022 Statutory Authority The Commissioner of Agriculture adopts these rules pursuant to § 35-1.2-103(7)(a), (b), and (c), Purpose To create the Colorado Agricultural Future Loan Program providing funds to businesses, farmers, and ranchers to support the future of agriculture in Colorado. To establish general eligibility requirements for the Program. To establish application processes and procedures for the Program. To establish processes and procedures for the review of applications and award of loan funds.
In developing these Rules, the Department reviewed policies and program guidelines of previous loan programs administered by the Colorado Department of Agriculture as well as those administered by comparable entities. The Department also conducted listening sessions with agricultural stakeholders relating to the Colorado Agricultural Future Loan Program as well as sought stakeholder input on this Rule as adopted to help inform this rulemaking process. 9.2. Adopted July 10, 2024 – Effective August 30, 2024 Statutory Authority The Commissioner of Agriculture adopts these rules pursuant to § 35-1.2-103(7)(b) and (c), Purpose To adapt the rule to meet legislative changes indicated in SB23-050. To clarify CDA responsibilities related to the application process. To clarify Financial Entity responsibilities related to the application process. To ensure the application process is in alignment with the practical requirements of originating and servicing loans via a Financial Entity. Factual and Policy Issues This Commissioner amends this Rule to harmonize the requirements of the rule with modifications the General Assembly made to 35-1.2-101, et seq., C.R.S., in the 2023 legislative session. Senate Bill 23-050. These amendments include: adding a requirement that CDA ensure applicants approved for loans or grants meet the requirements for “eligible business” and “eligible farmers or ranchers,” as defined at 35-1.2-102(5) and (6), C.R.S., which terms were amended in the 2023 session; removing references to mandatory spending provisions in part 1.4, which were repealed, effective January 1, 2023 (see SB 21-248); and amending the definitions of “eligible business” and “eligible farmer or rancher” to include the prospective provisions. To comport the rule to the amended version of the statute, the reviewers re-organized the rule to set apart a newly named Part 3, “Loan Eligibility and Prioritization,” moving parts of the old Part 3 into Part 4, which itself clarifies the distinct role of the Financial Entity, separately from the role of the Department of Agriculture.
The reviewers updated the rules to include criteria added to the definitions of “eligible business” and “eligible farmer or rancher,” which both now include provisions for prospective consideration – prospective ownership and prospective income.
In reviewing the rule, the reviewers further updated provisions in Part 5 to be consistent with economic and practical matters that have caused changes to the program’s functions. _________________________________________________________________________ Editor’s Notes History New rule eff. 08/30/2024.