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HF 770

Rural Finance Authority funding provided, bonds issued, and money appropriated.

2025-2026 Regular Session Introduced by Keith Allen and 5 co-sponsors

The bill appropriates 30 million to the Rural Finance Authority to expand agricultural lending programs for beginning farmers, loan restructuring, seller-sponsored loans, and agric

Committee report, to adopt as amended and re-refer to Capital Investment
#agricultureandagriculturedepartment #bonds
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Bill Summary · HF 770

Summary of HF 770 (2025-2026) — Rural Finance Authority Funding, Bonds, and Appropriations

Overview

HF 770 is a capital investment bill that authorizes the sale of state bonds and appropriates $30 million from the bond proceeds fund to the Rural Finance Authority (RFA). The primary purpose is to support agricultural lending activities under Minnesota Statutes, particularly programs aimed at beginning farmers and loan programs that promote agriculture, livestock expansion, and modernization. The bill also allocates a small amount for bond sale expenses.

Purpose and Intent

  • Provide funding to the Rural Finance Authority to support agricultural lending initiatives.
  • Enable the RFA to purchase participation interests in or make direct agricultural loans to farmers, in alignment with the state’s constitution and statutes governing the RFA.
  • Prioritize loan opportunities to support beginning farmers, with secondary priority to seller-sponsored loans and, third, to agricultural improvement loans.
  • Ensure debt service on bond-financed loans is repaid by the RFA.

Key Provisions and Changes

Section: Appropriation to the Rural Finance Authority

  • Amount: $30,000,000 appropriated from the bond proceeds fund to the RFA.
  • Purposes: For the purposes specified in Minnesota Constitution, Article XI, §5(h), including:
    • Beginning farmer program (Minnesota Statutes, §41B.039)
    • Loan restructuring program (Minnesota Statutes, §41B.04)
    • Seller-sponsored program (Minnesota Statutes, §41B.042)
    • Agricultural improvement loan program (Minnesota Statutes, §41B.043)
    • Livestock expansion and modernization loan program (Minnesota Statutes, §41B.045)
  • Credit and Risk Management: Loan participations must be priced to provide full interest and principal coverage and include a reserve for potential losses.

Section: Bond Sale Expenses

  • Amount: $30,000 appropriated to the commissioner of management and budget for bond sale expenses (Minnesota Statutes, §16A.641, subd. 8).

Section: Bond Issuance

  • Authority: Commissioner of management and budget to sell and issue bonds up to $30,030,000 to finance the appropriation.
  • Legal Basis: In the manner and terms established by Minnesota Statutes, Chapters 16A.631 to 16A.675, and the Minnesota Constitution, Article XI, Sections 4–7.

Effective Date

  • The section becomes effective the day after final enactment.

Who and What It Affects

  • Rural Finance Authority (RFA): Receives funding to expand its loan programs and credit activities supporting farmers.
  • Farmers and Agricultural Financing Participants: Beginning farmers, seller-sponsored loan participants, and those seeking agricultural improvement or livestock expansion/modernization loans may benefit from increased loan availability, favorable terms, and program flexibility.
  • State Bond Market/Financing Authorities: Involves state bonding processes and debt service obligations related to the approved bond issue.
  • Budget and Management Agencies: Manage bond sale expenses and track bond proceeds use.

Procedural and Timeline Aspects

  • Introduction and Referral: Referred to Capital Investment after initial committee consideration.
  • Committee Action: Reported by Agriculture Finance and Policy and then to Capital Investment; further actions may occur in the 2025-2026 session.
  • Bond Issuance Timeline: The bill contemplates issuing up to $30.03 million in bonds, with debt service obligations to be covered by the RFA.
  • Effective Date: Post-enactment effective date for the appropriation and related provisions.

Potential Impacts and Considerations

  • Increases the availability of credit-oriented programs for Minnesota agriculture, particularly for new entrants and structural improvements.
  • Sets priorities to guide loan selection, potentially influencing which borrowers gain access to funds first.
  • Creates a defined mechanism to manage debt service and loan losses via pricing and loss reserves.
  • Requires ongoing oversight of bond proceeds use and RFA compliance with statutory and constitutional requirements.

Compiled from official sources — confirm details with the bill’s official record.

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