COBI 2015 - Agriculture Loan Programs

Overview
Issues
Performance
Background
Financials

Sources Uses

FY 2016 Appropriation

The Loans line item administers the two revolving loan funds: the Agriculture Resource Development Fund and the Rural Rehabilitation loan fund.

Funding History

Appropriation Overview

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $427,300 from all sources for Agriculture Loan Programs. This is a 3.1 percent increase from Fiscal Year 2015 revised estimated amounts from all sources.

Appropriation Adjustments

In addition to statewide compensation and internal service fund cost increases, the following appropriation adjustments were made during the 2015 General Session:

DescriptionOngoingOne-Time

Percent of Loans that are Delinquent

Since this is revolving loan funds program, the objective is to keep the delinquency rates as low as possible, so that funds can be repaid and loaned out again to meet the intent of the program.

The program is measuring the percent of loan portfolio that is delinquent for more than 30 days. Though they did not always meet their target of 2% or less, the delinquency rates for the Agricultural Loans Program is significantly better than those of the commercial banking industry.

Statute

The following laws govern operations of this program:

UCA 4-18-6 creates the Agriculture Resource Development Fund.
UCA 4-19 makes the department responsible for the conduct and administration of the Rural Rehabilitation loan fund.

The department administers two types of loans:

The Agriculture Resource Development Loan Fund. UCA 59-12-103(5)(b) requires that sales and use tax revenue generated by a 1/16% rate be used to deposit $525,000 (or 3% of $17.5 million) annually into this fund. Since this is in statute, it does not need to be part of the annual Appropriations Act. Other funding sources include loan repayments, interest, and money appropriated by the Legislature. Loans may be made for rangeland improvement, watershed protection, flood prevention, soil and water conservation, and energy efficient farming projects. The Agriculture Resource Development Loan (ARDL) provides low-interest (3% annual interest plus a one-time 4% technical assistance fee) loans.

The Utah Rural Rehabilitation Loan Fund. Established from a one-time federal appropriation in 1937, this revolving loan fund is replenished by repayments and low interest rates. Interest rates are set by the Agricultural Advisory Board (4-19-3). In essence, the Rural Rehabilitation Program is a lender of last resort to farmers who represent too high a risk to acquire financing from conventional lending institutions. Assets may be used for real estate loans, farm operating loans, youth loans, educational loans, and irrigation/water conservation loans.

The financing of the loans program comes from the two loan funds.

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Funding Source

Expenditure Category

Appropriation Type:

Appropriation History by

Programs	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
Agriculture Loan Program	374,400	374,700	365,700	387,100	414,600	0	414,600	12,700	427,300
Rural Rehabilitation Loan-Federal	0	0	0	0	0	0	0	0	0
Rural Rehabilitation Loan-State	0	0	0	0	0	0	0	0	0
Total	$374,400	$374,700	$365,700	$387,100	$414,600	$0	$414,600	$12,700	$427,300

Sources of Finance	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
Agri Resource Development	251,000	248,900	255,300	263,000	269,400	0	269,400	8,300	277,700
Agri Rural Dev Loan Fund	0	0	0	0	300	0	300	(200)	100
Utah Rural Rehab Loan State Fund	140,300	140,300	140,300	141,400	144,900	0	144,900	4,600	149,500
Lapsing Balance	(16,900)	(14,500)	(29,900)	(17,300)	0	0	0	0	0
Total	$374,400	$374,700	$365,700	$387,100	$414,600	$0	$414,600	$12,700	$427,300

Categories of Expenditure	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
Personnel Services	352,500	349,300	339,000	360,800	351,300	9,400	360,700	(600)	360,100
In-state Travel	1,500	3,400	2,000	2,800	3,400	(1,000)	2,400	1,000	3,400
Out-of-state Travel	1,500	2,300	2,900	3,200	2,300	400	2,700	(400)	2,300
Current Expense	13,000	13,400	13,400	13,600	50,800	(9,800)	41,000	13,500	54,500
DP Current Expense	5,900	6,300	8,400	6,700	6,800	1,000	7,800	(800)	7,000
Total	$374,400	$374,700	$365,700	$387,100	$414,600	$0	$414,600	$12,700	$427,300

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Other Indicators	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Revised	FY16 Approp
Budgeted FTE	4	5	5	5	5	5	5
Actual FTE	5.10	4.90	5.10	5	0	0	0
Vehicles	1	1	1	1	1	1	1

COBI contains unaudited data as presented to the Legislature by state agencies at the time of publication. For audited financial data see the State of Utah's Comprehensive Annual Financial Reports.