Similar Policies and Programs 



It is not known how other farm states plan to -•'^^ 

 continue operation of similar programs to assist 

 beginning farmers. Therefore, there are no examples 

 that can be studied. 



Nevertheless, a possible approach to provide 

 financing for the Beginning Farm Loan Program might be 

 to adopt the funding mechanism proposed under Senate 

 Bill 425 (SB 425) and Senate Bill 426 (SB 426), which 

 were debated in the 1985 Legislature. ' 



SB 425 would have provided for allocation of 25% 

 of all revenue deposited in the coal tax fund for 

 investment in banks, with the agreement that the banks 

 would in turn provide loans under the Beginning Farm 

 Loan Program and the Agricultural Loan Guaranty Program. 



A companion bill, SB 426, would have authorized an 

 assessment on agricultural products to fund the capital 

 reserve account of the Montana Agricultural Loan 

 Authority. The capital reserve account is a fund that 

 is used for the payment of principal, interest, and a 

 redemption premium on bonds sold by the Montana 

 Agricultural Loan Authority. 



There was significant support for SB 425 during the 

 1985 legislative session. The bill was approved on a 

 33-17 vote on third reading in the Montana State Senate. 

 However, it was ruled that passage of SB 425 required a 

 three-quarters vote of each house, and SB 425 failed to 

 advance to the Montana House of Representatives. It is 

 believed by legal counsel that this ruling was in error 

 and that SB 425 only required a majority vote in order 



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