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Rules/Other as amended, taking into account amendments up to Regional Investment Corporation (Agristarter Loans) Amendment (Loan Terms and Eligibility) Rule 2019
Administered by: Agriculture, Water and the Environment
Registered 14 Oct 2019
Start Date 01 Aug 2019

Commonwealth Coat of Arms of Australia

Regional Investment Corporation (Agristarter Loans) Rule 2019

made under section 54 of the

Regional Investment Corporation Act 2018

Compilation No. 1

Compilation date:                              1 August 2019

Includes amendments up to:            F2019L01028

Registered:                                         14 October 2019

 

About this compilation

This compilation

This is a compilation of the Regional Investment Corporation (Agristarter Loans) Rule 2019 that shows the text of the law as amended and in force on 1 August 2019 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

  

  

  


Contents

Part 1—Preliminary                                                                                                                                        1

1............ Name............................................................................................................................. 1

2............ Commencement............................................................................................................. 1

3............ Authority....................................................................................................................... 1

4............ Definitions..................................................................................................................... 1

Part 2—Provision of Loans                                                                                                                        2

5............ Prescription of the program........................................................................................... 2

6............ Application for an agristarter loan................................................................................. 2

7............ When a business is an eligible farm business................................................................ 2

8............ Grant of a succession loan............................................................................................. 3

9............ Grant of a purchaser loan.............................................................................................. 3

10.......... Terms of agristarter loans.............................................................................................. 4

Part 3—Administrative matters                                                                                                               6

11.......... Notice of decision to grant or refuse loan...................................................................... 6

12.......... Loan management.......................................................................................................... 6

13.......... Internal review............................................................................................................... 6

14.......... Corporation must publish program guidelines............................................................... 7

15.......... Corporation must report to responsible Ministers......................................................... 7

16.......... Responsible Ministers may give written directions....................................................... 7

Part 4—Financial matters                                                                                                                           8

17.......... Corporation may charge transaction costs..................................................................... 8

18.......... Funding arrangements................................................................................................... 8

Endnotes                                                                                                                                                                 9

Endnote 1—About the endnotes                                                                                                        9

Endnote 2—Abbreviation key                                                                                                          10

Endnote 3—Legislation history                                                                                                       11

Endnote 4—Amendment history                                                                                                     12

 


Part 1Preliminary

  

1  Name

                   This instrument is the Regional Investment Corporation (Agristarter Loans) Rule 2019.

2  Commencement

                   This instrument commences the day after it is registered.

3  Authority

                   This instrument is made under section 54 of the Regional Investment Corporation Act 2018.

4  Definitions

Note:           A number of expressions used in this instrument are defined in the Act, including the following:

(a)      Board;

(b)     Corporation;

(c)      farm business loan;

(d)     responsible Ministers;

(e)      constitutional trade or commerce.

                   In this instrument:

                   Act means the Regional Investment Corporation Act 2018.  

                   agristarter loan means a purchaser loan or a succession loan.

                   farm business inheritor means a person who has inherited or will inherit a farm business or a part of a farm business.              

                   program means the Agristarter Loans Program.

                   program guidelines has the meaning set out in subsection 14(1).

                   purchaser means a person who is seeking to purchase a farm business or a controlling stake in a farm business.

                   purchaser loan means a loan made to a purchaser under section 9.

                   succession loan means a loan made to a farm business or a farm business inheritor under section 8.

Part 2Provision of Loans

5  Prescription of the program

             (1)  For the purposes of subsection 8(5) of the Act, the program is prescribed.

Purpose of program

             (2)  The purpose of the program is to provide loans:

                     (a)  to assist purchasers to acquire a farm business or a controlling stake of a farm business, and

                     (b)  to assist farm businesses to undertake succession planning.

Specified constitutional basis of program

             (3)  For the purposes of paragraph 8(5)(a) of the Act, the constitutional basis for the program is the power of the Parliament to make laws with respect to trade and commerce with other countries, and among the States.

6  Application for an agristarter loan

             (1)  To obtain an agristarter loan, a purchaser, farm business or farm business inheritor (as the case may be) must make an application to the Corporation.

             (3)  The application must:

                     (a)  be in writing; and

                     (b)  include any information, and be accompanied by any documents, required by the Corporation.

7  When a business is an eligible farm business

             (1)  Eligible farm businesses are those:

                     (a)  where at least one member of the farm business is an Australian citizen or a permanent resident as defined in the program guidelines; and

                     (b)  that are assessed as financially viable, or as having sound prospects of becoming financially viable within the term of the loan; and

                     (c)  that undertake all primary production aspects of the business wholly within Australia; and

                     (d)  where at least one member has experience operating a farm business or a demonstrated potential to operate a farm business; and

                     (e)  where at least one member of the farm business:

                              (i)  in respect of all loansintends to have the farm business as their principal business pursuit (in terms of being where they contribute at least 50 per cent of their labour and where they derive or plan to derive at least 50 percent of their income); and

                             (ii)  in respect of succession loans provided directly to a farm business onlycurrently has the farm business as their principal business pursuit (in terms of being where they contribute at least 50 per cent of their labour and where they derive or plan to derive at least 50 percent of their income); and    

                      (f)  that are operated by a sole trader, partnership, trustee of a trust or private company; and

                     (g)  that are registered for tax purposes in Australia with an Australian Business Number (ABN) and registered for GST; and

                     (h)  that are not under external administration or bankruptcy; and

                      (i)  that are, or intend to be, engaged solely or mainly in producing commodities for constitutional trade and commerce.

8  Grant of a succession loan

Eligibility requirementssuccession loans

             (1)  Subject to subsection (2), the Corporation may grant a loan to a farm business or farm business inheritor (recipient) where the Corporation is satisfied that:

                     (a)  the business is undertaking or has undertaken succession planning and the loan is to support the activities identified in the succession planning process; and

                     (b)  the recipient will obtain or has obtained a loan on commercial terms; and

                     (c)  the recipient is in financial need of a concessional loan; and

                     (d)  the recipient has the capacity to repay the loan; and

                     (e)  the business is an eligible farm business and will continue to be an eligible farm business after the succession arrangements take place.

             (2)  The Corporation must not grant a loan under subsection (1) unless it is satisfied:

                     (a)  of the matters set out in subsection (1); and

                     (b)  that the loan is made:

                              (i)  in respect of a farm business that is engaged solely or mainly in producing commodities for constitutional trade or commerce; or

                             (ii)  for the purpose of encouraging or promoting constitutional trade or commerce.

9  Grant of a purchaser loan

Eligibility requirementspurchaser loans

             (1)  Subject to subsection (2), the Corporation may grant a loan to a purchaser where the Corporation is satisfied that:

                     (a)  the purchaser will obtain or has obtained a loan on commercial terms; and

                     (b)  the purchaser is in financial need of a concessional loan; and

                     (c)  the purchaser has the capacity to repay the loan; and

                     (d)  the farm business to be purchased will be an eligible farm business after the purchase has completed.

             (2)  The Corporation must not grant a loan under subsection (1) unless it is satisfied:

                     (a)  of the matters set out in subsection (1); and

                     (b)  that the loan is made:

                              (i)  in respect of a farm business that is engaged solely or mainly in producing commodities for constitutional trade or commerce; or

                             (ii)  for the purpose of encouraging or promoting constitutional trade or commerce.

10  Terms of agristarter loans

             (1)  Subject to subsections (2) and (3), the Corporation may set the terms and conditions upon which an agristarter loan is made.

Offering agristarter loans

             (2)  The maximum amount of an agristarter loan is the lesser of:

                     (a)  the amount that would result in the recipient having 50 per cent of its total debt in Commonwealth funded concessional loans; or

                     (b)  $2 million.

             (3)  The Corporation has discretion to set the terms and conditions upon which an agristarter loan is made, provided that the agristarter loan:

                     (a)  has an initial loan term of ten years; and

                     (b)  has an initial interest‑only period of five years; and

                     (c)  interest is payable at the rate mentioned in subsection (4); and 

                     (d)  allows full or partial early repayment (of principal, interest or both, at the recipient’s discretion) at any time without penalty; and

                     (e)  is backed by sufficient security.

             (4)  For the purposes of paragraph (3)(c)—the Corporation must set a variable interest rate, and notify loan recipients of changes to that rate, in accordance with section 8 of the Regional Investment Corporation Operating Mandate Direction 2018.

                   Types of security the Corporation must consider

             (5)  For the purposes of paragraph (3)(e)—the Corporation must consider requiring security in the form of:

                     (a)  a registered mortgage over land; or

                     (b)  a registered mortgage over livestock; or

                     (c)  a registered security interest in water rights.

                   Meaning of total debt

             (6)  For the purposes of paragraph (2)(a)—total debt means the total debt owed by the recipient in respect of the farm business, including:

                     (a)  debt established on commercial terms, at commercial interest rates; and

                     (b)  debt established under Commonwealth funded concessional loans,

                   but excluding debts which are not in respect of the farm business, such as personal, credit card and home loan debts.

Part 3Administrative matters

11  Notice of decision to grant or refuse loan

                   The Corporation will ensure that applicants for agristarter loans are informed of the outcome of their loan application as soon as practicable after a decision on their application has been made.

12  Loan management

             (1)  The Corporation must undertake all aspects of its loan management in a prudential manner to minimise the risk of default.

             (2)  The Board must ensure that prudential and arrears management policies and procedures are developed and applied by the Corporation. The Board must ensure at all times that the loan management, arrears management, recovery action, foreclosure arrangements, waiver of debt, write‑offs and dispute/complaints handling are undertaken in accordance with those policies and procedures.

             (3)  In developing its policies and procedures in relation to loan management activities, the Corporation is expected to have regard to the concessional nature of loans and consider the impact on the farm business of any proposed action in relation to the loan. The Corporation must offer, and undertake where required, farm debt mediation.

             (4)  The Corporation may take loan recovery and foreclosure action. Where possible, decisions on foreclosure should be made by the Board, and not by a delegate.

             (5)  The Corporation may waive an unpaid loan debt, in accordance with its arrears management policies and procedures. Before waiving any unpaid loan debt, the Corporation must consult with, and take into account the views of, the responsible Ministers. Where possible, a decision to waive an unpaid loan debt should be made by the Board, and not by a delegate.

             (6)  The Corporation will offer and promote refinancing to eligible farm businesses under the program. This may include debt from other concessional loan programs.

13  Internal review

             (1)  The Board must ensure that an internal review procedure for decisions to grant or refuse loans is developed and applied by the Corporation.

             (2)  The internal review procedure is required to be transparent, robust and fair. Specifically, the internal review procedure:

                     (a)  will require the internal review to be carried out by a person who was not the primary decision‑maker in the original decision;

                     (b)  will require the decision on the internal review to be made by an officer within the Corporation who was not the primary decision‑maker in the original decision (who may be the same person referred to in paragraph (a)); and

                     (c)  must be consistent with principles of procedural fairness.

14  Corporation must publish program guidelines

             (1)  The Corporation must develop and publish written guidelines relating to the program (the program guidelines).

             (2)  Without limiting subsection (1), the program guidelines must:

                     (a)  include details of the right to request an internal review of application decisions and the process for requesting such a review; and

                     (b)  contain information about the types of security the Corporation will consider accepting in relation to a loan; and

                     (c)  specify when the Corporation will consider a person to be an Australian citizen or permanent resident within the meaning of paragraph 7(1)(a).

15  Corporation must report to responsible Ministers

             (1)  The Corporation must provide a report to the responsible Ministers as at the end of every March, June, September and December in respect of the program. The report is to include information regarding the uptake of loans, details of the loan portfolio, financial performance information and any other matters requested by the responsible Ministers.

             (2)  The Corporation is expected to proactively advise the Commonwealth on matters that will improve the operation and policy outcomes of loans.

Note:          In this instrument, a reference to a loan is a reference to an agristarter loan under this program (see section 4).

16  Responsible Ministers may give written directions

                   For the purposes of subparagraph 8(5)(b)(iii) of the Act, to the extent that the responsible Ministers cannot otherwise give directions to the Corporation under section 11 of the Act, the responsible Ministers may give written directions to the Corporation in relation to the program.

Part 4Financial matters

17  Corporation may charge transaction costs

                   For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge a recipient for transaction costs incurred by the Corporation in relation to an agristarter loan.

18  Funding arrangements

             (1)  Funds for loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients as required.

             (2)  The Corporation must:

                     (a)  only request funds as they are required to advance loan funds to recipients; and

                     (b)  only use funds provided for loans for that purpose.

             (3)  The Corporation is authorised to collect all loan repayments (including principal repayments and payments of interest) and transaction costs from loan recipients.

             (4)  All loan repayments (including principal repayments and payments of interest) received by the Corporation from loan recipients must be paid to the Commonwealth as soon as reasonably practicable.

             (5)  Any funds received by the Corporation from farm businesses under section 17 to reimburse the Corporation for transaction costs may be retained by the Corporation and do not need to be paid to the Commonwealth.


Endnotes

Endnote 1—About the endnotes

The endnotes provide information about this compilation and the compiled law.

The following endnotes are included in every compilation:

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

Abbreviation key—Endnote 2

The abbreviation key sets out abbreviations that may be used in the endnotes.

Legislation history and amendment history—Endnotes 3 and 4

Amending laws are annotated in the legislation history and amendment history.

The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.

The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.

Editorial changes

The Legislation Act 2003 authorises First Parliamentary Counsel to make editorial and presentational changes to a compiled law in preparing a compilation of the law for registration. The changes must not change the effect of the law. Editorial changes take effect from the compilation registration date.

If the compilation includes editorial changes, the endnotes include a brief outline of the changes in general terms. Full details of any changes can be obtained from the Office of Parliamentary Counsel.

Misdescribed amendments

A misdescribed amendment is an amendment that does not accurately describe the amendment to be made. If, despite the misdescription, the amendment can be given effect as intended, the amendment is incorporated into the compiled law and the abbreviation “(md)” added to the details of the amendment included in the amendment history.

If a misdescribed amendment cannot be given effect as intended, the abbreviation “(md not incorp)” is added to the details of the amendment included in the amendment history.

 

Endnote 2—Abbreviation key

 

ad = added or inserted

o = order(s)

am = amended

Ord = Ordinance

amdt = amendment

orig = original

c = clause(s)

par = paragraph(s)/subparagraph(s)

C[x] = Compilation No. x

    /sub‑subparagraph(s)

Ch = Chapter(s)

pres = present

def = definition(s)

prev = previous

Dict = Dictionary

(prev…) = previously

disallowed = disallowed by Parliament

Pt = Part(s)

Div = Division(s)

r = regulation(s)/rule(s)

ed = editorial change

reloc = relocated

exp = expires/expired or ceases/ceased to have

renum = renumbered

    effect

rep = repealed

F = Federal Register of Legislation

rs = repealed and substituted

gaz = gazette

s = section(s)/subsection(s)

LA = Legislation Act 2003

Sch = Schedule(s)

LIA = Legislative Instruments Act 2003

Sdiv = Subdivision(s)

(md) = misdescribed amendment can be given

SLI = Select Legislative Instrument

    effect

SR = Statutory Rules

(md not incorp) = misdescribed amendment

Sub‑Ch = Sub‑Chapter(s)

    cannot be given effect

SubPt = Subpart(s)

mod = modified/modification

underlining = whole or part not

No. = Number(s)

    commenced or to be commenced

 

Endnote 3—Legislation history

 

Name

Registration

Commencement

Application, saving and transitional provisions

Regional Investment Corporation (Agristarter Loans) Rule 2019

11 Apr 2019 (F2019L00604)

12 Apr 2019 (s 2)

 

Regional Investment Corporation (Agristarter Loans) Amendment (Loan Terms and Eligibility) Rule 2019

31 July 2019 (F2019L01028)

1 Aug 2019 (s 2(1))

 

Endnote 4—Amendment history

 

Provision affected

How affected

Part 1

 

s 2.............................................

rep LA s 48D

Part 2

 

s 7.............................................

am F2019L01028

s 8.............................................

am F2019L01028

s 9.............................................

am F2019L01028

s 10...........................................

am F2019L01028