(1)  Title 80, chapter 12, MCA, authorizes the authority to provide loans for a variety of purposes.

(2)  Eligible loan activities consist of financing purchases of depreciable agricultural property, agricultural improvements, and agricultural land.

(a)  The authority will finance purchase of personal property suitable for use in farming/ranching for which an income tax deduction for depreciation is allowable in computing federal income taxes and which is located on agricultural land.   Examples are: livestock used for breeding purposes, farm/ranch machinery, trucks, etc. Feeder cattle, pigs or lambs do not qualify as depreciable property.

(b)  The authority will finance the purchase of improvements, buildings, structures or fixtures located on agricultural land which are suitable for use in farming/ranching. Examples are: confinement systems for swine, cattle, or poultry, barns and other out buildings, grain storage facilities, silos, tilling and soil conservation practices such as terraces, farm ponds, erosion control structures, waterways, etc.

(c)  The authority will finance the purchase of land in Montana suitable for farming/ranching and which is or will be operated for farming/ranching purposes by an individual beginning farmer/rancher who will be the principal user of such land and who will materially and substantially participate in the operation and management of the farm/ranch. Purchase of land for speculative purposes is ineligible for loan under this program.   The purchase of land that is entirely enrolled in conservation reserve program (CRP)  is not permitted.Depending on whether a portion of the loan is used to finance a house (not to exceed 5%)  , 20 to 25% of the loan proceeds may be used to purchase CRP acres.

(d)  Loan application for the exclusive purpose of acquiring a personal residence is not eligible for a loan under this program.

(3)  All funds provided by the authority from the sale of bonds will be administered under the terms and conditions of applicable state and federal law, appropriate state and federal rules and regulations including those of the authority and any agreements and contracts deemed necessary by the authority.