This instrument is the Regional Investment Corporation (Agristarter Loans) Amendment Rule 2020.

This instrument commences the day after it is registered.

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

Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

Schedule 1—Amendments

Regional Investment Corporation (Agristarter Loans) Rule 2019

1 Section 4 (paragraph (c) of the note after the section heading)

Repeal the paragraph.

2 Section 4 (definition of agristarter loan)

Omit ‘purchaser’, substitute ‘first farmer’.

3 Section 4

Insert:

farm asset successor means a person who holds the sole or a controlling interest in a farm business and:

(a) has recently inherited or will inherit farm assets; or

(b) has recently acquired or will acquire farm assets under a succession plan.

Note: Examples of farm assets include farm land, farm infrastructure and farm equipment.

4 Section 4 (definition of farm business inheritor)

Repeal the definition, substitute:

farm business successor means a person who:

(a) has recently inherited or will inherit an interest in a farm business; or

(b) has recently acquired or will acquire an interest in a farm business under a succession plan.

5 Section 4

Insert:

first farmer means a person who is seeking to purchase, establish or develop a farm business in which the person holds or will hold the sole or a controlling interest.

first farmer loan means a loan made to a first farmer under section 9.

member of a farm business means, where the farm business is carried on by:

(a) a sole trader—the sole trader; or

(b) a partnership—a partner of the partnership; or

(d) a corporation (within the meaning of the Corporations Act 2001)—a member of the corporation.

6 Section 4

Insert:

principal business pursuit of a person means a business pursuit:

(a) to which the person contributes or plans to contribute at least 50 per cent of their labour; and

(b) from which the person derives or plans to derive at least 50 percent of their income.

7 Section 4 (definitions of purchaser and purchaser loan)

Repeal the definitions.

8 Section 4

Insert:

succession arrangements mean the succession planning process or activities identified in the succession planning process.

9 Section 4 (definition of succession loan)

Repeal the definition, substitute:

succession loan means a loan made to a farm business, a farm business successor or a farm asset successor under section 8.

10 Subsections 5(2) and 5(3)

Repeal the subsections, substitute:

Purpose of program

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

(a) first farmers to purchase, establish or develop a farm business in which they hold or will hold the sole or a controlling interest; or

(b) farm businesses, farm business successors and farm asset successors with succession arrangements.

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:

(a) trade and commerce with other countries, and among the States; and

(b) a Territory.

11 Subsection 6(1)

Repeal the subsection, substitute:

(1) To obtain an agristarter loan, a first farmer, farm business, farm business successor or farm asset successor must make an application to the Corporation.

12 Sections 7, 8 and 9

Repeal the sections, substitute:

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; and

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

(f) that are carried on by a sole trader, partnership, a trust, or corporation (within the meaning of the Corporations Act 2001); and

(g) where the entity carrying on the farm business is registered for tax purposes in Australia with an Australian Business Number, and is registered under the A New Tax System (Goods and Services Tax) Act 1999; and

(h) where the entity carrying on the farm business is not under external administration or bankrupt.

8 Grant of a succession loan

Eligibility requirements—succession loans

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

(a) the farm business is undertaking or has undertaken succession planning; and

(ab) the loan is to support succession arrangements; and

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

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

(e) in respect of a loan to support farm business succession, after the succession arrangements are carried out:

(i) at least one member of the farm business has experience operating a farm business or a demonstrated potential to operate a farm business; and

(ii) at least one member of the farm business intends to have the farm business as their principal business pursuit; and

(iii) the business will be an eligible farm business; and

(f) in respect of a loan to support farm asset succession, after the succession arrangements are carried out, the farm business in which the farm asset successor holds the sole or a controlling interest:

(i) will have at least one member who has experience operating a farm business or a demonstrated potential to operate a farm business; and

(ii) will have at least one member who intends to have the farm business as their principal business pursuit; and

(iii) will be an eligible farm business; and

(g) in respect of succession loans provided directly to a farm business, at least one member of the farm business has the farm business as their principal business pursuit.

When a succession loan must not be granted

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

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

(b) the loan is made:

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

(ia) to support farm asset succession in respect of a farm business in which a farm asset successor holds the sole or a controlling interest, and 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 first farmer loan

Eligibility requirements—first farmer loans

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

(aa) the loan is for one or more of the following purposes:

(i) purchasing the sole or a controlling interest in a farm business;

(ii) establishing a farm business in which the first farmer will hold the sole or a controlling interest;

(iii) developing a farm business that the first farmer has recently acquired or will acquire, being a farm business in which the first farmer holds or will hold the sole or a controlling interest;

(iv) developing a farm business that the first farmer has recently established or will establish, being a farm business in which the first farmer holds or will hold the sole or a controlling interest; and

Note: A first farmer loan may be granted for one or more of the above purposes. The loan can be used to, among other things, purchase an interest in a farm business, acquire farm assets (including land, infrastructure, equipment and stock), refinance loans associated with a farm business, and cover farm costs (including operating expenses, costs associated with purchasing an interest in a farm business and costs associated with acquiring farm assets).

(a) the first farmer has obtained or will obtain within a reasonable period a loan on commercial terms; and

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

(d) the farm business will be an eligible farm business; and

(e) the first farmer has not previously held the sole or a majority interest in a farm business other than a recently-acquired or recently-established farm business in respect of which the first farmer loan is sought; and

(f) the first farmer has at least three years of relevant on-farm or equivalent experience; and

(g) the first farmer intends to have the farm business as their principal business pursuit.

When a first farmer loan must not be granted

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

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

(b) 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.

13 Before paragraph 10(3)(a)

Insert:

(aa) is, pursuant to its terms, to be applied:

(i) in the case of a succession loan—to support succession arrangements in respect of a farm business that is or will be an eligible farm business; and

(ii) in the case of a first farmer loan—to support the purchase, establishment or development of a farm business that is or will be an eligible farm business; and

14 Subsection 10(5)

After “security”, insert “, including”.

15 After subsection 14(1)

Insert:

(1A) The program guidelines must be developed in consultation with the responsible Ministers.

16 Before paragraph 14(2)(a)

Insert:

(aa) specify the uses to which agristarter loans can be applied, consistently with this rule and having regard to the purpose of the program; and