Sections 1 to 4 [Debts] increases the amount of debt for which Famer-Lender Mediation Act by removing the $5,000 and cross-referencing a new provision in Section 6 of the bill, which establishes a minimum debt level of $15,000 with an inflator.

Section 5 [Debt exemption] exempts from the Farmer-Lender Mediation Act requirements for two years any new debt issued by a creditor to a farmer as the result of a farmer-lender mediation.

Section 6 [Minimum eligible debt amount] provides that a debt of less than $15,000 is not subject to Farmer-Lender Mediation Act requirements.  Requires University of Minnesota Extension to adjust this threshold for inflation every five years using a federal cost-of-production index.

Section 7 [Mediation request] requires a farmer participating in mediation to authorize University of Minnesota Extension to pull the farmer’s credit report.  The mediation request form completed by a farmer seeking mediation must notify the farmer that the farmer’s failure to list all significant unsecured creditors could result in a determination that the farmer is participating in mediation in bad faith.

Section 8 [Financial analyst] requires the financial analyst assigned to prepare a farmer for mediation to assure that all relevant financial information is prepared prior to the first mediation meeting with the creditors.

Section 9 [Orientation session] requires the mediator to inform the farmer prior to the first mediation meeting that participating in good faith requires addressing any inadequacies in the farmer’s records that were identified by the financial analyst.

Section 10 [Mediation proceeding notice] requires University of Minnesota Extension to send a mediation proceeding notice and claim form to any secured creditors that the farmer did not reveal, but that were discovered by University of Minnesota Extension by examining the farmer’s credit report.

Section 11 [End of mediation] requires the mediation termination statement prepared by the mediator to include the date on which the mediation ended and to identify any new debt issued by a creditor to the farmer as a result of the mediation.

Section 12 [Obligation of good faith] requires University of Minnesota Extension to notify all parties, prior to the initial mediation meeting, of their obligation to participate in good faith and the consequences of failing to participate in good faith. This section also: 

(1) provides that bad-faith participation includes a farmer’s failure to provide complete financial information no later than the initial mediation meeting with the creditors; and

(2) adjusts the amount that a creditor is required to release to the farmer each month for living expenses, net of any off-farm income, to the lesser of  $3,800 or 150 percent of the amount the farmer’s family would receive under the Minnesota Family Investment Program (MFIP).  Current law for necessary living expenses was the lesser of $1,600 or 150 percent of the amount the farmer’s family would receive under the MFIP.

Section 13 [Repealer] repeals the definition of “necessary living expenses” since it is being incorporated into the obligation of good faith section of the law.

Section 14 [Effective date] makes this act applicable only to new debt issued on or after August 1, 2017.

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