{"id":"F2020L00329","name":"Regional Investment Corporation (Drought Loans Expansion) Rule 2020","slug":"regional-investment-corporation-drought-loans-expansion-rule-2020","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":100886,"registerId":"commonwealth-F2020L00329-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Part 1","sectionType":"part","heading":"Preliminary","content":"## Part 1—Preliminary","sortOrder":0},{"sectionNumber":"1","sectionType":"section","heading":"Name","content":"#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Authority","content":"#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Definitions","content":"#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"What is an eligible farm business?","content":"#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.","sortOrder":4},{"sectionNumber":"Part 2","sectionType":"part","heading":"Drought Loans Expansion Program","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":5},{"sectionNumber":"Division 1","sectionType":"division","heading":"Prescribing Drought Loans Expansion Program","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":6},{"sectionNumber":"6","sectionType":"section","heading":"Drought Loans Expansion Program prescribed","content":"#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.","sortOrder":7},{"sectionNumber":"7","sectionType":"section","heading":"Constitutional basis for program","content":"#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.","sortOrder":8},{"sectionNumber":"Division 2","sectionType":"division","heading":"Dealing with applications for expanded drought loans","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":9},{"sectionNumber":"8","sectionType":"section","heading":"Loan application must meet certain criteria","content":"#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.","sortOrder":10},{"sectionNumber":"9","sectionType":"section","heading":"Informing applicants of outcome of applications","content":"#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.","sortOrder":11},{"sectionNumber":"Division 3","sectionType":"division","heading":"Making expanded drought loans","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":12},{"sectionNumber":"10","sectionType":"section","heading":"Expanded drought loan not to be made where farm business loan available","content":"#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.","sortOrder":13},{"sectionNumber":"11","sectionType":"section","heading":"Purpose criteria—connection with drought","content":"#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.","sortOrder":14},{"sectionNumber":"12","sectionType":"section","heading":"Capacity to repay loan and provide security","content":"#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.","sortOrder":15},{"sectionNumber":"13","sectionType":"section","heading":"Financial criteria","content":"#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.","sortOrder":16},{"sectionNumber":"14","sectionType":"section","heading":"Business activities and ownership criteria","content":"#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.","sortOrder":17},{"sectionNumber":"Division 4","sectionType":"division","heading":"Determining terms and conditions of expanded drought loans","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":18},{"sectionNumber":"15","sectionType":"section","heading":"Maximum amount of expanded drought loans","content":"#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.","sortOrder":19},{"sectionNumber":"16","sectionType":"section","heading":"Extra terms and conditions of expanded drought loans","content":"#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.","sortOrder":20},{"sectionNumber":"Division 5","sectionType":"division","heading":"Collecting and dealing with payments and enforcing security","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":21},{"sectionNumber":"18","sectionType":"section","heading":"Corporation to pay amounts collected to Commonwealth","content":"#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).","sortOrder":22},{"sectionNumber":"19","sectionType":"section","heading":"Decisions on foreclosure should be made by Board","content":"#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).","sortOrder":23},{"sectionNumber":"Division 6","sectionType":"division","heading":"Dealing with debt relating to expanded drought loans","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":24},{"sectionNumber":"20","sectionType":"section","heading":"Mediation","content":"#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.","sortOrder":25},{"sectionNumber":"21","sectionType":"section","heading":"Waiver","content":"#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.","sortOrder":26},{"sectionNumber":"Division 7","sectionType":"division","heading":"Reporting to responsible Ministers","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":27},{"sectionNumber":"22","sectionType":"section","heading":"Quarterly reporting","content":"#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.","sortOrder":28},{"sectionNumber":"Division 8","sectionType":"division","heading":"Funding of expanded drought loans","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":29},{"sectionNumber":"23","sectionType":"section","heading":"Funding of expanded drought loans","content":"#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.","sortOrder":30},{"sectionNumber":"Division 9","sectionType":"division","heading":"Other matters relating to program","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":31},{"sectionNumber":"24","sectionType":"section","heading":"Charging of transaction costs","content":"#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.","sortOrder":32},{"sectionNumber":"25","sectionType":"section","heading":"Directions by responsible Ministers","content":"#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.","sortOrder":33},{"sectionNumber":"Part 3","sectionType":"part","heading":"Other functions relating to program","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the Regional Investment Corporation (Drought Loans Expansion) Rule 2020.\n\n#### 3 Authority\n\n  This instrument is made under the Regional Investment Corporation Act 2018.\n\n#### 4 Definitions\n\n> Note: A number of expressions used in this instrument are defined in the Act, including the following:\n\n    (a) Board;\n    (b) constitutional corporation;\n    (c) constitutional trade or commerce;\n    (d) Corporation;\n    (e) Desertification Convention;\n    (f) responsible Ministers;\n    (g) farm business loan.\n  In this instrument:\n\n> Act means the Regional Investment Corporation Act 2018.\n\n> affected area has the same meaning as in the Desertification Convention.\n\nClimate Change Conventions means:\n\n    (a) the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992; and\n    (b) the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997; and\n    (c) the Paris Agreement, done at Paris on 12 December 2015.\n\n> Note: The Convention, the Protocol and the Agreement are in Australian Treaty Series 1994 No. 2 (\\[1994\\] ATS 2), 2008 No. 2 (\\[2008\\] ATS 2) and 2016 No. 24 (\\[2016\\] ATS 24), respectively. In 2020, they could be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\n> commercial debt means debt established on commercial terms, at commercial interest rates.\n\n> eligible farm business has the meaning given by section 5.\n\n> expanded drought loan means a loan by the Corporation to an eligible farm business, on terms and conditions that include the following:\n\n    (a) the term of the loan is 10 years;\n    (b) only interest is payable for the first 5 years of the loan;\n    (d) the business must pay interest and repay the principal over the final 5 years of the loan;\n    (e) the principal of the loan may be repaid (wholly or partly) at any time during the term of the loan without penalty;\n    (f) all outstanding amounts must be repaid at the end of the term of the loan.\n\n> Note: Part 2 of the Regional Investment Corporation Operating Mandate Direction 2018 deals with the interest rates applying to the loan.\n\n> program means the Expanded Drought Loans Program prescribed by section 6.\n\n#### 5 What is an eligible farm business?\n\n  An eligible farm business is a farm business that:\n    (a) is not located in an affected area; and\n    (b) is not located in a Territory; and\n    (c) is not solely or mainly engaged in producing commodities for constitutional trade or commerce; and\n    (d) is not a constitutional corporation.\n\n## Part 2—Drought Loans Expansion Program\n\n### Division 1—Prescribing Drought Loans Expansion Program\n\n#### 6 Drought Loans Expansion Program prescribed\n\n  (1) For the purposes of paragraph 8(1)(g) of the Act, this section prescribes the Drought Loans Expansion Program.\n  (2) The Drought Loans Expansion Program is the program that:\n    (a) consists of the following activities:\n    (i) receiving applications for expanded drought loans, and dealing with the applications in accordance with Division 2;\n    (ii) making expanded drought loans in accordance with Division 3;\n    (iii) determining, in accordance with Division 4, the terms and conditions on which expanded drought loans are made;\n    (iv) taking security for expanded drought loans;\n    (v) charging borrowers for transaction costs incurred by the Corporation in relation to expanded drought loans;\n    (vi) collecting and dealing with payments of interest on, and repayments of principal of, expanded drought loans, and if required, enforcing security taken for such loans, in accordance with Division 5;\n    (vii) seeking, where the Corporation considers it appropriate, to recover any costs the Corporation incurs in taking action to enforce a loan agreement;\n    (viii) periodically reviewing expanded drought loans and the terms and conditions on which they are made;\n    (ix) dealing with debts relating to expanded drought loans in accordance with Division 6;\n    (x) reporting to the responsible Ministers on expanded drought loans in accordance with Division 7; and\n    (b) relates to expanded drought loans funded in accordance with Division 8.\n\n#### 7 Constitutional basis for program\n\n  The constitutional basis for the program is paragraph 51(xxix) of the Constitution, so far as it provides a basis for implementing Australia’s international obligations under the following:\n    (a) the Desertification Convention;\n    (b) one or more of the Climate Change Conventions.\n\n### Division 2—Dealing with applications for expanded drought loans\n\n#### 8 Loan application must meet certain criteria\n\n  (1) To obtain an expanded drought loan, an eligible farm business must make an application to the Corporation.\n  (2) To be valid, the application must:\n    (a) be in writing; and\n    (b) include the information (if any) required by the Corporation; and\n    (c) be accompanied by the documents (if any) required by the Corporation.\n  (3) The Corporation is not required to consider an application that is not valid.\n\n#### 9 Informing applicants of outcome of applications\n\n  The Corporation must ensure that an applicant for an expanded drought loan is informed of the outcome of their loan application as soon as practicable after a decision on the application has been made.\n\n### Division 3—Making expanded drought loans\n\n#### 10 Expanded drought loan not to be made where farm business loan available\n\n  The Corporation must not make an expanded drought loan to an eligible farm business where the business would be eligible to receive a farm business loan.\n\n#### 11 Purpose criteria—connection with drought\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless the loan will assist the business to:\n    (a) engage in drought preparedness activities; or\n    (b) manage or recover from the effects of drought by doing one or more of the following:\n    (i) restructuring its existing debt;\n    (ii) meeting its operating expenses;\n    (iii) enhancing its productivity.\n  (2) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(a)—the business is in financial need of assistance due to an event outside of its control; or\n    (b) where the business intends to use the loan funds for the purpose mentioned in paragraph (1)(b)—the business is in financial need of assistance as a consequence of drought.\n  (3) The Corporation must not make an expanded drought loan to an eligible farm business unless the business has a drought management plan that:\n    (a) outlines the activities that the businesses proposes to spend the loan funds on; and\n    (b) sets out the business’s drought preparedness, management and recovery strategies.\n\n#### 12 Capacity to repay loan and provide security\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business has the capacity to repay the loan; and\n    (b) the business provides sufficient security for the loan.\n\nTypes of security the Corporation must consider\n\n  (2) For the purposes of paragraph (1)(b), the Corporation must consider requiring security in the form of:\n    (a) a registered mortgage over land; or\n    (b) a registered mortgage over livestock; or\n    (c) a registered security interest in water rights.\n\n> Note: The program guidelines published under section 26 will set out other kinds of securities that the Corporation will consider and require in relation to expanded drought loans.\n\n#### 13 Financial criteria\n\n  The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) the Corporation is satisfied that the business is financially viable, or has sound prospects of a return to financial viability within 10 years; and\n    (b) the business:\n    (i) owes commercial debt; and\n    (ii) has the support of the commercial lender to the proposed concessional loan; and\n    (c) the entity carrying on the business is not bankrupt or under external administration; and\n    (d) the entity carrying on the 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.\n\n#### 14 Business activities and ownership criteria\n\n  (1) The Corporation must not make an expanded drought loan to an eligible farm business unless:\n    (a) all primary production aspects of the business are undertaken wholly within Australia; and\n    (b) the business is carried on by:\n    (i) a sole trader covered by subsections (2) and (3); or\n    (ii) a partnership whose partners include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same partner or different partners); or\n    (iii) a trust whose beneficiaries or unit‑holders include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same beneficiary or unit‑holder or different ones); or\n    (iv) a corporation (within the meaning of the Corporations Act 2001), other than:\n    (A) a public company (within the meaning of that Act); or\n    (B) a constitutional corporation;\n    whose members include a person covered by subsection (2) and a person covered by subsection (3) (whether those subsections cover the same member or different members).\n\n> Note: Constitutional corporations are excluded from subparagraph 14(1)(b)(iv) because such corporations are not eligible for loans under the program – see paragraph 5(d).\n\n  (2) This subsection covers a person who is an Australian citizen or permanent resident.\n  (3) This subsection covers a person:\n    (a) who has experience in operating a farm business; and\n    (b) whose principal business pursuit is the eligible farm business.\n  (4) An eligible farm business is a person’s principal business pursuit where the person devotes the majority of their labour to, and derives the majority of their income from, the business.\n\n### Division 4—Determining terms and conditions of expanded drought loans\n\n#### 15 Maximum amount of expanded drought loans\n\n  (1) The Corporation must not grant a loan that exceeds the maximum loan amount.\n  (2) The maximum loan amount, for an eligible farm business, is the lesser of the following:\n    (a) an amount that would result in the business holding 50% of its total debt in Commonwealth‑funded concessional loans;\n    (b) $2 million.\n  (3) The total debt of an eligible farm business is the sum of:\n    (a) the business’s commercial debt; and\n    (b) the amount owing under each Commonwealth‑funded concessional loan provided to the business.\n\n> Note: The program guidelines published under section 26 must deal with the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans.\n\n#### 16 Extra terms and conditions of expanded drought loans\n\n  The Corporation may determine the terms and conditions on which an expanded drought loan is made.\n\n> Note: The loan must be subject to the terms and conditions mentioned in the definition of expanded drought loan in section 4.\n\n### Division 5—Collecting and dealing with payments and enforcing security\n\n#### 18 Corporation to pay amounts collected to Commonwealth\n\n  The Corporation must pay the Commonwealth, as soon as reasonably practicable, all loan repayments received by the Corporation from recipients of expanded drought loans (including principal repayments and payments of interest, but excluding payments of any transaction costs the Corporation charged the recipients in relation to the loans).\n\n#### 19 Decisions on foreclosure should be made by Board\n\n  A decision of the Corporation as to whether or not to foreclose on an expanded drought loan should be made by the Board (not a delegate of the Corporation or the Board).\n\n### Division 6—Dealing with debt relating to expanded drought loans\n\n#### 20 Mediation\n\n  The Corporation must offer to undertake mediation in respect of debts relating to expanded drought loans, and, if the offer is accepted, undertake the mediation.\n\n#### 21 Waiver\n\n  A decision of the Corporation to waive a debt relating to an expanded drought loan:\n    (a) should be made by the Board (not a delegate of the Corporation or the Board); and\n    (b) must only be made after the Corporation has consulted the responsible Ministers and taken their views into account.\n\n### Division 7—Reporting to responsible Ministers\n\n#### 22 Quarterly reporting\n\n  The Corporation must provide a report on expanded drought loans to the responsible Ministers as at the end of every March, June, September and December, including information regarding:\n    (a) the uptake of expanded drought loans; and\n    (b) details of the portfolio of expanded drought loans; and\n    (c) financial performance information.\n\n> Note: The Corporation also has the function of providing information about expanded drought loans to the responsible Ministers on request: see section 27.\n\n### Division 8—Funding of expanded drought loans\n\n#### 23 Funding of expanded drought loans\n\n  (1) The Corporation will be funded to make expanded drought loans through an appropriation made by an Act.\n  (2) Funds for expanded drought loans will be provided to the Corporation upon the Corporation’s request to enable the Corporation to advance loan funds to recipients of those loans as required.\n  (3) The Corporation must:\n    (a) only request funds as they are required to advance loan funds to recipients of expanded drought loans; and\n    (b) only use funds provided for expanded drought loans for that purpose.\n\n### Division 9—Other matters relating to program\n\n#### 24 Charging of transaction costs\n\n  For the purposes of subparagraph 8(5)(b)(i) of the Act, the Corporation may charge transaction costs incurred by the Corporation in relation to loans granted under the program.\n\n#### 25 Directions by responsible Ministers\n\n  (1) For the purposes of subparagraph 8(5)(b)(iii) of the Act, the responsible Ministers may give written directions to the Corporation relating to the program.\n  (2) The responsible Ministers must not give a direction in relation to a particular expanded drought loan.\n\n## Part 3—Other functions relating to program\n\n### Division 1—Corporation functions\n\n#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.\n\n#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.\n\n### Division 2—Board functions\n\n#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.\n\n#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.\n\n## Part 4—Transitional, application and savings provisions\n\n#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.\n\n#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.\n\n#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":34},{"sectionNumber":"26","sectionType":"section","heading":"Preparing and publishing guidelines relating to program","content":"#### 26 Preparing and publishing guidelines relating to program\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) preparing, in consultation with the responsible Ministers, written guidelines about the program, including guidelines about the following:\n    (i) the types of security the Corporation will consider and require for expanded drought loans;\n    (ii) how the Corporation will determine whether persons are Australian citizens or permanent residents;\n    (iii) the right to request review of decisions to make or refuse expanded drought loans, and the process for requesting such reviews;\n    (iv) the kind of loans that the Corporation considers to be Commonwealth‑funded concessional loans; and\n    (b) publishing the guidelines.","sortOrder":36},{"sectionNumber":"27","sectionType":"section","heading":"Providing information and advice to responsible Ministers","content":"#### 27 Providing information and advice to responsible Ministers\n\n  For the purposes of paragraph 8(1)(h) of the Act, the Corporation has the functions of:\n    (a) providing information about expanded drought loans to the responsible Ministers on request; and\n    (b) advising the Commonwealth on matters that will improve the operation and policy outcomes of expanded drought loans.","sortOrder":37},{"sectionNumber":"28","sectionType":"section","heading":"Ensuring internal review of decisions about loans","content":"#### 28 Ensuring internal review of decisions about loans\n\n  For the purposes of paragraph 15(1)(e) of the Act, the Board has the function of ensuring that the Corporation develops and applies procedures for reviewing decisions (the original decisions) to make or refuse expanded drought loans, that:\n    (a) are transparent, robust and fair; and\n    (b) require reviews to be carried out, and decisions to be made on reviews, by persons who were not the primary decision‑makers of the original decisions; and\n    (c) are consistent with principles of procedural fairness.","sortOrder":39},{"sectionNumber":"30","sectionType":"section","heading":"Developing and applying loan management policies and procedures","content":"#### 30 Developing and applying loan management policies and procedures\n\n  (1) For the purposes of paragraph 15(1)(e) of the Act, the Board has the functions of:\n    (a) ensuring that the Corporation develops the policies and procedures described in subsection (2), having regard to the following matters:\n    (i) the concessional nature of expanded drought loans;\n    (ii) the effect on eligible farm businesses of taking action in accordance with those policies and procedures; and\n    (b) ensuring that the Corporation applies those policies and procedures, and takes those matters into account when doing so.\n  (2) Subsection (1) applies to policies and procedures for managing expanded drought loans in a prudential manner to minimise the risk of default, including policies and procedures for the following:\n    (a) arrears management;\n    (b) recovery action;\n    (c) foreclosure arrangements;\n    (d) waiving debt after consulting the responsible Ministers;\n    (e) writing off debt;\n    (f) handling disputes and complaints.","sortOrder":40},{"sectionNumber":"Part 4","sectionType":"part","heading":"Transitional, application and savings provisions","content":"## Part 4—Transitional, application and savings provisions","sortOrder":41},{"sectionNumber":"31","sectionType":"section","heading":"Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions","content":"#### 31 Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020—transitional and application provisions\n\n  (1) In this section:\n  commencement day means 1 October 2020.\n\n> Note: This is the day on which the instrument that made the relevant amendments commenced.\n\n> relevant amendments means the amendments to this instrument made by the Regional Investment Corporation (Drought and Small Business Drought Loans) (Cessation of Interest‑Free‑Period) Amendment Instrument 2020.\n\n  (2) Where an application for an expanded drought loan was made before the commencement day, this instrument applies in relation to the application and any loan offered on the basis of the application as if the relevant amendments had not been made.","sortOrder":42},{"sectionNumber":"32","sectionType":"section","heading":"Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision","content":"#### 32 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2025 apply to the determining of interest rates as mentioned in section 17 after the day on which this section commences.","sortOrder":43},{"sectionNumber":"33","sectionType":"section","heading":"Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision","content":"#### 33 Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026—application provision\n\n  The amendments of this instrument made by Part 2 of Schedule 1 to the Regional Investment Corporation Legislation Amendment (Interest Rates) Instrument 2026 apply in relation to the 6‑month period beginning on 1 February 2026 and each later 6‑month period.","sortOrder":44}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"_metrics":{"completionTokens":640},"content_quality":"ok","complexity_score":7,"scope_assessment":{"changed":false,"description":"The legislation remains focused on its original purpose of establishing a drought loan program for eligible farm businesses. While it includes detailed operational requirements and future-dated amendment provisions, these do not expand beyond the core objective of providing concessional drought finance."},"complexity_factors":["Multiple cross-references to parent Act (Regional Investment Corporation Act 2018) and external treaties (Desertification Convention, Climate Change Conventions)","Nested eligibility criteria with multiple negative conditions (not in affected area, not in Territory, not constitutional corporation, not mainly export-focused)","Complex ownership structure requirements covering sole traders, partnerships, trusts, and private corporations with specific member characteristics","Conditional logic for loan purposes with different financial need tests depending on intended use","Transitional provisions referencing future amendment instruments (2025 and 2026) creating temporal complexity","Defined terms that themselves reference other defined terms or external documents","Multiple divisions with interlocking functions between Corporation, Board, and responsible Ministers"],"plain_english_summary":"A government-backed Expanded Drought Loans program run by the Regional Investment Corporation offers concessional 10-year loans (interest-only for 5 years) to help Australian farm businesses prepare for, manage, or recover from drought. Loans fund preparedness, debt restructuring, operating costs, or productivity improvements, capped at $2 million and 50% of total debt, and require security.\n\nEligibility is limited to viable, State-based family farm businesses (citizen/PR owners, principal business) with commercial debt and bank support; excludes Territories, certain treaty “affected areas,” large exporters, and other farm‑loan recipients."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"This Rule materially expands the Regional Investment Corporation’s lending remit by prescribing a new concessional loan product and a dedicated \"Expanded Drought Loans Program\" with its own eligibility, prudential tests, governance rules, funding mechanics and reporting obligations (see ss6,4,11–16,23). Compared with a narrower domestic farm‑loan framework, the instrument adds: (1) a long‑term, interest‑only initial period loan design (definition); (2) specific exclusions and detailed ownership/structure eligibility rules (s5, s14); (3) a cap tying concessional exposure to 50% of total debt (s15); (4) Board and Minister roles for foreclosure, waivers and program directions (ss19,21,25); and (5) delegation to internal program guidelines and separate instruments for interest‑rate setting (s26; ss32–33). Those elements extend the Corporation’s operational, fiscal and policy footprint beyond simply administering existing short‑term drought assistance and place new budgetary and implementation responsibilities on the Commonwealth and the Corporation."},"complexity_factors":["Multiple defined terms with cross‑references to the Regional Investment Corporation Act and international instruments (definition block, s4)","Several layered eligibility criteria (s5, ss11–14) including negative exclusions (affected areas, Territories, constitutional corporations)","Nested ownership/structure conditions for who may carry on the business (s14(1)(b) with subsections (2)–(4))","Conditional lending tests combining purpose, financial need, lender support and prudential viability (ss11,13)","Loan cap calculation requiring aggregation of commercial debt and Commonwealth‑funded concessional loans (s15) and rules delegated to program guidelines (s26)","Delegation of operational detail to Corporation guidelines (s26) and separate instruments for interest rates (notes, ss32–33) — increases interpretive load","Board/Minister decision split (foreclosure, waivers, directions) with required consultations and prohibitions on directions about particular loans (ss19,21,25)","Transitional and staged application provisions covering earlier applications and future instrument amendments (ss31–33)","Varied security types (land, livestock, water rights) with differing legal enforcement regimes to be considered (s12)","Reporting, review and internal procedure obligations across multiple divisions (ss22,26,28,30)"],"plain_english_summary":"**What this Rule does (mechanics)\n\n- Creates and defines the \"Expanded Drought Loans Program\" run by the Regional Investment Corporation (the Corporation). (s6)\n- Prescribes a specific loan product — an \"expanded drought loan\" — with core terms: 10‑year term; interest‑only payments for the first 5 years; principal and interest repaid over the final 5 years; early principal repayment allowed without penalty; all outstanding amounts due at term end. (definition, s4)\n- Sets who may apply and who is excluded. An \"eligible farm business\" must not be in an \"affected area\" (as defined by the Desertification Convention), must not be in a Territory, must not be a constitutional corporation, and must not be mainly producing commodities for constitutional trade or commerce. (s5)\n- Sets substantive eligibility and prudential tests the Corporation must apply before making a loan: connection to drought or drought preparedness; demonstrable financial need; a written drought management plan; capacity to repay; sufficient security; financial viability or credible prospect of viability within 10 years; existing commercial debt and support from the commercial lender; not bankrupt or under external administration; Australian tax registration. (ss11–13)\n- Limits loan size: the lesser of an amount that would leave no more than 50% of the business’s total debt in Commonwealth‑funded concessional loans, or $2 million. Total debt is commercial debt plus amounts owing under other Commonwealth concessional loans. (s15)\n- Lists types of security the Corporation must consider (registered mortgage over land, mortgage over livestock, security interest in water rights) and requires the Corporation to publish guidelines on other acceptable securities. (s12, s26)\n- Requires the Corporation to collect repayments and pay receipts (principal and interest) back to the Commonwealth promptly; transaction costs charged to borrowers are excepted. (s18)\n- Assigns governance and decision roles: Board should decide foreclosure and is recommended to decide waiver decisions (and waivers require consultation with responsible Ministers); Board must ensure internal review procedures and prudential loan‑management policies. (ss19,21,28,30)\n- Requires quarterly reporting to the responsible Ministers on uptake, portfolio and financial performance. Ministers may issue written directions relating to the program generally, but not about individual loans. (ss22,25)\n- Funds are provided by appropriation and advanced to the Corporation on request as required to make loans; the Corporation must only request and use funds for that purpose. (s23)\n- Provides transitional and application rules for amendments (for example, a transitional rule preserving older terms for pre‑existing applications and later provisions about interest‑rate amendments). (ss31–33)\n\n\nWho this affects\n\n- Primary effect on small to medium farm businesses that meet the \"eligible farm business\" tests (citizenship/residency, Australian primary production, business structure limits, not constitutional corporations, not in declared \"affected areas\", not in Territories). (s5, s14)\n- Commercial lenders to those businesses: a condition of an expanded drought loan is that the business owes commercial debt and has the commercial lender's support for the concessional loan. That creates a role for private lenders in any assisted restructuring. (s13(b))\n- The Commonwealth budget/taxpayer: funds for loan advances come from appropriation and repayments are returned to the Commonwealth. (s23, s18)\n- The Corporation and its Board: new operational, reporting, prudential and review duties; Board-level decisions on foreclosures and waivers; obligations to prepare and publish program guidelines. (ss19,21,26,28,30)\n- Responsible Ministers: receive quarterly reports, can give written directions about the program (but not about specific loans), and must be consulted before waiving debt. (ss22,25,21)\n\n\nWhy it matters (stated purposes and the concrete tradeoffs)\n\n- Stated purpose: to provide concessional, longer‑term loans to farm businesses to support drought preparedness, manage or recover from drought impacts (including restructuring debt, meeting operating costs, or productivity measures). (s6, s11)\n\n- Costs and who pays: the program is funded by parliamentary appropriation (taxpayer funds). Loan receipts (principal and interest) are repaid to the Commonwealth; transaction fees charged to borrowers may be retained by the Corporation. Net fiscal cost depends on loan terms, default losses and administration costs. (ss23,18,24)\n\n- Incentives and behaviour changes:\n  - The product lowers near‑term cash outflows for recipients (interest‑only for 5 years), reducing immediate liquidity pressure but increasing medium‑term repayment obligations. (definition)\n  - Requirement that commercial lenders support the concession and that concessional loans be capped at 50% of total debt means the program is designed to be a partial complement to private finance rather than a full substitution. (s13(b), s15)\n  - Security requirements (land, livestock, water rights, others in guidelines) and Board oversight of foreclosure/waiver aim to preserve creditor discipline and recovery options. (s12, s19, s21)\n\n- Trade‑offs and implementation risks:\n  - Fiscal risk: if borrowers default, write‑offs or waivers (which require ministerial consultation) create direct costs to the budget. (s21,30)\n  - Assessment risk: the Corporation must judge \"capacity to repay\", \"financial viability or prospects within 10 years\" and the drought nexus; these are fact‑intensive judgments that could be administratively burdensome and contested. (ss11,13)\n  - Operational complexity: enforcing security in livestock or water rights is technically and legally different from land mortgages and could be costly. Guidelines are delegated to the Corporation to reduce uncertainty, but that shifts detail into administrative instruments. (s12, s26)\n  - Potential crowding or substitution: the cap at 50% and the requirement for commercial lender support reduce full crowding out of private credit, but some substitution of private lending or changed bargaining with lenders is possible because concessional finance improves borrower leverage. (s13(b), s15)\n\n\nConcrete decision‑makers and limits\n\n- The Corporation is the primary decision‑maker for applications and loan administration, subject to mandatory eligibility/prudential tests set in the Rule. (ss6,8,11–16)\n- The Board must decide foreclosure and is the recommended decision‑maker for waivers; waivers require consultation with responsible Ministers. The Board must also ensure internal review procedures and prudential policies are in place. (ss19,21,28,30)\n- Responsible Ministers can issue written directions about the program generally, but are not permitted to direct on particular loans. Ministers receive quarterly reports and are consulted on waivers. (ss22,25,21)\n\n\nWhere the Rule leaves detail to later instruments\n\n- The Corporation must publish program guidelines (in consultation with Ministers) to specify: the other securities it will accept, how it determines citizenship/permanent residency, review processes for decisions, and what counts as \"Commonwealth‑funded concessional loans\" for the 50% test. Those published guidelines will materially affect operation. (s26)\n- Interest‑rate methodology is handled separately (Operating Mandate Direction and later interest‑rate amendment instruments referenced). (note to definition; ss32–33)\n\n\nKey sections to read for applicants and administrators: definitions and eligibility (s4–5), purpose and nexus tests (s11), financial and security requirements (ss12–13), maximum loan cap (s15), funding and repayments (ss18,23), Board and Minister roles (ss19,21,22,25), and guideline/administration delegation (s26)."}},"importantCases":[],"_links":{"self":"/api/acts/regional-investment-corporation-drought-loans-expansion-rule-2020","history":"/api/acts/regional-investment-corporation-drought-loans-expansion-rule-2020/history","analysis":"/api/acts/regional-investment-corporation-drought-loans-expansion-rule-2020/analysis","conflicts":"/api/acts/regional-investment-corporation-drought-loans-expansion-rule-2020/conflicts","importantCases":"/api/acts/regional-investment-corporation-drought-loans-expansion-rule-2020/important-cases","documents":"/api/acts/regional-investment-corporation-drought-loans-expansion-rule-2020/documents"}}