Louisiana Revised Statutes 49:327.1 – Linked deposit program for low-interest agricultural production loans
Terms Used In Louisiana Revised Statutes 49:327.1
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Continuance: Putting off of a hearing ot trial until a later time.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fixed Rate: Having a "fixed" rate means that the APR doesn't change based on fluctuations of some external rate (such as the "Prime Rate"). In other words, a fixed rate is a rate that is not a variable rate. A fixed APR can change over time, in several circumstances:
- You are late making a payment or commit some other default, triggering an increase to a penalty rate
- The bank changes the terms of your account and you do not reject the change.
- The rate expires (if the rate was fixed for only a certain period of time).
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. Source: OCC
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
A. The legislature finds that many farmers throughout the state are experiencing economic crisis due to low commodity prices, rising production costs, dropping land values, and natural disasters. Accordingly, it is declared to be the public policy of this state to provide lower cost funds for low interest agricultural production loans through the linked deposit program.
B. As used in this Section:
(1) “Agricultural production loan” means any loan made by a lending institution to a farmer under the linked deposit program. An agricultural production loan may only be made and used for one or more of the following purposes:
(a) If necessary for the continuance of the operation of the farm through the crop or production year, repair of agricultural equipment or machinery, or purchase of used replacement equipment or machinery.
(b) Operating capital including, but not limited to, capital necessary for the rental of equipment or machinery and the purchase of seed, feed, fertilizer, chemical, crop insurance, livestock, and production-related energy, labor, or veterinarian fees.
(c) Refinancing all or a portion of a loan entered into before the effective date of this Section for a purpose set forth in Subparagraphs (a) or (b).
(2) “Farmer” means any person that:
(a) Is an owner and operator or an operator of a farm engaged in the production of agricultural goods, and if incorporated, has a majority of the stock owned by persons operating the farm for which the loan is sought.
(b) Is headquartered in this state.
(c) Conducts agricultural operations exclusively in this state.
(d) Employs less than ten employees.
(e) Is a resident of this state, or if a corporation or multi-member entity, the majority of the stockholders or members are residents of this state.
(f) Is organized for profit.
(g) Has gross income from the agricultural operation which is at least fifty percent of his total income.
(h) Has a positive net worth.
(i) Repealed by Acts 1993, No. 595, §2, eff. June 15, 1993.
(3) “Lending institution” means any state bank organized under the laws of this state and any national bank having its principal office in this state which is authorized to make agricultural production loans and agrees to participate in the linked deposit program.
(4) “Linked deposit” means a certificate of deposit placed by the state treasurer with a lending institution at three percent below existing market rates, as determined and calculated by the state treasurer, provided the institution agrees to lend the value of such deposit, according to the deposit agreement required by this Section, to farmers at three percent below the existing borrowing rate applicable to each specific farmer at the time of the deposit of state funds in the lending institution.
(5) “Treasurer” means the state treasurer.
C. The state treasurer may invest in linked deposits. However, the total amount so deposited at any one time shall not exceed, in the aggregate, ten million dollars.
D. Any lending institution that desires to receive a linked deposit shall accept and review applications for loans from farmers. The lending institution shall apply all usual lending standards to determine the creditworthiness of each farmer.
E.(1) Only one loan shall be made and be outstanding at any one time to any farmer.
(2) The maximum amount which may be loaned to any farmer at any one time shall be one hundred thousand dollars.
(3) No loan shall be made to any officer or director of the lending institution making the loan.
(4) A farmer shall certify on his loan application that the loan shall be used exclusively for one or more of the purposes set forth in this Section.
F. The lending institution shall forward to the treasurer a linked deposit loan package, in the form and manner prescribed by the treasurer. The package shall include such information as required by the treasurer, including the amount of each loan requested. The institution shall certify that each applicant is an eligible farmer and the amount to be loaned and the borrowing rate applicable to each farmer.
G. The treasurer may accept or reject a linked deposit loan package or any portion thereof.
H. Upon acceptance of the linked deposit loan package or any portion thereof, the treasurer may place certificates of deposit with the lending institution at three percent below the current market rates, as determined and calculated by the treasurer. When necessary, the treasurer may place certificates of deposit prior to acceptance of a linked deposit loan package.
I. The lending institution shall enter into a deposit agreement with the treasurer which shall include the requirements necessary to carry out the purposes of this Section. The requirements shall reflect the agricultural conditions prevailing in the lending institution’s lending area. The agreement may specify the period of time in which the lending institution is to loan funds upon the placement of a linked deposit, and shall include provisions for the certificates of deposit to mature within a period not to exceed one year. The treasurer may renew a certificate of deposit for additional periods of time, each of which shall not exceed one year. Interest shall be paid at the times determined by the treasurer.
J. The period of time for which each certificate of deposit is placed with a lending institution shall be neither longer nor shorter than the period of time for which the linked deposit shall be used to provide loans at reduced interest rates. The agreement shall further provide that the state shall receive market interest rates on any certificate of deposit or any portion thereof for any period of time for which there shall be no corresponding linked deposit loan outstanding to a farmer.
K. Lending institutions shall comply with the provisions of this Section and the rules and regulations adopted under this Section.
L. Upon placement of a linked deposit, a lending institution shall loan funds to each approved farmer listed in the linked deposit loan package and in accordance with the deposit agreement. Each loan shall be at a fixed rate of interest which shall be three percent below the current borrowing rate applicable to each farmer as determined pursuant to rules and regulations adopted under this Section. All records and documents pertaining to the linked deposit program shall be segregated by each lending institution for ease of identification and examination. A certification of compliance with this Section in the form and manner prescribed by the treasurer shall be completed by the lending institution and filed with the treasurer.
M. The treasurer and the commissioner of agriculture and forestry shall take any and all steps necessary to implement the linked deposit program and monitor compliance of lending institutions and farmers with the provisions of this Section and the rules and regulations adopted under this Section.
N. Annually, by February first, the treasurer shall report on the linked deposit program for the preceding calendar year to the governor, commissioner of agriculture, commissioner of financial institutions, president of the Senate, speaker of the House of Representatives, chairman of the Senate Committee on Agriculture, Forestry, Aquaculture and Rural Development, and the chairman of the House Committee on Agriculture, Forestry, Aquaculture and Rural Development. The report shall include each linked deposit made by the treasurer during the year and information regarding the nature, terms, and amounts of the loans upon which the linked deposits were based and the farmers to whom the loans were made. The report shall not include the assets, liabilities, or percent equity of any recipient farmer but shall include a statement by the treasurer that the lending institutions have certified that all recipient farmers meet the requirements of this Section.
O. Neither the state, the commissioner of agriculture and forestry, nor the treasurer shall be liable to any lending institution in any manner for payment of the principal or interest on any loan to a farmer under this Section. Any delay in payments or default on the part of a farmer shall not in any manner affect the deposit agreement between the lending institution and the state treasurer. The deposits made by the treasurer under this program shall not be considered pledged in any way to the lending institution in the event of a loan default.
P. The treasurer and the commissioner of agriculture and forestry may adopt rules and regulations necessary to implement and enforce the provision of this Section in accordance with the Administrative Procedure Act.
Q. Whoever intentionally violates any provision of this Section shall be guilty of a misdemeanor and shall be fined not more than five hundred dollars or imprisoned not more than six months, or both, for each violation.
Acts 1986, No. 228, §1, eff. June 28, 1986; Acts 1993, No. 595, §§1 and 2, eff. June 15, 1993; Acts 2003, No. 116, §3, eff. May 28, 2003.