Louisiana Revised Statutes 49:327.2 – Linked deposit program for low-interest agricultural product processing loans
Terms Used In Louisiana Revised Statutes 49:327.2
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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).
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- 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
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
A. Louisiana agricultural products constitute a significant element in the state’s economy. To a large extent, Louisiana agricultural products are not processed in Louisiana. In order to expand the state’s economic base, to increase its ability for final processing of Louisiana agricultural products, and to increase its capacity to export value-added agricultural products, it is necessary that the state encourage and support the development and expansion of agricultural processing plants in this state. Accordingly, it is declared to be the public policy of the state to provide appropriate support, through the linked deposit loan program herein established, for low-interest loans to any person, partnership, corporation, or cooperative who owns, leases, or operates, or who seeks to own, lease, or operate, an agricultural product processing plant in this state. It is the legislative intent that such lower cost loans shall result in a significant contribution to the economic development of the state and assist in maintaining or improving business profitability as well as preserving and creating jobs for Louisiana citizens.
B. As used in this Section:
(1) “Commissioner” means the commissioner of the Louisiana Department of Agriculture and Forestry.
(2) “Eligible agricultural products processing business” means any person, partnership, corporation, or cooperative which possesses all of the following characteristics:
(a) Is headquartered in this state.
(b) Maintains offices and operating facilities in this state and transacts business in this state.
(c) Employs fewer than one hundred fifty full-time employees, eighty percent of whom are residents of this state.
(d) Is organized for profit.
(e) Is engaged in the processing or marketing of any agricultural, agronomic, horticultural, silvicultural, or aquacultural crop, or raw product derived therefrom, or any final derivative resulting from a combination or breakdown of raw farm materials.
(3) “Eligible lending institution” means any bank located in this state and organized under the laws of this state and any national bank having its principal office in this state which is authorized to make commercial or agricultural loans and which agrees to participate in the linked deposit program.
(4) “Linked deposit” means a certificate of deposit placed by the treasurer with an eligible lending institution at three percent below existing investment rates, as determined and calculated by the treasurer, provided the institution agrees to lend the value of such deposit, according to the deposit agreement required by this Section, to eligible agricultural products processing businesses at three percent below the existing borrowing rate applicable to each specific business at the time of the deposit of state funds in the lending institution.
(5) “Treasurer” means the treasurer of the state of Louisiana.
C. The treasurer may invest in linked deposits, as defined by this Section, provided that at the time of placement of any linked deposit the total amount of such investments at any one time shall not exceed, in the aggregate, ten million dollars. When deciding whether to invest in linked deposits, the treasurer shall give priority to the investment, liquidity, and cash flow needs of the state.
D. An eligible lending institution that desires to receive a linked deposit shall accept and review applications for loans from eligible agricultural products processing businesses. The eligible lending institution shall apply all usual lending standards to determine the creditworthiness of each eligible agricultural products processing business. The eligible lending institution shall not charge, levy, or collect any loan application fee, processing fee, or other charges other than its normal loan application fee, processing fee, or other charges when handling a link deposit application.
E.(1) Only one loan through the linked deposit program shall be made and shall be outstanding at any one time to any eligible agricultural products processing business.
(2) The maximum amount which may be loaned to any eligible agricultural products processing business at any one time shall be two hundred thousand dollars.
(3) No loan shall be made to any officer or director of the lending institution making the loan.
F. An eligible agricultural products processing business shall certify on its loan application that the reduced rate loan will be used exclusively to create new jobs or preserve existing jobs and employment opportunities in the state. Whoever knowingly files a false statement concerning such application shall be guilty of the offense of filing false public records and shall be subject to the penalty provided for in La. Rev. Stat. 14:133.
G. In considering which eligible agricultural products processing businesses to include in the linked deposit loan package for reduced rate loans, the eligible lending institution shall give priority to the economic needs of the area of the state in which the business is located, the number of jobs to be created or preserved in the state by the receipt of such loans, and such other factors as the eligible lending institution considers appropriate to determine the relative financial need of the eligible agricultural products processing business.
H. The eligible lending institution shall forward to the commissioner for review a linked deposit loan package, in the form and manner prescribed by the commissioner. The package shall include such information as required by the commissioner including, the amount of the loan requested, the number of jobs to be created or sustained in the state by each eligible agricultural products processing business, the ratio of state funds to be deposited to jobs sustained or created, and any reports, statements, or plans applicable to the business, the overall financial need of the business, and such other factors as the commissioner considers appropriate. The eligible financial institution shall certify that each applicant is an eligible agricultural products processing business as defined by this Section and shall, for each eligible agricultural products processing business, certify the present borrowing rate applicable to each specific eligible agricultural products processing business. The commissioner shall provide written recommendations to the treasurer on each linked deposit loan package received from eligible financial institutions.
I. The treasurer may accept or reject a linked deposit loan package or any portion thereof, based on the treasurer’s review of the recommendations of the commissioner, the availability and amount of state funds to be deposited, and a determination of the financial soundness of the financial institution in which the deposit is to be made.
J. Upon acceptance of the linked deposit loan package or any portion thereof, the treasurer may place certificates of deposit with the eligible lending institution at three percent below the current investment 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.
K. The eligible 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 market conditions prevailing in the eligible 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 in one year increments but in no event shall the total period of time that a certificate of deposit is placed with any lending institution exceed three consecutive years. Interest shall be paid at the times determined by the treasurer.
L. The period of time for which each certificate of deposit is placed with an eligible 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 investment 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 an eligible agricultural products processing business.
M. Eligible lending institutions shall comply fully with the provisions of this Section and the rules and regulations adopted under this Section.
N. Upon placement of a linked deposit with an eligible lending institution, the institution shall lend such funds to each approved eligible agricultural products processing business listed in the linked deposit loan package. Each loan shall be at a fixed rate of interest for a period of one year which shall be three percent below the current borrowing rate applicable to each eligible agricultural products processing business. 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 and the commissioner.
O. The treasurer and the commissioner shall take any and all steps necessary to implement the linked deposit program and monitor compliance of eligible lending institutions and eligible agricultural products processing businesses with the provisions of this Section and the rules and regulations adopted under this Section.
P. Annually, by February first, the treasurer shall report on the linked deposit program for the preceding calendar year to the governor, the commissioner of financial institutions, the president of the Senate, the speaker of the House of Representatives, the 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 agricultural products processing businesses to whom the loans were made. The report shall not include the assets, liabilities, or percent equity of any recipient agricultural products processing business, but shall include a statement by the treasurer that the lending institutions have certified that all recipient agricultural products processing businesses meet the requirements of this Section.
Q. Neither the state, the commissioner, nor the treasurer shall be liable to any lending institution in any manner for payment of the principal or interest on any loan to an eligible agricultural products processing business under this Section. Any delay in payments or default on the part of an agricultural products processing business shall not in any manner affect the deposit agreement between the eligible lending institution and the treasurer. The deposits made by the treasurer under this program shall not be considered pledged in any way to the eligible lending institution in the event of a loan default.
R. The treasurer and commissioner shall adopt rules and regulations in accordance with the Administrative Procedure Act as may be necessary to implement and enforce the provisions of this Section.
S. 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 no more than six months, or both, for each violation.
Acts 1989, No. 717, §1; Acts 2003, No. 116, §3, eff. May 28, 2003.