Louisiana Administrative Code
Title 7 - AGRICULTURE AND ANIMALS
Part V - Advertising, Marketing and Processing
Chapter 7 - Market Commission-Agricultural Production Linked Deposit Loan Program
Subchapter A - Authorization and Administration of Agricultural Products Processing Linked Deposit Loan Program
Section V-705 - Linked Deposit Loan Program Authorization; Lending Institution Requirements; Applicants Requirements and Conditions for Approval

A. The treasurer may invest in linked deposits, as provided and defined by R.S. 49:327.2, and, also defined herein, 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, $10,000,000. When deciding whether to invest in linked deposits, the treasurer shall give priority to the investment, liquidity, and cash flow needs of the state and a determination of the financial soundness of the eligible lending institution.

B. 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 credit worthiness 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 linked deposit application.

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D. 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 penalty provided for in R.S. 14:133.

E. In considering which eligible agricultural products processing business 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.

F. The eligible lending institution shall forward to the commissioner and the treasurer for review a linked deposit loan package. The package shall include such information as required by the commissioner including the amount of the loan requester, 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 herein and shall, for each eligible agricultural products processing business, certify the present borrowing rate applicable to each specific eligible agricultural products processing business. Within 45 days after receipt, the commissioner shall provide written recommendations to the treasurer on each linked deposit loan package received from eligible financial institutions.

G. 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. The treasurer shall notify the commissioner and the eligible lending institution of acceptance or rejection of a linked deposit loan package within 15 days of receipt of the recommendations of the commissioner.

H. 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 3 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.

I. 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 Chapter. 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. However, upon placement of a linked deposit, the treasurer will give priority to renewal of existing linked deposits prior to placement of new linked deposits. Prior to renewal of linked deposits, the treasurer shall continue to give priority to the investment, liquidity cash flow needs of the state and a determination of the financial soundness of the eligible lending institution.

J. 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.

K. 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 3 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 leading institution and filed with the treasurer and the commissioner.

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