Louisiana Administrative Code › Title 7 - AGRICULTURE AND ANIMALS › Part III - Agricultural Finance › Chapter 1 - General Provisions › Section III-101 - Definitions

Current through Register Vol. 50, No. 6, June 20, 2024
A. The words and
				terms defined in
				R.S.
				3:263 are applicable to this Part.
B. The following words and terms are defined
				for the purposes of this Part and are applicable to this Part.
Act
-the Louisiana Agricultural Finance Act
				  found in Chapter 3-B of Title 3 of the Louisiana Revised Statutes of 1950,
				  (R.S.
				  3:261 et seq.).
Agricultural
-the adjective form of
agriculture
as defined in
				  R.S.
				  3:263(6).
Farm
-the total of all areas of land, water,
				  or both in Louisiana, used by an agricultural producer to produce or harvest
				  one or more agricultural products, regardless of whether the area or areas are
				  located in more than one parish.
LAFA
-the Louisiana Agricultural Finance
				  Authority.
C. The following
				words and terms are defined for the purposes of the Louisiana Direct Placement
				Agricultural Revenue Bond Program (§§105-141) only.
Bond
or
Bonds
-LAFA Direct
				  Placement Agricultural Revenue Bonds which are exempt from federal taxation.
				  Such bonds are issued from time to time throughout the year, and each issue
				  will be identified by a letter designation, e.g., Series 1984-A, Series 1984-B,
				  etc. The letter designation merely identifies the date of issue of each series
				  of bonds. The proceeds of such bonds are used to purchase loans and pay the
				  costs of issuance of the bonds.
Bond Resolution
-the resolution adopted by
				  LAFA to authorize the issuance of a bond to be sold to a lender.
Borrower
-an individual, partnership, firm,
				  corporation, company, cooperative, association, society, trust or any other
				  business unit or entity, including any state or federal agency, which uses
				  proceeds of a loan for any project which meets the requirements of these
				  regulations.
Borrower's Certificate
-the certified
				  statement which each borrower must execute, prior to submission of the offer,
				  setting forth the borrower's eligibility to participate in the program.
Closing
-the date on which a loan is
				  originated by a lender, which shall be mutually agreed upon between lender and
				  borrower and sold to LAFA.
Code
-the Federal Internal Revenue Code of
				  1954 as amended. In these regulations, the term Code may have specific
				  reference to section 103(b)(6) of the
				  Internal Revenue Code and/or to regulations enacted by the Internal Revenue
				  Service pursuant thereunder.
Default
or
In Default
-with
				  respect to any loan, any payment of principal or interest which is more than 30
				  days in arrears.
Farm
-includes stock, dairy, poultry, fruit,
				  fur-bearing animal and truck farms; plantations; ranches; nurseries; ranges;
				  greenhouses or similar structures used primarily for the raising of
				  agricultural or horticultural commodities; and orchards.
Fee
or
Fees
-any and all of
				  the following:
a.
Application Fee
-a set fee based on the
				  total value of the loan which is paid by the borrower and transmitted by the
				  lender to LAFA for LAFA processing of the application for a loan.
b.
Commitment Fee
-a percentage of the total
				  value of the loan which is paid by the borrower to the lender prior to
				  submission of the offer to cover the costs of issuing the bond to support the
				  loan granted to the borrower. This fee is refundable to the borrower under the
				  conditions set forth in
				  §121. B hereof.
c.
Cost of Issue Fee
-a percentage of the
				  total value of the loan which is paid by the borrower to cover the costs of
				  issuing the bond to support the loan granted to the borrower. The fee is paid
				  in the form of a discount from the original principal amount of the loan when
				  purchased by a LAFA from lender.
d.
Origination Fee
-a percentage of the total
				  value of the loan which is paid by the borrower to the lender to cover the
				  costs of processing, originating, and disbursing the proceeds of the loan
				  granted to the borrower.
e.
Program Participation Fee
-a percentage of
				  the remaining principal balance of the loan granted to borrower which is paid
				  by the borrower to the lender on the due date of the annual payment directed by
				  trustee. The lender transmits to the trustee along with the loan payment, and
				  the proceeds thereof are used to cover the administrative costs of trustee and
				  LAFA.
First-Time Farmer
-an individual who has
				  never had any direct or indirect ownership interest in substantial farmland in
				  the operation of which such individual materially participated. Ownership or
				  participation by a spouse or child is treated as ownership or participation by
				  the individual. Substantial farmland means any parcel of land unless:
a. such parcel is smaller than 15 percent of the median farm
				  size in the parish in which such parcel is located; and
b. the fair market value of the land does not at any time
				  while held by the individual exceed $125,000.
Intent Resolution
-the resolution adopted by
				  LAFA stating its intent to accept the offer and to issue a bond, the proceeds
				  of which will be used to purchase an agricultural loan originated by the lender
				  and accepting the offer.
Interest Rate
-one of the following when
				  applied to a loan:
a.
Fixed Interest Rate
-a rate of interest
				  which does not change throughout the term of the loan.
b.
Variable Interest Rate
-a rate of interest
				  which may change from time to time at stated intervals throughout the term of
				  the loan.
c.
Prime Interest Rate
-the base rate on
				  corporate loans at large U.S. money center commercial banks as published in The
				  Wall Street Journal as the prime rate. When the prime rate is published in The
				  Wall Street Journal as a range in the form of a low and high rate, then in that
				  event, LAFA may designate a rate within the published range which shall be the
				  prime interest rate. When LAFA does not designate a rate within the published
				  range the prime interest rate shall be the high of the range.
IRS
-the Internal Revenue Service of the
				  United States.
LAFA
-the Louisiana Agricultural Finance
				  Authority, an agency of state government under the jurisdiction of the
				  Department of Agriculture and Forestry, and any of its duly authorized agents;
				  the term also means the issuer of Direct Placement Agricultural Revenue
				  Bonds.
Lender
-any of the following, when
				  participating in the program: a bank, bank or trust company, federal land bank,
				  production credit association, bank for cooperatives, building and loan
				  association, homestead, insurance company, investing banker, mortgage banker or
				  company, pension or retirement fund, savings bank or savings and loan
				  association, small business investment company, credit union, any other
				  financial institution authorized to do business in Louisiana or operating under
				  the supervision of any federal agency or any Edge Act Corporation or agreement,
				  or a corporation organized or operating pursuant to Section 25 of the Federal
				  Reserve Act.
Loan
or
Loans
-an
				  interest-bearing agricultural loan, described by an offer, originated by a
				  lender participating in the LAFA Program to an eligible borrower, and evidenced
				  by a loan note.
Loan File
-the loan documents pertaining to a
				  particular loan, which consist of the following, all in the form provided by
				  LAFA:
a. loan purchase agreement;
b. loan submission voucher;
c. opinion of lender's counsel;
d. officer's closing certificate;
e. loan note;
f. mortgage or any other evidence of security securing the
				  borrower's obligations under the loan note;
g. certificate of economic life; and
h. assignment of loan note.
Loan Note
-a promissory note or other
				  evidence of indebtedness executed by a borrower to evidence the borrower's
				  obligation to repay the loan.
Loan Purchase Agreement
-an agreement between
				  LAFA and a lender under which, among other required provisions, LAFA agrees to
				  purchase a loan after it is originated by the lender and the lender agrees to
				  repurchase the loan in the event of default by the borrower.
Loan Submission Voucher
-a document provided
				  by LAFA and submitted by the lender to the trustee requesting the purchase of
				  the loan by LAFA at a price equal to a specified percentage of the principal
				  amount of the loan and which also contains substantially the same terms and
				  conditions set forth in the loan terms schedule contained in the offer.
Loan Terms Schedule
-a loan description form,
				  to be attached to the offer, which describes the terms and conditions of the
				  proposed loan and the project to be financed with loan proceeds.
Offer
-the written document entitled Offer to
				  Originate and Sell Agricultural Loans executed by a lender setting forth the
				  terms and conditions whereby the lender agrees to originate and sell a loan to
				  LAFA and to purchase a bond in the same principal amount as the loan.
Origination Period
-a six-month period
				  beginning with the date of issuance of a bond by LAFA.
Principal User
-a person or company who uses
				  more than 10 percent of a project, measured by the value paid by such user for
				  the project. All capital expenditures for the project, must be taken into
				  account to determine which are principal users of the project. For example, A,
				  B, and C own Farm X in Parish X, each owning individually and not as a partner,
				  respectively, 55 percent, 40 percent, and 5 percent by value, of the farm. A
				  and B are principal users of Farm X (i.e., each owns more than 10 percent, by
				  value), but C is not a principal user of Farm X because C only owns 5 percent
				  by value. If A or B seek to acquire another Farm Y in Parish X, to be financed
				  by a bond, the capital expenditures of A or B on Farm X will be deducted from
				  the maximum principal amount of the bond (either $1,000,000 or $10,000,000; see
				  §111). Since C is not a principal user of Farm X, if he acquired Farm Y with
				  bond financing, he would not be required to deduct his capital expenditures on
				  Farm X from the loan proceeds for the purchase of Farm Y.
Program
-the Direct Placement Agricultural
				  Revenue Bond Program administered by LAFA.
Project
-the property to be financed with
				  loan proceeds, pursuant to the terms and conditions contained in the offer and
				  in the loan purchase agreement.
Rehabilitation Expenditures
-any costs
				  associated with renovation or modernization of an existing building or the
				  equipment located within an existing building which can be properly charged to
				  a capital account; the term does not include expenditures for enlargement of an
				  existing building.
Related Person
-
a. the following are related persons if borrower is an
				  individual:
i. borrower's spouse or a spouse's ancestors or lineal
				  descendants;
ii. borrower's siblings (i.e., brothers and sisters);
iii. borrower's ancestors and/or lineal descendants;
iv. a corporation in which more than 50 percent in value of
				  the outstanding stock is owned, directly or indirectly, by or for
				  borrower;
v. a trust of which borrower is the grantor or the
				  beneficiary; and
vi. a partnership of which borrower owns, directly or
				  indirectly, more than 50 percent of the capital or profits interest;
b. the following are related persons if borrower is a
				  corporation:
i. an individual who owns, directly or indirectly, more than
				  50 percent in value of the outstanding stock of the corporation;
ii. a trust which owns, directly or indirectly, more than 50
				  percent in value of the outstanding stock of the corporation;
iii. a corporation that is a member of the same
				  parent-subsidiary controlled group, a brother-sister controlled group, or a
				  combined group of corporations;
iv. a partnership which owns, directly or indirectly, more
				  than 50 percent of the outstanding stock of the corporation; and
v. for purposes of these regulations, stock owned, directly
				  or indirectly, by or for a corporation, partnership, estate or trust is
				  considered to be owned proportionately by or for its shareholders, partners or
				  beneficiaries. In addition, an individual is considered to be the owner of
				  stock owned, directly or indirectly, by or for his family;
c. the following are related persons if borrower is a
				  partnership:
i. a partner who owns, directly or indirectly, more than 50
				  percent of the capital or profits interest of the partnership;
ii. another partnership in which the same persons own,
				  directly or indirectly, more than 50 percent of the capital or profits
				  interest;
iii. if an individual owns stock in a corporation, other than
				  constructively though his family, he is considered as owning the stock owned,
				  directly or indirectly, by or for his partner; and
iv. a partner is considered as the owner of partnership
				  interests:
(a). owned by a corporation, partnership, estate or trust,
				  proportionately, if he is a shareholder, partner, or beneficiary; and
(b). owned by his brothers, sisters, spouse, ancestors or
				  lineal descendants;
d. the following are related persons if borrower is a
				  trust:
i. its grantor;
ii. another trust, if the same person is the grantor of both
				  trusts;
iii. a beneficiary of the trust;
iv. a beneficiary of another trust, if the same person is the
				  grantor of both trusts; and
v. a corporation of which more than 50 percent in value of
				  the outstanding stock is owned, directly or indirectly, by or for the trust or
				  by or for a grantor of the trust.
TEFRA
-the Tax Equity and Fiscal
				  Responsibility Act of 1982 (federal).
Trustee
-Capital Bank and Trust Company of
				  Baton Rouge, Louisiana.
D.
				The following words and terms are defined for the purposes of the 2016
				Louisiana Farm Recovery Grant Program.
Expected Gross Crop Revenue
(for 2016)-the
				  level of revenue that would have been expected to have been generated in 2016
				  under normal weather conditions and is calculated using the applicants response
				  to the number of acres harvested in 2016, a 5-year parish average for crop
				  yields and the estimated average market price in 2016.
Gross Crop Revenue
(for 2016)-calculated by
				  multiplying total acres harvested times the total average yield times an
				  estimated average selling price. The estimated average selling price is
				  calculated by dividing the applicants share of crop revenue by the amount of
				  the crop marketed by the applicant.
Increases in either Harvest or Production
				  Costs
-the costs of having to replant crops that were ruined due to
				  high levels of rainfall and flooding; costs associated with harvesting crops
				  under excessively wet field conditions causing reduced harvest speeds and
				  efficiency; and costs associated with increased tillage and land preparation
				  due to damage caused to land resulting from either having to harvest under
				  excessively wet conditions or resulting from the impact of pounding rainfall
				  and flooding.
Loss of Stored Hay
-calculated by using the
				  number of bales destroyed and then converting them into tons of hay assuming an
				  average bale weight of 1,200 pounds. A market value for hay lost due to
				  flooding is then calculated using the average 2016 market price as defined by
				  the 2016
Louisiana Summary
publication.
Lost or Dead Cattle
-cattle that were lost or
				  killed and calculated on a value per head by for the two classes of cattle
				  using average 2016 market prices obtained from the 2016
Louisiana
				  Summary
publication and assuming an average weight for calves of 500
				  pounds and breeding animals of 1,200 pounds.
Net Estimated Losses
-the amount of losses
				  eligible for assistance under the 2016 Louisiana Farm Recovery Grant Program
				  calculated by the difference between the total estimated losses and any
				  assistance received by the applicant from other sources.
Producer
-one who engages, as an occupation,
				  in farming operations as a distinct activity for the purpose of producing a
				  farm crop and assumes the production and market risks associated with the
				  agricultural production of those crops. A corporation or farmers cooperative
				  may be a "producer" if engaged in actual farming of the nature and extent there
				  indicated.
Reductions in Grazing Availability
-the
				  economic loss associated with pastures that were flooded making grazing
				  unavailable to cattle which is calculated using a hay equivalent methodology.
				  The methodology assumes the economic loss is equal to the value of the amount
				  of hay that would be needed to compensate for the lost grazing. The methodology
				  assumes that each mature cow weighs 1,200 pounds and eats 2 percent of her body
				  weight per day. With this information, the total amount of hay needed for the
				  number of days grazing was unavailable is calculated. The value of that hay is
				  then estimated using the average 2016 market price for hay as defined by the
				  2016
Louisiana Summary
publication.
Total Estimated Losses
(suffered by the
				  farming operation)-a summation of the estimated economic losses associated with
				  each crop produced and any cattle related losses.
AUTHORITY NOTE:
				  Promulgated in accordance with
				  R.S.
				  3:266.