202 KAR 9:020. Linked Deposit Investment

Program.

 

      RELATES TO: KRS 41.600-41.620

      STATUTORY AUTHORITY: KRS 41.606(7)

      NECESSITY, FUNCTION, AND CONFORMITY: KRS

41.606(7) requires the Kentucky Agricultural Finance Corporation and the Kentucky

Cabinet for Economic Development to promulgate administrative regulations

establishing the conditions for eligibility of agribusinesses for loans through

the Linked Deposit Investment Program. This administrative regulation

establishes the conditions for eligibility of agribusinesses for loans through

the Linked Deposit Investment Program, provides for agency review of the

information provided by the lending institution as part of the loan package,

and incorporates by reference the form that must be completed and submitted to

the corporation for an agribusiness to apply for a Linked Deposit Investment Program

loan.

 

      Section 1. Definitions. (1)

"Applicant" means an agribusiness which has completed a loan package

in conjunction with an eligible lending institution for a linked deposit

investment program loan.

      (2) "Corporation" means the

Kentucky Agricultural Finance Corporation.

      (3) "Eligible agribusiness" is

defined by KRS 41.600(2).

      (4) "Eligible lending

institution" is defined by KRS 41.600(3).

      (5) "Linked deposit investment"

is defined by KRS 41.600(4).

      (6) "Linked Deposit Investment

Program loan" means a loan approved by the Kentucky Agricultural Finance

Corporation:

      (a) Which is eligible for funding out of

the unclaimed and abandoned property program administered by the Department of

Treasury; and

      (b) For which the State Investment

Commission has accepted a linked deposit investment with an eligible lending institution.

      (7) "Loan package" means the:

      (a) "Agribusiness Linked Deposit

Loan Application"; and

      (b) Lending institution's application for

the loan.

 

      Section 2. Loan Package Approval

Standards. (1) An eligible lending institution shall submit the original and

two (2) copies of the loan package to the Kentucky Agricultural Finance

Corporation at 404 Ann Street, Frankfort, Kentucky 40601.

      (2) The corporation shall review the

information provided by the applicant in the Agribusiness Linked Deposit Loan

Application to determine whether the applicant is an eligible agribusiness as defined

by KRS 41.600(2).

      (3)(a) The corporation shall return an

incomplete loan package to the eligible lending institution which submitted the

application on behalf of the applicant.

      (b) The completed loan package may be

resubmitted to the corporation for approval.

 

      Section 3. Loan and Investment Approval

Process. (1) Funds available for Linked Deposit Investment Program loans shall:

      (a) Be based on the recommendation

contained in the Department of Treasury annual report submitted pursuant to

subsection (2) of this section; and

      (b) Not exceed the limits established by

the State Investment Commission.

      (2) The Department of Treasury shall

submit an annual report to the State Investment Commission and the Kentucky

Agricultural Finance Corporation no later than March 31 of each year, detailing

the amount of money in the unclaimed and abandoned property fund.

      (3) Approval for a new application for a

linked deposit investment may be denied or an existing investment revoked by

the State Investment Commission for failure of the financial institution to

meet and maintain the eligibility requirements prescribed in KRS 42.500 and 200

KAR Chapter 14 for each investment type.

 

      Section 4. Repayments. The eligible

lending institution shall remit to the State Investment Commission by June 30 of

each year all loan principal repayments for the preceding year beginning June 1

and ending May 31.

 

      Section 5. Reporting Requirements. (1)

Within thirty (30) days from the date a linked deposit investment has been

funded by the State Investment Commission, the eligible lending institution

shall submit written documentation to the corporation describing with particularity

the actual terms of the loan agreement between the applicant and the eligible

lending institution, including:

      (a) The loan amount;

      (b) The interest rate charged to the

applicant;

      (c) The length of time permitted for

repayment of the loan; and

      (d) Any other terms or documents required

by the eligible lending institution to execute the loan.

      (2) The State Investment Commission shall

submit to the Kentucky Agricultural Finance Corporation a copy of the letter

confirming each approved linked deposit investment with the eligible lending

institution no later than thirty (30) days after the date the Linked Deposit

Investment Program loan has been funded.

      (3) The eligible lending institution

shall submit to the Kentucky Agricultural Finance Corporation on or before

August 1 of each year a report summarizing the status and total of each Linked

Deposit Investment Program loan outstanding with the lender, including, but not

limited to, the beginning balance, ending balance, and principal repayments

received during the year.

 

      Section 6. Incorporation by Reference.

(1) The "Agribusiness Linked Deposit Loan Application (7/96)" is

incorporated by reference.

      (2) This material may be inspected,

copied, or obtained, subject to applicable copyright law, at the Kentucky

Agricultural Finance Corporation, 404 Ann Street, Frankfort, Kentucky 40601,

Monday through Friday, 8 a.m. to 4:30 p.m. (502) 564-4627. (32 Ky.R. 1024;

1391; eff. 3-3-2006.)