Okla. Stat. tit. 2, § 2-5-87: Acceptance or rejection of agricultural linked deposit

loan package - Notice - Agricultural linked deposit agreements.

A. The State Treasurer may accept or reject an agricultural

linked deposit loan package or any portion of the package, based on

the State Treasurer's evaluation of the eligible agricultural

businesses included in the package, the amount of individual loans

in the package, and the amount of the package. If the State

Treasurer recommends rejection, the written recommendation shall

include reasons for the rejection in a report to the State Board of

Agriculture. The Board shall forward a copy of the rejection notice

to the lending institution and the borrower. The borrower may be

allowed to bring the application into compliance with the Board and

the State Treasurer and resubmit the application. If the State

Treasurer rejects the loan because sufficient funds are not

available for a linked deposit, then the applications may be

considered in the order received when funds are once again available

subject to a review by the Board and the lending institution. In

evaluating the eligible agricultural businesses, the State Treasurer

shall consider the recommendation of the Board and the economic

needs of the area where the business is located.

B. The State Treasurer may accept or reject an agricultural

linked deposit loan package or any portion of the package, based on

the agricultural business's debt-to-asset ratio. The State

Treasurer shall have the authority to establish quarterly, based on

the availability of funds, a minimum debt-to-asset ratio of not less

than forty percent (40%), nor more than fifty-five percent (55%),

required to qualify as an at-risk farm or ranch business.

C. Upon acceptance of the agricultural linked deposit loan

package or any portion of the package, the State Treasurer shall

notify the Board, the lending institution and the borrower. Upon

acceptance, the State Treasurer may place certificates of deposit

with the eligible lending institution at a rate below current market

rates, as determined and calculated by the State Treasurer, or may

invest in bonds, notes, debentures, or other obligations or

securities issued by the federal farm credit bank with respect to

the eligible lending institution at a rate below current market

rates, as determined and calculated by the State Treasurer. When

necessary, the State Treasurer may place certificates of deposit or

may invest in obligations or securities prior to acceptance of an

agricultural linked deposit loan package.

D. 1. The eligible lending institution shall enter into an

agricultural linked deposit agreement with the State Treasurer, that

shall include requirements necessary to implement the purposes of

the Oklahoma Agricultural Linked Deposit Program. The requirements

shall include an agreement by the eligible lending institution to

lend an amount equal to the agricultural linked deposit to eligible

agricultural businesses at an interest rate that reflects a

percentage rate reduction below the present borrowing rate

applicable to each specific agricultural business in the accepted

loan package that is equal to the percentage rate reduction below

market rates at which the certificates of deposit that constitute

the agricultural linked deposit were placed or at which the

investments in bonds, notes, debentures, or other obligations or

securities that constitute the agricultural linked deposit were

made. The requirements shall also reflect the market conditions

prevailing in the eligible lending institution's lending area.

2. The agreement may include a specification of the period of

time in which the lending institution is to lend funds upon the

placement of a linked deposit, and shall include provisions for the

certificates of deposit to be placed or the investment in bonds,

notes, debentures, obligations, or securities to be made for any

ditions

prevailing in the eligible lending institution's lending area.

2. The agreement may include a specification of the period of

time in which the lending institution is to lend funds upon the

placement of a linked deposit, and shall include provisions for the

certificates of deposit to be placed or the investment in bonds,

notes, debentures, obligations, or securities to be made for any

maturity considered appropriate by the State Treasurer not to exceed

two (2) years and may be renewed for up to an additional three

renewals not to exceed two (2) years each at the option of the State

Treasurer. Two additional renewals may be approved by the State

Treasurer up to a total duration of participation of twelve (12)

years, but new eligible participants and eligible participants who

have had linked deposit loans for less than eight (8) years shall

have priority over renewals. No renewals will be allowed unless the

amount of principal has been reduced by a minimum of five percent

(5%) and all interest paid to date from the time of the prior loan

or renewal. Interest shall be paid at the times determined by the

State Treasurer.