<html> <head> <title>Rule 12:21:01:11 South Dakota beginning farmer bond program.</title> <META NAME="Keywords" Content="Administrative Rules 12:21:01:11"> <META NAME="Description" Content="Administrative Rules 12:21:01:11 South Dakota beginning farmer bond program."> <meta name=Generator content="Microsoft Office HTML Filter 2.0"> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Originator content="Microsoft Word 10"> <style> <!-- --> </style> </head> <body lang=EN-US> <div> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>12:21:01:11.&nbsp;&nbsp;South Dakota beginning farmer bond program.</b> The beginning farmer bond program allows beginning farmers to obtain lower interest rate loans for qualified purposes by obtaining loan funds from the proceeds of a tax exempt bond issued by the authority and purchased by the lender. The authority shall enter into a loan agreement with the beginning farmer and assign that loan to the lender. At the same time, the authority shall issue a tax-exempt bond in the amount of the loan and the lender shall purchase that bond, which is used to fund the loan assigned to the lender. The only security for the lender is the underlying security on the assigned loan.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The program also allows a bond purchaser to receive tax-exempt interest for a direct loan or contract sale made to beginning farmers. The bond purchaser, after arranging the loan or sales contract, shall obtain from the authority a federal tax-exempt bond in the amount of the loan or the unpaid balance on the sales contract. In the case of a loan, the authority shall lend the amount paid by the bond purchaser for the bond to the beginning farmer and assign the loan and its collateral to the bond purchaser as security for the bond. In the case of a contract sale, the authority shall enter into the contract with the bond purchaser who will receive the bond as evidence of the authority's obligations under the contract. The authority shall then assign the authority's right, title, and interest in the contract to the beginning farmer who shall assume the payment obligations of the authority under the contract.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 22 SDR 97, effective January 22, 1996.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b>SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=1-16E-24">1-16E-24.</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b>SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=1-16E-24">1-16E-24.</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Cross-Reference:</b> Authority bonds not state or subdivision obligation, SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=1-16E-11">1-16E-11.</A></p> </div> </body> </html>