Wyo. Code R. 060-0003-7
Loan and Investment Board
Chapter 7: Farm Loans
Effective Date: 05/12/1998 to 01/02/2003
Rule Type: Superceded Rules & Regulations
Reference Number: 060.0003.7.05121998
STATE LOAN AND INVESTMENT BOARD
Section 1. Authority.
(a) This chapter is adopted pursuant to W.S. 11-34-101 et seq.
Section 2. Definitions.
As used in this chapter:
(a) “Acquired lands” means lands to which the Board has acquired legal or equitable title. (b) “Agricultural products” means typical crops produced from the cultivation and management of the soil. (c) “Board” means the State Loan and Investment Board. (d) “Director” means the Director of the Office of State Lands and Investments. (e) “Livestock” means horses, cattle, buffalo, sheep, and swine. (f) “Office” means the Office of State Lands and Investments. (g) “Single agricultural enterprise” means an agricultural operation managed as one business. (h) “Legal entity” means corporations, limited partnerships, general partnerships, limited liability companies, trusts and other organizations or business entities recognized by the State of Wyoming.
Section 3. General Policy.
(a) The Board shall extend farm loans to foster and encourage agriculture, dairying, and livestock raising in the State of Wyoming, and the development and improvement of farm lands. Farm loans shall be made in such a manner and to such parties as shall, in the judgment of the Board, inure to the greatest benefit of the state and represent a wise investment of state funds.
Section 4. Eligible Applicants.
(a) Individuals, to be eligible applicants, must be able to demonstrate that they are qualified Wyoming Electors as determined by Election Code Statutes of Title 22. (b) Corporations, to be eligible applicants, must be able to demonstrate that a majority of the corporation’s outstanding shares are owned by individuals who meet the qualifications listed in subsection (a) of this section.
(c) General partnerships, limited partnerships, limited liability companies, and trusts, to be eligible applicants, must be able to demonstrate that a majority of the interest in the partnership, company, or trust is owned by individuals who meet the qualifications listed in subsection (a) of this section.
(d) Single loans or a combination of loans made to a single agricultural enterprise shall not exceed an outstanding principal balance of four hundred thousand dollars ($400,000.00), regardless of the identity of the applicants.
(a) Loans may be made only for the following purposes:
(i) To purchase lands used principally for raising agricultural products, livestock, or dairying;
(ii) To purchase livestock, fertilizers, and equipment calculated to maintain or increase the earning capacity of the borrower’s agricultural operation;
(iii) To purchase, construct, or install improvements calculated to maintain or increase the earning capacity of the borrower’s agricultural operation; or
(iv) To liquidate debts of the borrower incurred in the furtherance of the borrower’s agricultural operation.
(a) Applications.
(i) Each prospective borrower shall submit a written loan application, on the form furnished by the Office.
(ii) Incomplete applications shall not be submitted to the Board for consideration.
(iii) Any false or misleading statements made by the applicant in an application shall be grounds for summary rejection of the application.
(iv) A fee as established by W.S. 11-34-121 shall be deposited with the State Loan and Investment Board before the application is considered. The unused portion of the fee shall be returned to the applicant if the loan is not granted.
(v) Applications, financial statements, appraisals, and all other information pertaining to an application which has not been submitted to the Board shall be held as confidential information. Upon consideration by the Board, the application and all information with respect thereto in the Board’s files are public records available for inspection and reproduction as provided by law.
(i) The Office shall conduct a preliminary review of all applications received. If the staff identifies problems with the application which would result in a negative recommendation to the Board, the staff shall notify the applicant of the problem and the applicant shall have the opportunity to withdraw the application from further consideration. The Board shall be informed of every application received that is returned to the applicant because the Director believes it will result in a negative recommendation. Information in regards to the returned application shall include the applicant's name, address, telephone number, content of the application, the rationale for the Director's decision and any other information pertinent to the issue. This information may be presented in executive session.
(ii) All applications, not withdrawn under paragraph (i) of this subsection, shall be presented to the Board for its consideration.
(iii) The Board shall take the following into account, when considering applications:
(A) The applicant's net worth;
(B) The applicant's ability to repay the loan based on viable, continuous income from any source;
(C) The applicant's credit history; and
(D) The applicant's need.
(iv) The Board shall take action on applications only once. The Board shall not reconsider an application that is substantially the same as an application previously acted upon. Applicants may submit a substantially different application, provided that it complies with all the requirements for filing a new application.
(a) Interest rate. The interest rate for loans under this chapter shall be pursuant to Chapter 14 of the rules as established by the Board in accordance with current interest rates.
(b) Length. The term of each loan shall be set by the Board with due regard given to repayment ability and the security offered, but in no event shall the term exceed thirty (30) years.
(c) Repayment. Loans shall be payable in equal, annual installments.
(a) Every loan shall be evidenced by a promissory note for the principal sum of the loan.
(b) Every loan shall be secured by a first mortgage upon farm or ranch land within Wyoming of sufficient value to secure the loan. Proof of merchantable title must be provided by the borrower in the form of title insurance naming the Board as beneficiary.
(c) An appraisal as provided for by statute, shall be prepared for the Board. Appraisals shall reflect the current agricultural market value of the land to be mortgaged.
(d) The Board shall take a Uniform Commercial Code (UCC) security agreement on all irrigation equipment located on the lands being offered for security.
(e) The Board shall take security interests in secure leaseholds, reservoir company stock, and grazing association stock whenever necessary to protect the value of the lands being offered for security as an agricultural operation.
(a) The proceeds of a farm loan shall not be disbursed to the borrower until such time as the borrower can show a mature obligation, the satisfaction or partial satisfaction of which will result from the application of the loan proceeds. The borrower shall use the proceeds of any farm loan exclusively for the purpose or purposes set out in the application, and shall furnish evidence satisfactory to the Board to that effect.
(b) The Office shall inspect and verify any reports and records required by the Board and submitted by the borrower before proceeds shall be released for payment.
(c) Loan proceeds shall be disbursed at a closing when all loan documents shall be executed by the borrower. Documents executed on behalf of a legal entity shall be executed by persons authorized by that entity to borrow money and mortgage property. Officers or major stockholders of a corporation shall also be personally liable for repayment of the loan.
(d) The borrower shall pay the costs of recording all lien documents.
(a) When a borrower conveys legal or equitable title to property securing a farm loan, the purchaser may assume the repayment obligation to the Board if qualified under W.S. 11-34-110 and Section 4 of this chapter. If the loan is not assumed by the purchaser, the loan shall be paid off in full at the time of the conveyance.
(a) A borrower may request a partial release of land from the mortgage. Such requests shall be directed to the Office, and may be approved by the Board if the borrower demonstrates a prompt payment history, a sound financial statement, and the release of land would be in the best interest of the Board.
(a) Pursuant to W.S. 11-34-113, the Board may reamortize the unpaid principal balance of a farm loan over the remaining term of the mortgage at the same interest rate as that in effect at the time of the reamortization. A borrower requesting reamortization must provide current financial information and other documentation as requested by the Office and must show that reamortization will significantly improve the financial viability of his agricultural operation. The fee for reamortization is one percent (1%) of the reamortized amount.
(a) If an annual payment which is due December 1st, is not received by by December 31st of each year, the Office shall immediately notify the borrower of the default. The borrower shall have until the following May 1st to submit a repayment plan to the Office. Repayment plans shall include the following:
(i) The amounts and dates of payments that the borrower can make against the loan; and
(b) If the borrower does not submit a repayment plan to the Office by May 1st, the Director shall immediately initiate foreclosure on the defaulted loan.
(c) The Director shall review all repayment plans and make recommendations to the Board regarding their acceptance or rejection no later than the following August Board meeting.
(d) If the Board accepts a repayment plan, the Director shall allow the borrower to make payments in accordance with the accepted plan. If the borrower then fails to make the payments called for in the accepted plan, the Board shall immediately initiate foreclosure on the defaulted loan.
(e) If the Board rejects a repayment plan, the Board shall immediately initiate foreclosure on the defaulted loan.
(a) Leasing procedure. The Board shall receive applications to lease acquired land for a period of twenty (20) days after public notice is given of its intent to lease any property. Persons desiring to lease acquired lands shall submit to the Office a completed application in a sealed envelope, as provided by the Office. Applications offering cash rental shall be accompanied by a certified check or money order in the amount of the offer.
(b) Board's decision. The Board shall consider all aspects of the offers received and award the lease to the applicant whose offer would be most advantageous to the Board. The Board may reject any or all applications. Monies tendered by unsuccessful applicants for their rental offer shall be returned after the Board has awarded the lease or rejected all applications.
(c) Term. The term of the lease shall be set by the Board on a case-by-case basis, except that the term of a lease of land which is subject to a right of redemption shall not exceed the expiration of the redemption periods created by W.S. 1-18-103 and W.S. 1-18-104. If the redemption period will expire at an inopportune time during the growing season, the Board may extend the lease term until a more convenient time in the growing season.
(d) Transfers. No lease granted under this section may be assigned or subleased without the approval of the Board.
(e) Reservation prohibited. A lease of acquired lands shall not contain a reservation of public hunting and fishing privileges.
(a) Decision to sell. The Board shall sell acquired lands upon determination that the sale of the property would be the best means of restoring loan funds.
(b) Applications. Any person may petition the Board to sell specific acquired lands by submitting a written application on the form provided by the Office. If the application contains an offered price which is reasonable in light of the current appraised value of the property, the application shall be presented to the Board for consideration. If the offered price is unreasonably low, the applicant shall be so advised and shall be given the opportunity to amend the offered price on the application or to withdraw the application.
(c) Finder's Fee. The Board shall pay, out of the sale proceeds, a real estate broker, associate broker, or salesman (hereinafter: realtor) a finder's fee in the amount of one-half of one percent of the purchase price if the realtor represents the successful bidder at the auction.
(d) Advertisement. All sales of acquired lands shall be advertised once per week, for four consecutive weeks, in both a newspaper in the county in which the property is located and a newspaper of statewide circulation. The purchaser of the property shall pay the cost of advertising.
(e) Auctions. All sales shall be by public auction, conducted by the Director or his representative, at the front door of the county courthouse of the county in which the property is located. If the sale is being held pursuant to an application to purchase, the minimum bid shall be no less than the offered price. If the sale is being held on the Board's own initiative, the minimum bid shall be as set by the Board. The Board reserves the right to reject any and all bids. The successful bidder must tender at least thirty percent (30%) of the purchase price, in the form of a cashier's check, certified check, or letter of credit, at the auction. Within ten (10) days of the auction, the purchaser shall either pay the balance of the purchase price or if eligible enter into a sales contract pursuant to subsection (g) of this section.
(f) Title Insurance. The Board will order a title insurance commitment in the amount of the purchase price. The purchaser of the property shall pay the cost of the commitment.
(g) Sales Contracts.
(i) Eligibility. Any individual or legal entity that was the mortgagor when the land was acquired by the Board shall not be eligible to enter into a sales contract in the purchase of that acquired land.
(ii) Terms. Eligible purchasers may pay the balance of the purchase price pursuant to a sales contract with the following terms:
(A) The length of the contract shall not exceed thirty (30) years; and
(B) The contract interest rate shall be pursuant to Chapter 14 of the rules as established by the Board.
(h) Assignments of Sales Contracts.
(i) The original purchaser of state land under a sales contract shall remain obligated to the Board for performance under the contract regardless of any assignments of the purchaser’s rights under the contract.
(ii) Upon receipt of written notice of the name, address, and tax identification number of an assignee of the purchaser’s contract rights, the Office shall note this information for purposes of mailing payment notices and reporting interest paid on the contract to the United States Internal Revenue Service.
(a) The Board hereby delegates to the Director the authority to sell, by public auction, sealed bid, or negotiated sale, any personal property acquired through foreclosure, repossession, or surrender. The Director shall report all sales of personal property to the Board at its next regular meeting.
(a) The loan fee is one percent (1%) of the amount of the loan. The fee for reamortization is one percent (1%) of the reamortized amount.