§ 5112. Release of Farm Loan Funds.

(a) Farm Lender shall not lend funds received pursuant to a Farm Lender Credit Agreement to a Farm Borrower without complying with the following conditions precedent:

(1) For a Nonguaranteed Farm Borrower Loan, or for a Guaranteed Farm Borrower with a loan that cannot be legally assigned or sold, assignment to the Agency of the Farm Borrower Agreement note, together with an assignment of any financing statement, security interest or similar instrument obtained or entered into pursuant to the related Farm Borrower Agreement, perfected by a UCC-1 public notice.

(2) For a Guaranteed Farm Borrower Loan:

(A) A Guarantee has been executed, and either assigned to the Agency or sold pursuant to section 5116, and

(B) A certification by the Farm Lender that it has complied with or has taken all actions which are in its opinion necessary to comply with any conditions precedent to the issuance of such Guarantee required by USDA; provided, however, that for the purposes of this section, payment of funds to the Farm Borrower shall not be deemed to be such a condition.

(b) Farm Lender shall provide evidence of compliance with subsection (a) to the Agency within seven (7) days of disbursement of funds to a Farm Borrower.

HISTORY

1. Repealer and new section filed 2-1-94 as an emergency; operative 2-1-94 (Register 94, No. 5). A Certificate of Compliance must be transmitted to OAL by 8-1-94 pursuant to Corporations Code section 14024 or emergency language will be repealed by operation of law on the following day. For prior history, see Register 89, No. 8.

2. Amendment filed 12-27-2004 as a deemed emergency pursuant to Corporations Code section 14024; operative 12-27-2004 (Register 2004, No. 53). A Certificate of Compliance must be transmitted to OAL by 6-27-2005 or emergency language will be repealed by operation of law on the following day.

3. Editorial correction of History 2 (Register 2005, No. 27).

4. Certificate of Compliance as to 12-27-2004 order, including amendment of Note, transmitted to OAL 5-25-2005 and filed 7-7-2005 (Register 2005, No. 27).

5. Amendment of subsections (a) and (b) filed 8-4-2008 as an emergency; operative 8-4-2008 (Register 2008, No. 32). A Certificate of Compliance must be transmitted to OAL by 2-2-2009 or emergency language will be repealed by operation of law on the following day.

6. Certificate of Compliance as to 8-4-2008 order transmitted to OAL 1-26-2009 and filed 2-19-2009 (Register 2009, No. 8).

Note

Note: Authority cited: Section 14024, Corporations Code. Reference: Sections 14067 and 14070, Corporations Code.