The purpose of these rules is to assist Applicants in applying for the benefits available under the Beginning and Expanding Farmer Loan Program (aka Aggie Bonds Program) authorized by ORS 285A.420 to 285A.435 and to describe the procedures to be used by the Oregon Business Development Department in administering that Program.
The Program lowers the interest cost on loans made by private parties to Beginning Farmers for the acquisition of Agricultural Land and Agricultural Improvements and Depreciable Agricultural Property. This is accomplished by Beginning Farmers arranging loans through Eligible Lenders in compliance with the rules in this Division, so that the Eligible Lender may exclude interest from gross income under Section 147(c)(2) of the United States Internal Revenue Code and may exempt interest from Oregon personal income taxes.
Section 147(c)(2) of the United States Internal Revenue Code, its regulations and ORS 285A.420 to 285A.435 impose very substantial restrictions on the Program; the administrative rules in this Division outline those restrictions to assist Applicants in determining whether they may qualify for the Program.
The Program does not provide any state or federal money to repay Beginning and Expanding Farmer loans, to guarantee these loans, or to repay any Aggie Bonds that are issued under the Program. Those loans and the related Aggie Bonds are secured only by the resources that eligible Beginning Farmers provide to lenders.
A lender under the Aggie Bonds Program may become a Participating Lender. A Participating Lender will be familiar with the Aggie Bonds Program and will have executed a master financing agreement for Aggie Bonds with the Department. The Department will maintain a list of Participating Lenders and make that list available to people considering Aggie Bond financing.