Cal. Code Regs. tit. 10 § 4010

Current through Register 2024 Notice Reg. No. 45, November 8, 2024

Section 4010 - Definitions

In addition to the definitions contained in Corporations Code section 14010 and section of Title 105000 of Title 10 of the California Code of Regulations, the following supplemental definitions shall govern the construction of this chapter:

(a) "Agricultural Enterprise" means a business engaged in the production of food fiber, ranching and raising of livestock, agriculture, or other similar agriculture-related industries, other than farming.

(b) "Application" means

(1) for an Applicant for a Small Business Loan, the application for a Federal Disaster Loan, and

(2) for an Applicant for an Enterprise Loan, the loan application submitted to the Lender.

(c) "Borrower" means, for an Article 2 Loan, a Small Business that has received a Loan; for an Article 3 Loan, a Farm Enterprise that has received a Loan.

(d) "Creditworthy" means that as a result of the Loan the Borrower will, for the reasonably foreseeable future, continue or resume operations in the same business enterprise disrupted by the Disaster.

(e) "Default" means failure by the Borrower to pay when due any interest or principal payment as provided in the Loan Agreement.

(f) "Demand" means a request for payment by a Lender pursuant to section 4013.

(g) "Demand letter" means a letter containing a Demand for payment of the guaranteed portion of Loan interest and principal, delivered pursuant to section 4013(b).

(h) "Disaster" and "Disaster Area" mean, for a Small Business Loan, a major disaster, and the geographic area of that disaster, respectively, as determined under the Disaster Relief and Emergency Assistance Act, 42 U.S.C.A. section 5121 et seq. of the Small Business Act, 15 U.S.C.A. section 636 and for a Farm Enterprise Loan, an emergency pursuant to Government Code Section 8558, declared by the Governor.

(i) "Economic injury" means an economic loss resulting in the inability of a business, as a direct result of a Disaster, to meet its obligations as they mature and to pay its ordinary and necessary operating expenses, including production losses.

(j) "Federal Disaster Loan" means a Small Business Administration Physical Disaster Loan or Economic Injury Disaster Loan made pursuant to 13 C.F.R. Section 123.

(k) "Farm Enterprise" means an Agricultural Enterprise, Nursery or Small Farm.

(l) "Guarantee" means a written agreement, made in accordance with chapter 6.51 of Title 10 of the California Code of Regulations, to guarantee the repayment of a portion of a Loan.

(m) "Lender" means a commercial lending institution which is a bank, savings and loan institution, institution of the Farm Credit System, as specified in 12 United States Code Section 2002 or credit union licensed to do business in California.

(n) "Lender Certification" means a written statement by Lender certifying that (1) the Loan would not be made without the Guarantee, and (2) the Lender will not charge Loan fees or charges other than those charged for similar Loans.

(o) "Loan" means a Loan made pursuant to a Loan Agreement.

(p) "Loan Agreement" means an agreement for Loan entered into between a Lender and Borrower, which is guaranteed pursuant to section 4012.

(q) "Nursery" means a Small Business primarily engaged in the wholesale or retail selling of plants.

(r) "Physical Damage" means a real or personal property damaged or lost, including structural losses, as a direct result of a Disaster.

(s) "Prime" means the Lender's publicly announced prime rate.

(t) "Production Losses" means a reduction in normal production of one or more of the following, directly attributable to the Disaster:

(1) yield per acre;

(2) quality of crops produced;

(3) quantity and/or quality of livestock products produced per animal unit; and

(4) weight gain and/or natural increase in numbers of livestock units.

(u) "Security" means a lien on any equipment purchased with Loan proceeds, and to the extent required by a Corporation, a first beneficial interest in the life insurance policies of Borrower management personnel, and security interests in Borrower's real or personal property.

(v) "Small Farms" means a farm which:

(1) Provides agricultural commodities for sale in sufficient quantities so that it is recognized in the community as a farm rather than a rural residence.

(2) Provides enough agricultural income by itself, including rented land, or together with any other dependable income, to enable the Borrower to:

(A) pay necessary family and operating expenses;

(B) maintain essential chattel and real property; and

(C) pay debts^*.

(3) Is managed by:

(A) the Borrower when the Loan is made to an individual; or

(B) the members, stockholders, partners or joint operators responsible for operating the farm when a Loan is made to a cooperative, corporation, partnership or joint operation.

(4) Has substantial amount of the labor requirements for the farm and non-farm enterprise provided by:

(A) the Borrower and family members for a Loan made to an individual; or

(B) the members, stockholders, partners or joint operators responsible for operating the farm, along with the families of these individuals, if a Loan is made to a cooperative, corporation, partnership, or joint operation.

(5) May use a reasonable amount of full-time hired labor and seasonable labor during peak loan periods.

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^* For the purposes of calculating subsection (2), a farmer shall be authorized to calculate the projected income reasonably expected from an orchard when the trees are fully producing.

Cal. Code Regs. Tit. 10, § 4010

1. New section filed 12-8-89 as an emergency; operative 12-8-89 (Register 89, No. 52). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 4-9-90.
2. Amendment of subsections (b), (h), (n) and (q) filed 12-22-89 as an emergency; operative 12-22-89 (Register 89, No. 52). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 4-23-90.
3. Certificate of Compliance as to 12-8-89 and 12-22-89 orders including nonsubstantive amendments transmitted to OAL 4-6-90 and filed 5-7-90 (Register 90, No. 25).
4. Amendment filed 3-22-91 as an emergency; operative 3-22-91 (Register 91, No. 16). A Certificate of Compliance must be transmitted to OAL by 7-22-91 or emergency language will be repealed by operation of law on the following day.
5. Amendment refiled 4-9-91 including new amendment of subsections (a), (m) and (v) as an emergency; operative 4-9-91 (Register 91, No. 25). A Certificate of Compliance must be transmitted to OAL by 8-7-91 or emergency language will be repealed by operation of law on the following day.
6. Editorial correction of printing error removing erroneous former HISTORY 5. (Register 91, No. 25).
7. Editorial correction of subsections (p) and (v)(4)(B) (Register 91, No. 32).
8. Change without regulatory effect amending section filed 9-3-91 pursuant to section 100, title 1, California Code of Regulations (Register 92, No. 3).
9. Repealer and new section filed 3-19-92 as an emergency; operative 3-19-92 (Register 92, No. 15). A Certificate of Compliance must be transmitted to OAL 7-17-92 or emergency language will be repealed by operation of law on the following day.
10. Renumbering of former section 4010 to section 4610 and new section 4010 filed 6-2-92; operative 6-2-92 (Register 92, No. 24).
11. Change without regulatory effect amending chapter heading filed 2-7-94 pursuant to title 1, section 100, California Code of Regulations (Register 94, No. 6).
12. Amendment of chapter heading and section 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.
13. Editorial correction of HISTORY 12 (Register 2005, No. 27).
14. 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).

Note: Authority cited: Section 14075 (b), Corporations Code. Reference: Section 14075 (a), Corporations Code; and Section 8684.2, Government Code.

1. New section filed 12-8-89 as an emergency; operative 12-8-89 (Register 89, No. 52). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 4-9-90.
2. Amendment of subsections (b), (h), (n) and (q) filed 12-22-89 as an emergency; operative 12-22-89 (Register 89, No. 52). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 4-23-90.
3. Certificate of Compliance as to 12-8-89 and 12-22-89 orders including nonsubstantive amendments transmitted to OAL 4-6-90 and filed 5-7-90 (Register 90, No. 25).
4. Amendment filed 3-22-91 as an emergency; operative 3-22-91 (Register 91, No. 16). A Certificate of Compliance must be transmitted to OAL by 7-22-91 or emergency language will be repealed by operation of law on the following day.
5. Amendment refiled 4-9-91 including new amendment of subsections (a), (m) and (v) as an emergency; operative 4-9-91 (Register 91, No. 25). A Certificate of Compliance must be transmitted to OAL by 8-7-91 or emergency language will be repealed by operation of law on the following day.
6. Editorial correction of printing error removing erroneous former HISTORY5. (Register 91, No. 25).
7. Editorial correction of subsections (p) and (v)(4)(B) (Register 91, No. 32).
8. Change without regulatory effect amending section filed 9-3-91 pursuant to section 100, title 1, California Code of Regulations (Register 92, No. 3).
9. Repealer and new section filed 3-19-92 as an emergency; operative 3-19-92 (Register 92, No. 15). A Certificate of Compliance must be transmitted to OAL 7-17-92 or emergency language will be repealed by operation of law on the following day.
10. Renumbering of former section 4010 to section 4610 and new section 4010 filed 6-2-92; operative 6-2-92 (Register 92, No. 24).
11. Change without regulatory effect amending chapter heading filed 2-7-94 pursuant to title 1, section 100, California Code of Regulations (Register 94, No. 6).
12. Amendment of chapter heading and section 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.
13. Editorial correction of History 12 (Register 2005, No. 27).
14. 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).