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chase price to be in proportion to the income derived from the operation of the farm. (d) Provide sufficient rental to permit the payment of taxes, insurance, management, and maintenance expenses, and accumulate separately a sufficient fund to permit the repayment of the client's equity in case the Contract is canceled.* [Par. I, Adm. Instr. 141, June 4, 1938]

302.6 Same; conditions for use of Contract. (a) Form FSALE 207, Farm Purchase Contract, will be used where all of the following factors are present:

(1) It has been administratively determined that the units on a project will be sold to approved clients.

(2) Farm Management Plans and development of the unit have progressed sufficiently to permit the sale of the unit to a client.

(3) The client involved has been in occupancy under Tenure Form D-2, or other lease form, over a sufficient period of time to determine his acceptability as a client to whom a unit may be sold. The usual period of time should be 5 years. In exceptional cases a two-year period of time may be sufficient.

(4) In some cases it might be desirable to execute the Contract even though the conditions set forth in paragraph (a) (3) of this section are not present.

(5) A construction loan under $8 303.116-303.121 will not be made to the client.

(b) The Contract may be used in cases where: (1) A homestead association has been formed. (2) A homestead association might be formed in the future, but will not be formed by the time the Contract is executed. In such cases the Contract may, at a later date, be assigned to a homestead association, if formed.

(c) The Contract is to be used by clients residing on a project which has been financed partially or wholly with state rural rehabilitation corporation funds but which is under the managerial or trustee supervision of the Farm Security Administration.

(d) The Contract is to be used on rural resettlement type projects and is to be executed by approved clients.

(e) The Contract is not to supersede or modify any existing Temporary Licensing Agreement, Lease or Sublease form, or Tenure form, except Tenure Form C, Form FSA-LE 79, Agreement to Purchase Land.* [Par. III, Adm. Instr. 141, June 4, 1938]

302.7 Same; major provisions of Farm Purchase Contract. (a) The purchase price of the property, together with the annual rental, is payable out of agreed percentages of crops harvested by the purchaser and of livestock and poultry products sold by him.

(b) Cash payments are made by the purchaser based on predetermined percentages of the market value at the time of harvesting of crops or sale of livestock or products) of each of the marketable farm products. These percentages may be changed by mutual consent in writing and are to be paid in cash.

(c) No time limit for the payment of the principal sum is specified.

*For statutory citation, see note to g 302.1.

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(d) There is first to be deducted from said sums an "annual rental,” which is to include:

(1) Three percent of the balance of the purchase price not covered by deposits thereto at the beginning of the year.

(2) A proportionate share of the taxes or payments in lieu of taxes which the Government may make in connection with the project.

(3) Insurance.

(4) A sum necessary to cover the purchaser's share of the cost of management, and for reserves.

(5) A sum necessary for maintenance and repairs.

(e) The balance of the sums received from the agreed percentages is to be applied to making deposits towards payment of the purchase price, and is to be held by the Government in trust and not deposited into the United States Treasury as miscellaneous receipts.

(f) Annual rental is to be due and owing from the purchaser regardless of the value of the crops raised by him. The Government may, in its discretion, direct that any amount of annual rental which is unpaid, shall accrue and be added to the annual rental to be paid by the purchaser for the following year.

(g) The purchaser may make prepayments towards the purchase price, but the final payment may not be prepaid without the written consent of the Government.

(h) The purchaser is to plant such crops, conduct his farming operations in such manner, and keep the property in such condition, as are in accord with approved farm organization and good husbandry and with a Farm and Home Management Plan approved by the Government.

(i) The purchaser may not sell, lease, and so forth, the property or any interest under the Contract, without the written consent of the Government.

(j) The Government does not plan to take security, but may demand it on any chattels including crops at any time if circumstances So warrant.

(k) The law (of testacy or intestacy, as the case may be) of the state in which the property is situated, is to govern in determining the person who shall succeed to the interests of the purchaser in the event of his death.

(1) In the event the Contract is terminated, the purchaser is not to be obligated to pay annual rental and to make deposits towards the purchase price. Alternative methods are specified for compensating him for his interest in the property.

(m) Upon the payment by the purchaser of all sums due the Government under the Contract, the Government is to deliver to the purchaser a quitclaim deed conveying the property. The deed is to recite the reservation of mineral rights set forth in paragraph 1 of the Contract. That paragraph provides that all mineral rights are reserved to the Government, except that the purchaser is given the right to mine coal in an amount reasonable for his own use, but not for the purpose of selling the same.* [Pars. V, VI, and Exhibit A, Adm. Instr. 141, June 4, 1938]

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*For statutory citation, see note to § 302.1. SUBPART-TENURE AGREEMENTS AND LEASES FOR RESETTLEMENT


302.25 Limitations in use of Tenure Forms. (a) Form FSA-LE 161, Tenure Form D-1, will be executed between the Government and the lessee only after the United States has acquired title to the land, and :

(1) Where a farm management plan has not yet been evolved and it is necessary or desirable to have the farm operated in the meantime by a client who has been selected for permanent tenure; or

(2) Where a farm management plan has been evolved but no selected client is available and it is desirable to have the farm operated by a farmer who has not been selected for permanent tenure.

(3) Whether or not a farm management plan has been evolved but where construction plans or construction has not sufficiently progressed to permit the execution of Tenure Form D-2.

(b) Form FSA-LE 161, Tenure Form D-1, may be modified and used:

(1) Where the lessee is a client or a person otherwise entitled to rural rehabilitation and where the regional director finds that the rural rehabilitation of such lessee will be promoted by providing that the lessee shall clear, terrace, or otherwise perform minor improvements and repairs upon the leased lands and the buildings and structures thereon. In no case should the modification, hereinafter provided for, be used when the sole purpose is to avoid the expenditure of appropriated or allotted funds for the improvements in question. Where the modification provided for is used, the value of such repairs, clearing, terracing or other improvements shall be taken into account in fixing the rent. In this situation, the following paragraph will be substituted for paragraph 5, page 4, of Form FSA-LE 161:

5. The Lessee shall utilize the pasture and woodland, and plant, cultivate, and harvest such crops and conduct such livestock, dairy and poultry enterprises on said Property as are in accordance with approved farm organization, management and practices of good husbandry. In order to further the rehabilitation of the lessee and maintain the property for efficient farming operations, the lessee agrees to conduct such farming operations and make such improvements on said property in accordance with the provisions of such farm management plans as may be prescribed by the Government.

(c) Form FSA-LE 162, Tenure Form D-2, will be executed between the Government and the lessee only after the United States has acquired title to the land and for a term of approximately five years:

(1) Where a farm management plan has been evolved and an approved client has been selected; and

(2) Where construction plans or construction is sufficiently advanced to permit the execution of a lease for a term of approximately

(d) Form FSA-LE 163, Tenure Form D-3, will be executed between the vendor and the lessee only where the United States has not yet acquired title to the land and for a term running to the end of the crop year, or until such time as title to the property is acquired by the United States, whichever period is the shorter, and :

five years.

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(1) Where the United States is willing to permit the vendor to lease the land to a client, or a nonclient of the Farm Security Administration or a low-income farmer.

(e) Form FSA-LE 164, Tenure Form D-4, will be executed between the Government and the lessee prior to the date of acquisition of title to the land by the United States, will become operative upon acquisition of title, and :

(1) Where it appears desirable to insure continued occupancy of the tenant to the end of the crop year, after the tenancy under Tenure Form D-3 has terminated by reason of acquisition of title to the land by the United States.

(f) Form FSA-LE 165, Tenure Form D-5, will be executed between the Government and the vendor prior to the acquisition of title to the land by the United States and will become operative upon acquisition of title and will terminate on a date not later than the end of the crop year, and:

(1) Where it appears that title to the land may be acquired by the United States during a crop year and it has been administratively determined that developmental work thereon will not be undertaken during the crop year, and the United States is desirous of making such provision as will permit the present owner or his tenants to cultivate the land in order that the land will not remain idle for the entire crop year; or

(2) Where it appears desirable to insure continued occupancy of the land to the vendor to the end of the crop year in order that the land will not remain idle for the entire crop year.* [Par. 4, A.O. 233, Feb. 15, 1938, 3 F.R. 386]



SUBPART—Tenant purchase

SUBPART—Loans to individuals loans to individuals

for emergency rehabilitation 303.1 State organization.

needs 303.2 County organization.

303.46 General policies. 303.3 Allocation of loan funds to 303.47 Persons eligible. States and Counties.

303.48 Purposes for which loans may 303.4 Selection of applicants.

be made. 303.5 Selection of farms.

303.49 Rate of interest.
SUBPART—Loans to individuals 303.50 Amortization.
for rural rehabilitation

303.51 Notes and security.

303.52 Recording and filing of securing 303.21 General policies.

documents. 303.22 Persons eligible.

303.53 Limitations upon loans for 303.23 Special cases.

crop production, pursuant to 303.24 Purposes for which loans may

8 303.48(d). be made and periods of such

303.54 Administrative authorization. loans.

303.55 Delegation of authority. 303.25 Amortization and rate of interest.

SUBPART- Loans to individuals 303.26 Notes and security.

for participation in coopera303.27 Recording and filing of securing

tive and group service loans documents.

303.71 Purposes. 303.28 Encumbrances and creditors. 303.72 Security. 303.29 Administrative authorization. 303.73 Period of loan. 303.30 Delegation of authority.

303.74 Amortization.

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*For statutory citation, see note to 8 302.1.


Sec. 303.75 Rate of interest.

303.119 Application for purchase and 303.76 Reports.

loan. 303.77 Procedure.

303.120 Performing construction. 303.78 Construction and establishment 303.121 Supplemental loans. of approved services.

SUBPART—Collection of rural reSUBPART-Loans to occupants of

habilitation loans rural resettlement type proj- 303.136 General policies. ects for operating capital 303.137 Death of borrower.

303.138 Sale of produce or other en303.91 Families eligible.

cumbered property. 303.92 Purposes for which operating 303.139 Final settlement, cancelation goods loans may be made.

and surrender of rates. 303.93 Terms and conditions. 303.94 Repayments.

303.140 Administrative authorization.

303.141 Delegation of authority. 303.95 Security. 303.96 Releases.

SUBPART/Release of property

subject to a lien SUBPART—Loans to individuals

303.155 Purpose. for construction on resettle

303.156 Definition. ment lands occupied under 303.157 Conditions upon which prop lease and purchase contracts

erty may be released. 303.116 Families eligible.

303.158 Purposes for which property 303.117 Terms, conditions and purposes

may be released. for which construction loans 303.159 Application for release. and lease and purchase of 303.160 Execution of release form and land may be made.

delegation of authority to ex303.118 Security.

ecute the same.


Section 303.1 State organization. Subject to the administrative authority of the regional director, or his designated assistant the State director of the Farm Security Administration shall be responsible for supervising the execution of the tenant purchase program in the respective states.

In each State there shall be a State Farm Security Advisory committee, which shall serve in an advisory capacity with respect to all phases of the Farm Security Program, except that such committees are not intended to replace existing state Farm-Debt Adjustment committees. These committees shall be appointed by the Secretary of Agriculture in the following manner:

Each regional director of the Farm Security Administration shall, in the manner indicated in special instructions to be issued, submit to the Administrator of the Farm Security Administration for transmittal to the Secretary of Agriculture, 15 nominees listed in order of preference with information regarding the qualifications of each nominee. The Secretary of Agriculture will consider the nominations submitted and, if acceptable, will select nine appointees and designate a committee chairman. If the nominees submitted are not acceptable, others shall be submitted in like manner. Nominees shall be selected from the standpoint of their qualifications for service without reference to political affiliation. Members of state committees shall serve without compensation but they shall be reimbursed for expenses incurred in attending committee meetings.

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