(a) Corporations and tribes may be charged one head for each ten head loaned for a period not exceeding twentyfive years.

(b) Cooperatives and individuals may be charged one head for each ten head loaned for a period not exceeding eight years.

§ 23.10

Records and reports. Borrowers, other than individuals, shall keep separate records and accounts of their cattle loans and make signed reports as directed by the Commissioner. The Commissioner shall make an annual report to the Secretary on loans of cattle.

§ 23.11 Maturity. The period of maturity of loans of cattle shall be determined according to the circumstances, except that thirty years shall be the maximum on loans to corporations and tribes, and ten years shall be the maximum on loans to cooperative associations and individuals.

§ 23.12 Security. Borrowers shall furnish security, if available, up to an amount adequate to protect the loan. Trust or restricted land may not be taken as security for loans of cattle by the United States. Assignments of income from trust or restricted land may be required as security. Loans of cattle to corporations and tribes may be secured through the assignment of notes, chattel mortgages, income, liens (except on trust or restricted land), and such other securities as the Commissioner may require, Provided, That where the constitution, bylaws or charter require approval of security by the Secretary, the approval of the Secretary or his authorized representative must be obtained before the loan is approved.

§ 23.13 Title. Unless otherwise provided in the loan agreement, title to all cattle loaned, the increase therefrom, and any "lieu" cattle to replace animals loaned, shall remain in the United States in trust for the borrower until the loan is repaid.

§ 23.14 Branding. Unless otherwise provided in the loan agreement, all cattle loaned by the United States, the increase therefrom, and any "lieu" cattle replacing animals loaned, shall be branded ID, and in the case of loans to corporate and tribal enterprises, individuals and cooperatives, all cattle shall also be branded with the brand or mark of the borrower.

§ 23.15 Penalties on default. Unless otherwise provided in the loan agreement, failure on the part of a borrower to conform to the terms of the loan agreement will be deemed grounds for any one or all of the following steps to be taken by the Commissioner or, in the case of cooperative associations and individual borrowers, by an authorized representative of the Commissioner:

(a) Take possession of any or all collateral given as security, and in the case of individuals and cooperative associations, the cattle loaned.

(b) Prosecute legal action against the borrower, or against officers of corporations, tribes, and cooperative associations.

(c) Declare the loan immediately due and payable.

(d) In the case of corporations and tribes, prevent further loans of cattle under the control of the borrower, and repossess any cattle which have not been reloaned, and require that all repayments on loans made by the corporation or tribe be applied to liquidate its indebtedness to the United States.

(e) In the case of cooperative associations, take possession of the assets of the borrower, and exercise or arrange for the exercise of its powers until the indebtedness to the United States is liquidated, or until the Commissioner or his authorized representative has received acceptable assurance of its repayment and of compliance with the loan agreement.

(f) In the case of corporate and tribal enterprises, liquidate or operate, or arrange for the operation of the enterprise until its indebtedness is paid, or until the Commissioner has received acceptable assurance of its repayment and of compliance with the loan agreement.

§ 23.16 Assignment.

A corporation

or tribe may not assign its loan agreement or any interest therein to a third party without the written consent of the Commissioner. A cooperative or individual may not make such assignment without the written consent of the Commissioner or his authorized representative.

§ 23.17 Sales and exchanges. The Commissioner or his authorized representative may grant borrowers permission to sell or exchange cattle for which repayment has not been made, provided the interests of the United States in the

loan will not be jeopardized. Such sales shall be for the account of the borrower. The proceeds of any sales of cattle not for the account of a borrower must be deposited in the Treasury to the credit of the United States.

Repayments.

Repayments

§ 23.18 shall be made to a bonded Government disbursing agent or his authorized representative, who shall issue receipts for all such payments. When it is impracticable for borrowers to repay their loans in cattle because of the death of the cattle or for other cause, the Commissioner or his authorized representative may accept from borrowers, their heirs, successors, or assigns, cash in lieu thereof for deposit as individual Indian moneys to be expended in the purchase of cattle to be credited on such loans. Such transactions shall be for the account of the borrower and credit for repayments shall be given only after the cattle have been purchased.

§ 23.19 Transfer of cattle. Cattle repaid or repossessed from borrowers or assignees may be transferred to such reservations as the Commissioner may determine for the purpose of making loans.

§ 23.20 Relending by corporations and tribes. Corporations and tribes receiving loans of cattle from the United States may relend the cattle as follows:

(a) Purpose. All loans shall be to promote the economic development of the borrower.

(b) Eligibility. Loans may be made to individual members of the corporation or tribe, subordinate bands, and to cooperative associations whose articles of association and bylaws have been approved by the Commissioner or his authorized representative.

(c) Application, The application shall be on a form approved by the Commissioner indicating the period of the loan, the interest to be paid, the security offered, and the procedures to be followed in handling and repaying the loan.

(d) Approval. All loans shall require approval of the Commissioner or his authorized representative, unless the Commissioner authorizes the corporation or tribe to approve loans up to a specified number of cattle. Loan agreements must be executed on a form approved by the Commissioner. Applications shall be approved either as submitted, or by issuance of a commitment order covering the terms and conditions of making the loan.

Commitment orders shall be unconditionally accepted by borrowers.

(e) Modifications. Unless otherwise authorized by the Commissioner, modifications of loan agreements shall be handled through the same channels as the original loan agreement.

(f) Interest. Interest may be charged at a rate as nearly equivalent as possible to one head for each ten head loaned for a period not exceeding eight years. Payments may be made either in cattle or in cash. Cash payments shall be based on market prices of cattle as approved by the Commissioner or his authorized representative.

(g) Maturity. Ten years shall be the maximum on loans.

(h) Security. Borrowers shall furnish security, if available, up to an amount adequate to protect the loan. Liens on trust or restricted land may be taken as security by corporations and tribes.

(i) Title. Unless otherwise provided in the loan agreement, title to all cattle loaned, the increase therefrom, and any "lieu" cattle replacing animals loaned, shall remain in the United States in trust for the lender until the loan is repaid.

(j) Branding. Unless otherwise provided in the loan agreement, all cattle loaned, the increase therefrom, and any "lieu" cattle replacing animals loaned, shall be branded ID, and also with the brand or mark of the borrower.

(k) Penalties on default. Unless the loan agreement otherwise provides, failure on the part of a borrower to conform to the terms of the loan agreement will be deemed grounds for any one or all of the following steps to be taken at the option of the lender:

(1) Take possession of any or all collateral given as security, and the cattle loaned.

(2) Prosecute legal action against the borrower.

(3) Declare the loan immediately due and payable.

(4) In the case of cooperative associations, take possession of the assets of the borrower, and exercise or arrange for the exercise of its powers until the indebtedness to the corporation or tribe is liquidated, or until the lender has received acceptable assurance of its repayment and of compliance with the loan agreement.

(1) Assignment. A borrower may not assign a loan agreement or any interest therein to a third party without the consent of the lender.

(m) Sales and exchanges. The lender, with the approval of the Commissioner or his authorized representative, may grant borrowers permission to sell or exchange cattle for which repayment has not been made, provided the interests of the lender in the loan will not be jeopardized. Such sales shall be for the account of the borrower.

(n) Repayments. Repayments shall be made to an authorized representative of the lender, who shall issue receipts for all repayments. When it is impracticable for borrowers to repay their loans in cattle because of the death of the cattle or for some other cause, the lender may accept from borrowers, their heirs, successors, or assigns, cash in lieu thereof for the purchase of suitable replacements.

(0) Number loaned. Not less than ten head of beef cattle of breeding quality, nor more than fifty head, may be loaned to any one individual borrower or family group.

(p) Preference. Preference shall be given to applicants in the following order:

(1) Applicants who have herds of less than fifty head of beef breeding cattle who are equipped to handle up to fifty head. Loans to this group in sufficient numbers to bring their herds up to fifty head of breeding cattle shall receive priority.

(2) Applicants who have not previously participated in the program, but who are equipped to handle a beef cattle enterprise.

(3) Applicants who have fifty head or more but less than 100 head of beef breeding cattle. This group of applicants shall not receive loans until all applicants having less than fifty head of breeding cattle who are equipped to handle a fifty head breeding unit, have received loans.

(q) Restrictions. Loans to applicants owning 100 head or more shall not be approved without the consent of the Commissioner. Applicants who do not maintain or increase their herds after having participated in the program shall not receive loans of additional cattle until such time as all other applications have been considered, and then only upon a

28.17 28.18

Records and reports.

Maturity.

Security.

Insurance.

Deceased borrowers.

Responsibility of superintendent.

AUTHORITY: §§ 28.1 to 28.18, inclusive, issued under Sec. 3, 50 Stat. 872; 25 U.S.C. 532.

SOURCE: §§ 28.1 to 28.18. inclusive, contained in Regulations, Assistant Secretary of the Interior, Sept. 30, 1947, 12 F.R. 6735.

§ 28.1 Definitions. Wherever used in the regulations in this part the terms defined in this section shall have the meaning stated in this part.

(a) "Commissioner" means the Commissioner of Indian Affairs.

(b) "Superintendent" means the Superintendent of the Klamath Indian Agency.

(c) "District Director" means the officer in charge of the district office of the Indian Service, under which the Klamath Indian Agency is placed for administrative purposes. The authority of the District Director under this part may be delegated by him in writing to his subordinates in the district office.

(d) "Klamath Tribes" means the Klamath and Modoc Tribes and Yahoo

skin Band of Snake Indians of the Klamath Reservation in Oregon.

(e) "Business Committee" means the Business Committee of the Klamath Tribes elected in accordance with the constitution and bylaws approved by the Commissioner.

(f) "Board" means the Klamath Loan Board elected in accordance with the regulations in this part.

(g) "Fund" means the reimbursable loan fund authorized by the acts of August 28, 1937 and August 7, 1939 (50 Stat. 872, 53 Stat. 1253, 25 U. S. C. 530-535, 542 (a)).

(h) "Loan agreement" means the approved application, supporting papers, commitment order. and note or notes.

§ 28.2 Purpose of regulations. The purpose of the regulations in this part is to prescribe the terms and conditions of loans from the fund.

§ 28.3 Loan board. The fund shall be administered by a Board of three adult enrolled members of the Klamath Tribes.

(a) Election. Board members shall be elected by the Klamath General Council. The Commissioner may prescribe detailed election procedures which are not inconsistent with the provisions of this section. Only adult enrolled members, or minor enrolled members who are heads of families shall be entitled to vote. Voting shall be by secret ballot. The members of the present Board shall remain in office until their terms expire, unless suspended under the regulations in this part. Thereafter, one new member shall be elected each year for a term of three years, or until his successor is elected. The candidate receiving the highest number of votes shall be deemed to have been elected. If a vacancy occurs, a successor shall be elected at a special meeting of the Klamath General Council at which the same procedure shall be followed as in the case of a regular election. The person so elected shall serve only for the unexpired term of the member whom he replaces.

(b) Officers. Each year within 30 days after the election of a new member, the Board shall meet and elect from among its members, a chairman and a vice-chairman. The Board shall select and employ a secretary, who shall not be a member of the Board.

(c) Duties of officers. The chairman shall preside at meetings of the Board,

perform acts and other duties usually performed by a presiding officer, and sign papers as authorized or directed by the Board. The vice-chairman shall perform the duties of chairman during his absence, or as authorized by the Board. The secretary shall keep a complete record of all meetings of the Board, make reports, and perform such other duties as may be required by the Board.

(d) Meetings. The Board shall meet at least once each month, but shall not meet oftener than once a week, unless the Business Committee authorizes meet ́ings to be held oftener during a specified period of time when the volume of business justifies more frequent meetings.

(e) Quorum. Two members shall constitute a quorum.

(f) Suspension. The Business Committee may suspend a member of the Board at any time for cause, notice of which shall be given to the member in writing. A suspended member shall have no authority to act for or on the Board during a period of suspension. The Commissioner may suspend all powers of the Board if he finds after investigation that the Board is being administered in a manner detrimental to the interests of the tribe. In case more than one member has been suspended by the Business Committee at a particular time, or if the Commissioner has suspended all powers of the Board, the Superintendent may exercise such functions of the Board as may be necessary to protect the funds loaned, but new loans may not be made during such period.

(g) Expenses. The Board may hire clerical and other assistance necessary to administer the fund. Salaries of Board members, and expenditures in connection with the business of the Board, may be paid as administrative expenses. Necessary travel by members of the Board, or by officers and employees of the Board, by common carrier, shall be on Government transportation requests in accordance with existing Government travel regulations. Transportation requests shall be issued by the Superintendent. All claims for services rendered shall be submitted to the Superintendent on a form provided by him for that purpose. All claims of whatever nature shall be subject to audit and approval by the Superintendent.

(h) Budget. The Board shall, at the beginning of each fiscal year, submit to the Business Committee for approval a

written budget of estimated income from interest and service fees and estimated expenses for the ensuing fiscal year. The budget shall show the rate of compensation to Board members and employees, the amount outstanding in loans, the amount delinquent, and potential losses. Budgets shall be acted upon by the Business Committee, and, if approved, shall constitute the Superintendent's authority to make disbursements thereunder as expenses are incurred, Provided, That no disbursements shall be made in excess of the amount of income received from interest and service fees, or in violation of any of the regulations in this part. Budgets may be modified by the Business Committee upon request of the Board.

§ 28.4 Eligibility. Loans may be made to enrolled members of the Klamath Tribes, and to cooperative associations of members, Provided, That the articles of association and bylaws of cooperative associations must be approved by the District Director.

§ 28.5 Application. Applications shall be submitted to the Board on a form approved by the Commissioner. Each application shall indicate the purposes for which the loan is to be used, the period of the loan, the rate of interest and amount of service fees to be paid, the security to be given, and the procedures to be followed in handling and repaying the loan.

§ 28.6 Purpose of loans. Loans may be made for any purpose authorized by section 2 of the act of August 28, 1937 (50 Stat. 872; 25 U. S. C. 531).

§ 28.7 Approval of loans. Loan agreements must be executed on a form approved by the Commissioner.

(a) Action by Board. Action on applications shall require an affirmative vote of at least two members of the Board. In order to receive final approval, all loans must be acted upon favorably by the Board.

(b) Approval by Board. Except as otherwise indicated in this part, the Board shall have authority to approve loans where the applicant's total indebtedness to the fund will not exceed $2,000.

(c) Approval by Superintendent. Except as otherwise indicated in the regulations in this part, loans acted upon favorably by the Board, where the applicant's total indebtedness to the fund

will exceed $2,000 but not exceed $3,000 may be approved by the Superintendent.

(d) Approval by District Director. Except as otherwise indicated in the regulations in this part, loans acted upon favorably by the Board where the applicant's indebtedness to the fund will exceed $3,000 but not exceed $5,000, may be approved by the District Director. Loans to cooperatives; loans for the purchase of livestock, equipment, or machinery with maturities exceeding six years; loans with maturities exceeding ten years; educational loans; and loans to individuals who are Government employees shall require approval of the District Director regardless of amount. Burial loans in excess of $500; emergency loans in excess of $500 to applicants who do not have security adequate to protect the loans; and loans for maintenance and support of aged, infirm, or incapacitated members in excess of $500 shall also require approval of the District Director.

(e) Approval by Commissioner. All loans in excess of $5,000 shall require approval by the Commissioner.

(f) Restrictions on approval. Loans shall not be approved for less than $25. Any loans to borrowers who are delinquent in payment of previous indebtedness to the fund shall require the approval of the Business Committee in addition to the approvals set forth in other sections of the regulations in this part. Not more than two loan agreements may be in effect with the same borrower at the same time. Only joint loans may be made to a husband and wife who are both eligible for loans, and any existing loan to either spouse shall be consolidated with such loan.

(g) Amount of loans. The amounts set forth in the regulations in this part refer to the total amounts of loans, regardless of whether they are joint or partnership loans.

(h) Modifications. Modifications of loan agreements involving the extension of the terms of repayment shall require approval of the District Director. Other modifications shall be handled through the same channels as the original applications, except that the District Director may approve modifications of loan agreements approved originally by the Commissioner in cases in which the amounts of the loans are not increased.

§ 28.8 Interest and service fees. Borrowers shall pay 3 percent interest annu