ARSD Article 68:02 — BOARD OF ECONOMIC DEVELOPMENT

GOVERNOR'S OFFICE OF ECONOMIC DEVELOPMENT GOVERNOR'S OFFICE OF ECONOMIC DEVELOPMENT

Chapter 68:02:01 REDI loans

ARSD 68:02:01:01 Repealed

Definitions.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; 21 SDR 44, effective July 4, 1994; 30 SDR 99, effective December 15, 2003; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:02 Repealed

Eligibility requirements.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; 25 SDR 59, effective October 28, 1998; 30 SDR 99, effective December 15, 2003; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:03 Repealed

Preapplication conference.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:04 Repealed

Application requirements.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; 21 SDR 44, effective July 4, 1994; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:05 Repealed

Loan amounts.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:06 Repealed

Equity contribution.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; 21 SDR 44, effective July 4. 1994; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:07 Repealed

Permissible uses of loan proceeds.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:08 Repealed

Impermissible uses of loan proceeds.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:09 Repealed

Interim financing.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:10 Repealed

Factors for board action.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; 21 SDR 44, effective July 4, 1994; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:11 Repealed

Board action on applications.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:12 Repealed

Acceptance and time restrictions of applicant.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; 21 SDR 44, effective July 4, 1994; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:13 Repealed

Lender agreement.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; 21 SDR 44, effective July 4, 1994; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:14 Repealed

Regulated lender reporting requirements.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:15 Repealed

Loan agreement.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:16 Repealed

Borrower reporting requirements.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; 21 SDR 44, effective July 4, 1994; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:17 Repealed

Inspection of the business by the board and retention of records.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:18 Repealed

Additional notification requirements.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:19 Repealed

Maturity and interest rate.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; 21 SDR 44, effective July 4, 1994; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:20 Repealed

Review of financial status.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:21 Repealed

Default on loan agreement.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:22 Repealed

Enterprise zones.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:23 Repealed

Delegation of administrative functions.** Repealed.

History

Source: 14 SDR 24, effective August 19, 1987; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:24 Repealed

Banking commission audit.** Repealed.

History

Source: 21 SDR 44, effective July 4, 1994; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:25 Repealed

Loans to RRLFs.** Repealed.

History

Source: 30 SDR 99, effective December 15, 2003; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:26 Repealed

RRLF application requirements.** Repealed.

History

Source: 30 SDR 99, effective December 15, 2003; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:27 Repealed

RRLF loan amount.** Repealed.

History

Source: 30 SDR 99, effective December 15, 2003; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:28 Repealed

RRLF loan maturity and interest rate.** Repealed.

History

Source: 30 SDR 99, effective December 15, 2003; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:29 Repealed

RRLF loan collateral.** Repealed.

History

Source: 30 SDR 99, effective December 15, 2003; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:30 Repealed

Impermissible uses of RRLF loan proceeds.** Repealed.

History

Source: 30 SDR 99, effective December 15, 2003; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:31 Repealed

RRLF borrower reporting requirements.** Repealed.

History

Source: 30 SDR 99, effective December 15, 2003; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:32 Repealed

Application of other rules to RRLF loans.** Repealed.

History

Source: 30 SDR 99, effective December 15, 2003; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:01:33 Definitions

Terms used in this chapter mean:

(1) "Applicant," any natural person, for-profit entity, or non-profit entity that has completed a REDI fund loan application;

(2) "Board," the Board of Economic Development;

(3) "Borrower," an applicant who has been awarded a REDI fund loan;

(4) "Credit committee," a committee made up of members of the board appointed by the chair of the board with the powers described in § 68:02:01:56;

(5) "Equity," capital that has no guaranteed or mandatory return which must be invested in the project in any event and which has no definite timetable for repayment to the equity holder;

(6) "GOED," the Governor's Office of Economic Development;

(7) "Multifamily housing," housing containing two or more dwelling units, including in an apartment building, duplex, triplex, quadriplex, or townhomes. The term includes housing intended for lease or purchase by the occupant;

(8) "Preliminary design stage," that portion of the project associated with market research studies identifying the project scope and need, compilation of the business plan, written initial cost estimates, written site options and description, and obtaining the commitments of the lenders;

(9) "Primary jobs," jobs derived from businesses that bring new income into an area, stimulate other local businesses, or assist a community to diversity and stabilize its economy;

(10) "Project," except when the term is used in conjunction with multifamily housing, the new business; retention, relocation or expansion of an existing business; or other endeavor which will create or retain primary jobs. When the term is used in conjunction with multifamily housing, the term means new multifamily housing or the acquisition and refurbishment of existing multifamily housing;

(11) "REDI fund," the revolving economic development and initiative fund;

(12) "Total project costs," the direct costs associated with the purchase of land, necessary site development and improvements, construction or acquisition and remodeling of buildings and works necessary to the operation and protection of the project, purchase and installation of machinery and equipment, purchase or development of intellectual property rights, fees for services, approved in-kind contributions, adequate working capital financing, and any other cost approved by the board.

History

Source: 34 SDR 68, effective September 13, 2007; 39 SDR 16, effective August 6, 2012; 46 SDR 123, effective May 12, 2020.
General Authority: SDCL 1-16G-5, 1-16G-8.
Law Implemented: SDCL 1-16G-5, 1-16G-8.

ARSD 68:02:01:34 Eligibility requirements

Any natural person or entity whose project will create or retain primary jobs is eligible to apply for a loan from the REDI fund. The creation or retention of primary jobs is not required for a project which consists solely of multifamily housing.

History

Source: 34 SDR 68, effective September 13, 2007; 46 SDR 123, effective May 12, 2020.
General Authority: SDCL 1-16G-5, 1-16G-8(6).
Law Implemented: SDCL 1-16G-5, 1-16G-8(6).

ARSD 68:02:01:35 Application requirements -- Screening

GOED shall provide loan application forms, which the applicant shall complete and sign before an application may be presented to the board. GOED shall screen all applications for completeness and eligibility upon receipt. No incomplete application or ineligible applicant may be presented to the board.

Applications must include the following information:

(1) The applicant's name and address;

(2) The name, address, resume, and references of any owner, investor, or management of the business;

(3) The articles of incorporation and bylaws, or other agreements, that describe the legal operation or structure of the business;

(4) The name and address of the owner or operator of the business during the term of the loan;

(5) A business plan that contains, as applicable:

(a) Information regarding the housing, products, or services to be offered by the applicant;

(b) Job descriptions with attendant salary or wage information by job category;

(d) Educational requirements by job category; and

(e) Methods of accounting, financing, marketing, sales, merchandising, and other disciplines proposed to be used for business growth and expansion;

(6) A letter of commitment from every funding source;

(7) Up to three years of historical balance sheets, cash flow statements, and income statements or federal tax returns;

(8) Pro forma balance sheets, cash flow statements, and income statements for the greater of three years or the term of the loan;

(9) A statement of licensing requirements applicable to the applicant's business operations and their status;

(10) A statement that describes the effect of the business on the tax base of the area of the project and other positive and negative effects of the project on the area;

(11) Evidence the project does or will comply with local zoning laws and building codes and that the necessary public utilities are available or will be available when needed by the project;

(12) A statement describing the approximate construction date, construction completion date, and the date by which the project is to be fully operational;

(13) Documentation that the preliminary design stage has been completed; and

(14) Any other information, as requested by the board, in order to make a decision on the application.

History

Source: 34 SDR 68, effective September 13, 2007; 52 SDR 49, effective November 17, 2025.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5.

ARSD 68:02:01:36 Loan amounts

Unless waived by an affirmative vote of two-thirds of the members of the board present and voting, a loan made pursuant to this chapter may not exceed the original principal amount of three million dollars. Unless waived by an affirmative vote of two-thirds of the members of the board present and voting, a loan made pursuant to this chapter may not exceed forty-five percent of the total project cost.

History

Source: 34 SDR 68, effective September 13, 2007; 52 SDR 49, effective November 17, 2025.
General Authority: SDCL 1-16G-5, 1-16G-8(10).
Law Implemented: SDCL 1-16G-5.

ARSD 68:02:01:37 Equity contribution

The applicant shall provide an equity contribution of a minimum of 10 percent of the total project costs as determined by the board. The requirement may be waived by the affirmative vote of two-thirds vote of the members of the board present and voting if the equity contribution is not necessary to secure the interests of the board. In-kind contributions and completed work may be applied toward the equity contribution and total project costs if, in the judgment of the board, such in-kind contributions and completed work contribute substantially to the project. Costs associated with the preliminary design stage may not be considered as equity contribution except for board-approved intellectual property and innovative technology research and development expenses. The applicant shall provide proof of the existence or availability of the equity contribution.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(10).

ARSD 68:02:01:38 Use of loan proceeds

Loan proceeds may be used for any portion of the total project costs. Except as otherwise provided in this chapter, loan proceeds may not be used for costs associated with the preliminary design stage. Loan proceeds may not be used to finance or refinance the cost of the preliminary design stage. Except for the refinancing of third party interim loans incurred for the project, loan proceeds may not be used to pay existing debt.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(9).
Law Implemented: SDCL 1-16G-5, 1-16G-8(9).

ARSD 68:02:01:39 REDI loan as take-out financing

Unless otherwise specifically provided in the resolution or motion approving the loan, the applicant shall use the loan to pay off interim financing incurred for the project.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(9).
Law Implemented: SDCL 1-16G-5, 1-16G-8(9).

ARSD 68:02:01:40 Factors for board action

When making a decision on an application, the board may, in addition to other factors necessary to make a prudent loan decision, consider the following:

(1) Project impact factors:

(a) Economic impact of primary jobs created or retained;

(b) Net economic effect of increasing or stabilizing the economy on the community, area, and state;

(d) Support of the public entities of the community and area;

(e) The amount of the owner's equity contributed to the project;

(f) The effect of the project on the environment, health, and safety of the people in the community, area, and state;

(g) Compatibility with economic development plans of the area and state;

(h) Type of business;

(i) Payroll, pay structure, and employee benefit structure;

(j) Number of jobs created or retained; and

(k) In the case of multifamily housing, the impact of the project on the availability of workforce within the project area;

(2) Business feasibility factors:

(a) The potential success of the business and the potential for creating quality jobs and the growth of those jobs;

(b) The character, experience, management record, and background of the applicant;

(c) The capacity of the applicant to repay the loan. In determining the capacity of the applicant, the board shall consider the following:

(i) The amount of the loan;

(ii) The economic feasibility of the project;

(iii) The ability of the applicant to service the debt from cash flow of operations, capital, or collateral;

(iv) The financial status of the project, business plan, and applicant;

(v) The satisfaction of engineering, legal, and environmental regulations; and

(vi) The availability of necessary public utilities;

(d) The total capitalization of the project, which includes all capitalization subordinated to the REDI fund;

(e) The amount, terms, and conditions of the loan and their compatibility with the needs of the business and the REDI fund; and

(f) The availability of sufficient collateral to secure the interests of the REDI fund.

History

Source: 34 SDR 68, effective September 13, 2007; 46 SDR 123, effective May 12, 2020.
General Authority: SDCL 1-16G-5, 1-16G-8(8).
Law Implemented: SDCL 1-16G-5, 1-16G-8(8).

ARSD 68:02:01:41 Board action on applications

Within 30 days after GOED receives a complete application, the board shall either approve the application as requested, disapprove the application for modification, approve the application contingent on the realization of certain defined conditions, or disapprove the application. If the application is disapproved or disapproved for modification, the reasons shall be transmitted to the applicant in writing. The applicant whose application has been disapproved may submit another application that addresses the reason for disapproval. The board may extend the time for consideration of an application for up to 50 additional days by advising the applicant of the extension in writing.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7).

ARSD 68:02:01:42 Acceptance and time restrictions of applicant

The applicant must comply with any conditions required by the board before the application is approved. Within six months after the official loan approval by the board, the applicant must accept the approval in writing or the approval is void. Within six months after written acceptance, the applicant must commence the project. All loan proceeds must be disbursed within one year after approval by the board. The board or credit committee may extend the time for completion of the project and the final disbursement of loan proceeds if mitigating circumstances prevent completion of the project and the applicant has made a diligent effort so to do. The applicant shall submit any request for extension by the monthly loan application deadline prior to the expiration of the six-month period for completion of the project. The board or credit committee may establish the length of the extension period based on the mitigating circumstances.

History

Source: 34 SDR 68, effective September 13, 2007; 39 SDR 16, effective August 6, 2012.
General Authority: SDCL 1-16G-5, 1-16G-8(7)(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7)(10).

ARSD 68:02:01:43 Review of financial status

After the loan is approved but before the loan is closed, the board or GOED may conduct an overall review of the applicant's financial status. The review may include an analysis of all assets and liabilities and an analysis of the applicant's ability to repay the loan and comply with the loan covenants. The board may withdraw the commitment at any time if a material adverse change occurs.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(7)(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7)(10).

ARSD 68:02:01:44 Loan agreement -- Employment agreement -- Security

After the application for a loan is approved, the board and the borrower shall execute a loan agreement, employment agreement, and any other loan documents required by the board. The loan agreement shall contain the rights and responsibilities of the parties and the terms and conditions of the loan. The requirements to secure the loan shall be included in the loan agreement. The employment agreement shall establish the number of primary jobs to be created or retained and the damages payable by the borrower if those jobs are not created or retained. No employment agreement is required for a project consisting solely of multifamily housing.

A loan may be secured or unsecured. A secured loan may be secured by a lien on the interest of the borrower in real and personal property, whether tangible or intangible, as deemed necessary by the board to adequately collateralize the loan.

History

Source: 34 SDR 68, effective September 13, 2007; 46 SDR 123, effective May 12, 2020.
General Authority: SDCL 1-16G-5, 1-16G-8(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(10).

ARSD 68:02:01:45 Borrower reporting requirements

The borrower shall submit to the board annually the following information:

(1) Employment report;

(2) Federal tax returns or periodic financial statements, or both, as requested by the board; and

(3) Other information which the board or GOED deems necessary to determine the financial condition of the borrower and conformance to loan covenants.

The board may require that the financial statements be compiled, reviewed, or audited by an independent accountant at the borrower's expense.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(5).
Law Implemented: SDCL 1-16G-5, 1-16G-8(5).

ARSD 68:02:01:46 Inspection by the board and retention of records

During the term of the loan, the board or GOED may inspect construction; inspect the borrower's operations, books, and records; and request the borrower to provide accounting records, payments, and invoices to ensure compliance with the terms of the loan agreement and the borrower's ongoing ability to repay the loan. The borrower shall retain accounting and tax records for the term of the loan or for a period of three years, whichever is longer.

The board may contract for project monitoring and servicing during the planning, construction, and operation of the project and the borrower's business.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(5).
Law Implemented: SDCL 1-16G-5, 1-16G-8(5).

ARSD 68:02:01:47 Additional notification requirements

The borrower shall provide written notice to the board with ten business days of any:

(1) Change in top level management of the borrower's business;

(2) Change in ownership of ten percent or more of the business's stock, membership interests, or ownership interests; or

(3) Plans for sale, public offering, or lease of the business.

The sale, public offering, or lease of the business requires prior written approval of the board. If the notification and prior approval requirements of this section are not satisfied, the board may call the loan immediately due and payable.

History

Source: 34 SDR 68, effective September 13, 2007; 52 SDR 49, effective November 17, 2025.
General Authority: SDCL 1-16G-5, 1-16G-8(5).
Law Implemented: SDCL 1-16G-5.

ARSD 68:02:01:48 Loan term and amortization

The maturity of a loan and amortization of payments are as follows:

(1) For a project consisting solely of multifamily housing, a maturity date up to thirty years from the date of loan closing, with payments amortized over not more than thirty years; and

(2) For all other loans, a maturity date of up to five years from the date of loan closing, with payments amortized over not more than twenty years. However, upon an affirmative vote of two-thirds of the board members present and voting, loans for projects other than multifamily housing may be made with a maturity date up to ten years from the date of loan closing, with payments amortized over not more than twenty years.

History

Source: 34 SDR 68, effective September 13, 2007; 39 SDR 16, effective August 6, 2012; 46 SDR 123, effective May 12, 2020; 52 SDR 49, effective November 17, 2025.
General Authority: SDCL 1-16G-5, 1-16G-8(7)(10).
Law Implemented: SDCL 1-16G-5.

ARSD 68:02:01:48.01 Interest rate

The board shall establish the standard interest rate for REDI loans from time-to-time and publish the rates on the GOED website. The board may deviate from the standard interest rate based on the economic impact of the project, nature and extent of collateral, risk, the amortization period of the loan, and other prudent lending criteria.

The board shall consider the following when establishing the standard interest rate:

(1) State and national market interest rates;

(2) State and national economic conditions;

(3) The solvency and balance of the REDI fund; and

(4) Other economic or business information necessary to fulfill the board mission to promote economic development in this state.

The borrower is responsible for arranging other financing when the loan is due. If the borrower is unable to obtain financing at reasonable rates and upon reasonable terms, the borrower may apply, before the loan due date, for an extension of the loan at an interest rate and for a time period established by the board. The borrower shall submit an application for extension by the monthly loan application deadline prior to the loan maturity date.

History

Source: 52 SDR 49, effective November 17, 2025.
General Authority: SDCL 1-16G-5, 1-16G-8(7)(10).
Law Implemented: SDCL 1-16G-5.

ARSD 68:02:01:49 Default

If the borrower violates any of the terms of the loan agreement, the other loan documents, this chapter, or other applicable law, the board may declare the loan in default. Upon default, the board may do one or more of the following:

(1) Declare the entire principal amount then outstanding and interest accrued thereon immediately due and payable

(2) Increase the interest rate to the default rate established in the loan documents;

(3) Take possession of the collateral;

(4) Repair, maintain, and operate the collateral, or sell, lease, or otherwise dispose of the collateral to another person or entity; or

(5) Take any other action considered appropriate by the board to protect the interest of the board and the REDI fund.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(10).
Law Implemented: SDCL 1-16G-1.1(6), 1-16G-5, 1-16G-8(10).

ARSD 68:02:01:50 Delegation of administrative functions

GOED shall, on behalf of the board with respect to loans:

(1) Perform the administrative functions of the creation, processing, and review of loan applications, including the financial status of an applicant, prior to board consideration;

(2) Prepare and negotiate loan commitment letters and loan agreements with a borrower following the board's approval of a loan;

(3) Add collateral requirements or co-borrowers to conform to the circumstances of the borrower and the loan at the time of loan closing;

(4) Add or remove guarantors at the time of loan closing based on applicable board policy with respect to a guarantor-owner's interest in the project;

(5) Consent to immaterial variances in total project costs or financing terms from other funding sources in connection with loan closing;

(6) Close and fund a loan made pursuant to this chapter in a principal amount up to five percent greater than originally approved by the board, subject to the following restrictions:

(a) The borrower documents specific, increased project costs incurred between loan approval and loan closing;

(b) The increase in total project cost is not due to the borrower's decision to enlarge the scope of the project or its business materially from what was presented in its application;

(d) All other lenders agree to increase their respective funding for the project on the same basis; and

(e) The board resolution approving the loan did not revoke or specifically limit GOED's authority under this subdivision;

(7) Review the financial status of an applicant or borrower;

(8) Perform loan servicing after loan closing and other functions necessary to expedite and assist it in the performance of its administration of loans on behalf of the board; and

(9) Allow a partial lien release or substitution of collateral for a loan, if requested in connection with the disposition of real or personal property collateral made in a borrower's normal course of business after loan closing.

Notwithstanding any assurance, guarantee, communication, or representation made to the contrary, there is no commitment of the REDI fund without specific authorization by the board. Only the board may make an award from the REDI fund to an applicant.

History

Source: 34 SDR 68, effective September 13, 2007; 52 SDR 49, effective November 17, 2025.
General Authority: SDCL 1-16G-5, 1-16G-8(5)(7).
Law Implemented: SDCL 1-16G-5.

ARSD 68:02:01:51 Official forms

The board may from time-to-time establish official forms of loan documents, including a loan agreement, promissory note, mortgage, security agreement, employment agreement, and such other documents, certifications, and agreements as the board deems necessary and appropriate. GOED may consent on behalf of the board on a case-by-case basis to any non-substantive modification or to any modification necessary to conform the official forms to the terms of the loan as established by the board.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(10).

ARSD 68:02:01:52 Conflicts of interest

No member of the board or GOED staff may participate in or vote upon a decision of the board relating to an application or loan servicing action relating to a borrower in which that individual has a direct personal or financial interest.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7).

ARSD 68:02:01:53 Confidentiality

The board, any committee of the board, and the GOED shall, to the extent it constitutes or contains trade secrets or commercial or financial information relating to the operation of an applicant or borrower, maintain as confidential any document, materials, information, or data received or generated by the board, any committee of the board, or the GOED in connection with a proposed or pending application for a REDI loan or an existing REDI loan. If requested by the applicant, the fact that an application has been proposed or is pending shall be maintained as confidential until such time as the application is considered by the board for approval. Any meeting of the credit committee shall be conducted in accordance with SDCL chapter 1-25 and SDCL 1-16G-11.

History

Source: 34 SDR 68, effective September 13, 2007; 39 SDR 16, effective August 6, 2012.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5, 1-16G-11.

ARSD 68:02:01:54 Repealed

Pre-existing loans.** Repealed.

History

Source: 34 SDR 68, effective September 13, 2007; 46 SDR 123, effective May 12, 2020.

ARSD 68:02:01:55 Banking Commission examination

The board shall request the South Dakota State Banking Commission to make an annual examination of the board's lending policies and procedures and the documentation and classification of loans in the REDI fund loan portfolio and all other loans administered by the board.

History

Source: 34 SDR 68, effective September 13, 2007; 39 SDR 16, effective August 6, 2012; 52 SDR 49, effective November 17, 2025.
General Authority: SDCL 1-16G-5.
Law Implemented: SDCL 1-16G-5.

ARSD 68:02:01:56 Credit committee -- Other committees

The chair shall appoint and may remove the members of the credit committee. The credit committee has the powers and duties described in this chapter and such other powers and duties as the board may delegate to it.

The board may establish other standing or ad hoc committees as the board deems appropriate. The chair shall appoint and may remove the members of committees established by the board.

History

Source: 39 SDR 16, effective August 6, 2012.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5.

Chapter 68:02:02 Value-added agriculture subfund

ARSD 68:02:02:01 Repealed

Definitions.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:02 Repealed

Eligibility requirements.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:03 Repealed

Application requirements.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:04 Repealed

Factors for board action.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:05 Repealed

Board action on applications.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:06 Repealed

Loan commitments.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:07 Repealed

Loan agreement.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:08 Repealed

Maturity and interest rate.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:09 Repealed

Review of financial status.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:10 Repealed

Loan disbursements.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:11 Repealed

Reporting requirements.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:12 Repealed

Notice requirements.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:13 Repealed

Default on loan agreement.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:14 Repealed

Delegation of administrative functions.** Repealed.

History

Source: 19 SDR 73, effective November 19, 1992; repealed, 34 SDR 68, effective September 13, 2007.

ARSD 68:02:02:15 Definitions

Terms used in this chapter mean:

(1) "Applicant," any natural person or entity that has completed a VASF loan application;

(2) "Board," the Board of Economic Development;

(3) "Borrower," an applicant who has been awarded a VASF loan;

(4) "Equity," capital that has no guaranteed or mandatory return which must be invested in the project in any event and which has no definite timetable for repayment to the equity holder;

(5) "GOED," the Governor's Office of Economic Development;

(6) "Project," the new business or expansion or redirection of an existing business that is eligible for a VASF loan;

(7) "REDI fund," the revolving economic development and initiative fund;

(8) "Study," the feasibility study, including any associated business plan; or marketing study, including any associated business plan; to be conducted in connection with the project and funded from the VASF. The term, "study," does not include research and development study or studies, advertising, travel, costs of consultants, or any other work associated with an equity drive;

(9) "VASF," the value-added agriculture subfund of the REDI fund created by SDCL 1-16G-25 to 1-16G-27, inclusive.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8.
Law Implemented: SDCL 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:16 Eligibility

Any natural person or entity whose project meets the following criterion may apply for a VASF loan:

(1) The industrial and nonfood production processes of the project utilize South Dakota agricultural products; or

(2) The food, feed, and fiber products and uses of the project utilize South Dakota agricultural products and add to the value of South Dakota agricultural products.

Any proposal aimed solely at business expansion or creation without regard to agricultural product utilization, any proposal that cannot reasonably be expected to result in a viable commercial application, or any proposal that is or has been duplicated by other research efforts or an existing business is not eligible for a VASF loan.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(6).
Law Implemented: SDCL 1-16G-5, 1-16G-8(6), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:17 Application requirements -- Screening

Application forms shall be provided by GOED, and shall be completed and signed before being presented to the board. GOED shall screen all applications for completeness and eligibility upon receipt. No incomplete or ineligible applications may be presented to the board. Applications shall include the following information if applicable:

(1) Applicant's name and address;

(2) Names, addresses, résumés, and references of owners, investors, and management of the project and of consultants to be engaged in connection with the study;

(3) Articles of incorporation and bylaws or other legal documents or agreements that describe the legal operation or structure of the business or of an intent to form a legal entity upon the award of a VASF loan;

(4) Name and address of the owner or operator of the project during the term of the VASF loan;

(5) An executive summary, summarizing the essential elements of the project, including narrative and funding request;

(6) Project narrative, including:

(a) Description of the product or process which will result from the study;

(b) Description of the planned commercialization efforts, including market research and feasibility studies to date by the applicant or others, and potential market for the product or process to be developed. A copy of any marketing plan to date and a copy of any business plan to date must be attached;

(c) Description of the feasibility or market research methodology to be employed, including objectives, tasks, milestones and research site; and a schedule of planned activities and timeframe for completion;

(d) Summary of prior market or feasibility research done by the applicant or others and the development of the product or process to date;

(e) Explanation of how the technology or innovation will benefit the applicant and agricultural producers in South Dakota;

(f) Explanation of why the project is needed and how the project will further develop existing technologies;

(g) Explanation of patents or regulatory approval needed, granted, or expected to be granted as a result of successful feasibility studies or marketing research;

(h) Explanation of the estimated benefit of the project to one or more sectors of South Dakota agriculture, such as increased markets, new uses, or value added to agricultural products;

(i) Explanation of the estimated benefit of the project in terms of impact on tax base, job creation, impact on infrastructure, stability of the economy, bringing new income to the area, or stimulation of other local businesses, together with other positive and negative effects of the project on the area; and

(j) List of project co-sponsors, including name of organization, address, telephone, key contact, and nature of participation. Letters of commitment from co-sponsors must be attached;

(7) List of letters of commitment from all funding sources;

(8) Up to three years of historical financial information from the business, if an existing business;

(9) Assurance of compliance with local zoning and building codes, and that the necessary utilities will be available, or are available, when needed by the project;

(10) Approximate construction date, construction completion date, and date by which the project will be fully operational;

(11) Any preliminary design information that has been completed;

(12) Project budget, including the following categories:

(a) Salaries, wages, and fringe benefits;

(b) Marketing or feasibility study consultant contracts, amounts, and résumés for any such consultants;

(d) Materials and supplies;

(e) Travel;

(f) Publication costs;

(g) Computer costs;

(h) Accounting services, including by whom they are provided;

(i) Legal and patent or intellectual property services, including by whom they are provided; and

(j) All other direct and indirect costs;

(13) Planned expenditures by funding source:

(a) VASF loan proceeds;

(b) Private funds;

(d) Equity funds of investors or owners; and

(e) Other matching funds, identified by individual source, including letters of commitment for matching funds to be provided contingent on approval of the grant or loan; and

(14) Any other information as requested by the board in order to make a sound and prudent loan decision.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:18 Loan amount

Unless waived by the affirmative vote of two-thirds of the members of the board present and voting, the total amount of a loan made pursuant to this chapter may not exceed $100,000. Unless waived by the affirmative vote of two-thirds of the members of the board present and voting, a VASF loan may not exceed 45% of the total cost of the study. Matching funds may not include grant or loan funds from another agency or grant or loan program of the state.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(10), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:19 Equity contribution

An applicant shall provide an equity contribution of at least 10 percent of the total cost of the study. The requirement may be waived by a two-thirds affirmative vote of the members of the board present and voting if the equity contribution is not necessary to secure the interests of the board. In-kind contributions and completed work may be applied toward the equity contribution if, in the judgment of the board, such in-kind contributions and work completed contribute substantially to the study. The applicant shall provide proof of the existence or availability of the equity contribution.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(10), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:20 Uses of loan proceeds -- Board-funded study

Loan proceeds may be used for salaries, consultant contracts, supplies, and necessary services for studies, and for other purposes not listed in this section as may be individually approved by the board. Loan proceeds may not be used to finance or refinance existing debt; for the purchase of land, site development or improvement; for the construction, purchase, or installation of equipment; or for other fees, services, and costs related to the construction of the project. No more than once per fiscal year, the board may commission a study and pay the entire cost of the study from VASF if it determines that doing so may avoid duplication of effort or will serve an unmet need. The cost to the VASF of a board-commissioned study may not exceed $100,000.

History

Source: 34 SDR 68, effective September 13, 2007; 39 SDR 16, effective August 6, 2012.
General Authority: SDCL 1-16G-5, 1-16G-8(9), 1-16G-28(3)(4).
Law Implemented: SDCL 1-16G-5, 1-16G-8(9), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:21 Factors for board action

When making a decision on an application, the board may, in addition to other factors necessary to make a prudent loan decision, consider the following:

(1) The concept is new technology or a new application of existing technology with a reasonable assurance that the concept will work;

(2) Preliminary market and feasibility research has been conducted by the applicant or others, and there is a reasonable assurance of a potential market;

(3) The applicant has demonstrated the ability to manage the commercialization of the concept and has prepared a commercialization development plan;

(4) There is favorable community support for the project;

(5) There are favorable recommendations for the project from local economic development groups, university-based technical specialists, or other qualified service providers;

(6) There are adequate references available to determine the applicant's qualifications and background;

(7) The applicant demonstrates a personal commitment to the project;

(8) The capacity of the applicant to repay a loan if awarded, including the amount of the loan, the economic feasibility of the project and product; the ability of the applicant to service the debt from cash flow of operations, capital, or collateral; the review of the financial status of the project, business plan, and applicant; the satisfaction of engineering, legal and environmental regulations; and the availability of necessary utilities;

(9) The amount, terms, and conditions of the loan, if awarded, and compatibility with the needs of the business and the VASF;

(10) There is an adequate and realistic budget projection;

(11) Compatibility with economic development plans of the area and state; and

(12) The balance remaining in the VASF.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(8).
Law Implemented: SDCL 1-16G-5, 1-16G-8(8), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:22 Board action on applications

Within 30 days after GOED receives a completed application, the board shall either approve the application as requested, disapprove the application for modification, approve the application contingent on realization of certain defined conditions, or disapprove the application. The board may extend the time for consideration of an application for up to 50 additional days by advising the applicant of the extension.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:23 Acceptance and time restrictions of applicant

The applicant must comply with any conditions required by the board before the application is approved. Within sixty days after official loan approval by the board, the applicant must accept the approval in writing or the approval is void. Within six months after written acceptance, the applicant must commence the study. Final disbursement of the loan proceeds must be made within one year after approval by the board. The board or credit committee may extend the time for completion of the study and the final disbursement of loan proceeds if mitigating circumstances prevent the completion of the study and the applicant has made a diligent effort so to do. The applicant shall submit any request for extension by the monthly application deadline prior to the expiration of the one year period for completion of the study. The board or credit committee as defined in § 68:02:01:33 may establish the length of the extension, if any, period based on the mitigating circumstances.

History

Source: 34 SDR 68, effective September 13, 2007; 39 SDR 16, effective August 6, 2012.
General Authority: SDCL 1-16G-5, 1-16G-8(10), 1-16G-28(4).
Law Implemented: SDCL 1-16G-5, 1-16G-8(10), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:24 Review of financial status

After the loan is approved but before the loan is closed, the board or GOED may conduct an overall review of the applicant's financial status. This review may include an analysis of all assets and liabilities and an analysis of the applicant's ability to repay the loan and comply with the loan covenants. The board may withdraw the commitment at any time if a material adverse change occurs.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(7)(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7)(10), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:25 Loan documents

After an application for a loan is approved, the board shall execute a loan agreement with the borrower. The loan agreement shall contain the rights and responsibilities of the parties and the terms and conditions of the loan. The requirements to secure the loan shall be included in the loan agreement. A loan may be secured or unsecured. A secured loan may be secured by a lien on the interest of the borrower in real and personal property, whether tangible or intangible, considered necessary by the board to adequately collateralize the loan.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(10), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:26 Reporting

The borrower shall submit to the board quarterly reports describing progress on the study, including compliance with the time line and budget contained in the application. Any material deviation from any condition imposed by the board or in the loan agreement may result in the withholding of further funding or the declaration of a default. The borrower shall submit a final written report describing the work performed, results obtained, and potential economic impact within 90 days of completion of the study.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(5).
Law Implemented: SDCL 1-16G-5, 1-16G-8(5), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:27 Inspection by the board and retention of records

All financial documents, books, receipts, orders, expenditures, electronic data, and accounting procedures and practices of the borrower are subject to examination by or for the board at any time for three years following the completion of the study or for the life of the loan, whichever period is greater.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(5).
Law Implemented: SDCL 1-16G-5, 1-16G-8(5), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:28 Additional notification requirements

The borrower shall provide the board with written notice within 10 business days of any change in top level management of the borrower's business or of any plan for sale, public offering, or lease of the business. Any sale, public offering, or lease of the business requires the prior written approval of the board. If the notification and prior approval requirements of this section are not satisfied, the board may declare the loan immediately due and payable.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(5).
Law Implemented: SDCL 1-16G-5, 1-16G-8(5), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:29 Maturity and interest rate

Unless different terms are established upon the affirmative vote of two-thirds of the members of the board present and voting, the maturity date of the VASF loan may not be more than six years from the date of the final disbursement of loan proceeds, with regular payments amortized over not more than 20 years from the date of final disbursement of loan proceeds. The first payment shall be due one year from the date of the final disbursement of loan proceeds. The borrower may request an extension of the date of the first payment, but the extension will not act to extend the final maturity date. The application for an extension must be submitted by the monthly loan application deadline prior to the first payment date.

The standard interest rate for VASF loans shall be established by the board from time-to-time and published on the GOED website. The board may deviate from the standard interest rate based on the economic impact of the project, risk, and other prudent lending criteria.

The board shall consider the following when establishing the standard interest rate:

(1) State and national market interest rates;

(2) State and national economic conditions;

(3) The solvency and balance of the VASF; and

(4) Other economic or business information necessary to fulfill the board mission and to develop and promote South Dakota value-added agricultural products.

The borrower is responsible for arranging other financing when the VASF loan is due. If the borrower is unable to obtain financing, the borrower may apply for an extension of the loan by the board at an interest rate and term established by the board. The borrower shall submit any application for an extension by the monthly loan application deadline prior to the loan maturity date.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: 1-16G-5, 1-16G-8(10)(11).
Law Implemented: 1-16G-5, 1-16G-8(10)(11), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:30 Loan forgiveness

Upon the borrower's written petition and a showing of good cause, the board may forgive all or part of a VASF loan upon terms and conditions established by the board. When determining whether to forgive all or any part of a VASF loan, the board shall consider the following:

(1) Whether the study deemed the project to be feasible;

(2) Whether the borrower has proceeded or intends to proceed with the project;

(3) Whether the borrower has acted in conformity with the terms of the loan agreement and applicable law, including this chapter; and

(4) Whether the borrower has acted in good faith in connection with the application, the project, the loan, and the decision not to proceed with the project.

A petition for loan forgiveness shall be accompanied by the original and all copies of the study and related documents, including any related business plan. If the loan is forgiven in whole or in part, all right, title, and interest in the study, including the exclusive right to use the study and any business plan associated with the study, becomes the property of the board.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(10)(11).
Law Implemented: SDCL 1-16G-5, 1-16G-8(10)(11), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:31 Default

(1) Declare the entire principal amount then outstanding and interest accrued thereon immediately due and payable;

(2) Increase the interest rate to the default rate established in the loan documents;

(3) Take possession of the study or other collateral;

(4) Repair, maintain, and operate the collateral, or sell, lease, or otherwise dispose of the collateral to another person or entity; or

(5) Take any other action considered appropriate by the board to protect the interest of the board and the VASF.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(10)(11).
Law Implemented: SDCL 1-16G-1.1(6), 1-16G-5, 1-16G-8(10)(11), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:32 Delegation of administrative functions

The GOED shall perform the administrative functions of the creation, processing, and review of loan applications; the preparation and negotiation of loan agreements; the review of the financial status of an applicant; loan servicing; and other functions necessary to expedite and assist it in the performance of its duties. Notwithstanding any assurance, guarantee, communication, or representation made to the contrary, there is no commitment of the VASF without specific authorization by the board. Only the board may make a loan award from the VASF to an applicant.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(5)(7).
Law Implemented: SDCL 1-16G-5, 1-52-3.2, 1-52-3.3, 1-52.5.

ARSD 68:02:02:33 Official forms

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(10), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:34 Conflict of interest

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7), 1-16G-25 to 1-16G-27, inclusive.

ARSD 68:02:02:35 Confidentiality

The board and GOED shall, to the extent it constitutes or contains trade secrets or commercial or financial information relating to the operations of an applicant or borrower, maintain as confidential any documents, materials, information, or data received or generated by the board or GOED in connection with a proposed or pending application for a VASF loan or an existing VASF loan. If requested by the applicant, the fact that an application has been proposed or is pending shall be maintained as confidential until such time as the application is presented to the board for approval.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5, 1-16G-11.

ARSD 68:02:02:36 Pre-existing loans

Any loan made prior to September 13, 2007, shall be administered based upon the law in effect at the time the loan was approved by the board.

History

Source: 34 SDR 68, effective September 13, 2007.
General Authority: SDCL 1-16G-5, 1-16G-8(10).
Law Implemented: SDCL 1-16G-5, 1-16G-8(10), 1-16G-25 to 1-16G-27, inclusive.

Chapter 68:02:03 Tourism enhancement program, Repealed

ARSD 68:02:03 Repealed chapter

CHAPTER 68:02:03

TOURISM ENHANCEMENT PROGRAM

(Repealed, 39 SDR 16, effective August 6, 2012)

Chapter 68:02:04 Value-added tourism subfund, Repealed

ARSD 68:02:04 Repealed chapter

CHAPTER 68:02:04

VALUE-ADDED TOURISM SUBFUND

(Repealed. 34 SDR 68, effective September 13, 2007)

Chapter 68:02:05 Capital investment entity loans, Repealed

ARSD 68:02:05 Repealed chapter

CHAPTER 68:02:05

CAPITAL INVESTMENT ENTITY LOANS

(Repealed. 34 SDR 68, effective September 13, 2007)

Chapter 68:02:06 Entrepreneur support program, Repealed

ARSD 68:02:06 Repealed chapter

CHAPTER 68:02:06

ENTREPRENEUR SUPPORT PROGRAM

(Repealed. 34 SDR 68, effective September 13, 2007)

Chapter 68:02:07 Reinvestment payment program

ARSD 68:02:07:01 Definitions

Terms defined in SDCL 1-16G-56 have the same meaning in this chapter. In addition, terms used in this chapter mean:

(1) "Applicant," any person that has completed an application for a reinvestment payment from the reinvestment payment fund;

(2) "Reinvestment payment," a payment disbursed from the reinvestment payment fund in accordance with this chapter;

(3) "Reinvestment payment fund," a fund established in the state treasury for the purpose of making reinvestment payments pursuant to SDCL 1-16G-64.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8, 1-16G-67.
Law Implemented: SDCL 1-16G-8, 1-16G-56, 1-16G-67.

ARSD 68:02:07:02 Eligibility

If the project costs for a new and expanded facility exceed the amounts specified in SDCL 1-16G-57, a person may apply for a reinvestment payment pursuant to this chapter. The person shall:

(1) Timely file an application with GOED as required by SDCL 1-16G-58;

(2) Request the board take action to approve or deny its application for reinvestment payment pursuant to § 68:02:07:05;

(3) Accept the board's approval and receive a permit from GOED pursuant to § 68:02:07:06;

(4) Timely file an affidavit for reinvestment payment with GOED as required by § 68:02:07:10; and

(5) Otherwise comply with the conditions, restrictions, and limitations imposed by this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(6), 1-16G-67.
Law Implemented: SDCL 1-16G-8(6), 1-16G-57, 1-16G-67.

ARSD 68:02:07:03 Reinvestment payment

The board may approve a reinvestment payment pursuant to SDCL 1-16G-59 as it deems appropriate based on the criteria set forth in this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(9), 1-16G-67.
Law Implemented: SDCL 1-16G-8(9), 1-16G-67.

ARSD 68:02:07:04 Criteria

When making a decision on an application, the board shall, in addition to the factors required by SDCL 1-16G-59, consider the following:

(1) Economic impact of primary jobs created or retained by the project;

(2) Net economic effects of increasing or stabilizing the economy on the community, area, and state;

(3) Competitive effect of the project on existing businesses;

(4) The effect of the project on the environment, health, and safety of the people in the community, area, and state;

(5) Compatibility of the project with economic development plans of the area and state;

(6) Type of project;

(7) Infrastructure needed to support the project;

(8) Impact of the project on the property tax base;

(9) Projected payroll, pay structure, and employee benefit structure;

(10) Number of jobs created or retained by the project;

(11) The potential success of the project and the potential for creating quality jobs and the growth of those jobs; and

(12) The character, experience, management record, and background of the applicant.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(8), 1-16G-59, 1-16G-67.
Law Implemented: SDCL 1-16G-8(8), 1-16G-59, 1-16G-67.

ARSD 68:02:07:05 Board action on application

After GOED has received the completed application, the applicant may make a written request to GOED for the board to take action on the application. If requested by the applicant, the fact that an application has been proposed or is pending must be maintained as confidential until such time as the applicant makes a written request for the board to take action on the application. At the next regular meeting that is more than 15 days after the request to take action or within 60 days of the request, whichever is sooner, the board shall approve the application as requested, approve the application contingent on the realization of certain defined conditions, or disapprove the application. If the application is disapproved, the reasons shall be transmitted to the applicant in writing. An applicant whose application has been disapproved may submit another application that addresses the reason for disapproval. The board may extend the time for consideration of an application for up to 50 additional days by advising the applicant of the extension in writing. No action may be taken by the board on any application submitted to GOED until requested in writing by the applicant. Any official action on the application shall be taken in open session.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7), 1-16G-67.
Law Implemented: SDCL 1-16G-8(7), 1-16G-57, 1-16G-67.

ARSD 68:02:07:06 Acceptance and permit

Within 90 days of board approval of the application, the applicant shall accept the approval in writing or the approval is void. At the time of acceptance, the applicant shall either show it has complied with any conditional requirements imposed by the board, or agree in writing to comply with any such conditions prior to issuance of the reinvestment payment. Within 30 days after written acceptance is received, GOED shall issue a permit entitling the applicant to submit an affidavit for reinvestment payment. If an application for modification is approved by the board after GOED has issued a permit to the applicant, GOED shall issue a modified permit consistent with the approved application for modification.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7)(11), 1-16G-67.
Law Implemented: SDCL 1-16G-8(7)(11), 1-16G-60, 1-16G-67.

ARSD 68:02:07:07 Conditions of reinvestment payment

At the time the board takes action on an application, the board may impose requirements relating to employment, including the number of jobs created and the wages and benefits paid. The board may also place conditions upon the board's approval to ensure the project as completed is substantially similar to the project described in the application and that the capital expenditures made in connection with the project are substantially similar to those described in the application. The applicant shall notify the GOED in writing within 30 days of the construction date to indicate the project has commenced.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(11), 1-16G-67.
Law Implemented: SDCL 1-16G-8(11), 1-16G-67.

ARSD 68:02:07:08 Application for modification

If after receiving board approval of its application, a material change occurs in the information contained in the approved application, the applicant may apply to modify its approved application. The board may approve the application for modification as requested, disapprove the application for modification, approve the application for modification contingent on the realization of certain defined conditions, or disapprove the application for modification. If the application for modification is disapproved, the reasons shall be transmitted to the applicant in writing. An applicant whose application for modification has been disapproved may submit another application for modification that addresses the reason for disapproval.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7), 1-16G-67.
Law Implemented: SDCL 1-16G-8(7), 1-16G-67.

ARSD 68:02:07:09 Time restrictions on applicant

The construction date must be no later than six months after receiving a permit from GOED, however, the board may extend the time for the construction date at the time the board approves the application if the request has been made in writing by the applicant, or at a later date if mitigating circumstances prevent the applicant from meeting the construction date deadline and the applicant has made diligent effort to meet the construction date deadline established pursuant to this section.

Any request for extension of the time to complete the project pursuant to SDCL 1-16G-62 must state the grounds for the requested extension and must be received by GOED within two years and nine months from the date of construction.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7)(11), 1-16G-67.
Law Implemented: SDCL 1-16G-8(7)(11), 1-16G-62, 1-16G-67.

ARSD 68:02:07:10 Affidavit for reinvestment payment

The affidavit required by SDCL 1-16G-61 shall be made in the form prescribed by the commissioner and shall include a statement that the project, as completed, substantially conforms to the project described in the original application or as modified pursuant to § 68:02:07:08. The affidavit shall be filed within the time allowed pursuant to SDCL 1-16G-62.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7)(11), 1-16G-67.
Law Implemented: SDCL 1-16G-8(7)(11), 1-16G-61, 1-16G-67.

ARSD 68:02:07:11 Payment

Within 90 days of receiving the completed affidavit for reinvestment payment and a determination by GOED that all terms and conditions imposed pursuant to this chapter have been met, GOED shall tender the reinvestment payment to the project owner or the project owner's assignee. If the project owner or assignee has granted a security interest in the expectation of receipt of the reinvestment payment, payment shall be made jointly-payable to the project owner or assignee and the holder of the security interest.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(9), 1-16G-67.
Law Implemented: SDCL 1-16G-8(9), 1-16G-63, 1-16G-67.

ARSD 68:02:07:12 Delegation of administrative functions

The GOED shall perform the administrative functions of the creation, processing, and review of reinvestment payment applications; the creation, processing, and review of documentation necessary to evidence compliance with the terms and conditions of the reinvestment payment and the requirements of this chapter; disbursement of reimbursement payments in accordance with conditions imposed pursuant to this chapter; and other tasks necessary to expedite and assist the board in the board's duties. Notwithstanding any assurance, guarantee, communication, or representation made to the contrary, there is no commitment of the reinvestment payment fund without specific authorization by the board. Only the board may approve a reinvestment payment from the reinvestment payment fund.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(5)(7), 1-16G-67.
Law Implemented: SDCL 1-16G-8(5)(7), 1-16G-67.

ARSD 68:02:07:13 Access and reporting

An applicant shall grant GOED reasonable access to the project and to applicant's records, and provide such information, documentation and reports as GOED may require, for the purpose of determining compliance with the conditions of the reinvestment payment and of this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(5)(11), 1-16G-67.
Law Implemented: SDCL 1-16G-8(5)(11), 1-16G-61, 1-16G-67.

ARSD 68:02:07:14 Default

Any of the following constitutes a default upon the condition of a reinvestment payment:

(1) If the person filing the affidavit for reinvestment payment knowingly makes any material false statement or report in the affidavit for reinvestment payment;

(2) Failure to adhere to the conditions of the reinvestment payment;

(3) Repealed failure by the applicant to provide access to the project or related documents or to provide the reports and other information required by this chapter; or

(4) Failure of the applicant to remain current on its tax obligations to the State of South Dakota. However, for the purposes of this section, the applicant is not deemed delinquent on its tax obligations to the State of South Dakota if the applicant is currently disputing its tax obligation in accordance with the appeal procedures provided by law.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(9)(11), 1-16G-67.
Law Implemented: SDCL 1-16G-8(9)(11), 1-16G-67.

ARSD 68:02:07:15 Remedies

If there is a default pursuant to § 68:02:07:14 as determined by the board, within thirty days of written demand from the board, the project owner shall repay to GOED the reinvestment payment disbursed to the project owner. In addition to any other action considered appropriate by the board to protect the interest of the board and the reinvestment payment fund, the board may retain counsel and commence a civil action to recover any reinvestment payment proceeds that the project owner is required to repay.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-67.
Law Implemented: SDCL 1-16G-1.1(5)(7), 1-16G-67.

ARSD 68:02:07:16 Conflicts of interest

No member of the board or the GOED staff may participate in or vote upon a decision of the board concerning an application relating to a project in which that member has a direct personal or financial interest.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7), 1-16G-67.
Law Implemented: SDCL 1-16G-8(7), 1-16G-67.

Chapter 68:02:08 Economic development partnership program

ARSD 68:02:08:01 Definitions

Terms used in this chapter mean:

(1) "Applicant," any nonprofit development corporation, tribal government, or any municipality, county, or other political subdivision of this state that has completed an application for an economic development partnership grant from the economic development partnership fund;

(2) "Board," the Board of Economic Development;

(3) "Commissioner," the commissioner of the Governor's Office of Economic Development;

(4) "GOED," the Governor's Office of Economic Development;

(5) "Economic development partnership grant," a grant disbursed from the economic development partnership fund in accordance with this chapter;

(6) "Economic development partnership fund," a fund established in the state treasury for the purpose of making grants in accordance with this chapter.

History

Source: 39 SDR 221, effective July 1, 2013; 42 SDR 57, effective October 26, 2015.
General Authority: SDCL 1-16G-8, 1-16G-55.
Law Implemented: SDCL 1-16G-8, 1-16G-51, 1-16G-55.

ARSD 68:02:08:02 Eligibility and permitted uses

Any nonprofit development corporation, tribal government, or any municipality, county, or other political subdivision of this state may apply for an economic development partnership grant pursuant to this chapter. Economic development partnership grants are awarded on a matching basis as determined by the board. Grant funds may be utilized for the purposes set forth in SDCL 1-16G-52. The applicant shall timely file an application with GOED as required by §§ 68:02:08:03 and 68:02:08:04 and otherwise comply with the requirements, conditions, restrictions, and limitations imposed by this chapter.

History

Source: 39 SDR 221, effective July 1, 2013; 42 SDR 57, effective October 26, 2015.
General Authority: SDCL 1-16G-8(6), 1-16G-55.
Law Implemented: SDCL 1-16G-8(6), 1-16G-51, 1-16G-52, 1-16G-53, 1-16G-55.

ARSD 68:02:08:03 Application

Each application shall be made on the form prescribed by the commissioner, be signed by a duly authorized representative of the applicant, and submitted to GOED. The application shall be executed under penalties of perjury.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7), 1-16G-55.
Law Implemented: SDCL 1-16G-8(7), 1-16G-55.

ARSD 68:02:08:04 Application periods

The board shall consider applications on a quarterly basis. Any application received by July 31^st shall be considered by the board at the board's September meeting; any application received by October 31^st shall be considered by the board at the board's December meeting; any application received by January 31^st shall be considered by the board at the board's March meeting; and any application received by April 30^th shall be considered by the board at the board's June meeting. If the board does not meet in any of the months designated by this section, the board shall consider any application at its next scheduled meeting.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7), 1-16G-55.
Law Implemented: SDCL 1-16G-8(7), 1-16G-55.

ARSD 68:02:08:05 Economic development partnership grant award

The board may award an economic development partnership grant as it deems appropriate based on the criteria set forth in this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(8)(9), 1-16G-55.
Law Implemented: SDCL 1-16G-8(8)(9), 1-16G-51, 1-16G-55.

ARSD 68:02:08:06 Criteria

When making a decision on an application, the board shall consider the character, experience, management record, and background of the applicant and the likelihood the grant award will result in:

(1) High quality employment opportunities;

(2) Repopulation;

(3) Stronger economies;

(4) Housing development;

(5) Business growth;

(6) Support for entrepreneurship; or

(7) Job creation, expansion, and retention.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(8), 1-16G-55.
Law Implemented: SDCL 1-16G-8(8), 1-16G-52, 1-16G-55.

ARSD 68:02:08:07 Conditions of economic development partnership grant

The board may place conditions on any economic development partnership grant issued under this chapter in order to ensure substantial conformity with the representations contained in the application and the criteria described in § 68:02:08:06 under which the grant was awarded.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(11), 1-16G-55.
Law Implemented: SDCL 1-16G-8(11), 1-16G-55.

ARSD 68:02:08:08 Payment

GOED shall tender payment of any economic development partnership grant awarded under this chapter within 30 days of the applicant providing the documentation required by GOED to establish it has complied with the terms and conditions imposed pursuant to this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(9), 1-16G-55.
Law Implemented: SDCL 1-16G-8(9), 1-16G-51, 1-16G-55.

ARSD 68:02:08:09 Delegation of administrative functions

The GOED shall perform the administrative functions of the creation, processing, and review of economic development partnership applications; the creation, processing, and review of documentation necessary to evidence compliance with the terms and conditions of the economic development partnership grant and the requirements of this chapter; disbursement of economic development partnership grants in accordance with conditions imposed pursuant to this chapter; and other tasks necessary to expedite and assist the board in the board's duties. Notwithstanding any assurance, guarantee, communication, or representation made to the contrary, there is no commitment of the economic development partnership fund without specific authorization by the board. Only the board may approve an economic development partnership grant from the economic development partnership fund.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(5)(7), 1-16G-55.
Law Implemented: SDCL 1-16G-8(5)(7), 1-16G-51, 1-16G-55.

ARSD 68:02:08:10 Access and reporting

An applicant shall grant GOED reasonable access to the applicant's records, and provide such information, documentation and reports as GOED may require, for the purpose of determining compliance with the conditions of the economic development partnership grant and of this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(5)(11), 1-16G-55.
Law Implemented: SDCL 1-16G-8(5)(11), 1-16G-51, 1-16G-55.

ARSD 68:02:08:11 Default

Any of the following constitutes a default upon the conditions of an economic development partnership grant:

(1) If the applicant knowingly makes any material false statement or report in the application;

(2) Failure to secure the required matching funds for the economic development partnership grant;

(3) Failure to adhere to the conditions of the economic development partnership grant; or

(4) Repeated failure by the applicant to provide access to documents or to provide the reports and other information required by this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(9)(11), 1-16G-55.
Law Implemented: SDCL 1-16G-8(9)(11), 1-16G-51, 1-16G-55.

ARSD 68:02:08:12 Remedies

If there is a default pursuant to § 68:02:08:11 as determined by the board, within thirty days of written demand from the board, the applicant shall repay to GOED the economic development partnership grant disbursed to the applicant. In addition to any other action considered appropriate by the board to protect the interest of the board and the economic development partnership fund, the board may retain counsel and commence a civil action to recover any economic development partnership grant proceeds that the applicant is required to repay.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(11), 1-16G-55.
Law Implemented: SDCL 1-16G-1.1(5)(7), 1-16G-8(11), 1-16G-51, 1-16G-55.

ARSD 68:02:08:13 Conflicts of interest

No member of the board or the GOED staff may participate in or vote upon a decision of the board concerning an application in which that member has a direct personal or financial interest.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7), 1-16G-55.
Law Implemented: SDCL 1-16G-8(7), 1-16G-55.

Chapter 68:02:09 Local infrastructure improvement program

ARSD 68:02:09:01 Definitions

Terms used in this chapter mean:

(1) "Applicant," any political subdivision of this state, tribal government, or local economic development corporation that has completed an application for a local infrastructure improvement grant from the local infrastructure improvement grant fund;

(2) "Board," the Board of Economic Development;

(3) "Commissioner," the commissioner of the Governor's Office of Economic Development;

(4) "GOED," the Governor's Office of Economic Development;

(5) "Local infrastructure improvement grant," a grant disbursed from the local infrastructure improvement grant fund in accordance with this chapter;

(6) "Local infrastructure improvement grant fund," a fund established in the state treasury for the purpose of making grants in accordance with this chapter.

History

Source: 39 SDR 221, effective July 1, 2013; 42 SDR 57, effective October 26, 2015.
General Authority: SDCL 1-16G-8, 1-16G-54.
Law Implemented: SDCL 1-16G-8, 1-16G-50, 1-16G-54.

ARSD 68:02:09:02 Eligibility and permitted uses.

Eligibility and permitted uses.** Any political subdivision of this state, tribal government, or local development corporation may apply for a local infrastructure improvement grant pursuant to this chapter for the purposes described in SDCL 1-16G-50. The applicant shall timely file an application with GOED as required by §§ 68:02:09:03 and 68:02:09:04 and otherwise comply with the requirements, conditions, restrictions, and limitations imposed by this chapter.

History

Source: 39 SDR 221, effective July 1, 2013; 42 SDR 57, effective October 26, 2015.
General Authority: SDCL 1-16G-8(6), 1-16G-54.
Law Implemented: SDCL 1-16G-8(6), 1-16G-50, 1-16G-54.

ARSD 68:02:09:03 Application

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7), 1-16G-54.
Law Implemented: SDCL 1-16G-8(7), 1-16G-50, 1-16G-54.

ARSD 68:02:09:04 Application periods

Except as otherwise directed by the board, the board shall consider applications on a quarterly basis. Any application received by July 31^st shall be considered by the board at the board's September meeting; any application received by October 31^st shall be considered by the board at the board's December meeting; any application received by January 31^st shall be considered by the board at the board's March meeting; and any application received by April 30^th shall be considered by the board at the board's June meeting. If the board does not meet in any of the months designated in this section, the board shall consider any application at the board's next scheduled meeting.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7), 1-16G-54.
Law Implemented: SDCL 1-16G-8(7), 1-16G-50, 1-16G-54.

ARSD 68:02:09:05 Local infrastructure improvement grant award

The board may award a local infrastructure improvement grant as it deems appropriate based on the criteria set forth in this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(8)(9), 1-16G-54.
Law Implemented: SDCL 1-16G-8(8)(9), 1-16G-50, 1-16G-54.

ARSD 68:02:09:06 Criteria

When making a decision on an application, the board shall consult with appropriate state agencies to evaluate the feasibility and merits of the proposed infrastructure improvements, consider the economic impact of the economic development project to be served by the proposed infrastructure improvements, and consider the funding available to and utilized by the applicant.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(8), 1-16G-54.
Law Implemented: SDCL 1-16G-8(8), 1-16G-50, 1-16G-54.

ARSD 68:02:09:07 Conditions of local infrastructure improvement grant

The board may place conditions on any local infrastructure improvement grant issued under this chapter in order to ensure substantial conformity with the representations contained in the application and the criteria described in § 68:02:09:06 under which the grant was awarded.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(11), 1-16G-54.
Law Implemented: SDCL 1-16G-8(11), 1-16G-54.

ARSD 68:02:09:08 Payment

GOED shall tender payment of any local infrastructure improvement grant awarded under this chapter within 30 days of the applicant providing the documentation required by GOED to establish it has complied with the terms and conditions imposed pursuant to this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(11), 1-16G-54.
Law Implemented: SDCL 1-16G-8(11), 1-16G-50, 1-16G-54.

ARSD 68:02:09:09 Delegation of administrative functions

The GOED shall perform the administrative functions of the creation, processing, and review of local infrastructure improvement applications; the creation, processing, and review of documentation necessary to evidence compliance with the terms and conditions of the local infrastructure improvement grant and the requirements of this chapter; disbursement of local infrastructure improvement grants in accordance with conditions imposed pursuant to this chapter; and other tasks necessary to expedite and assist the board in the board's duties. Notwithstanding any assurance, guarantee, communication, or representation made to the contrary, there is no commitment of the local infrastructure improvement grant fund without specific authorization by the board. Only the board may approve a local infrastructure improvement grant from the local infrastructure improvement grant fund.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(5)(7), 1-16G-54.
Law Implemented: SDCL 1-16G-8(5)(7), 1-16G-50, 1-16G-54.

ARSD 68:02:09:10 Access and reporting

An applicant shall grant GOED reasonable access to the project and the applicant's records, and provide such information, documentation and reports as GOED may require, for the purpose of determining compliance with the conditions of the local infrastructure improvement grant and of this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(9)(11), 1-16G-50, 1-16G-54.
Law Implemented: SDCL 1-16G-8(9)(11), 1-16G-50, 1-16G-54.

ARSD 68:02:09:11 Default

Any of the following constitutes a default upon the conditions of a local infrastructure improvement grant:

(1) If the applicant knowingly makes any material false statement or report in the application;

(2) Failure to adhere to the conditions of the local infrastructure improvement grant; or

(3) Repealed failure by the applicant to provide access to documents or to provide the reports and other information required by this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(9)(11), 1-16G-54.
Law Implemented: SDCL 1-16G-8(9)(11), 1-16G-50, 1-16G-54.

ARSD 68:02:09:12 Remedies

If there is a default pursuant to § 68:02:09:11 as determined by the board, within thirty days of written demand from the board, the applicant shall repay to GOED the local infrastructure improvement grant disbursed to the applicant. In addition to any other action considered appropriate by the board to protect the interest of the board and the local infrastructure improvement grant fund, the board may retain counsel and commence a civil action to recover any local infrastructure improvement grant proceeds that the applicant is required to pay.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(11), 1-16G-54.
Law Implemented: SDCL 1-16G-1.1(5)(7), 1-16G-8(11), 1-16G-50, 1-16G-54.

ARSD 68:02:09:13 Conflicts of interest

No member of the board or the GOED staff may participate in or vote upon a decision of the board concerning an application in which that member has a direct personal or financial interest.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8(7), 1-16G-54.
Law Implemented: SDCL 1-16G-8(7), 1-16G-54.

Chapter 68:02:10 South Dakota jobs grant program

ARSD 68:02:10:01 Definitions

Terms used in this chapter mean:

(1) "Applicant," any person that has completed a REDI fund grant application;

(2) "Board," the Board of Economic Development;

(3) "Commissioner," the commissioner of the Governor's Office of Economic Development;

(4) "Completed the project" or "completion of the project," the first date when the project is operational;

(5) "Construction date," the first date earth is excavated or a contractor has initiated work for the purpose of constructing a new or expanded facility or the first date new equipment is located on the project site or existing equipment is removed from the project site for the purpose of equipment upgrades, whichever occurs first;

(6) "Equipment upgrades," the installation of new equipment or the replacement or improvement of existing equipment, which is subject to the sales use tax imposed by chapters 10-45 or 10-46 or contractor's excise tax imposed by SDCL chapter 10-46A or 10-46B;

(7) "GOED," the Governor's Office of Economic Development;

(8) "New or expanded facility," a new building or structure, or the expansion, renovation, or retrofitting of an existing building or structure, which is subject to the contractor's excise tax imposed by SDCL chapter 10-46A or 10-46B;

(9) "Person," any individual, firm, copartnership, joint venture, association, cooperative, nonprofit development corporation, limited liability company, limited liability partnership, corporation, estate, trust, business trust, receiver, or any group or combination acting as a unit;

(10) "Project," a new or expanded facility with a project cost which is less than twenty million dollars, or equipment upgrades with a project cost which is less than two million dollars. A project includes laboratory and testing facilities, manufacturing facilities, data centers, power generation facilities, power transmission facilities, agricultural processing facilities, wind energy facilities, and facilities defined by GOED as targeted industries. A project does not include a building or structure:

(a) Used predominantly for the sale of products at retail, other than the sale of electricity at retail, to individual consumers;

(b) Used predominantly for residential housing or transient lodging;

(d) Used predominantly for the transportation or transmission of natural gas, oil, or crude oil by means of a pipeline; or

(e) That is not subject to ad valorem real property taxation or equivalent taxes measured by gross receipts;

(11) "Project cost," the amount paid by the project owner in money, credits, property, or other consideration associated with a project, including without limitation, land, labor, material, furniture, equipment, fees, or fixtures;

(12) "REDI fund," the Revolving Economic Development and Initiative Fund created pursuant to SDCL 1-16G-3;

(13) "South Dakota Jobs subfund," that portion of the REDI fund funded pursuant to SDCL 1-16G-48(5); and

(14) "South Dakota Jobs grant," a grant disbursed from the South Dakota Jobs subfund in accordance with this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-8.
Law Implemented: SDCL 1-16G-5, 1-16G-8, 1-16G-48(5).

ARSD 68:02:10:02 Eligibility

A person may apply for a South Dakota Jobs grant pursuant to this chapter for a project as defined in § 68:02:10:01(10). The person shall:

(1) Timely file an application with GOED as required by § 68:02:10:03;

(2) Request the board take action to approve or deny its application for South Dakota Jobs grant pursuant to § 68:02:10:06;

(3) Accept the board's approval pursuant to § 68:02:10:07;

(4) Timely file an affidavit for a South Dakota Jobs grant with GOED as required by § 68:02:10:11; and

(5) Otherwise comply with the conditions, restrictions, and limitations imposed by this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(6).
Law Implemented: SDCL 1-16G-5, 1-16G-8(6), 1-16G-48(5).

ARSD 68:02:10:03 Application

Any person commencing a project in South Dakota is eligible to apply for a South Dakota Jobs grant. Each application shall be made on the form prescribed by the commissioner, signed by the project owner, and submitted to GOED. The application must be submitted to GOED no later than ninety days after the construction date. The application shall be executed under penalties of perjury.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7), 1-16G-48(5).

ARSD 68:02:10:04 South Dakota Jobs grant

The board may approve South Dakota Jobs grant as it deems appropriate based on the criteria set forth in this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(9).
Law Implemented: SDCL 1-16G-5, 1-16G-8(9), 1-16G-48(5).

ARSD 68:02:10:05 Criteria

When making a decision on an application, the board shall consider the following:

(1) Likelihood the project would have occurred without the grant;

(2) Economic impact of primary jobs created or retained by the project;

(3) Net economic effects of increasing or stabilizing the economy on the community, area, and state;

(4) Competitive effect of the project on existing businesses;

(5) Support of the public entities of the community and area for the project;

(6) The effect of the project on the environment, health, and safety of the people in the community, area, and state;

(7) Compatibility of the project with economic development plans of the area and state;

(8) Type of project;

(9) Infrastructure needed to support the project;

(10) Impact of the project on the property tax base;

(11) Projected payroll, pay structure, and employee benefit structure;

(12) Number of jobs created or retained by the project;

(13) The potential success of the project and the potential for creating quality jobs and the growth of those jobs; and

(14) The character, experience, management record, and background of the applicant.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(8).
Law Implemented: SDCL 1-16G-5, 1-16G-8(8), 1-16G-48(5).

ARSD 68:02:10:06 Board action on application

After GOED has received the completed application, the applicant may make a written request to GOED for the board to take action on the application. If requested by the applicant, the fact that an application has been proposed or is pending shall be maintained as confidential until such time as the applicant makes a written request for the board to take action on the application. At the next regular meeting that is more than 15 days after the request to take action or within 60 days of the request, whichever is sooner, the board shall approve the application as requested, approve the application contingent on the realization of certain defined conditions, or disapprove the application. If the application is disapproved, the reasons shall be transmitted to the applicant in writing. An applicant whose application has been disapproved may submit another application that addresses the reason for disapproval. The board may extend the time for consideration of an application for up to 50 additional days by advising the applicant of the extension in writing. No action may be taken by the board on any application submitted to GOED until requested in writing by the applicant. Any official action on the application shall be taken in open session.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(7), 1-16G-48(5).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7), 1-16G-48(5).

ARSD 68:02:10:07 Acceptance

Within 90 days of board approval of the application, the applicant must accept the approval in writing or the approval is void. At the time of acceptance, the applicant must either show it has complied with any requirements imposed by the board, or agree in writing to comply with any such conditions prior to payment of the South Dakota Jobs grant.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(7)(11).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7)(11), 1-16G-48(5).

ARSD 68:02:10:08 Conditions of South Dakota Jobs grant

At the time it takes action on an application, the board may place conditions on any South Dakota Jobs grant approved under this chapter in order to ensure substantial conformity with the representations contained in the application and the criteria described in § 68:02:10:05 under which the grant was awarded.

The applicant shall notify the GOED in writing within 30 days of the construction date to indicate the project has commenced.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(11)
Law Implemented: SDCL 1-16G-5, 1-16G-8(11), 1-16G-48(5).

ARSD 68:02:10:09 Application for modification

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7), 1-16G-48(5).

ARSD 68:02:10:10 Time restrictions on applicant

Unless an extension is granted at the sole discretion of the board, no project costs that occur after three years from the construction date may be included in the final project cost determination. Any request for extension of the time allowed pursuant to this chapter to complete the project must state the grounds for the requested extension and must be received by GOED within two years and nine months from the date of construction. In no event may project costs incurred more than four years from the date of construction be included in the final project cost determination.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(7)(11), 1-16G-48(5).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7)(11), 1-16G-48(5).

ARSD 68:02:10:11 Affidavit for South Dakota Jobs grant

Within six months after the completion of the project, the applicant shall file an affidavit for a South Dakota Jobs grant with GOED. The affidavit for a South Dakota Jobs grant shall be on the form prescribed by the commissioner, shall include a statement that the project, as completed, substantially conforms to the project described in the original application or as modified pursuant to § 68:02:10:09, shall contain all other information required by the chapter, and be signed by the project owner. The affidavit for a South Dakota Jobs grant shall be executed under penalties of perjury.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(7)(11).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7)(11), 1-16G-48(5).

ARSD 68:02:10:12 Payment

Within 90 days of receiving the completed affidavit for a South Dakota Jobs grant and a determination by GOED that all terms and conditions imposed pursuant to this chapter have been met, GOED shall tender the South Dakota Jobs grant to the project owner or the project owner's assignee. If the project owner or assignee has granted a security interest in the expectation of receipt of a South Dakota Jobs grant, payment shall be made jointly-payable to the project owner or assignee and the holder of the security interest. If GOED requests additional information or documentation from the project owner, the 90 day period shall begin to run from the date of receipt of the additional documents or information.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(9).
Law Implemented: SDCL 1-16G-5, 1-16G-8(9), 1-16G-48(5).

ARSD 68:02:10:13 Delegation of administrative functions

The GOED shall perform the administrative functions of the creation, processing, and review of South Dakota Jobs grant applications; the creation, processing, and review of documentation necessary to evidence compliance with the terms and conditions of the South Dakota Jobs grant and the requirements of this chapter; disbursement of South Dakota Jobs grant and the requirements of this chapter; and other tasks necessary to expedite and assist the board in the board's duties. Notwithstanding any assurance, guarantee, communication, or representation made to the contrary, there is no commitment of the South Dakota Jobs subfund without specific authorization by the board. Only the board may approve a South Dakota Jobs grant from the South Dakota Jobs subfund.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(5)(7).
Law Implemented: SDCL 1-16G-5, 1-16G-8(5)(7), 1-16G-48(5).

ARSD 68:02:10:14 Access and reporting

An applicant shall grant GOED reasonable access to the project and to applicant's records, and provide such information, documentation, and reports as GOED may require, for the purpose of determining compliance with the conditions of the reinvestment payment and of this chapter.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(5)(11).
Law Implemented: SDCL 1-16G-5, 1-16G-8(5)(11), 1-16G-48(5).

ARSD 68:02:10:15 Default

Any of the following constitutes a default upon the conditions of a reinvestment payment:

(1) If the person filing the affidavit for a South Dakota Jobs grant knowingly makes any material false statement or report in the affidavit for a South Dakota Jobs grant;

(2) Failure to adhere to the conditions of the South Dakota Jobs grant;

(3) Repeated failure by the applicant to provide access to the project or related documents or to provide the reports and other information required by this chapter; or

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(9)(11).
Law Implemented: SDCL 1-16G-5, 1-16G-8(9)(11), 1-16G-48(5).

ARSD 68:02:10:16 Remedies

If there is a default pursuant to § 68:02:10:15 as determined by the board, within thirty days of written demand from the board, the project owner shall repay to GOED the South Dakota Jobs grant disbursed to the project owner. In addition to any other action considered appropriate by the board to protect the interest of the board and the South Dakota Jobs subfund, the board may retain counsel and commence a civil action to recover any grant proceeds that the project owner is required to repay.

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(11).
Law Implemented: SDCL 1-16G-1.1(5)(7), 1-16G-5, 1-16G-8(11).

ARSD 68:02:10:17 Conflicts of interest

History

Source: 39 SDR 221, effective July 1, 2013.
General Authority: SDCL 1-16G-5, 1-16G-8(7).
Law Implemented: SDCL 1-16G-5, 1-16G-8(7).