ARSD Article 12:22 — AGRIBUSINESS BONDING AND LENDING PROGRAMS

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

Chapter 12:22:01

ARSD 12:22:01:01 Definitions

Terms defined in SDCL 1-16B-1 have the same meaning when used in this article. In addition, terms used in this article mean:

(1) "Bond purchaser," any individual, corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, or any other legal entity, that purchases an authority bond under the agribusiness bonding program;

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

(3) "Eligible applicant." a for-profit or nonprofit agricultural or business enterprise;

(4) "Program," the agribusiness bonding program;

(5) "Project," a description of the intended use of the loan proceeds; and

(6) "Qualified purpose," any land, buildings or other improvements, or any real or personal property, debt service reserve fund, capitalized interest, and any cost relating to the foregoing.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-1, 1-16B-56, 1-16B-57.

ARSD 12:22:01:02 Contents of application

An applicant for an agribusiness bonding program loan must apply for the loan on a form provided by the authority. The application must include the following:

(1) The applicant's name and mailing address;

(2) A description of the anticipated use of loan proceeds;

(3) The amount of the loan requested; and

(4) The applicant's down payment, if any.

An application is complete when all documents and information needed to approve a loan are submitted.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-56, 1-16B-57, 1-16B-58(1).

ARSD 12:22:01:03 Procedure for informal settlements in contested cases, Repealed

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:01:04 Eligibility

To be eligible for assistance under this chapter, the project must be located in South Dakota at the time the bond is issued to finance the loan and the eligible applicant must agree to pay all fees associated with receiving an authority bond.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-56, 1-16B-57, 1-16B-58(1).

ARSD 12:22:01:05 Ineligible uses of loan proceeds

The agribusiness bonding program may not be used to finance working capital or inventory.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-56, 1-16B-57, 1-16B-58(1).

ARSD 12:22:01:06 Loan requirements

The following are requirements for a loan under the agribusiness bonding program:

(1) The authority may take security for a loan in the form of a promissory note, security agreement, mortgage, or similar agreement;

(2) A loan may not be assumed; and any interest in land, improvements, or depreciable property may not be leased, sold, exchanged, used as a trade-in, used on an equipment-for-hire basis, or otherwise conveyed without the prior written consent of the authority. The authority may not consent to an assumption of its loan or the conveyance of property subject to its mortgage or security agreement unless the purchaser of the property is an eligible applicant for an authority loan; and

(3) The eligible applicant, bond purchaser, or lender must pay the following fees to the authority:

(a) With the submission of an application, a nonrefundable fee of two hundred dollars;

(b) On the date of bond issuance, a fee equal to one-eighth of one percent of the bond amount with a five-hundred-dollar minimum;

(c) If the loan is assumed, on the date of assumption, a fee equal to one-sixteenth of one percent of the outstanding bond balance with a three-hundred-dollar minimum;

(d) On the date of bond issuance, a fee equal to one-eighth of one percent of the bond amount; and

(e) On the date of bond issuance, the fees and expenses of bond counsel and the authority's special counsel.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-56, 1-16B-57, 1-16B-58(1).

ARSD 12:22:01:07 Availability of books and records

Bond purchasers or their agents shall maintain books and records setting forth payments received and disbursements made on all authority loans. The books and records must be available for examination by the authority or its agent.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-56, 1-16B-57, 1-16B-58(1).

ARSD 12:22:01:08 Application procedures

The eligible applicant shall obtain an application from the authority and submit the completed application along with the application fee described in subsection 12:22:01:06(3)(a), to the authority. The authority's legal counsel shall review the application to determine if the project qualifies. The authority staff shall review the application to determine if program requirements are met. If the project qualifies and program requirements are met, the staff must forward the application to the authority board of directors. The board shall consider the application at its monthly meeting. If the project meets the authority's requirements, the board must consider the adoption of a nonbinding resolution of intent by the authority to issue bonds to finance the project. The resolution is not final approval and does not bind the authority to issue bonds.

The applicant shall contact a financial institution or an underwriter and make arrangements for the structuring and purchase of the tax-exempt bonds. When the terms of the financing are known, the authority's bond counsel shall draft the necessary documentation for the financing. No bond may be issued until the Governor makes any allocation from the state volume cap that may be required for issuing a private activity bond.

Cross-Reference: Public hearing -- Approval of bond issuance, § 12:22:01:09.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-56, 1-16B-57, 1-16B-58(1).

ARSD 12:22:01:09 Public hearing -- Approval of bond issuance

The authority may not issue a bond for the purpose of financing a project for a specific eligible applicant unless, before its issuance, the authority has conducted a public hearing conforming to the applicable requirements of 26 U.S.C. § 147(f)(2)(B) (December 31, 2024). Upon receipt of a completed application, the commissioner shall set a date, time, and place for the hearing. The commissioner shall publish notice of hearing at least fourteen days before the date of the hearing in a newspaper of general circulation available to residents in the county where the project is located. The notice must include the date, time, and place of the hearing, the name of the eligible applicant, and a general description of the project.

If a local hearing is requested, the authority may cancel the previously scheduled hearing. The commissioner shall set a date, time, and place for a local hearing and publish notice of the hearing in the local area as provided in this section. The date, time, and place for the local hearing must be reasonably convenient to persons affected by the project. Public hearings may be conducted by a board member, an appointee, or employee of the authority, or another qualified hearing officer. The commissioner shall provide a means by which an interested party may participate electronically.

The authority may not issue a bond for the purpose of financing a project by a specific eligible applicant unless, before the issuance, the Governor or another elected official of the state who is designated by the Governor approves the issuance of the bond. Following the public hearing, the authority shall send to the Governor's office, or to the office of the designated official a statement describing each bond or series of bonds that it proposes to issue, along with a summary of the public comments received.

Following approval of the loan by the authority and upon completion of a public hearing and approval of the bond issuance by the Governor or another designated state official, the authority shall issue a bond, to be purchased by the bond purchaser, in the amount and fitting the terms of the loan to the eligible applicant. The principal and interest on the bond is a limited obligation payable solely out of the revenues derived from the loan to the eligible applicant or the project financed with the proceeds of the loan and the underlying collateral or other security furnished by or on behalf of the eligible applicant. The principal and interest on the bond does not constitute an indebtedness of the authority or a charge against its general credit or general fund.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-56, 1-16B-57, 1-16B-58(1).

ARSD 12:22:01:10 Priority of applications

The authority shall process applications on a first-come, first-served basis, based on the receipt of a complete application.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-56, 1-16B-57, 1-16B-58(1).

ARSD 12:22:01:11 Procedures following bond issuance

Following disbursement of the bond proceeds, the authority may require the bond purchaser or the bond purchaser's agent and the eligible applicant to certify to the authority that the proceeds were used by a qualified eligible applicant for a qualified purpose.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-56, 1-16B-57, 1-16B-58(1), 1-16B-73.

ARSD 12:22:01:12 Assignment of loans

A bond purchaser may assign a loan in whole or in part. Servicing of the loan may also be assigned.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-57, 1-16B-58.

ARSD 12:22:01:13 Right to audit

The authority may audit the records of a bond purchaser or the bond purchaser's agents, and the eligible applicant, relating to any loan or bond governed by this chapter, to ensure that bond proceeds were used for a qualified purpose.

History

• Source: 23 SDR 161, effective April 7, 1997; 52 SDR 49, effective November 17, 2025.
• General Authority: SDCL 1-16B-70.
• Law Implemented: SDCL 1-16B-56, 1-16B-57, 1-16B-73.

Chapter 12:22:02

ARSD 12:22:02:01 Definitions, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 42 SDR 14, effective August 10, 2015; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:02 Eligibility requirements, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:03 Application requirements, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:04 Loan amounts, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 42 SDR 14, effective August 10, 2015; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:05 Equity contribution, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:06 Permissible uses of loan proceeds, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:07 Impermissible uses of loan proceeds, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:08 Factors for action by VAFA, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:09 Action by VAFA on applications, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:10 Reservation of right to make loan, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:11 Acceptance by applicant -- Time restrictions, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:12 Review of financial status, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:13 Loan agreement, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:14 Maturity and interest rate, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:15 Reporting requirements for borrower, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:16 Inspection of project by VAFA -- Retention of records, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:17 Default on loan agreement, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:02:18 Interim financing, Repealed

History

• Source: 28 SDR 44, effective October 2, 2001; 52 SDR 49, effective November 17, 2025.

Chapter 12:22:03

ARSD 12:22:03:01 Definitions, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:02 Eligibility, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:03 Application requirements, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:04 Funding amount, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:05 Uses of funds, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; 42 SDR 177, effective June 29, 2016; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:06 Factors for board action, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:07 Board action on applications, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:08 Acceptance and time restrictions of applicant, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:09 Review of financial status, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:10 Funding documents, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:11 Reporting, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:12 Inspection by the board and retention of records, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:13 Maturity and interest rate, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:14 Loan forgiveness, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:15 Default, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:16 Delegation of administrative functions, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:17 Official forms, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:18 Conflict of interest, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.

ARSD 12:22:03:19 Confidentiality, Repealed

History

• Source: 40 SDR 109, effective December 9, 2013; SL 2019, ch 235, § 37 and 38, effective April 14, 2019; 52 SDR 49, effective November 17, 2025.