<html> <head> <title>Rule 74:05:07:13 Security.</title> <META NAME="Keywords" Content="Administrative Rules 74:05:07:13"> <META NAME="Description" Content="Administrative Rules 74:05:07:13 Security."> <meta name=Generator content="Microsoft Office HTML Filter 2.0"> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Originator content="Microsoft Word 10"> <style> <!-- --> </style> </head> <body lang=EN-US> <div> <p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>74:05:07:13.&nbsp;&nbsp;Security.</b> The funding agreement for a loan must contain specific requirements to secure the loan. The loan may be secured by one or more of the following:</font></p> <p><font size=3 face="Times New Roman">&nbsp;</font></p> <p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)&nbsp;&nbsp;Full faith and credit of the borrower;</font></p> <p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)&nbsp;&nbsp;Pledges of taxes or assessments;</font></p> <p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3)&nbsp;&nbsp;Pledges of facility revenue; or</font></p> <p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4)&nbsp;&nbsp;Liens on the interest of the applicant in all real and personal property, easements, rights-of-way, water rights, water purchase contracts, and similar property rights, including leasehold interests, used in connection with the facility, whether owned at the time the loan is approved or acquired with loan funds.</font></p> <p><font size=3 face="Times New Roman">&nbsp;</font></p> <p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A debt coverage ratio, which is a comparative statistic showing the relationship between the applicant's debt and the security pledged toward repayment, of at least 100 percent must be demonstrated in all funding agreements.</font></p> <p><font size=3 face="Times New Roman">&nbsp;</font></p> <p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 13 SDR 23, effective September 3, 1986; 13 SDR 129, 13 SDR 141, effective July&nbsp;1, 1987; 19 SDR 202, effective July 4, 1993; 21 SDR 97, effective November 28, 1994.</font></p> <p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=46A-1-65">46A-1-65.</A></font></p> <p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=46A-1-61">46A-1-61</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=46A-1-63.1">46A-1-63.1</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=46A-1-64">46A-1-64.</A></font></p> <p><font size=3 face="Times New Roman">&nbsp;</font></p> <p><font size=3 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Cross-Reference:</b> Funding agreements, §&nbsp;74:05:07:20.</font></p> <p><font size=3 face="Times New Roman">&nbsp;</font></p> </div> </body> </html>