31:01:01:01. Definitions. Words used in this article mean:
(1) "Btu," British thermal unit; the amount of heat required to raise the temperature of one pound of water one degree Fahrenheit at or near 39.2 degrees F;
(2) "Btu/sqft/yr," Btu per square foot per year; an index of building energy use, calculated by dividing the total annual energy use of a building by its square foot area;
(3) "Commercial establishment," a retail, wholesale, or manufacturing firm which provides goods or services from a location in South Dakota, including any income-producing residential property located in South Dakota;
(4) "Energy conservation measure," installation or modification of equipment or material in a building which is intended to reduce energy consumption or allow the use of an alternate energy source;
(5) "Office," the Governor's Office of Economic Development;
(6) "Payback," the length of time, in years, the energy savings of a conservation measure will take to return the cost of implementing the measure, calculated by dividing the cost of the measure by the dollar amount of the estimated annual energy savings;
(7) "Program," the energy conservation loan program authorized by SDCL 1-33B-15;
(8) "Renewable energy resources," resources of energy which are replaced within 50 years by new or additional supplies, including forestry products, forest harvest residues, agricultural wastes, solar radiation, natural daylighting, phenomena resulting from solar radiation, wind, waves, tides, lake or pond thermal differences, and nocturnal thermal changes;
(9) "Technical analysis," an engineering review of one or more proposed changes or additions to a building or any of its energy-using systems to determine the magnitude of the impact on the energy use of the building and to make recommendations concerning the feasibility of the implementation of any or all of the proposed changes; and
(10) "Technical analyst," a registered professional engineer or architect who has received special training and experience in energy conservation to conduct technical analyses for the purposes of this article.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:01:01, 15 SDR 209, effective July 9, 1989; 17 SDR 22, effective August 13, 1990; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
CHAPTER 31:01:02
TECHNICAL ANALYSIS
Section
31:01:02:01 Technical analysis required.
31:01:02:02 Qualifications of technical analyst.
31:01:02:03 Report required.
31:01:02:01. Technical analysis required. An application for an energy conservation loan must be accompanied by a technical analysis. The technical analysis for a governmental; commercial, including a multiple-family apartment building; or nonprofit organizational building must be conducted by a technical analyst qualified pursuant to § 31:01:02:02, except as provided in this section.
A limited energy savings payback analysis in a format provided by the office may be used in lieu of a technical analysis if the application is limited to one or more of the following items:
(1) Replacement of a heating or cooling system with more energy-efficient units;
(2) Insulation;
(3) Replacement of existing lighting with more energy-efficient lighting;
(4) Replacement of existing motors with more energy-efficient motors in the heating, ventilating, and air conditioning system.
The individual cost of any single item in this list may not exceed $10,000 and the aggregate cost for measures to be installed in any one building may not exceed $25,000. For owner-occupied residential properties the individual cost of any single item may not exceed $5,000 and the aggregate cost for the measures to be installed in any one building may not exceed $10,000. The dollar limit may be waived at the discretion of the commissioner of the office.
The analysis for a single-family residence may be conducted by the office, using information supplied by the homeowner on a questionnaire provided by the office.
Source: 14 SDR 183, effective July 13, 1988; amended and transferred from § 20:13:02:01, 15 SDR 209, effective July 9, 1989; 17 SDR 22, effective August 13, 1990; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
31:01:02:02. Qualifications of technical analyst. To be qualified to conduct the technical analysis required by this article, a technical analyst must meet the following requirements:
(1) Be a professional engineer or architect registered in South Dakota;
(2) Have received special training offered by the office; and
(3) Provide evidence satisfactory to the office of experience in energy conservation in building construction and mechanical systems.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:02:02, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
31:01:02:03. Report required. A qualified technical analyst shall submit the results of a technical analysis in writing in a format provided by the office. The report must, as a minimum, include the following:
(1) A description and engineering analysis of each recommended energy conservation measure, including the following:
(a) An estimate of the cost of design, acquisition, and installation, discussing pertinent assumptions as necessary;
(b) An estimate of the annual energy and energy cost savings by fuel type, including all data and assumptions used in arriving at the estimate;
(c) The simple payback period of each recommended energy conservation measure, calculated by dividing the estimated total cost of the measure by the estimated annual energy cost saving;
(d) The payback period of each recommended energy conservation measure, taking into account the interactions among the various measures; and
(2) The energy use and cost data for each fuel type used for the prior twelve-month period, by month or in accordance with the usual billing cycle.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:02:03, 15 SDR 209, effective July 9, 1989; 17 SDR 22, effective August 13, 1990; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
CHAPTER 31:01:03
LOANS
Section
31:01:03:01 Eligibility.
31:01:03:02 Criteria for energy conservation loans.
31:01:03:03 Conditions and limitations.
31:01:03:04 Application procedures.
31:01:03:05 Application review.
31:01:03:06 Loan approval.
31:01:03:07 Loan agreement and promissory note.
31:01:03:08 Records.
31:01:03:09 Reports.
31:01:03:10 Monitoring.
31:01:03:11 Default.
31:01:03:01. Eligibility. The following classes of applicants are eligible to apply for loans:
(1) Local government subdivisions;
(2) Public and private nonprofit organizations;
(3) Commercial establishments; and
(4) Private individuals.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:01, 15 SDR 209, effective July 9, 1989; 17 SDR 22, effective August 13, 1990; 19 SDR 148, effective April 4, 1992; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
31:01:03:02. Criteria for energy conservation loans. Energy conservation projects for which the loans are desired must meet the following criteria:
(1) The building in which the measures are being installed must be in South Dakota;
(2) The project must be consistent with the state energy conservation program plan required by 40 C.F.R. § 420 as published in 48 Fed. Reg. 39,356-39,364 (August 30, 1983);
(3) The project must demonstrate the ability to conserve energy through efficient energy use or the utilization of renewable energy resources which results in energy savings based upon a net reduction in the use of nonrenewable resources;
(4) The project must utilize existing, proven reliable technologies;
(5) The project must show energy savings;
(6) The project must demonstrate a simple payback period of 10 years or less, which may be subject to waiver in unusual circumstances;
(7) The project must meet state air and water quality standards; and
(8) The project must be recommended in a current technical analysis report as required by chapter 31:01:02.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:02, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
Cross-References:
Surface water quality standards, ch 74:51:01.
Drinking water standards, ch 74:04:05.
Air pollution control program, art 74:36.
31:01:03:03. Conditions and limitations. Loans are made subject to the following conditions and limitations:
(1) Interest shall be charged at the rate of three percent per year on the unpaid balance and shall begin accruing on the date funds are disbursed to the borrower;
(2) The amount of the loan cannot exceed the estimated cost of the measures applied for as found in the technical analysis report;
(3) The repayment schedule shall be based on the estimated payback as shown in the technical analysis report with the first payment due within 12 months after the loan disbursement date. However, the first payment must be made not later than two years after the date of the loan and the last payment due not later than 10 years after the date the loan funds are disbursed;
(4) Payments shall not be made more often than monthly, nor less often than annually;
(5) The total amount of the loan may be repaid at any time without penalty;
(6) All work or construction done with the proceeds of a loan under this program must comply with all applicable building and housing codes and standards;
(7) Loan recipients must adhere to the requirements of Office of Management and Budget Circular A-102 (January 1981) or A-110 (July 30, 1976) as applicable. They must also meet the requirements of federal Department of Labor standards in 29 C.F.R. Part 3 (April 15, 1976) and 29 C.F.R. Part 5 as published in 48 Fed. Reg. 19,540-19,553 (April 29, 1983);
(8) Project implementation must begin within 90 days after written notice of loan approval. Projects on owner-occupied residential structures must be completed within 180 days after written notice of loan approval, and projects on all other types of structures must be complete within 365 days after written notice of loan approval;
(9) Loans may not be used to replace an existing permanent loan;
(10) Funds shall be disbursed to the borrower on a reimbursement basis after proof of payment is provided to the office or to both the borrower or borrowers and the contract supplier after project completion. The contract supplier's invoice showing the actual costs incurred must be submitted to the office together with verification of installation of the approved energy conservation measure;
(11) Advances of funds, not to exceed expenditures anticipated within 60 days following the date of submission of a voucher, may be approved in unusual circumstances;
(12) Loan payments, made payable to the Office of Economic Development, shall be sent or delivered to the office at its current address; and
(13) Collateral may be required to secure the loan.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:03, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
Cross-References:
Electricians, art 20:44.
State plumbing code, art 20:54.
Fire safety, art 61:15.
Building codes and standards, SDCL 11-10.
31:01:03:04. Application procedures. At the time the office announces the availability of funds it shall designate which classes set out in § 31:01:03:01 are eligible to apply for those funds and the deadline date for applications. Applications may be made only in response to funding availability announcements. Application forms are provided by the office and must contain, at a minimum, the following information:
(1) The name and complete mailing address, including the county, of the applicant;
(2) The name of a contact person, including title and telephone number;
(3) The amount of the loan requested;
(4) A summary description of each energy conservation measure, including its estimated cost, estimated annual energy cost savings, and estimated payback;
(5) The estimated date of completion of the project;
(6) A copy of the complete technical analysis report as required by chapter 31:01:02; and
(7) Sufficient financial data on which to base a determination of the sound economic stability of the applicant. Documentation may include the following:
(a) Current financial statement;
(b) Latest profit and loss statement;
(c) Last financial audit;
(d) Amount and status of outstanding debts; and
(e) Amount and coverage of insurance.
The office may request additional information as necessary for the decision-making process.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:04, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
31:01:03:05. Application review. In addition to consideration of the criteria listed in § 31:01:03:02 and the conditions and limitations listed in § 31:01:03:03, application review shall consist of the following two phases:
(1) The administrative review shall consider the following, at a minimum:
(a) Completeness;
(b) Eligibility;
(c) Accuracy; and
(d) Supporting data;
(2) The technical review shall consider each energy conservation measure for which funding is requested and shall include the accuracy and sufficiency of calculations, engineering principles considered, and labor and material costs relative to the current local market.
Negotiations with the analyst and applicant shall be used to resolve any problems. If, after review, corrections or adjustments cause the estimated payback of a measure to exceed ten years, the measure shall be eliminated from the application and the total amount of the loan request adjusted accordingly.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:05, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
31:01:03:06. Loan approval. Applications shall be considered for loan approval upon completion of the administrative and technical review. Approval shall be based upon the following:
(1) Results of the administrative and technical review;
(2) Economic stability of the applicant;
(3) Demonstrated ability of the applicant to utilize the funds to implement the energy conservation measures; and
(4) Comparative standing among all applicants for funds available. Criteria will include payback, fuel type saved, and geographical location.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:06, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
31:01:03:07. Loan agreement and promissory note. After an application for a loan is approved, a loan agreement shall be executed between the office and the borrower. The loan agreement, including a promissory note and other necessary documents, 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. Loans may be secured or unsecured. Secured loans may be secured by liens on the interest of the borrower in all real and personal property, tangible or intangible; easements; rights-of-way; water rights; and any other assets of the borrower considered necessary to collateralize the loan.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:07, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
31:01:03:08. Records. Borrowers are not required to maintain a separate bank account for these loan funds; however, they must maintain a separate bookkeeping account. All expenditures must be supported by vouchers and must be for items approved for the energy conservation project for which the loan was made. Account books, records, and all documents pertinent to the project must be available for audit at any time. All records of the borrower, contractors, and subcontractors concerning the project must be retained until the loan is repaid in full.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:08, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
31:01:03:09. Reports. Reports must be submitted as follows:
(1) Progress reports must be submitted quarterly during the period implementation or construction is in progress and must include a description of the current status, any problems, and forecast of expectations or deviations from the planned schedule;
(2) A final report must be submitted to the office upon completion of the project. The report must include a description of the measures implemented, the actual cost of each measure, and the adjusted estimated payback, based on the actual cost; and
(3) The office may request a report of annual energy use to be submitted once each year during the life of the loan. This report must contain the monthly use and cost of all forms of energy used. Forms shall be provided by the office.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:09, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
31:01:03:10. Monitoring. The office shall monitor the use of the funds under this program through selective review of reports and on-site review of records and through discretionary inspection of buildings where the energy conservation projects are in progress or were completed.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:10, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
General Authority: SDCL 1-33B-15.
Law Implemented: SDCL 1-33B-15.
31:01:03:11. Default. If the borrower violates any of the terms of the loan agreement, the office may place the borrower in default. Borrowers determined to be in default shall be notified by certified mail. The notice shall explain the reasons for the action. The borrower must respond to the notice within 30 days, providing evidence of correction of the reasons for the action. If the borrower fails to respond or to take corrective action, the entire remaining balance becomes due and payable immediately and the office may take any action it considers appropriate to protect its interest.
Source: 14 SDR 183, effective July 13, 1988; transferred from § 20:13:03:11, 15 SDR 209, effective July 9, 1989; 19 SDR 148, effective April 4, 1993; 20 SDR 222, effective July 5, 1994.
CHAPTER 31:01:04
GRANTS
(Repealed. 19 SDR 148, effective April 4, 1993)
